Technical Standards for Closed-End Venture Capital Investment Funds

CNBCR-12/2018
NDMC-18
TECHNICAL STANDARDS FOR CLOSED-END VENTURE CAPITAL INVESTMENT FUNDS Approval: 21/11/2018 Validity: 10/12/2018

THE COMMITTEE OF STANDARDS OF THE CENTRAL BANK OF RESERVE OF EL SALVADOR,

CONSIDERING:

I. That Article 5 of the Investment Funds Law establishes that the Superintendence of the Financial System is the competent authority to supervise the compliance and execution of the aforementioned Law; likewise, to supervise Investment Fund Managers, their operations, and other participants regulated by the same.

II. That Article 6 of the Investment Funds Law establishes that it is the responsibility of the Central Bank of Reserve of El Salvador to issue the necessary Technical Standards for the application of the aforementioned Law.

III. That Article 47, third paragraph of the Investment Funds Law, regulates that the content of the extract of the Fund's Internal Regulations and the Placement Prospectus for Participation Quotas shall be established by the Central Bank of Reserve of El Salvador through technical standards.

IV. That Article 62 of the Investment Funds Law refers to the documents that the Closed-End Investment Fund Manager must accompany with the application to be recorded in the Register of Investment Funds maintained by the Superintendence of the Financial System.

V. That Article 63 of the Investment Funds Law establishes that Closed-End Investment Funds, as well as their issuances, must be recorded in the Register maintained by the Superintendence of the Financial System for such purposes and subsequently must be registered in a stock exchange, complying with the requirements established in the Securities Market Law insofar as they do not contradict the aforementioned Law.

VI. That Article 97 of the Investment Funds Law establishes that Closed-End Investment Funds may invest off-exchange in securities issued by companies whose shares are not traded on an exchange and whose purpose is investment in specific business projects to be developed in the medium and long term.

VII. That Article 98 of the Investment Funds Law establishes that Funds that invest in companies whose shares are not traded on an exchange and whose purpose is investment in specific business projects to be developed in the medium and long term, may have direct or indirect control of an issuer, an Investment Fund, or a Securitization Fund.

VIII. That Article 99 of the Investment Funds Law establishes that when Closed Funds invest in companies whose shares are not traded on an exchange and whose purpose is investment in business projects to be developed in the medium and long term, they must clearly state this in their investment policy.

IX. That Article 9, second paragraph, numerals 10 and 11 of the Special Law for the Prevention, Control, and Sanction of Money Laundering, Terrorism Financing, and Financing of the Proliferation of Weapons of Mass Destruction, regulates that obligated subjects must establish internal audit mechanisms, using the risk-based administration principle, to verify compliance with what is prescribed in said Law; and have external or specialized audit for risk management to evaluate and issue reports on the evaluation of the management of the prevention system. (3)

X. That Article 15, first paragraph of the Special Law for the Prevention, Control, and Sanction of Money Laundering, Terrorism Financing, and Financing of the Proliferation of Weapons of Mass Destruction, establishes that obligated subjects, in order to identify their clients and users, including the controller, recipient, or final beneficiary, manage the risks associated with them and obtain appropriate information about the commercial relationships established or their continuity, must take reasonable measures to carry out due diligence procedures. (3)

XI. That the Consumer Protection Law establishes the rights of consumers in relation to the obligations of financial service providers. (3)

THEREFORE,

in virtue of the regulatory powers conferred by Article 99 of the Law on Supervision and Regulation of the Financial System,

AGREES to issue the following:

TECHNICAL STANDARDS FOR CLOSED-END VENTURE CAPITAL INVESTMENT FUNDS

CHAPTER I
OBJECT, SUBJECTS, AND TERMS

Object
Art. 1.- These Standards aim to establish the provisions applicable to Closed-End Venture Capital Investment Funds regarding their authorization, registration, operation, valuation policies for their investments, and other related aspects. Closed-End Investment Funds that include, in their investment policy, partial investments in securities issued by companies whose shares are not traded on an exchange and whose purpose is investment in business projects to be developed in the medium and long term, shall apply the provisions regulated in these Standards to such investments.

Subjects
Art. 2.- The subjects obligated to comply with the provisions established in these Standards are:
a) Investment Administrators of Closed-End Venture Capital Funds, authorized by the Superintendence of the Financial System, who work for an Investment Fund Manager; b) Investment Fund Managers authorized by the Superintendence of the Financial System that manage Closed-End Investment Funds in accordance with what is established in the Investment Funds Law; and c) Selling Entities or Agents.

Terms
Art. 3.- For the purposes of these Standards, the terms indicated below have the following meaning:
a) Investment Administrator: A natural person who is employed by an Investment Fund Manager to manage the decision-making and execution of investments made with resources from Closed-End Venture Capital Funds in accordance with the internal regulations and investment policy thereof. This category includes the Investment Manager or their substitute, according to the organizational structure of the Manager; b) Central Bank: Central Bank of Reserve of El Salvador; c) Exchange: Stock Exchange constituted in El Salvador and registered with the Superintendence of the Financial System; d) House: Stockbrokerage House; authorized and registered with the Superintendence of the Financial System; e) Financial Conglomerate: In accordance with Article 113 of the Banks Law, it is a set of companies characterized by the fact that more than fifty percent of their respective share capital is owned by a controlling company, which is also a member of the Conglomerate. The controlling company of the Conglomerate may be a company with exclusive purpose or a bank constituted in the country; f) Quotas: Participation Quotas; g) Selling Entity or Agent: Stockbrokerage House as well as another legal entity authorized by the Superintendence of the Financial System for the sale of Investment Fund quotas and which has signed an agency contract with a Manager for the sale of quotas of Closed-End Venture Capital Investment Funds; h) Funds: Investment Funds; i) Venture Capital Funds: Closed-End Investment Funds whose main object is to invest off-exchange, in securities issued by companies whose shares are not traded on an exchange and whose purpose is investment in business projects to be developed in the medium and long term; j) Manager: Investment Fund Management Company; k) Business Group: In accordance with Article 5, letter n) of the Securities Market Law, it is that in which a company or set of companies have a common controller, who acting directly or indirectly participates with at least fifty percent in the share capital of each of them or that have common shareholders who, directly or indirectly, hold at least fifty percent of the capital of another company, which allows to presume that the economic and financial performance is determined by common interests or subordinate to the group; l) Investor: Natural or legal person interested in acquiring quotas of an Investment Fund; m) Funds Law: Investment Funds Law; n) Participant: Investor in an Investment Fund; o) Related Persons: In accordance with Article 29 of the Investment Funds Law, related persons to the Manager are those indicated in Article 204 of the Banks Law; p) Investment Policy: In accordance with Article 99 of the Funds Law, the investment policy defined in the internal regulations and prospectus of each Fund, which indicates the minimum and maximum limits of investment in each of the types of assets contemplated in Article 36 of these Standards; q) Placement Prospectus: Placement prospectus for
participation quotas; r) Register: Public Stock Register of the Superintendence of the Financial System; s) Internal Regulations: Document containing all the specific characteristics and rules governing the operation of a specific Investment Fund; and t) Superintendence: Superintendence of the Financial System.

CHAPTER II
GENERAL PROVISIONS ON VENTURE CAPITAL FUNDS

Applicable Regulations
Art. 4.- The provisions contained in the following Standards approved by the Central Bank, through its Committee of Standards, are applicable to Venture Capital Investment Funds in all that does not contradict these Standards:
a) “Technical Standards for the Authorization of Constitution, Start of Operations, Registration, and Management of Operations of Investment Fund Managers” (NDMC - 02); b) “Technical Standards for the Authorization and Registration of Investment Administrators of Investment Funds” (NDMC - 03); c) “Technical Standards for the Authorization, Registration, and Operation of Investment Funds” (NDMC - 06); d) “Technical Standards for the Investments of Investment Funds” (NDMC - 07); e) “Technical Standards for the Calculation of the Value of the Participation Quota and Allocation of Participation Quotas” (NDMC - 11); f) “Technical Standards for the Transmission and Disclosure of Information of Investment Funds” (NDMC-13); and g) “Technical Standards for the Transfer or Merger of Investment Funds” (NDMC - 16).

Characteristics of a Venture Capital Fund
Art. 5.- A Closed-End Investment Fund will be considered a Venture Capital Fund when its main object is to invest off-exchange, in shares and debt securities issued by companies whose shares are not registered in an exchange and whose purpose is investment in business projects to be developed in the medium and long term. This type of investment will be subject to the term established in the contract that, in accordance with what is stipulated in Article 30 of these Standards, the Manager will sign with the companies in which it will invest. Such companies will be referred to as “companies subject to investment by the Fund”. A business project is understood as the business initiative that will be developed by a company subject to investment by the Venture Capital Fund. The Manager must verify that the selected companies meet the conditions established in Article 42 of these Standards.

Art. 6.- Venture Capital Funds may have direct or indirect control of the company in which they invest, in accordance with what is established in Article 98 of the Funds Law, considering their investment and the contract signed between the Manager and the companies subject to investment by the Funds, in accordance with what is established in Article 30 of these Standards. The Manager must clearly define in the internal regulations and placement prospectus of the Fund, the business of the companies eligible to be subject to investment by the Fund.

Identification and Profile of the Investor
Art. 7.- The Manager must clearly and precisely establish in the internal regulations, the risk profile of the investor to whom the Venture Capital Fund is oriented, which must be consistent with the object of the Fund.
The Manager must have policies and procedures to determine the risk profile of investors in order to categorize them correctly and determine those that match the investor profile to which the Venture Capital Fund is directed; for this, the Manager must inform clearly, timely, and accurately about its characteristics, explaining at least, the business of the company and the type of investments it will acquire from the company that will be subject to investment by the Fund, that Venture Capital Funds are of medium or long term, and that if the investor decides to obtain liquidity from their quotas in the secondary market on an exchange, this will depend on the market conditions existing at that time. Likewise, the investor must declare in writing that they are aware of the risks associated with the investment they will make.

Art. 8.- It is the responsibility of the Manager to ensure that the quotas of Venture Capital Funds are sold to investors whose risk profile matches the investor profile to which the Fund has been directed.
In the event that the Manager sells quotas to investors whose risk profile does not match the profile required by the Fund, it must comply with what is established in Chapter VI of the “Technical Standards for the Process and Registration of Orders to Buy and Sell Securities of Stockbrokerage Houses” (NDMC - 01), documenting that the Manager issued a warning to the investor about the main risks related to the Venture Capital Fund and the characteristics of the quotas, the object and investment policy of the Fund, and that such Fund is not consistent with the risk profile determined in the analysis performed on the investor, specifying the customer category determined by the Manager or agent. The aforementioned document must be signed by the participant and by the General Manager in accordance with the Technical Standards referenced in this article. If the sale of Venture Capital Fund quotas is carried out through the intermediation service provided by a House, it must comply with what is established in this article and Articles 7 and 9 of these Standards, observing in the placement and negotiation of quotas, what is regulated in the Securities Market Law, other laws, and applicable regulations.

