Agreement 6-2024 of July 23, 2024 Modifying Certain Provisions of Agreement No. 5-2004 and Agreement No. 11-2013 and Issuing Other Provisions

No. 30184 Official Digital Gazette, Tuesday, December 24, 2024 1

The Board of Directors of the Securities Market Superintendence,

in the exercise of its legal powers, and

CONSIDERING:

That Law 67 of September 1, 2011, reformed Decree-Law 1 of July 8, 1999, and created the Securities Market Superintendence (hereinafter: the Superintendence), as an autonomous entity of the State, with legal personality, its own assets, and administrative, budgetary, and financial independence.

That the Board of Directors, in accordance with Articles 5, 6, 10 (numeral 1), 19, and 20 of the Single Text of the Securities Market Law (hereinafter: Single Text), acts as the Highest Consultative, Regulatory, and Policy-Setting Body of the Superintendence and has among its attributes the power to adopt, reform, and revoke Agreements that develop the provisions of the Securities Market Law.

That the Superintendence, by virtue of Article 3 of the Single Text, has the general objective of regulating, supervising, and auditing the securities market activities carried out in the Republic of Panama or from it, promoting legal certainty for all market participants and guaranteeing transparency, with special protection of investors' rights.

That Articles 25 and 26 of the Single Text establish the registration and supervision fees that persons requesting registrations and licenses from the Securities Market Superintendence must pay.

That Article 27 of the Single Text sets forth the criteria for determining fees, stating they "must bear a strict relationship with the costs incurred by the Superintendence to fulfill its functions rationally and efficiently in accordance with its budget."

That Article 157 of the Single Text establishes that the following must be registered with the Superintendence and are considered registered investment societies: i) Those that publicly offer their participation shares in the Republic of Panama and must be registered with the Superintendence in accordance with Title V of this Law, and ii) Those that are administered in the Republic of Panama or from it, unless they are considered private investment societies.

That the Superintendence, through Agreement No. 5-2004 of July 23, 2004, adopted the procedure for registration requests of the investment societies described in Article 157 of the Single Text, as well as the rules for their functioning and operation.

That through Agreement No. 11-2013 of December 23, 2013, the criteria for the form and dates of payment of registration and supervision fees that regulated and supervised subjects must pay to the Superintendence were established.

That through Law 66 of December 9, 2016, among other things, the registration and supervision fees for investment societies provided for in Articles 25 and 26 of the Single Text were modified, resulting in the following:

Article 25. Registration Fees. Persons requesting the following registrations or licenses from the Superintendence shall be subject to the payment of the following fees:

5. Investment society, five thousand balboas (B/. 5,000.00). This fee shall be calculated per investment society. In the case of subfunds or fund families, an additional fee of one thousand five hundred balboas (B/. 1,500.00) shall be established.

... (The bolding is ours)

Article 26. Supervision Fees. The following registrations and licenses at the Superintendence shall be subject to the payment of an annual supervision fee as detailed below:

1. Investment society, 0.0020% of the average net asset value of the investment society during the year, corresponding to the participation shares registered with the Superintendence and sold in the Republic of Panama, with a minimum of one thousand balboas (B/. 1,000.00) and a maximum of twenty thousand balboas (B/. 20,000.00). This fee shall be calculated per investment society and per fund or subfund that it may have.

(La negrita es nuestra)

That according to Article 19 of the Single Text, administrative positions shall be adopted by the Superintendent and shall be called opinions, which shall have binding character and be of general application. The opinions shall be limited to expressing the administrative position of the Superintendence regarding the application of a specific provision of the Securities Market Law to a particular case, but they cannot contradict decisions issued by the Board of Directors or the Executive Branch on the same matter.

That through Opinion No. 5-2024 of July 22, 2024, the Securities Market Superintendence of its own motion established an administrative position to clarify the meaning and scope of the rules regarding the payment of registration and supervision fees for investment societies, following the modifications to Articles 25 and 26 of the Single Text through Law 66 of December 9, 2016, in order to avoid erroneous application in the formula for calculating these fees, given that the Superintendence registers, in this case, the investment vehicle known as an investment society or "fund," however, in registration requests and supplements, the market uses different terms such as: series, classes, among other designations, which could generate confusion with the determination of subfund or family of funds established for the purpose of paying registration and supervision fees for investment societies.

That the aforementioned Opinion concludes that for the purposes of the registration and supervision fees for investment societies provided for in Articles 25 and 26 of the Single Text, the term or designation subfunds corresponds to the investment society (also known as "funds" of investment) that forms part of the structure of an umbrella investment society that maintains a differentiated share capital from the mother investment society and that will issue its own participation shares. Similarly, the additional registration and supervision fees established for investment societies in said articles of the Law shall also apply in the case of "group" or "family of funds," where several investment societies operate jointly and are registered with the Superintendence simultaneously and through a joint request, in accordance with Article 16 of Agreement No. 5-2004 of July 23, 2004.

That the Superintendence deems it necessary for the benefit of our regulated entities and the general public, once the administrative position adopted by the Superintendence through Opinion No. 5-2024 of July 22, 2024, has been established, to clarify in the regulatory Agreements the meaning and scope of the rules regarding the payment of registration and supervision fees for investment societies, following the modifications to Articles 25 and 26 of the Single Text through Law 66 of December 9, 2016, in order to avoid erroneous application in the formula for calculating these fees, which corresponds to making the respective adjustments to the texts of Agreement No. 5-2004 of July 23, 2004, and Agreement No. 11-2013 of December 23, 2013.

