General Rule on Imposition of Sanctions on Securities Market Entities

CERTIFICATION OF RESOLUTION
RUTH ELIZABETH ROJAS MERCADO, Secretary of the Monetary and Financial Board, CERTIFIES:
that in Ordinary Session number twenty of the Monetary and Financial Board, held on Wednesday, May 27, 2026, Resolution No. CDMF-XX-1-26 was unanimously approved, which literally states:
Monetary and Financial Board
Ordinary Session No. 20
May, Wednesday 27, 2026
THE MONETARY AND FINANCIAL BOARD
RESOLUTION CDMF-XX-1-26
CONSIDERING
I
That in accordance with Article 105 of the Full Text of the "Political Constitution of the Republic of Nicaragua," banks and other financial institutions, private and state-owned, are supervised, regulated, and audited by the Superintendence of Banks and Other Financial Institutions, in accordance with the relevant laws. II That Article 147 of Law No. 1232, "Law on the Administration of the Monetary and Financial System," published in La Gaceta, Official Gazette No. 241, of December 30, 2024, established a new range of fines for "regulated institutions" for violations of the provisions of said Law, related laws, and regulations, which will be applied by the Superintendence. Likewise, Article 148 of said Law No. 1232 establishes the fines to be imposed on other persons other than those mentioned in the cited Article 147. III That Article 146 of said Law No. 1232 establishes that "For the application of the fines contemplated in this Law and related laws with the functions of the Central Bank and the Superintendence, net worth and the fine unit will be used as reference. The value of each fine unit will correspond to the national average minimum wage on the date of imposition of the fine, which is the simple average calculated based on the Minimum Wage Table by Activity Sector determined by the relevant law." IV That Article 17, letter A, numeral 10, of said Law No. 1232, states that it is an attribute of the Monetary and Financial Board: "Approve general rules on violations of this Law, sanctions and fines, as well as the criteria for their application."

V
That in accordance with Articles 9, numeral 1), and 30 of Law No. 977, "Law Against Money Laundering, Terrorism Financing and Financing of the Proliferation of Weapons of Mass Destruction," whose consolidated text is contained in Law No. 1175, "Law of the Nicaraguan Legal Digest of the Banking and Finance Matter," published in La Gaceta, Official Gazette No. 153, of August 20, 2024, and its subsequent reforms, it is the faculty of the Superintendence of Banks and Other Financial Institutions, hereinafter the Superintendence, regarding obligated subjects under its supervision and within the scope of preventing money laundering, terrorism financing, and financing of the proliferation of weapons of mass destruction, to establish administrative measures that give operational effect to said law, supervise with a risk-based approach that obligated subjects implement their AML/CFT/FP prevention obligations, and impose corrective measures and administrative sanctions when appropriate. VI That Article 36 of the same Law No. 977 empowers supervisors to "order the implementation of corrective measures and impose sanctions on Obligated Subjects and/or their directors, administrative managers, and compliance officers, as appropriate, for non-compliance with the applicable AML/CFT/FP prevention obligations, without prejudice to what is provided in criminal legislation." In exercise of its powers, HAS ISSUED The following:
GENERAL RULE ON IMPOSITION OF SANCTIONS ON SECURITIES MARKET ENTITIES
CHAPTER I
GENERAL PROVISIONS
Article 1. Definitions. - For the purposes of this rule, the terms indicated in this article, both in uppercase and lowercase, singular or plural, shall have the following meanings:
a) Securities market entity or entities: Entities that facilitate or provide brokerage intermediation services, such as stock exchanges, brokerage houses, securities depositories, clearing and settlement societies, investment fund management companies, securitization fund management companies, and other supervised institutions in accordance with Law No. 587, Capital Market Law. b) Law No. 1232: "Law on the Administration of the Monetary and Financial System," published in La Gaceta, Official Gazette No. 241, of December 30, 2024. c) Law No. 587: "Capital Market Law," contained in Law No. 1175, "Law of the Nicaraguan Legal Digest of the Banking and Finance Matter," published in La Gaceta, Official Gazette No. 153, of August 20, 2024, and its reforms.