Promotion of the Venture Capital Fund
Art. 9.- The Venture Capital Fund must clearly express its object in its internal regulations, in any document sent to participants, as well as in any information regarding the Fund disseminated by the Manager through its website or any promotional or advertising material. Likewise, they must express in their internal regulations, the types of medium or long-term business projects in which the Fund will invest, indicating also the companies that are subject to investment by the Fund. In the dissemination of information and promotion of the Venture Capital Fund, it is the responsibility of the Manager to ensure that the name of the Fund and its object do not induce error or confusion for investors or participants, regarding its investment policy, its risk, or the liquidity of the quotas. The Manager and the persons performing the function of selling quotas in accordance with what is established in Article 26 of the Funds Law, will be responsible for explaining to the investor the characteristics of the Venture Capital Fund, clearly specifying the companies subject to investment by the Fund, the types of medium and long-term business projects that the companies will develop, as well as the valuation methods for the investments made in the companies subject to investment in accordance with what is established in the internal regulations and placement prospectus of the Fund.

CHAPTER III
AUTHORIZATION AND REGISTRATION OF VENTURE CAPITAL FUNDS

Application for Registration of the Venture Capital Fund and Authorization of Documents Art. 10.- For the authorization of the entry in the Register of Closed Funds, the legal representative or attorney of the Manager must present to the Superintendence, an application accompanied by the following documentation and information:
a) Certification of the agreement of the Board of Directors of the Manager in which the constitution of the Venture Capital Fund was agreed, as well as the approval of the internal regulations and the placement prospectus; b) Draft of the issuance of participation quotas; c) Internal regulations, which must include the minimum content defined in Annex No. 1 of these Standards; d) Placement prospectus for participation quotas, which must include the minimum content defined in Annex No. 2 of these Standards; e) Model of subscription contract for participation quotas between the Manager and the participant; f) Draft of the documents related to the guarantee that the Manager will constitute or modify for the Venture Capital Fund, according to its nature, considering what is established in Article 22 of the Funds Law; g) Certification of the agreement of the Board of Directors of the Manager in which the entity that will be the representative of the beneficiaries of the guarantee is designated; h) Acceptance of the entity as representative of the beneficiaries of the guarantee; i) Valuation method for investments in securities in accordance with what is established in Article 102 of the Funds Law; j) Manual of procedures and policies for the handling of operations carried out in the administration of the Venture Capital Fund, responsible personnel who will intervene in such procedures, including flowcharts that describe the Fund management process in which activities, departments, hierarchical levels involved, controls on the companies in which the Fund will invest, and model forms that will be used in the administration of Venture Capital Funds, such as: signature register, customer identification forms, account statements, daily availability control, among others; k) Name of the person(s) designated as investment administrator(s), specifying the date of authorization of the registry entry by the Superintendence; l) Projections of income and expenses flows for the first five years of the Venture Capital Fund. If the term of the Fund is less than that established in this letter, the projections will be presented for the term of maturity of the Fund; m) Accounting system of the Fund to be used by the Manager and the description of the computer platform on which it has been developed, description of its information systems, description of information backups, security and controls in the systems. The accounting systems must be presented in accordance with the “Accounting Manual for Investment Funds” (NDMC - 08), approved by the Central Bank through its Committee of Standards; and n) Other documentation and information necessary due to the nature of the Fund. In the application, the means to receive notifications and the designation of persons commissioned for such effect must be established. (1) The projections referred to in letter l) of this article will be made in accordance with the model established by the Manager, documenting the basic assumptions
of such projections, which must be coherent, supporting each of the variables of the model used. The application and documentation may be presented through the means made available by the Superintendence, which may be electronic. In any case, the term referred to in the first paragraph of Article 13 of these Standards will begin to run from the next business day after the application has been presented. (1)

Model of Subscription Contract for Participation Quotas Art. 11.- The subscription contract model must include at least what is established in the “Technical Standards for the Authorization, Registration, and Operation of Investment Funds” (NDMC - 06) and observe what is regulated in Article 22 of the Consumer Protection Law and what is established in the Regulations of the Consumer Protection Law regarding the adhesion contract.

Extract of Internal Regulations and Placement Prospectus Art. 12.- The Manager must prepare an extract of the internal regulations and placement prospectus, which will form part of the respective internal regulations and placement prospectus. These extracts will contain in summary form the information detailed in Annex No. 1, numeral 5) and Annex No. 2, numeral 6) of these Standards.

Authorization Procedure in the Register
Art. 13.- Upon receiving the application for authorization of entry in the Register, in accordance with what is established in Article 10 of these Standards, the Superintendence will proceed to verify compliance with the requirements defined by the Funds Law and these Standards, having a maximum term of thirty business days in accordance with Article 62 of the Funds Law for the authorization or denial.

CNBCR-12/2018
NDMC-18
TECHNICAL STANDARDS FOR CLOSED-END VENTURE CAPITAL INVESTMENT FUNDS Approval: 11/21/2018 Validity: 12/10/2018

from the corresponding entry authorization. (1) If the request is not accompanied by the complete and properly formatted information detailed in Article 10 of these Standards, the Superintendency, due to the lack of necessary requirements, may require applicants to present the missing documents within a period of ten business days counted from the day following the notification, a period that may be extended at the request of the applicants, when there are reasons justifying such extension. (1) The Superintendency in the same notice will indicate to the applicants that if they do not complete the information within the aforementioned period, it will proceed without further procedure to archive the request, reserving their right to present a new request. (1)

If after the analysis of the documentation presented in accordance with Article 10 of these Standards, the Superintendency has observations or when the documentation or information presented is not sufficient to establish the facts or information to be accredited; the Superintendency may warn the Manager once to remedy the deficiencies communicated or present additional documentation or information requested. (1) The Manager will have a maximum period of ten business days counted from the day following the notification, to resolve the observations or present the information requested by the Superintendency. (1) The Superintendency may, through a reasoned resolution, extend the period indicated in the previous paragraph by up to another ten business days, when the nature of the observations or deficiencies warned requires it. (1)

Extension Period (1)
Art. 13-A.- The Manager may present to the Superintendency a request for extension of the periods indicated in the fifth paragraph of Article 13 of these Standards, before the expiration of said period, must express the reasons on which it is based and propose, if applicable, the relevant proof. (1) The extension period may not exceed ten business days and will start from the next business day following the expiration date of the original period. (1)

Suspension of the period (1)
Art. 13-B.- The thirty-day period indicated in the first paragraph of Article 13 of these Standards, will be suspended for the days that elapse between the notification of the requirement to complete information or documentation referred to in the second and fifth paragraphs of said article, until the interested parties remedy the observations required by the Superintendency. (1)

CNBCR-12/2018
NDMC-18
TECHNICAL STANDARDS FOR CLOSED-END VENTURE CAPITAL INVESTMENT FUNDS Approval: 11/21/2018 Validity: 12/10/2018 Once the complete and properly formatted documentation is presented, the Superintendency will proceed to respond to the request for authorization of the entry in the Closed-End Funds Register. (1)

Presentation of documents to the Superintendency Art. 14.- In the case that the agreement by the Superintendency is favorable, the Manager, within a maximum period of thirty business days from the communication of said agreement, must make the payment of registration fees and send the definitive documentation detailed below:
a) Deed of issuance of quotas; b) Internal regulations of the Fund, signed by the person authorized to do so, including all annexes referenced therein; c) Placement prospectus, signed by the person authorized to do so, including all annexes referenced therein; d) Documentation proving the constitution of the guarantee required in Article 22 of the Funds Law; and e) Quota subscription contract, duly deposited with the Superintendency. Received by the Superintendency the documentation and verified that it conforms to that authorized by the Superintendency, it will proceed to issue the registry entry of the Venture Capital Fund within a maximum period of five business days from the date the definitive documents are presented and will communicate it to the Manager within a maximum period of three business days from the date the registry entry was issued. Art. 15.- Subsequent to the receipt of the communication of the registry entry and prior to the placement of the quotas, the Manager will send to the Superintendency within a period of five business days, the certification of the point of the minutes of its Board of Directors, in which the appointment of the Surveillance Committee that will act provisionally until the first assembly of participants is recorded, in accordance with Article 77 of the Funds Law.

Modification of registry entry
Art. 16.- When the Manager intends to modify the internal regulations, the placement prospectus, subscription contract model or the deed of issuance of quotas, it must present to the Superintendency, the request for authorization of modification to said documents in accordance with Article 70 of the Funds Law, attaching for these purposes the following information and documentation:
a) Certification of the minutes of the extraordinary assembly of participants in which the modifications to the internal regulations were approved, once the Fund has reached the minimum assets and number of participants required; b) Certification of the agreement authorizing modifications to the placement prospectus, issued by the Board of Directors or by the assembly of participants, as applicable; c) Subscription contract model including the modifications to be made; d) Draft deed of issuance; e) Detail of the proposed modifications, including the justification for them, as well as supporting documentation when applicable; f) Draft documents that are required to be authorized by the Superintendency in which the proposed modifications requested will be incorporated; and g) Model of publication and communication that they will send to the participants when applicable, in which the content of each of the modifications is specified, detailing the contact information designated by the Manager to handle inquiries. The request and documentation may be presented through the means made available by the Superintendency, which may be electronic. In any case, the period referred to in the first paragraph of Article 16-A of these Standards will start to run from the next business day after the request has been presented. (1) Procedure for authorization of modification of registry entry (1) Art. 16-A.- Upon receipt of the request for modification of the registry entry, in accordance with Article 16 of these Standards, the Superintendency will proceed to verify compliance with the requirements defined by the Funds Law and these Standards, having up to thirty business days for the authorization or denial of the modification of the corresponding Registry entry. (1)

If the request is not accompanied by the complete and properly formatted information detailed in Article 16 of these Standards, the Superintendency, due to the lack of necessary requirements, may require the Manager to present the missing documents within a period of ten business days counted from the day following the notification, a period that may be extended at the request of the Manager when there are reasons justifying such extension. (1)

The Superintendency in the same notice will indicate to the Manager that if it does not complete the information within the aforementioned period, it will proceed without further procedure to archive the request, reserving its right to present a new request. (1) If after the analysis of the documentation presented in accordance with Article 16 of these Standards, the Superintendency has observations or when the documentation or information presented is not sufficient to establish the facts or information to be accredited; the Superintendency will warn the respective Manager once to remedy the deficiencies communicated or present additional documentation or information requested. (1)

CNBCR-12/2018
NDMC-18
TECHNICAL STANDARDS FOR CLOSED-END VENTURE CAPITAL INVESTMENT FUNDS Approval: 11/21/2018 Validity: 12/10/2018 The Manager will have a maximum period of ten business days counted from the day following the notification, to resolve the observations or present the information requested by the Superintendency. (1) The Superintendency through a reasoned resolution, will extend by up to another ten business days the period indicated in the previous paragraph, when the nature of the observations or deficiencies warned requires it. (1)

Extension Period (1)
Art. 16-B.- The Manager may present to the Superintendency a request for extension of the periods indicated in the fifth paragraph of Article 16-A of these Standards, before the expiration of said period, must express the reasons on which it is based and propose, if applicable, the relevant proof. (1) The extension period may not exceed ten business days and will start from the next business day following the expiration date of the original period. (1)

Suspension of the period (1)
Art. 16-C.-The thirty-day period indicated in the first paragraph of Article 16-A of these Standards, will be suspended for the days that elapse between the notification of the requirement to complete information or documentation referred to in the second and fifth paragraphs of said article, until the interested parties remedy the observations required by the Superintendency. (1) Once the complete and properly formatted documentation is presented, the Superintendency will proceed to notify the resolution in which it authorizes or denies the request for modification of the entry in the Fund Register, within a maximum period of three business days from the date the resolution is issued. (1)

Disclosure of modifications
Art. 17.- The modifications to the internal regulations, placement prospectus and deed of issuance resulting from the process of subsequent fund issuances, will enter into force fifteen days after notification of the authorization by the Superintendency, the Manager proceeding to disclose them through its website and inform the participants, the Manager must have procedures that document the receipt of said notification in accordance with Article 70 of the Funds Law and the "Technical Standards for the Submission and Disclosure of Information of Investment Funds" (NDMC -13), approved by the Central Bank through its Standards Committee.