That it should be noted that Article 323 of the Single Text establishes that when the Superintendence contemplates adopting an Agreement, it must consider to determine if the action is necessary and appropriate: (a) the public interest, (b) the protection of investors, and (c) whether the action promotes efficiency, market competition, and capital formation.

That taking into account that the provisions contemplated in this Agreement are limited to clarifying the meaning and scope of the rules for charging registration and supervision fees for investment societies registered in accordance with the administrative position of the Superintendence, it corresponds to apply what is established in Article 326 of the Single Text, regarding actions that grant an exemption or eliminate any restriction, therefore the provisions contained in Title XV, regarding the "Administrative Procedure for the Adoption of Agreements," shall not be applicable to this Agreement.

That, by virtue of the foregoing, the Board of Directors of the Securities Market Superintendence, in the exercise of its legal powers,

RESOLVES:

ARTICLE FIRST: MODIFY numeral 5 of Article 15 of Agreement No. 5-2004 of July 23, 2004, which shall read as follows:

Article 15. Registration Request.

Before commencing operations or performing any act aimed at offering its shares or participation shares in the Republic of Panama, the Investment Societies referred to in Article 10 of this Agreement must register with the Securities Market Superintendence.

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5. Identification of the type of fund (investment society) in question, its category according to the redemption option, its category according to risk, and its structure, which must be clearly detailed.

ARTICLE SECOND: ADD numeral 17 to Article 16 of Agreement No. 5-2004 of July 23, 2004, which shall read as follows:

Article 16. Documents to accompany the request.

The registration request of an investment society must be accompanied by the following documentation:

3. Proof of payment of the corresponding Registration Fee, which shall be provided: (a) in the case of requests made physically at the Superintendence: at the time of submission of the registration request; and (b) in the case of requests made through the official email of the Superintendence: once the credit of the fee payment is verified in the Superintendence's bank account.

In the case of registration requests for umbrella investment societies that include within their structure other investment societies with share capital different from the main investment society and which will issue its own participation shares; or investment societies that wish to operate jointly under the concept of "family" or "group" of investment societies, the registration fee for the investment society and the additional fee for subfunds or fund families must be paid separately, to comply with what is established in numeral 5 of Article 25 of the Single Text of the Securities Market Law.

ARTICLE THIRD: MODIFY Article 2 of Agreement No. 11-2013 of December 23, 2013, which shall read as follows:

Article 2. (Registration Fees)

Persons requesting from the Superintendence the registration, license, or any of the services established in Article 25 of the Securities Market Law must pay the corresponding registration fee.

Registration fees respond to the expenses incurred by the Superintendence in the process of attention, analysis, and qualification of the received request, according to the complexity of the matter, as well as the time and experience dedicated by the personnel to direct it to its completion, whose satisfactory result will depend on the compliance with legal requirements by the applicant.

The person requesting the registration of a public offer of securities and/or the registration of a public offer of a revolving securities program must pay the registration fee corresponding to and established separately by Article 25 of the Securities Market Law.

In the case where two different types of public offers of securities are contemplated in the same prospectus, that is: on the one hand, the public offer of securities within a revolving securities program and, on the other hand, the public offer of securities outside a revolving securities program, the registration fee for each of these types of public offers must be paid separately, to comply with what is established in Article 25, numeral 1, of the Securities Market Law.

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In the case where an umbrella investment society, after its registration with the Superintendence, decides to constitute and incorporate within its umbrella structure an investment society with share capital different from the main investment society and which will issue its own participation shares, it must pay the additional registration fee established in numeral 5 of Article 25 of the Single Text of the Securities Market Law, prior to the date on which the incorporation of this new investment society into its structure is perfected.

ARTICLE FOURTH: MODIFY Article 14 of Agreement No. 11-2013 of December 23, 2013, which shall read as follows:

Article 14. (Calculation of the supervision fee for investment societies).

Registered investment societies shall make the payment of their annual supervision fee no later than before the last business day of the month of May of each year. If the investment society is notified of the resolution granting the registration of participation shares in any month of the year, in addition to the payment of the Registration Fee, it must make the corresponding payment of its Supervision Fee.

Umbrella investment societies that include within their structure other investment societies with share capital different from the main investment society and which will issue its own participation shares; or investment societies registered jointly under the concept of "family" or "group" of investment societies shall calculate and pay their annual supervision fee per investment society registered within their structure in accordance with what is provided in numeral 3 of Article 26 of the Single Text of the Securities Market Law.

ARTICLE FIFTH: MODIFY Article 6 of Agreement No. 1-2014 of May 28, 2014, which shall read as follows:

Article 6 (Documents to accompany the request)

The registration request of a Venture Capital Investment Society must be accompanied by the documentation indicated in numerals 1, 2, 3, 4, 5, 6, 7, 8, 10, 13, 16, and 17 of Article 16 of Agreement 5-2004 of July 23, 2004. However, the prospectus, indicated in numeral 7 of Article 16 of Agreement 5-2004 of July 23, 2004, must be presented in accordance with Article 7 (Prospectus) of this Agreement.

The Venture Capital Investment Society must obtain prior authorization of the draft bylaws, or reforms thereto, in accordance with Article 332 of the Securities Market Law, regulated by means of Agreement 7-2013 of September 10, 2013.

ARTICLE SIXTH: VALIDITY. This Agreement shall enter into force from its promulgation in the Official Gazette.

PUBLISHED AND COMPLY,

Adriana Caries President of the Board of Directors

Luis Secretary

Brown of the Board

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