d) Fine: Administrative sanction of a pecuniary nature applied based on net worth or in fine units. e) Net Worth: Amount established in the supervised entity's financial statements, as defined in its applicable accounting framework. f) Superintendence: Superintendence of Banks and Other Financial Institutions. g) Superintendent: Superintendent of Banks and Other Financial Institutions. h) Fine Unit: Sanction of a pecuniary nature applied in accordance with Article 146 of Law No. 1232. The value of each fine unit will correspond to the national average minimum wage on the date of imposition of the fine, which is the simple average calculated based on the Minimum Wage Table by Activity Sector determined by the relevant law.
Article 2. Object and Scope. - In accordance with Articles 147 and 148 of Law No. 1232, this rule aims to establish the types of infractions and applicable sanctions for securities market entities within the ranges established in its Title V, Chapter I, determined according to the severity of the offense, in accordance with the parameters and criteria to be indicated in this rule.
Article 3. Calculation of fines based on net worth. - In cases where the fine corresponds to a percentage of net worth, it shall be calculated on the net worth registered in the financial statements corresponding to the month of December of the year prior to the application of the fine, reported by the offending entity to the Superintendence and published by it on its website.
In the case of entities that have been in operation for less than twelve (12) months, the fine shall be calculated on the net worth registered in the financial statements corresponding to the most recent month, reported by the entity to the Superintendence.
CHAPTER II
INFRACTIONS AND FINES IN GENERAL
Article 4. Imposition of fine for lacking authorization. - A serious infraction shall be committed by any natural or legal person who, without being authorized, carries out operations for which Law No. 587 requires prior authorization. In these cases, the Superintendent shall impose a fine equivalent to between fifty point zero one (50.01) and one hundred (100) fine units.
Article 5. Imposition of fine for violations of laws, resolutions, and instructions of the Superintendence.-
When authorized entities violate any of the provisions contained in Law No. 587, other applicable laws or regulations, resolutions of the Monetary and Financial Board; as well as orders, resolutions, or instructions issued by the Superintendent; or irregularities are detected in their functioning or documents or reports received do not correspond to their true situation, the Superintendent may impose a fine in accordance with the following:

Ranges:
a) Minor Infractions: between zero point zero zero one percent (0.001%) and zero point one two five percent (0.125%) of net worth. b) Moderate Infractions: between zero point one two five one percent (0.1251%) and zero point two five percent (0.25%) of net worth. c) Serious Infractions: between zero point two five one percent (0.251%) and zero point five percent (0.5%) of net worth. Infractions:
a) Minor Infractions:

1. Failure to inform the Superintendence or informing outside the established deadlines about changes in Board of Directors members, General Managers, and Internal Auditor.
2. Failure to give notice, or giving notice outside the established deadline, of the appointment of the external auditor of the supervised entity.
3. Sending outside the established deadline or sending incomplete or inaccurate reports, minutes, reports, forms, or other physical, electronic, or other medium information that supervised entities must remit to the Superintendence, occasionally or periodically, in accordance with law, regulations, or Superintendent's instructions.
4. Any other infractions of equal or similar gravity committed against legal, regulatory, and other applicable provisions, as well as Superintendent's instructions.
   b) Moderate Infractions:
5. Regarding information and accounting.
   i. Non-compliance with current regulations on the accounting of operations, on the formulation of accounts, and on how mandatory books and records must be kept.
   ii. Delay in mandatory accounting books and records.
   iii. Failure to communicate information to the governing bodies of secondary markets and the Superintendence, outside cases classified as serious.
   iv. Failure to send or publish information that entities are obligated to render to their partners, participants, or the public.
   v. The carrying out of advertising activities prohibited by Law No. 587.
   vi. Any other infractions of equal or similar gravity committed against legal, regulatory, and other applicable provisions, as well as Superintendent's instructions.
   The non-existence or malfunction of controls to prevent the leakage of information flows provided for in Law No. 587 shall be graded as moderate or serious, considering the result and valuing the mitigating or aggravating circumstances provided for in Article 190 of Law No. 587.
6. Regarding all types of securities and other book-entry instruments.
   i. Non-compliance by societies responsible for the control of mandatory records, clearing and settlement systems, and by securities depositories and custody societies, of the obligations entrusted to them in the interest of third parties and any others, regarding the securities and instruments they manage.
   ii. Unjustified delay in issuing legitimization certificates or others that the societies mentioned in the previous letter must issue, so that investors can exercise their rights.
   iii. Charging fees or commissions for the provision of services related to securities of any kind, when the services are free, or when the amounts charged exceed those established and published.
   iv. Any other infractions of equal or similar gravity committed against legal, regulatory, and other applicable provisions, as well as Superintendent's instructions.
7. Regarding public offerings.
   i. Unjustified delay in communicating and publishing the report that administrators of the society affected by a public acquisition offer must provide.
   ii. Irregularity and delay in liquidation processes and in the transfer of securities and cash that such public offering processes require in each case.
   iii. Unjustified delay in communicating the price, amount, and other determinable elements of a pending sale offer after its registration.
   iv. Any other infractions of equal or similar gravity committed against legal, regulatory, and other applicable provisions, as well as Superintendent's instructions.
   The violation of any of the cooperation duties that the offeror, its assistants, and representatives are obligated to provide by mandate of Law No. 587 or at the request of the Superintendent, as well as the delay in publishing mandatory announcements and reports, in fulfilling admission commitments to quotation of the offered securities, or other promises included in the prospectus that must be materialized after the closing of the offer, shall be classified, in all cases, as moderate or serious infractions in accordance with the provisions of this article regarding information and accounting.
8. Regarding markets and their operations.
   i. Admission and separation of members by the brokerage society failing to comply with what is provided in Law No. 587 or the market regulation.
   ii. The maintenance of administrators incompatible with the position.
   iii. Non-compliance with the duties of monitoring and supervising the conduct of its members and of preventing and eliminating bad practices, by applying the sanctions contemplated in this rule.

iv. Lack of transparency and non-compliance with operational rules and procedures that will govern trading sessions, the practice of negotiation, conflict resolution, and other procedures through which the functioning of the market is articulated, including those established by self-regulation.
v. Lack of cooperation with the Superintendent, other authorities, and other markets, including foreign ones, when assistance or obedience is mandatory.
vi. Any other infractions of equal or similar gravity committed against legal, regulatory, and other applicable provisions, as well as Superintendent's instructions.
The above provisions shall apply to societies engaged in clearing and settlement and, where applicable, to securities depositories with the pertinent adaptations.
5) Regarding intermediaries.
i. The improper use of designations reserved by Law No. 587 that may cause confusion.
ii. Non-observance of regulations governing active and passive operations, which can only be carried out by those authorized to act on behalf of others.
iii. Reduction of own resources to a level below eighty percent of the established minimum and remaining in that situation for a time greater than two months and less than six.
iv. Any of the infractions provided for regarding intermediaries, classified as serious, that do not have a habitual or repeated character.
v. Violation of the duty to maintain adequate personal and material means for the exercise of the activity practiced.
vi. Any other infractions of equal or similar gravity committed against legal, regulatory, and other applicable provisions, as well as Superintendent's instructions.
The moderate infraction shall also be transformed into a serious one when, in the five years prior to its commission, another moderate or serious sanction had been imposed on the offender.
6) In matters of securitization and collective investment.
The ones designated as serious in matters of securitization and collective investment, excluding those mentioned in numerals i), vi), and vii) if the risk or damage that the infraction may produce makes it disproportionate to classify them as serious or if they consist of delays that are not excessive or very dangerous. Likewise, the following shall be considered moderate infractions:
i. Violation of regulations on subscription, redemption, and valuation.
ii. Non-compliance with regulations on indebtedness, loans, and pledges.
iii. Disallowed mismatches in the financial flows of securitization funds operating under direct imputation regime.
iv. The moderate infractions provided for in this article regarding information and accounting (numeral 1), and all types of securities and other book-entry instruments (numeral 2), shall also apply to investment funds, securitization funds, their respective management companies, and other participants in the practice of said activities, when they incur in the scenarios contemplated in said letters.