Subsequent issuances
Art. 18.- The extraordinary assembly of participants may agree on a capital increase through new quota issuances, for which the same legal requirements necessary for the inscription and registration of the first issuance must be observed in the pertinent part, adding the certification of the corresponding agreement of the assembly of participants, in accordance with Article 71 of the Funds Law. (2) Art. 19.- For the request for authorization of capital increases, the Manager must observe what is established in Articles 70 to 74 of the Funds Law and its legal representative or attorney must present to the Superintendency a request accompanied by the following documentation and information:
a) Copy of the two reports from independent experts that support the determination of the placement price; b) Certification of the point of the minutes of the Session of the extraordinary assembly of participants in which it was agreed to approve the capital increase of the Fund through new quota issuances; c) Projections of income and expense flows considering the increase in the assets of the Venture Capital Fund for the following five years. If the maturity period of the Fund is less, the projections will be presented for the period remaining until said maturity; d) Characteristics of the investments that the Venture Capital Fund will make in accordance with its investment policy; e) Draft of the documents related to the constitution or modification of the guarantee of the Venture Capital Fund, according to its nature considering the capital increase; f) Draft deed of modification of the issuance; and g) Internal regulations and placement prospectus of quotas that includes the modifications approved in the extraordinary assembly of participants. The documents established in letters e), g) and h) of Article 10 of these Standards, must be presented to the Superintendency in the case that they require modification considering the increase in capital. In addition to what is established in this article, the authorization procedure established in Articles 16-A, 16-B and 16-C must be observed; as well as the disclosure process provided for in Article 17 of these Standards. (1) The request and documentation may be presented through the means made available by the Superintendency, which may be electronic. In any case, the period referred to in the first paragraph of Article 16-A of these Standards will start to run from the next business day after the request has been presented. (1) REPEALED (1) Notice of placement of subsequent issuances Art. 20.- In addition to the disclosure established in Article 17 of these Standards, the Manager must publish prior to the validity of the modifications approved by the Superintendency, the placement conditions of the subsequent issuances of a Fund, through a prominent notice in the newspaper indicated in the internal regulations, which must contain as a minimum the following information:
a) Name of the Fund; b) Name of the Manager; c) Reference to the extraordinary assembly of participants in which the increase in the Fund's assets was agreed; d) Date and session of authorization of the capital increase by the Superintendency; e) Specify the amount agreed to increase the Fund's assets, including the number of quotas it represents; f) Characteristics of the issuance such as: currency, term (detailing the expiration date of the issuance), placement price, number of quotas to be issued, method of updating the placement price during the subscription period; g) Specify the use or destination for which the capital increase is required; h) Risk classification of the Fund and the entity that issues it; i) Expiration date of the preferential subscription period; j) Generalities of the destination of the funds of this new issuance; k) Period for receiving requests with preferential subscription rights, considering that the maximum period is thirty days counted from the date of publication of the placement notice; l) Period for the issuance, subscription and payment of the quotas; m) Specify if the subscription will be carried out directly by the Manager or through a Mandataria; n) Specify if the placement will be carried out at the counter or on the Stock Exchange; o) Procedure in case the issuances are considered failed; p) Rights and obligations of the participants with respect to the capital increase; q) Detail of the place and person designated to handle inquiries related to the capital increase of the Fund; and r) Any other information that the Manager considers important. From the publication of the placement notice, quota owners have the right to subscribe to them, in accordance with the conditions and period established in Article 73 of the Funds Law. Art. 21.- In the case that the issuance results in failure, the Manager will proceed in accordance with what is established in Articles 66 and 74 of the Funds Law. Independent experts Art. 22.- Independent experts are understood to be those referred to in Articles 72 of the Funds Law and 19, letter a) of these Standards, to natural persons who possess a university degree in Engineering, Public Accounting, Business Administration, Economics or other related fields; and who have training in finance or, in default thereof, have received specialized training in asset valuation, related to the investments made by the Fund in accordance with its investment policy. The Manager is responsible for verifying that the independent experts do not have conflicts of interest such as those generated by being debtors of the Manager or the directors of the Manager, director, administrator or employee of the Manager or participants of the Fund. In the case that the independent expert is a company, the above is applicable to the personnel working in said company and who provide the service to the Manager for the determination of the placement price of subsequent issuances. Capital decreases Art. 23.-
Venture Capital Funds may carry out voluntary and partial decreases of their capital in the manner, conditions and periods indicated in the internal regulations. The decrease in the Fund's capital can be carried out for the purposes indicated in Article 76 of the Funds Law, the Manager must publish a notice in the newspaper indicated in the internal regulations, disclose it on its website and inform participants directly. For these purposes, the Manager must have procedures that document the receipt of said notification in accordance with Article 76 of the Funds Law and in the "Technical Standards for the Submission and Disclosure of Information of Investment Funds" (NDMC -13), approved by the Central Bank through its Standards Committee. Art. 24.- In the case of capital decrease of the Venture Capital Fund, the Manager, through its legal representative or attorney, must present to the Superintendency the following documentation and information:
a) Certification of the point of the minutes of the Session of the extraordinary assembly of participants in which the capital decrease was approved; b) Schedule of payment dates and methodology for calculating the return value of participation quotas; c) Internal regulations and placement prospectus that includes the modifications approved in the extraordinary assembly of participants; d) Detail the purpose for which the capital decrease has been agreed; and e) If the capital decrease is due to the absorption of losses generated in the Fund's operations, detail the causes that generated said losses. In addition to what is established in this article, the Manager must present, where applicable, the information and documents referred to in Article 16 of these Standards, observing the authorization procedure established in Articles 16-A, 16-B and 16-C; as well as the disclosure process provided for in Article 17 of these Standards. (1)

The request and documentation may be presented through the means made available by the Superintendency, which may be electronic. In any case, the period referred to in the first paragraph of Article 16-A of these Standards

CNBCR-12/2018
NDMC-18
TECHNICAL STANDARDS FOR CLOSED-END VENTURE CAPITAL INVESTMENT FUNDS Approval: 11/21/2018 Validity: 12/10/2018 will start to run from the next business day after the request has been presented. (1) Archiving of proceedings initiated by registration request Art. 25.- The Superintendency will proceed without further procedure to archive the proceedings initiated in the registration procedure detailed in these Standards, when the following situations occur:
a) The Manager has not remedied the observations or has not presented the information and documentation required, in accordance with Articles 10, 16, 19 and 24 of these Standards; b) The Superintendency revokes the authorization for not having presented the information required in Article 14 of these Standards; or c) The Manager presents a letter to the Superintendency, informing the desire to withdraw the request at any time. In any case, the interested parties will maintain their right to present a new request to the Superintendency, which will give rise to a new procedure.

Communication of quota placement
Art. 26.- For the purpose of placement of the quota issuance, the Manager must communicate to the Superintendency the planned placement date and its method of placement, within a minimum period of three business days prior to the planned date for the placement of the issuance, attaching a copy of the agreement or resolution adopted by the competent authority of the Manager regarding this matter. (1)

CHAPTER IV
OPERATION OF VENTURE CAPITAL FUNDS

Assets of Venture Capital Funds
Art. 27.- Venture Capital Funds must reach the minimum assets and number of participants referred to in Article 61 of the Funds Law, within a period of six months counted from the date the Fund was entered in the Register and must permanently comply with said requirements. If the Venture Capital Fund does not reach the minimum assets and number of participants required in the period defined above or fails to comply with said requirements at any time, the Manager must communicate it to the Superintendency on the next business day, who may grant a period for compliance. When the Manager does not remedy the non-compliance indicated in the previous paragraph, it must communicate it to the Superintendency within two business days following the expiration of the granted period, proceeding to the liquidation of the Venture Capital Fund in accordance with what is established in Articles 61, 65, 66, 103 and 105 of the Funds Law and what is established in these Standards.

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In the event that the initial net assets of the Fund exceed the minimum required in Article 61 of the Funds Law and if upon concluding the period for the issuance, subscription, and payment of participation shares referred to in Article 65 of the Funds Law, the required net assets are not reached, the capital will be reduced to the amount effectively paid by the participants. The Manager must make the corresponding modifications to the internal regulations, the prospectus for the placement of participation shares, the issuance deed, and the participation share subscription contract, where applicable, observing what is established in Article 16 of these Standards.

The net asset value of the Venture Capital Fund, in accordance with what is established in Article 90 of the Funds Law, will be calculated by subtracting its liabilities from the value of its assets. This calculation is considered in obtaining the value of the share as established in Article 49 of these Standards.

Placement of Shares
Art. 28.- The primary placement of shares may be carried out at the counter of the Manager or on a stock exchange.

In accordance with what is established in Article 64 of the Funds Law, in the event that the Manager is interested in carrying out the primary placement with a commercial entity different from a Brokerage House, said entity must be previously authorized by the Superintendency in accordance with what is established in Article 26 of the Funds Law.

In any case, legal entities other than a Brokerage House interested in being authorized as a commercializing entity must comply with the requirements established in Chapter II of the “Technical Standards for the Commercialization of Participation Shares of Open-End Investment Funds” (NDMC-10), approved by the Central Bank through its Standards Committee, except for the computer system for the registration of contributions and redemptions.

