Norm Reforming Article 13 of the Standard on Deposit and Investment Limits

Page 1 of 2 Resolution No. CD-SIBOIF-1262-2-AGOS3-2021 Dated August 3, 2021 STANDARD REFORMING ARTICLE 13 OF THE STANDARD ON DEPOSIT AND INVESTMENT LIMITS

The Board of Directors of the Superintendence of Banks and Other Financial Institutions,

CONSIDERING

I

That Article 10, item 11, of Law No. 316, "Law of the Superintendence of Banks and Other Financial Institutions," and Articles 53, 54, and 57, item 1, of Law No. 561, "General Law of Banks, Non-Bank Financial Institutions, and Financial Groups," both legal frameworks contained in the Nicaraguan Legal Digest of the Banking and Finance Sector, published in La Gaceta, Official Gazette No. 164, of August 27, 2018, and its updates, empower the Board of Directors of the Superintendence of Banks and Other Financial Institutions to issue standards related to the investments and deposits of supervised financial institutions, as well as the limits for this type of operation in the country and abroad.

II

That it is necessary to reform Article 13 of the Standard on Deposit and Investment Limits, in order to update it in accordance with business practices related to the encumbrance of deposits and investments in foreign financial institutions.

In exercise of its powers,

HAS ISSUED

The following,

CD-SIBOIF-1262-2-AGOS3-2021 STANDARD REFORMING ARTICLE 13 OF THE STANDARD ON DEPOSIT AND INVESTMENT LIMITS

FIRST: Article 13 of the Standard on Deposit and Investment Limits contained in Resolution No. CD-SIBOIF-650-2-OCT20-2010, of October 20, 2010, published in La Gaceta, Official Gazette No. 2, of January 6, 2011, and its reforms, is hereby reformed, which shall read as follows:

"Art. 13. Encumbrance of deposits and investments.- Financial institutions are prohibited from constituting any type of encumbrance on deposits held in, or investments in securities issued by other entities. The following cases are exempt from the above prohibition:

Page 2 of 2 a) Encumbrances constituted for the purpose of obtaining direct financing or contingent operations requested by the depositing or investing institution, provided that such encumbrances are constituted and accounted for in accordance with the corresponding regulations. b) Encumbrances required by the depositary entity for the confirmation of contingent operations, such as letters of credit, on behalf of clients of the depositing financial institution, provided that the aforementioned clients constitute liquid collateral in favor of the depositing financial institution in an amount equal to or greater than the encumbered amount, or that the operation is supported by a previously authorized loan.

SECOND: This standard shall enter into force upon its notification, without prejudice to its subsequent publication in La Gaceta, Official Gazette.

(F) Illegible Magaly María Sáenz Ulloa (F) Illegible (Luis Ángel Montenegro E) (F) Illegible Fausto Reyes (F) Illegible (Silvio Moisés Casco Marenco) (F) Illegible (Ervin Antonio Vargas Pérez).

SAÚL CASTELLÓN TÓRREZ Ad Hoc Secretary of the Board of Directors SIBOIF