In the placement of shares, the Manager must ensure that both it and the societies belonging to the same financial conglomerate or business group cannot be individual or joint holders of more than forty percent of the participation shares of the Venture Capital Fund, in accordance with what is established in Article 28 of the Funds Law.

Participation of the Manager in the administration of the investment target company Art. 29.- The Manager may exercise control over the investment target company in accordance with what is established in the fourth paragraph of Article 98 of the Funds Law. Likewise, the Manager, on behalf of the Venture Capital Fund, may participate in the administration and review of the activities developed by the societies in which it invests, provide technical assistance and financial advisory services in all those areas that contribute to improving their management capabilities, in accordance with what is agreed in the contract referred to in Article 30 of these Standards.

Contract between Manager and investment target company on behalf of the Fund Art. 30.- The Manager, on behalf of the Venture Capital Funds, must sign a contract with each of the societies in which it has invested and that meet the characteristics established in Articles 5, 42, and 43 of these Standards.

The contract aims to establish the conditions to which the investment made by the Venture Capital Fund will be subject and must be formalized prior to the disbursement made by the Fund. This contract must include at least the following:

a) Identification of parties signing the contract: Name, address, age, profession or occupation, Tax Identification Number (TIN), identity document of the legal representative or the person with sufficient legal authority to appear on behalf of the Manager and the investment target company on behalf of the Fund (must refer to the Notarial Deed of Constitution of the entities, the current social pact, and the power granted to the person appearing to sign the contract);

b) Terms regarding the sale of the issued securities of the investment target company by the Fund: the debt securities to be acquired, or in its case, the classes of shares, whether common or preferred;

c) Determination of the percentage of shares and debt values, where applicable, in which the Venture Capital Fund will be able to acquire, considering the limits established in its internal regulations;

d) Reason or purpose pursued with the investment: specify the characteristics and type of business project that the investment target company will carry out;

e) Contract term, specifying the termination of the contract and the Manager's investment in the investment target company;

f) Disinvestment mechanisms, specifying the exit conditions for the investment made by the Fund;

g) Conditions under which the Manager can redeem the investment early or rescind the contract signed with the society, if so agreed;

h) Prohibitions to which the societies in which the Fund has invested must be subject, if so agreed;

i) Obligation of the investment target company with the Manager, related to the generation and remittance of financial statements, information about its shareholders or partners and the society, specifying the form, terms, and periodicity thereof;

j) Other conditions established by the parties;

k) Signature of the persons authorized to sign the contract; and

l) Date.

In the event it is agreed that the Manager will provide advisory or technical assistance to the investment target company on behalf of the Fund or will participate in its Board of Directors, as well as any other type of assistance to be provided to said society, these conditions must form part of the contract signed.

Conclusion of the investment term
Art. 31.- Upon the conclusion of the term defined in the contract referred to in Article 30 of these Standards, Venture Capital Funds may extend their participation in the investment target company or conclude it, under the disinvestment modalities established in said contract, which must be detailed in its internal regulations.

Prevention and control of money laundering and due diligence (3) Art. 32.- The Manager must comply with the obligations established in the laws, instructions, and regulations in force related to the prevention, detection, and control of money laundering, terrorism financing, and the financing of the proliferation of weapons of mass destruction, in relation to the different activities it carries out, as well as the due diligence to future participants of the Venture Capital Fund, to the societies that will be the object of investment, verifying the use and destination of the funds in the projects carried out by said society and in general to any operation and service it carries out in its function as administrator of the Venture Capital Fund. (3)

CHAPTER V
INVESTMENTS OF VENTURE CAPITAL FUNDS

Evaluation of the business plan
Art. 33.- Prior to making the investments of the Venture Capital Funds in the investment target societies, the Manager must carry out the evaluation of the business plans, risks applicable to the economic sector, and audited financial statements of the society, the latter when available; taking into consideration those societies that at the time of their evaluation present projects with technical and financial feasibility with an expected return based on the level of risk in accordance with what is established in Articles 42 and 43 of these Standards.

Investments of the Venture Capital Fund
Art. 34.- The resources of the Venture Capital Funds, without prejudice to the amounts kept in cash, current account deposits, savings, or time deposits, must be invested according to their investment policy in:

a) Shares representing the capital of societies not registered on a stock exchange;

b) Debt securities not registered on a stock exchange, issued by societies that comply with what is established in Article 42 of these Standards; and

c) Public offering securities as established in Article 97 of the Funds Law, observing what is provided in the “Technical Standards for the Investments of Investment Funds” (NDMC-07), approved by the Central Bank through its Standards Committee.

Art. 35.- The shares and debt securities referred to in Article 34 of these Standards must be issued in favor of the Venture Capital Fund, observing the formalities established in the Commercial Code. The Manager will be responsible for the custody of the documents that back said securities, which evidence its investment in the investment target societies on behalf of the Venture Capital Fund.

Investment policy
Art. 36.- The Manager, in accordance with what is established in Article 99 of the Funds Law, in its investment policy must clearly express that the Venture Capital Fund will invest in societies whose shares are not traded on a stock exchange and whose purpose is the investment in business projects to be developed in the medium and long term.

Additionally, in the investment policy that will be included in the internal regulations of the Venture Capital Fund, the Manager must consider the nature of the values in which the Fund will invest in accordance with what is established in Article 34 of these Standards, the description and characteristics thereof, as well as its diversification.

Additionally, in its investment policy, it must establish the following aspects:

a) Definition of the size of the societies in which the Venture Capital Fund will invest, considering for this purpose the classifications established in the Law for Promotion, Protection, and Development of Micro and Small Enterprises and by the Ministry of Economy based on the level of annual gross sales and number of workers;

b) Business activity of the societies that will be the object of investment;

c) Specify the years of operation required for the societies or if the Venture Capital Fund will invest in societies that are starting operations;

d) Types of business projects that will be the object of investment by the Venture Capital Fund;

e) Sector or economic sectors towards which the investment will be oriented, such as: agriculture, industry, transport, electricity, commerce, services, among others;

f) Zone or geographic zones towards which the investment will be oriented;

g) Term in which the business project will be developed, whether medium or long term. Considered that the medium term is one to five years and long term is more than five years;

h) Criteria for maintaining investments and disinvesting from the investment target company;

i) Public offering securities as established in Article 97 of the Funds Law, specifying the types of Venture Capital Funds in which it will invest if applicable; and

j) Investment limits, specifying the minimum and maximum percentages of concentration in the following:

i. Concentration of investment in a society and by business group, if applicable;

ii. Zone or geographic zones; and

iii. Concentration by economic sector: agriculture, industry, transport, electricity, commerce, services, among others.

The Manager must include in its investment policy how it will participate in the management of the investment target company on behalf of the Venture Capital Fund, as well as the advisory services it could provide to said society.

Investment in liquid securities
Art. 37.- The Manager must keep resources of the Venture Capital Fund in cash, in bank deposits, and in liquid securities referred to in the “Technical Standards for the Investments of Investment Funds” (NDMC-07). For this purpose, within its investment policy, it must establish a percentage in relation to the net assets of the Venture Capital Fund, in order to adequately manage its liquidity risk.

Investment limits
Art. 38.- The investment limits in Venture Capital Funds will be established by the Manager in the internal regulations of the Fund in its investment policy. In the event that the Venture Capital Fund, in addition to the investment it makes in shares and debt securities not registered on a stock exchange, invests in public offering securities, it must observe the limits established in the “Technical Standards for the Investments of Investment Funds” (NDMC-07), approved by the Central Bank through its Standards Committee.

In consideration of what is established in letter j) of Article 29 of the Funds Law, the Manager cannot acquire unregistered securities issued by persons related to the Manager, from other Funds administered by it, or from societies of the same financial conglomerate or business group of the Manager.

Debt limits of the Venture Capital Fund
Art. 39.- The Venture Capital Fund cannot have debts exceeding fifty percent of its net assets. This limit includes the repo operations carried out by the Fund.

Modifications to the debt percentage established in the internal regulations and prospectus of the fund require the approval of the participants' assembly, observing the limit established in this article.

Term for compliance with limits
Art. 40.- To comply with investment limits, in the event that the Venture Capital Fund invests in public offering securities, it must comply with what is established in the “Technical Standards for the Investments of Investment Funds” (NDMC-07), approved by the Central Bank through its Standards Committee. For the case of investments in shares representing capital and debt securities carried out by the Fund, as established in letters a) and b) of Article 34 of these Standards, the Manager must comply with the investment limits within a term not exceeding ninety days from the moment the Fund reaches the net assets and minimum number of participants.

The Manager must observe the debt limits from the moment it reaches the net assets and minimum number of participants of the Fund referred to in Article 61 of the Funds Law.

Excesses to investment limits
Art. 41.- Excesses to the investment limits defined in the investment policy of the Venture Capital Fund, whether produced by causes attributable or not attributable to the Manager, must be notified to the Superintendency within three business days following the occurrence of the event, attaching the plan to reduce the excess, indicating additionally the causes thereof, the effects on the participants, and the activities that will be carried out to reduce said excesses.

The Manager will have a term of up to ninety days, counted from the date the excess occurred, to regularize the Fund's investments in public offering securities or instruments to the percentages established in its internal regulations, and one hundred eighty days in the event that the investment excess corresponds to shares representing capital and debt securities referred to in letters a) and b) of Article 34 of these Standards.

The terms may be extended for justified cause and when authorized by the Superintendency. The Manager cannot make new acquisitions of securities from the entities or securities involved in the excess until its situation is regularized.

Criteria to consider in the eligibility of societies Art. 42.- The Manager, in the eligibility of the societies that will be the object of investment by the Venture Capital Fund referred to in Article 5 of these Standards, must consider at least the following:

a) The society must be formally constituted and comply with the applicable commercial, tax, and labor laws of El Salvador;

b) That the company has financial statements and in the case the society has been constituted for more than one year, it will present audited financial statements at least annually, when available;

c) Have a specific medium or long-term business project to develop;

d) That the investment target society is in accordance with the investment policy defined by the Manager in its internal regulations;

e) Experience and technical capacity of the shareholders, directors, and managers of the society in the sector or activity in which the society's project will be developed;

f) Define in relation to the investment target society the limit of acceptance of debt (total liabilities/total assets), incorporating the percentage in the eligibility criteria of the society; and

g) Other considerations that the Manager, according to the objective of the Fund, establishes as a requirement for societies eligible to be the object of investment by the Venture Capital Fund, such as: minimum capital of the society, minimum investment amount to be made in the society, minimum annual sales or income, among others.

The Manager is responsible for maintaining the information that supports that each society in which it invests complies at all times with what is established in this article.

Regarding the project
Art. 43.- In the business project to be developed by the investment target society, the Manager will analyze and document at least the following:

a) Description of the project so that it is known what will be developed, when, how, where, if it will be developed in stages, if it includes equipment or other assets, and the provision of complementary services;

b) Have a term for its development;

c) Technical study of the project that includes the term and stages for its development, if applicable; location or zone or geographic zones, investment budget, investment schedule of the activities comprising the project, technical viability, legal feasibility, and associated permits according to the type of project, if applicable;

d) Financial feasibility study that includes cash flow projections for the term the project will last and the assumptions that support the projections, market study (target market, supply and demand analysis);

e) Have an investment plan and project financing structure, as well as its justification; and

f) Other considerations that the Manager establishes.

The Manager may carry out the evaluation of the project without the presentation of the associated permits referred to in letter c) of this article. This requirement will be necessary to present it prior to signing the contract between the Manager and the investment target society.

Evaluation by the Manager
Art. 44.- The Manager, in the analysis of the investment it will make for the selection of the investment target society by the Venture Capital Fund, must consider at least the following:

a) The shares of the society and the debt securities issued by the society must be subject to a valuation process in order to obtain their fair value;

b) The administrative organization of the society in accordance with the size and nature of its operations;

c) The analysis of the possible inherent risks that the Fund will assume with the project and the investment target society;

d) Evaluate possible situations that could affect the estimated behavior of the expected cash flows of the project, its risks, and respective management;

e) The result of the analysis of the financial statements;

f) The level of debt of the society;

g) Risk management policies, if available;

h) Minimum annual sales or income; and

i) Carry out the due diligence process for the society and its shareholders in accordance with what is established in the Special Law for the Prevention, Control, and Sanction of Money Laundering, Terrorism Financing, and Financing of the Proliferation of Weapons of Mass Destruction. (3)

Art. 45.- Once the evaluation and analysis referred to in Articles 42, 43, and 44 of these Standards are completed and the contract is signed in accordance with what is established in Article 30 of these Standards, the Manager will proceed to make the investment in the society.

Fair valuation of financial instruments
Art. 46.- When a Venture Capital Fund, in accordance with its internal regulations, invests in public offering securities, these must be valued individually at fair value in accordance with what is established in the “Technical Standards for the Calculation of the Value of the Participation Share and Allocation of Participation Shares” (NDMC-11), approved by the Central Bank through its Standards Committee.

Art. 47.- In consideration of what is established in Article 102 of the Funds Law, the Manager must elaborate a own methodology for the valuation of the financial instruments referred to in letters a) and b) of Article 34 of these Standards, in order to establish their fair value. Said methodology must be presented to the Superintendency at the time of requesting the Registration of the Venture Capital Fund.

The methodology elaborated by the Manager must comply at least with the requirements on the elaboration of valuation methodologies according to the “Technical Standards for Specialized Agents in Securities Valuation” (NDMC-09), approved by the Central Bank through its Standards Committee.

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Valuation of Shares
Art. 47.- The valuation of the shares of the Venture Capital Fund shall be performed daily, including weekends and holidays, and all expenses applicable to the Fund must be reflected on a daily basis.

The valuation must be carried out individually at market prices when applicable and under the premise of fair value, in accordance with the scope established in these Standards and in accordance with the periodicity established in its internal regulations.

To obtain the value of the share on a given date “t”, the following steps must be followed:

a) Daily Balance: preparation of a balance that includes the daily valuation of public offering values according to the last prevailing price vector as well as the value of investments in securities not listed on an exchange. The value of the Venture Capital Fund's equity shall be the result of subtracting the liability accounts on day “t” from the sum of all its assets at fair value; and

b) Calculation of the share value: the value of the shares on day “t” is established by dividing the value of the Fund's equity on day “t” without considering the shares issued and share payments on that day, when applicable, by the number of shares subscribed and paid at the beginning of day “t”. The value of the equity and the number of shares correspond to those calculated based on what is established in this article.

From the above, the calculation of the share value of a Venture Capital Fund is obtained by the following formula:

VCt = NAt / NCt

Where:
VCt = Value of the share on day “t”.
NAt = Net equity on day “t” to be considered for the calculation of the share value.
NCt = Number of shares subscribed and paid on day “t”.

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The share value must reflect the adjustment for quarterly and annual valuations, which are performed on the values issued and of the shares of the companies to which articles 47 and 48 of these Standards refer.

It is the responsibility of the Manager to value the assets in which the Venture Capital Fund invests, even if it has contracted the services of a price provider or an independent expert. Likewise, the Manager is responsible for maintaining the valuations of the assets of the Funds it manages in accordance with market conditions and what is established in article 102 of the Funds Law.

Distribution of Benefits
Art. 50.- Venture Capital Funds will distribute the net benefits received during the fiscal year, in accordance with the policy established in the internal regulations and placement prospectus, clearly specifying their calculation method, distribution periodicity, term, place and method of liquidation, and additionally must include the medium in which the distribution will be reported and the method to exercise the right to receive it. For these purposes, it will observe what is established in article 75 of the Funds Law.

CHAPTER VI
ADMINISTRATION OF VENTURE CAPITAL FUNDS

Internal Control in the Administration of the Venture Capital Fund Art. 51.- The Manager must define policies and procedures that include at least the following aspects:

a) Procedures for the evaluation and selection of investment target companies, as well as for the acquisition of securities issued by them;

b) Control procedures related to verifying compliance with the investment policy defined in the internal regulations;

c) Procedure for the analysis, evaluation and selection of projects of the companies, in which they must evaluate the technical and financial feasibility to which article 43 of these Standards refers;

d) Procedure for the investment process to be carried out with its different stages in the case it were applicable;

e) Policies and procedures on the type of technical, economic and financial advisory services that the Manager will provide to companies defined as investment targets and their business projects, when this type of service has been authorized by the Board of Directors in the case it is applicable, such situation must be included in the Fund's internal regulations;

f) Mechanisms and controls that the Manager will apply to ensure that the requirements determined by the general characteristics of the project, are met by the investment target company;

g) Mechanisms for the follow-up process of investment target companies, including compliance with the eligibility characteristics of the

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investment target companies;

h) Procedure for divestment in investment target companies, including the causes that motivate it, as is the case that the company does not maintain the eligibility conditions established in article 42 of these Standards. This procedure must be included in the contract signed by the company and the Manager;

i) Procedures for equal treatment of participants, with the aim of providing the same conditions and opportunities, avoiding any act, conduct, practice or omission that could be detrimental to their interests; and

j) Policies and procedures to detect, avoid and manage in its case conflicts of interest between the Manager and the Funds, with the companies in which it invests resources of the Venture Capital Fund, as well as with the participants of said Funds and conflicts that may occur between the different Investment Funds managed by the Manager. The divestment procedure referred to in literal h) of this article, must be approved by the Manager's Board of Directors. The Manager must have a file for each of the investment target companies and their business projects, which includes the evaluation documents to which articles 42, 43 and 44 of these Standards refer, as well as information relative to the follow-up of the development of the company's project in which it has invested the resources of the Venture Capital Fund.

Art. 52.- The Manager may contract the services of the financial feasibility study referred to in literal c) of article 51 of these Standards, the Manager must comply with what is established in article 30 of the Funds Law regarding service contracts, in any case the responsibility for such evaluation corresponds to the Manager. Likewise, the Manager must identify the professional responsible for the technical feasibility study, specifying if this is independent of the Manager, of the investment target company on behalf of the Fund and of the participants.

Art. 53.- The Manager that manages Venture Capital Funds must have knowledge of the sector or activity of the investment target company in which it will invest the resources of the Fund.

Management to be carried out by the Manager
Art. 54.- In the administration of Venture Capital Funds, the Manager must do the following:

a) Request from investment target companies, monthly financial statements, audited annual financial statements, periodic financial information, as well

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information relative to the project that is being developed, with the object that the Manager performs the corresponding analyses;

b) Have a record of investment target companies that includes: code assigned by the Manager, the name and corporate name of the company, date of incorporation, date of registration in the Commerce Registry, address and phone number of the company, identification of the legal representative, Board of Directors, business activity, main products or services, economic sector, size of the company, share capital, number of shares of the company, specify if the investment is in shares or debt securities, number of shares if applicable, amount of investment per company, percentage of the Fund's investment participation in relation to the equity of the investment target company;

c) Maintain the portfolio risk within reasonable parameters in relation to the Fund's object;

d) Verify that the companies in which it will invest its resources off-exchange, have sufficient payment capacity to meet their obligations;

e) Appoint the people who will participate in the Board of Directors, Committees, administration or management bodies of the investment target companies on behalf of the Fund, in case it were applicable;

f) Control and give permanent follow-up to the investment that is made in the investment target companies; as well as the appointment of the members of the administration or management body that direct the company and the substitutions, removals and incorporations of these;

g) Establish how the Manager will participate in the management of the investment target company, additionally, must specify the type of technical, economic and financial advisory programs that it will provide. These advisory services, in case they are agreed upon, must be included in the contract referred to in article 30 of these Standards;

h) Verify that the investment target companies on behalf of the Venture Capital Fund, comply with the business plan to carry out the specific business project to be developed, documenting such management and informing the participants' assembly;

i) Apply diligently the process of selection of investment target companies on behalf of the Fund as well as their projects;

j) Follow up on the inherent risks of the investment target company and of the projects developed by it;

k) Give timely follow-up to the project and to its stages in the case it were applicable, for the investment target company until its completion, documenting such follow-up and informing the participants' assembly;

l) Request from the investment target company, the information that is required by the Fund's Surveillance Committee and its participants; and

m) Have the documentation that records the modifications to the statutes and deed of incorporation of the investment target company, at the latest within thirty business days following the date on which they are registered in the Commerce Registry.

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Protection of the Business Project
Art. 55.- The Manager is responsible for monitoring that the investment target company has policies and guidelines on contracting insurance as well as following up on the provision of the services required for its proper care and handling, in case it is applicable its contracting. In the contracting of insurance that is carried out, the Manager must verify that it considers at least the following:

a) The insured amount must be at least the value of the project, which must be adjusted every time a valuation of it is performed;

b) That the quality of the contracted insurance does not deteriorate, for which it must review the insurance policies annually; and

c) That the contracted insurance covers when applicable, at least catastrophic insurance, fires and allied lines, of protection against risks for constructions in process, detailing the risks that such insurance does not cover.

Art. 56.- The Manager must have policies for the protection and confidentiality of patents, manufacturing process and trade secrets of investment target companies, for which it must identify the people with access to confidential information as well as the deduction of responsibilities and behavioral standards of said people.

Responsibility of the Investment Administrator Art. 57.- The Manager will establish the functions and responsibilities that investment administrators must fulfill, considering at least the following:

a) Evaluate and follow up on the assets that make up the investment portfolio of the Venture Capital Fund;

b) Comply with the guidelines established by the Manager for:

i. Investment decision making; and

ii. Determination of investment target companies on behalf of the Venture Capital Fund.

c) Present and propose to the Manager's Board of Directors, the analysis relative to the investment target companies as well as the projects to be developed by it, with the object that the Board of Directors authorizes the acquisition of investment securities in said company; and

d) Carry out the corresponding procedures with the investment target companies, with the object that the securities acquired to said company, are in favor of the Fund.
In order to ensure compliance with these functions in relation to the investment target company, the Manager must adapt its operational manuals.

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CHAPTER VII
DISCLOSURE AND REMITTAL OF INFORMATION

Art. 58.- In addition to the disclosure and remittal of information obligations established in the “Technical Standards for the Remittal and Disclosure of Information of Investment Funds” (NDMC-13), approved by the Central Bank through its Standards Committee, regarding disclosing, remitting and publishing on its website, the Manager must incorporate the information relative to Venture Capital Funds to which this chapter refers.

Advertising
Art. 59.- The information of the Investment Funds, as well as the advertising that is made about them, whether physical or electronic, disclosed by the Manager about the managed Funds, must not be false nor induce errors in the participants or investors. Such information must be clear, truthful, complete, timely and the same must be consistent with the characteristics of the Fund indicated in its internal regulations and in its placement prospectus. The Manager or the commercializing entity cannot guarantee the investment result or profitability to the participants. Guaranteeing profitability will be understood as the offer made by a Manager or the commercializing entity to all or certain participants, to obtain a certain gain on the invested capital, or to obtain a gain that fluctuates in a certain range, a minimum or a maximum, or the offer to maintain the amount invested by the participant.

Essential Information or Material Event
Art. 60.- In addition to what is established in the “Technical Standards for the Remittal and Disclosure of Information of Investment Funds” (NDMC -13), approved by the Central Bank through its Standards Committee, examples of essential information or material events about the Venture Capital Funds managed by the Manager are considered, any modification or information related to the following aspects:

a) The Contracting of the independent expert for the valuation of the investments on behalf of the Venture Capital Fund to which these Standards refer;

b) The divestments carried out by the Venture Capital Fund in the investment target companies; and

c) Any other information that could influence the valuation of the Fund's assets, the share value and in general, any information that can influence the appreciation of a participant regarding the performance of the Fund and the price of its shares in the market. The Manager is obligated to communicate any essential information or material event to the Superintendence on the next business day after the event occurs or becomes known to it.

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Account Statement
Art. 61.- The account statement sent to the participant must incorporate in an annex, the information relative to the composition of the Venture Capital Fund's portfolio by financial instruments that trade and those that do not trade on an exchange, size of the companies that are investment targets of the Fund, economic sector, geographic areas towards which the Fund has oriented its investment, as well as the types of projects that investment target companies carry out. Additionally, the account statement must indicate that the participant can access the Manager's website where the internal regulations, placement prospectus, essential information or material events and other information that the Manager considers pertinent are detailed.

Annual Report
Art. 62.- The Manager will keep available to its participants on its website, an annual report that must contain at least the following information:

a) Identification of the Venture Capital Fund and its Manager;

b) Detail of the Manager's Board of Directors and the Surveillance Committee;

c) Economic-financial panorama and market perspectives;

d) Structure of participants that make up the Venture Capital Fund;

e) Information about the ordinary or extraordinary participants' assemblies that have been held in the period;

f) Risk management report;

g) Business activity of the investment target companies;

h) Size of the investment target companies in which the Venture Capital Fund has invested;

i) Economic sector towards which the Venture Capital Fund has oriented its investment, such as: agriculture, industry, transport, electricity, commerce, services, among others;

j) Zone or zones towards which the Fund has oriented its investment;

k) Types of business projects that investment target companies are developing;

l) Detail of the expenses incurred during the reported period;

m) Performance obtained by the Fund during the last year;

n) Funding sources for the transactions carried out by the Fund;

o) Evolution of the Venture Capital Fund's equity;

p) Evolution of the value of the participation shares and of the prices on the exchange in which it trades;

q) Composition of the Fund's portfolio by issuer, economic sector, financial instruments that trade and those that do not trade on an exchange, as well as its evolution;

r) Risk factors of the Venture Capital Fund;

s) Information about material events that occurred during the reported period; and

t) Copy of the report and audited financial statements corresponding to the last

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TECHNICAL STANDARDS FOR CLOSED-END VENTURE CAPITAL INVESTMENT FUNDS Approval: 11/21/2018 Validity: 12/10/2018

exercise presented to the Superintendence.
The first report will be published at the latest during the quarter following the completion of the Fund's year of operation. The same deadline must be observed for the publication of subsequent reports.

Manager's Website
Art. 63.- As part of the information that the Manager will include on its website, the following information must be taken into account:

a) Orientation guides on the advantages and risks of investing in Venture Capital Funds;

b) Name of the companies in which the Fund has invested;

c) Value of the participation share and its nominal value, specifying the reference date of the valuation that has been considered for investments in securities not listed on an exchange;

d) Periodicity of valuation of the financial instruments in which the Venture Capital Fund invests; and

e) Name of the independent experts who have been contracted to perform the valuation of the securities issued by the investment target companies and that are not listed on an exchange and that are part of the Fund's investment portfolio.

Additionally, the Manager must publish on its respective website a report of the value of the equity and investment of the Venture Capital Fund with monthly periodicity within five business days following the month being reported, which must include at least the information detailed in Annex No. 4 of these Standards.

Disclosure of Information
Art. 64.- The Manager, when contracting services with Fund resources with companies that are members of its financial conglomerate, business group or related persons, must disclose on its website the name of the company that provides the service, the type and degree of linkage.

Remittal of Information
Art. 65.- The Manager must remit to the Superintendence for each Venture Capital Fund, the information to which the “Technical Standards for the Remittal and Disclosure of Information of Investment Funds” (NDMC -13) approved by the Central Bank through its Standards Committee refer, including in the daily annex relative to “Information of Investments with Fund Resources” a field in which it refers to whether such securities trade or not on an exchange. Additionally, the Manager must remit to the Superintendence the information relative to the administration of the Funds, according to the following detail:

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TECHNICAL STANDARDS FOR CLOSED-END VENTURE CAPITAL INVESTMENT FUNDS Approval: 11/21/2018 Validity: 12/10/2018

a) Annex No. 3: “Information of Investment Target Companies on behalf of the Venture Capital Fund”, with monthly periodicity, which must be remitted within five business days following the month being reported; and

b) Annex No. 4: “Report of Equity and Investments of the Investment Fund”, with monthly periodicity, which must be remitted within five business days following the month being reported.

Technical details for information submission
Art. 66.- The Superintendence shall send the Manager, within a maximum period of ninety days following the effective date of these Rules, with a copy to the Central Bank, the technical details related to the submission of the information required in article 65 of these Rules. The information requirements shall be limited to the collection of information as regulated in these Rules. The Manager must implement the necessary mechanisms for the aforementioned information submission within a maximum period of one hundred and twenty days after receiving the communication from the preceding paragraph, in accordance with the technical details sent by the Superintendence. The Manager must submit the information detailed in article 65 of these Rules electronically starting from the first business day following the initiation of the placement of the Fund's participation quotas.

CHAPTER VIII
OTHER PROVISIONS AND EFFECTIVE DATE

Information retention period
Art. 67.- The information and records of transactions carried out by participants, the investment target companies, and companies contracted to provide services to the Venture Capital Fund, must be preserved in accordance with the period established in the Special Law for the Prevention, Control and Sanction of Money Laundering, Terrorism Financing and Financing of the Proliferation of Weapons of Mass Destruction and the Commercial Code, respectively. (3)

Sanctions
Art. 68.- Non-compliance with the provisions contained in these Rules shall be sanctioned in accordance with what is established in the Law on Supervision and Regulation of the Financial System.

Unforeseen aspects
Art. 69.- Aspects not provided for in the regulatory matter of these Rules shall be resolved by the Central Bank through its Norms Committee.

CNBCR-12/2018
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TECHNICAL RULES FOR CLOSED-END VENTURE CAPITAL INVESTMENT FUNDS Approval: 21/11/2018 Effective Date: 10/12/2018

Effective Date
Art. 70.- These Rules shall enter into force starting from the tenth of December of two thousand eighteen.

MODIFICATIONS:

(1) Modifications to articles 10, 13, 16, 19, 24 and 26 and incorporation of articles 13-A, 13-B, 16-A, 16-B and 16-C, approved by the Central Bank through its Norms Committee, in Session CN-11/2021, of August 31 of two thousand twenty-one, with effect from September 17 of two thousand twenty-one. (2) Modification to article 18, approved by the Central Bank through its Norms Committee, in Session CN-09/2025, of November 10 of two thousand twenty-five, with effect from November 25 of two thousand twenty-five. (3) Modifications to articles 32, 44, 67 and Considerations IX and X and incorporation of Consideration X, approved by the Central Bank through its Norms Committee, in Session CN-03/2026, of March 19 of two thousand twenty-six, with effect from April 6 of two thousand twenty-six.

CNBCR-12/2018
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TECHNICAL RULES FOR CLOSED-END VENTURE CAPITAL INVESTMENT FUNDS Approval: 21/11/2018 Effective Date: 10/12/2018

Annex No. 1
MINIMUM CONTENT OF THE INTERNAL REGULATIONS OF VENTURE CAPITAL FUNDS

The internal regulation of each Venture Capital Fund must contain as a minimum the following:

1. Cover, which must contain as a minimum the following:
   a) Name of the Manager; b) Name of the Fund; c) Objective of the Fund: indicate in a summarized and descriptive manner, the destination of the majority of the investments or use of the Fund's resources, additionally specifying the type of Fund based on its investment policy, as well as specifying whether the Fund will be medium or long term; d) Type of investor to whom the Fund is directed, which must consider aspects such as investment horizon, liquidity needs, risk tolerance, knowledge and prior experience in the securities market; e) Include the following literal reasons:
   i. "The Closed-End Venture Capital Investment Fund (name) has been registered in the Public Stock Registry of the Superintendence of the Financial System, which does not imply that it recommends the subscription of its quotas and does not opine favorably on the profitability or quality of said instruments."; and
   ii. "The amounts of money received as contributions for an Investment Fund are investments at the account and risk of the investors, they are not bank deposits and do not have the guarantee of the Deposit Guarantee Institute".
   f) Name of the marketing entities, including reference of authorization in the Superintendence; g) References of authorization of the registry entry in the Public Registry kept by the Superintendence of the Manager and the Fund; h) Date: indicate the month and year of preparation of the internal regulation or reference of its update; and i) Other information that the Manager considers important.
2. Declaration of veracity of the information contained in the internal regulation, which must be granted by the legal representative or attorney-in-fact of the Manager in a notarial deed.
3. Submission of the internal regulation signed by the person authorized to do so.
4. Index and Glossary: include the index of the content, as well as a glossary in which the technical terms that form part of the internal regulation are defined.
5. Extract of the internal regulation, summarizing the information detailed below:
   a) Name of the Manager and relevant aspects thereof; b) Name of the Fund; c) Type of Fund, Fund amount, nominal amount and number of participation quotas, maximum participation percentages of participants and duration term; d) Investment policy of the resources, diversification of investments, maximum and minimum investment limits, liquidity of its assets, debt policy, treatment of investment excesses; investment valuation policy;

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Annex No. 1
e) Business activity of the company that will be the investment target by the Fund, specifying their size; f) Sector or economic sectors and zone or geographic zones towards which the Fund will orient its investment; g) Commissions to be charged by the Manager, indicating if they are charged to the Fund or to the investor, expressed as percentages or amounts; h) Information to be delivered to the participants; i) Surveillance Committee: specify its functions and powers; j) Procedure for the increase and decrease of the Fund's Equity; k) Participants' Assembly: include the mechanism to call participants to the assembly; l) Procedure for customer service; m) Causes that give rise to the participant's right to withdraw; n) Policy for the liquidation of the Fund upon expiration of the term; and o) Other information that the Manager considers important.
6) General aspects of the Fund:
a) Expression "Closed-End Venture Capital Investment Fund", followed by a name or designation that individualizes it from any other Fund authorized by the Superintendence; b) Type of Investor to whom the Fund is directed; c) Term of the Venture Capital Fund; d) Amount of the Fund; e) Guarantee: specify the Manager's guarantee based on the Fund's equity, in accordance with article 23 of the Funds Law; f) Commissions to be charged by the Manager, indicating their periodicity, the basis for determining their calculation and if they are charged to the Fund or to the investor, must be expressed as percentages or amounts; g) Expenses to be charged to the Fund, clearly detailing their concepts, expressed as percentages or amounts; h) Applicable tax regime for the Fund and the participants; and i) Specify the place or places where documents or evaluations related to the Fund will be available to the participants.
7) General aspects of the Manager:
a) Name, domicile and business group or conglomerate to which the Manager belongs, as well as its authorization data in the Registry; and b) Specify the body authorized to agree on the modification of the internal regulation.
8) Information on the issuance and placement of quotas:
a) Characteristics of the Fund's quota issuance and their nominal value; b) Minimum investment amount or number of quotas if applicable; c) Form of payment for the placement of participation quotas; d) Initial value of the quota and the procedure for calculating the quota value; e) Maximum participation percentages of participants in the Fund; f) Quota placement procedure; g) Terms, conditions and deadlines in the event of voluntary and partial capital reductions; and

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Annex No. 1
h) Specify the causes that give rise to the participant's right to withdraw.
9) Policies related to the Fund's operation:
a) Investment policy of resources and diversification of investments:
i. Investments to be made with Fund resources;
ii. Diversification of the Fund's investments;
iii. Public offer securities as established in article 97 of the Funds Law, specifying the types of Venture Capital Funds in which it will invest if applicable;
iv. Definition of the size of the companies in which the Fund will invest;
v. Economic sector towards which the investment will be oriented, such as: agriculture, industry, transport, electricity, commerce, services, among others;
vi. Zone or zones towards which the investment will be oriented;
vii. Criteria for maintaining investments and divestment;
viii. Types of business projects that companies must develop to be investment targets by the Fund, specifying if these are medium or long term;
ix. Investment limits, specifying the minimum and maximum percentages of concentration in the following:
ix.1 Concentration of investment in the same company and by business group if applicable; ix.2 Zone or zones; and ix.3 Concentration by economic sector: agriculture, industry, transport, electricity, commerce, services, among others. b) Investment valuation policy of the Fund:
i. Valuation method for public offer investments and the valuation method for those investments that are not registered in a stock exchange and are issued by companies that do not trade on a stock exchange and will be investment targets by the Fund; and
ii. Frequency of investment valuation.
c) Policies and processes related to the company that will be the investment target by the Fund:
i. Investment selection policy and process and criteria for the eligibility of investment target companies in accordance with article 42 of these Rules;
ii. General description of the process for the eligibility of investment target company projects;
iii. Circumstances or criteria by which the companies that are investment targets by the Fund may cease to be so;
iv. Description of the technical assistance and advisory services to be provided by the Manager to the investment target companies, if applicable; and
v. Policies for the Manager's participation on behalf of the Fund in the Board of Directors or Committees of the investment target company, if applicable.
d) Liquidity policy of the Fund's assets, for the purpose of having the necessary resources to carry out the Fund's operations;

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Annex No. 1
e) Debt policies in relation to the Fund's equity, indicating whether the Fund contemplates incurring debts, considering that the maximum debt limit is fifty percent; f) Capital increase policy through the issuance of participation quotas, specifying the procedure and maximum deadline for participants to exercise the preemptive subscription right; g) Capital reduction policy, specifying information to opt for reduction, the form and conditions, deadlines, payment dates, methodology for calculating the payment value of participation quotas; and h) Policy for the distribution of benefits obtained by the Fund.
10) Other management policies adopted:
a) Policies on the Fund's operations with related parties, the handling of conflicts of interest and assignment of operations when managing different Funds; and b) Policies, measures and procedures whose object is the adequate resolution of conflicts of interest between the Fund and its Manager, such as: investments and operations with related parties, operations between Funds and operations between the Fund and its Manager.
11) Controls and procedures:
a) Procedure for the acquisition of securities; b) Procedures, deadlines and other rules for the Manager's attention to participants regarding: inquiries made, attention and resolution of complaints and claims. The means of receipt, office address, telephone, email address in which the participant can make inquiries, complaints and claims must be specified; c) Procedure to resolve differences or conflicts between participants and the company that is the investment target by the Fund or between them and the Manager; d) Procedure to carry out the modification of the internal regulation; e) Fund administration rules; f) Rules for the liquidation of the Fund:
i. Procedure and deadline for liquidation;
ii. Date when the divestment of securities and shares of companies that do not trade on a stock exchange and have been investment targets by the Fund will begin;
iii. Process for the payment of participation quotas;
iv. Valuation of the Fund's investments; and
v. Maximum percentage of fees regarding the Fund's assets that would correspond to the liquidator.
12) Fund asset custody system: detail the custody system for the securities that make up its assets.
13) Fund Business Plan.
14) Definition of the organizational levels involved in the decision-making process for the purchase and sale of investments.

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TECHNICAL RULES FOR CLOSED-END VENTURE CAPITAL INVESTMENT FUNDS Approval: 21/11/2018 Effective Date: 10/12/2018

Annex No. 1
15) Selection and renewal criteria for professionals:
a) External auditor and fiscal auditor if applicable; b) Independent expert; c) Other professionals; and d) Indication that the Fund has a risk classification, specifying the name of the risk classification company.
16) Surveillance Committee:
a) Powers, duties and responsibilities of the Surveillance Committee; b) Meeting frequency; and c) Remuneration of the Surveillance Committee if applicable.
17) Causes that give rise to the right to withdraw: specify the circumstances that generate that the participant exercises the right to withdraw from the Fund, including the deadline and mechanism by which the participant can exercise the right.
18) Participants' Assembly: matters that will correspond to the knowledge of the extraordinary participants' assembly, in addition to those established in the Law. The mechanism to call participants to the investors' assembly must be included.
19) Rights, obligations and communication for the participant:
a) Specify the rights and obligations of the participant: rights in the Fund, mandatory information to be delivered to participants in addition to that established in the Funds Law and the participant's obligation to keep the Manager informed about possible changes of domicile, contact phone, among others; b) Detail of the information to be delivered to the participant at all times including its periodicity; c) Mechanisms to inform participants about relevant events that affect their investment; d) Name of the printed or electronic newspaper of national circulation in which publications will be made; e) Form and periodicity in which the Manager must inform about the ownership of shares of entities in which the Fund is a controller; and f) Manager's website.

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TECHNICAL RULES FOR CLOSED-END VENTURE CAPITAL INVESTMENT FUNDS Approval: 21/11/2018 Effective Date: 10/12/2018

Annex No. 2

MINIMUM CONTENT OF THE PLACEMENT PROSPECTUS FOR PARTICIPATION QUOTAS OF VENTURE CAPITAL FUNDS

The placement prospectus for participation quotas for Venture Capital Funds must contain, as a minimum, the following information:

1. Cover, which must contain as a minimum:
   a) Name of the Manager; b) Name of the Venture Capital Fund; c) Objective and type of Fund based on its investment policy; d) Investment target companies of the Fund and economic sectors towards which the investment will be oriented; e) Type of investor to whom the Fund is directed, which must consider aspects such as investment horizon, liquidity needs, risk tolerance, knowledge and prior experience in the securities market; f) Main characteristics of the Fund's issuance; g) Include the following literal reasons:
   i. "The Closed-End Venture Capital Investment Fund (name) has been registered in the Public Stock Registry of the Superintendence of the Financial System, which does not imply that it recommends the subscription of its quotas and does not opine favorably on the profitability or quality of said instruments."; and
   ii. "The amounts of money received as contributions for an Investment Fund are investments at the account and risk of the investors, they are not bank deposits and do not have the guarantee of the Deposit Guarantee Institute".
   h) Name of the brokerage house through which the Manager will carry out the placement on the Stock Exchange; i) Risk classification granted; j) References of authorizations for registration in the respective stock exchange and authorization of registry entry in the Public Registry kept by the Superintendence, of the Manager and of the quota issuance; and k) Date: indicate the month and year of preparation of the prospectus or reference of its update.
2. Back cover, which must contain the following information of the Manager, marketing entities, external auditors, legal advisors and any other natural or legal person who has intervened in the constitution and placement of the participation quota issuance: name, address, website, telephone, fax, email of the person designated as contact.
3. Declaration of veracity of the information contained in the prospectus, which must be granted by the legal representative or attorney-in-fact of the Manager in a notarial deed.
4. Submission of the prospectus signed by the legal representative of the Manager, acting in their capacity as Fund administrator.
5. Index.
6. Extract of the placement prospectus: include a summary of the information detailed below:
   a) Name of the Manager and relevant aspects thereof;

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Annex No. 2
b) Name of the Fund; c) Duration term of the Fund; d) Name of the brokerage house that will carry out the stock placement; e) Investment policy, treatment of investment excess and debt policy; f) Business activity of the company that will be the investment target by the Fund, specifying their size; g) Sector or economic sectors and zone or geographic zones towards which the Fund will orient its investment; h) Description of commissions and expenses; i) Maximum participation percentage of participants in the Fund; j) Causes that give rise to the right to withdraw from the Fund; k) Fund liquidation process upon expiration of its term; l) Potential risks to which the Fund is exposed; m) Information to be delivered and sent to participants; and n) Other information that the Manager considers important.
7) Fund authorizations:
a) Date and session of the Manager's competent authority that authorized the Fund's internal regulation; and b) Date and session of authorization of the Fund's registry entry in the Superintendence.
8) Characteristics of the Fund's issuance, which must contain as a minimum:
a) Name of the Manager and the Fund; b) Type of Fund: indicate Venture Capital Fund and express the name of the Fund; c) Type of investor to whom the Fund is directed, which must consider aspects such as: investment horizon, risk tolerance, knowledge and prior experience in the securities market; d) Name of the issuance; e) Nature and class of security; f) Issuance amount and number of participation quotas; g) Minimum amount and multiples of electronic book-entry securities in account contracting; h) Placement price of the participation quotas, including the form of daily update of the placement price during the subscription period; i) Trading currency; j) Guarantees: specify that the Manager has constituted a guarantee for the Fund, establishing the events or causes covered by it. Additionally, the name of the entity designated as the beneficiaries' representative must be detailed; k) Representation form: by electronic book-entry securities in account; l) Transfer of securities: express that the transfers of securities represented by book entries in account will be carried out through accounting transfer; m) Redemption of securities: detail the conditions under which the securities will be redeemed if applicable; n) Issuance term; o) Negotiability in the corresponding Stock Exchange;

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TECHNICAL RULES FOR CLOSED-END VENTURE CAPITAL INVESTMENT FUNDS Approval: 21/11/2018 Effective Date: 10/12/2018

Annex No. 2

p) Method of daily update of the placement price during the subscription period; q) Assets in which the resources contributed during the subscription period will be invested; r) Description of the investment and diversification policy of the Fund, detailing the types of assets in which they will invest, treatment of investment surplus, main economic sectors and zone or geographic zones towards which the investment will be oriented and other background information that allows knowing the risks and potential returns of the Fund; s) Business activity of the company that will be the object of investment by the Fund, specifying the size of the same; t) Types of business projects to be developed by the companies to be the object of investment by the Fund; u) Description of the Fund's profit distribution policy, specifying the calculation method, as well as the term, place, means of informing and established mode to exercise the right to receive them; v) Description of the policy on capital increases and decreases; w) Description of the debt policy; x) Modification to the characteristics of the issuance, clearly indicating the procedure to follow to request approval of modifications, specifying the internal and external bodies authorized for its approval; y) Custody and deposit, detail when applicable that the issuance will be deposited in the electronic records kept by the specialized company in the deposit and custody of securities contracted; z) Risk classification of the issuance, name of the risk classifier, the meaning of the assigned classification and the reference date of the classification report; aa) Conditions under which an issuance will be considered failed; and bb) Procedure to follow in case of judicial action against the Fund.
9) Policy and process for the selection of investment and criteria for the eligibility of the companies object of investment in accordance with what is established in article 42 of these Standards.
10) Causes that give rise to the right of withdrawal: specify the circumstances that generate that the participant exercises the right to withdraw from the Fund, including the term and mechanism by which the participant can exercise the right.
11) Name of the House that participates in the placement, if any, as well as the reference of authorization by the Superintendence.
12) Information of the Manager:
a) Social denomination, Tax Identification Number (TIN), number and date of registration in the Registry, address of the main office, telephone and fax numbers, email address, website address; b) Detail of the shareholders, whether natural or legal person; including the percentage of participation; c) Roll of the Board of Directors with their registration data in the Commercial Registry: General Manager or Executive Director of the Manager, main executives and persons who will have in charge the functions related to investment decisions in the Fund, incorporating a summary of their curriculum vitae;

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TECHNICAL STANDARDS FOR CLOSED-END VENTURE CAPITAL INVESTMENT FUNDS Approval: 11/21/2018 Validity: 12/10/2018
Annex No. 2
d) Relevant information (including lawsuits promoted against it and condemning payment sentences); and e) In case that the Manager belongs to a business group or conglomerate, it must include the controlling company of the Manager, the denominations of the companies, as well as a brief description of the business group and the position of the Manager within the same.
13) Financial information: audited financial information of the Venture Capital Fund corresponding to the last closing, when it comes to subsequent issuances.
14) Risk classification: attach the complete report of the risk classification of the issuance.
15) Register of Participants: specify the name of the entity responsible for keeping the referred register.
16) Risk factors of the Fund: identify and explain the main risks inherent to the Fund and its investments, considering within these risks, liquidity risk, price risk, sectoral risk, credit risk, operational risk, market risk, reputational risk, contract default risk.
17) Practices and policies of the Manager in risk management matters in the management of the Fund.
18) Procedure to follow in case of judicial action against the Manager.
19) Commissions: description of the commissions to be charged indicating their periodicity, the basis for determining their calculation and if they are charged to the Fund or to the investor, they must be expressed as percentages or amounts.
20) Expenses that will be charged to the Fund, clearly detailing their concepts and if they will be expressed as percentages or amounts.
21) Taxes: clear description of the tax regime applicable to the Fund and the participant.
22) Information to the participants:
a) Summary of the information that must be delivered to the participants of the Fund specifying its periodicity; b) Detail of the information to be delivered to the participant at all times including its periodicity; c) Periodicity and form to provide financial reports to the participants; d) Detail of the main rights of the participants; e) Places to obtain information on the financial statements of the Manager and the Fund; f) Inform the future participant of the consequences in case that the Fund's equity is not reached; and g) Inform that the quality of participant is lost when negotiating in a Stock Exchange the entirety of the shares that this holds in the Fund and the accounting transfers have been made in accordance with the Law of Electronic Annotations of Securities in Account.
23) Any other information that the Manager considers important to make known to the investing public.

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Annex No. 3

INFORMATION OF THE COMPANIES OBJECT OF INVESTMENT BY THE VENTURE CAPITAL FUND No. Name Description 1 Date of information Specify the month of reference of the information.
2 Company object of investment Indicate the denomination and legal name of the company.
3 Internal code of the company by the Manager
Indicate the code assigned by the Manager to the company object of investment.
4 Date of constitution Indicate the date of constitution of the company.

5
Registration in the Commercial
Registry
Indicate the registration number assigned by the Commercial Registry to the company.
6 Legal representative Indicate the name of the legal representative of the company.
7 Address Indicate the exact address of the company.
8 Telephone
Specify the number or telephone number of the offices of the company.
9 Business activity Indicate the business activity to which the company is dedicated.
10
Main products or services
Indicate the main products they manufacture or the main service they offer.
11 Economic sector
Indicate the economic sector of the company: agriculture, industry, transport, electricity, commerce, services, among others.
12 Size of the company
Specify the size of the company, considering the classifications established in the Law of Promotion, Protection and Development for Micro and Small Enterprise and by the Ministry of Economy based on the level of gross annual sales and number of workers. 13 Social capital Indicate the amount of social capital of the company. 14 Shares Indicate the number of shares corresponding to the capital of the company. 15 Securities Indicate the class of securities not listed on the stock exchange in which the Fund will invest: Shares representative of the capital of companies or Securities representative of debt not listed on the stock exchange. 16 Shares acquired Indicate the number of shares acquired by the Fund. 17 Participation in the company Indicate the percentage of participation of the Fund with respect to the equity of the company. 18 Amount of investment Indicate the amount invested in the company. 19 Type of project Specify the type of project that the company is developing in which the Venture Capital Fund has invested. 20 Zone or geographic zones Specify the zone or geographic zones in which the project is being developed.

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Annex No. 4

REPORT OF EQUITY AND INVESTMENTS OF THE VENTURE CAPITAL FUND

No. Name Description
1 Report date Establish the date on which the information was published.
2 Date of information Specify the month of reference of the information.
3 Name of the Manager Name of the Manager.
4 Name of the Fund Name of the Venture Capital Fund 5 Custodian Detail the name of the entity in which the values acquired with the resources of the Fund are deposited.
6 Object and type of Fund in function to its investment policy Establish the object and type of Fund in function to its investment policy with reference to its placement prospectus.
7 Date of start of operations
Indication of the date of start of operations of the Fund.
8 Value of the Fund's equity
Indicate the value of the Fund's equity, expressed in Dollars of the United States of America.
9 Number of participation shares of the Investment Fund Indicate the number of participation shares.
10 Number of participants in the
Fund
Indicate the number of participants that make up the Fund.
11 Share value The share value must be indicated.
12 Nominal value Indicate the nominal value of the participation share.
13 Market price of the participation share
Indicate the market price of the participation share of the stock exchange in which it is registered for its negotiation.
14 Evolution of share value Indicate the evolution of the share value in the last six months.
15 Return of the participation share
Indicate the return of the shares of the last six months.
This calculation will be carried out through the moving average of daily discrete return of the last six months, applying the annualization through a compound interest scheme.
Considering eight decimals for its calculation and four decimals for its disclosure.
16 Risk of the Fund Value at Risk (VaR) Indicator.
17 Commissions Indicate the commissions to be charged by the Manager, indicating its periodicity, the basis for determining its calculation and if they are charged to the Fund or to the investor, they must be expressed as percentages or amounts, in accordance with the internal regulations of the Fund. 18 Expenses Indicate the expenses that will be charged to the Fund, detailing clearly their concepts and will be expressed as percentages or amounts according to what is defined in the

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Annex No. 4

REPORT OF EQUITY AND INVESTMENTS OF THE VENTURE CAPITAL FUND

No. Name Description internal regulations.
19 Risk classification Classification granted to the Fund by a society classifier, specifying the reference date of the report of risk classification.
20 Investment policy Summary of the Fund's investment objectives and policies.
21 Fund composition Indicate the type of instrument:
a) Portfolio composition by type of investment:

1. Deposits (include savings, current and
   term deposit accounts);
2. Fixed income (debt);
3. Variable income (shares);
4. Open national Investment Funds;
5. Closed national Investment Funds;
6. Securitization values;
7. Foreign values;
8. Foreign Investment Fund (include ETFs); and
9. Repos.
   b) Portfolio composition by economic sector:
10. Agriculture, livestock, forestry and fishing;
11. Manufacturing industry;
12. Electricity, gas and water;
13. Construction;
14. Commerce, restaurants and hotels;
15. Transport, storage and communications;
16. Financial and insurance activities; and
17. Other sectors.
    c) Composition by size of the object company of investment in which the Fund invests:
    microenterprise, small enterprise, medium enterprise, large enterprise. d) Portfolio composition by issuances that cotize and that do not cotize in a stock exchange. e) Portfolio composition by issuer, indicating the ten main issuers of assets. f) Information by terms of the investment: 0-180 days. 181-365 days; 1 to 3 years; 3 to 5 years; more than 5 years. g) Portfolio composition by risk classification. h) Portfolio composition by type of currency.

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TECHNICAL STANDARDS FOR CLOSED-END VENTURE CAPITAL INVESTMENT FUNDS Approval: 11/21/2018 Validity: 12/10/2018
Annex No. 4

REPORT OF EQUITY AND INVESTMENTS OF THE VENTURE CAPITAL FUND

No. Name Description i) Portfolio composition by country of origin of the issuer.
22 Percentage of participation Corresponds to the percentages of participation of assets that make up the Fund's investment portfolio by type of instrument according to the detail of item 21.
23 Contact information Specify place and person designated to attend inquiries about the Fund's information.