v. Any other infractions of equal or similar gravity committed against legal, regulatory, and other applicable provisions, as well as Superintendent's instructions.
c) Serious Infractions:

1. Regarding information and accounting.
   i. Abuse of insider information.
   ii. Obligated societies lacking the required accounting and records or keeping them with flaws or irregularities that prevent knowing their financial and patrimonial situation or the scope and content of the operations they carry out, execute, or intermediate.
   iii. Failure to remit to the Superintendence and other recipients mandatory information, when two formal requests from the latter have intervened.
   iv. Non-compliance with the obligation to submit accounts to independent audit.
   v. Omission or false information of declarations of significant participations, material events, and information on secondary market transactions.
   vi. Deliberate action to supply insufficient information, as well as communication or disclosure that may alter investor decisions or price formation.
   vii. Any other infractions of equal or similar gravity committed against legal, regulatory, and other applicable provisions, as well as Superintendent's instructions.
2. Regarding all types of securities and other book-entry instruments.
   i. Issuance or distribution to the public of false securities or documents linked to financing operations by public or private societies, which do not meet the requirements provided in Law No. 587.
   ii. Failure by issuers to adopt adequate measures to prevent and correct mismatches between issued securities and those in circulation.
   iii. Omission of those same measures, and other requirements, by those entrusted with the control and records of book-entry instruments or by those managing securities accounts for themselves and third parties.
   iv. Violation of regulations on the separation of securities and cash for own and client accounts, by any of the societies obligated to ensure such separation.
   v. The startup and maintenance, as well as the suspension or closure, of book-entry securities records, clearing and settlement mechanisms, or securities custody services outside the cases or on terms different from those legally provided, as well as the practice of any of these activities by unauthorized societies.
   vi. Omission or distortion of constitutive registrations of securities and book-entry instruments, simulation or irregular execution of transfers on said instruments and securities, whether book-entry or not, falsification of transactions carried out on any of them, physical breach of deposits and other custody duties on dematerialized assets by those entrusted with respective obligations.
   vii. Any other infractions of equal or similar gravity committed against legal, regulatory, and other applicable provisions, as well as Superintendent's instructions.
3. Regarding public offerings.
   i. Acquisition, sale, or subscription of securities without promoting a public offering, and also carrying out the same without proceeding to its registration or with non-updated registration when this is mandatory.
   ii. Distortion of the accrediting documents or account audit required for the registration of the offering, when the changes or alterations are not included within the infractions provided for regarding information and accounting.
   iii. The scenarios generating liability for the prospectus, as provided in Article 15 of Law No. 587.
   iv. The carrying out of any of the prohibited transactions in the different phases of the offering procedures.
   v. Disclosure of the prospectus, or its supplement, before such documents are complete and duly registered by the Superintendence.
   vi. Violation of the principle of equal treatment
   vii. Non-compliance by the offeror and other societies intervening in the respective processes with the provisions that by law or by the prospectus must govern the practice of placement or acquisition of the securities subject to the offering.
   viii. Any other infractions of equal or similar gravity committed against legal, regulatory, and other applicable provisions, as well as Superintendent's instructions.
4. Regarding markets and their operations.
   i. Creation, maintenance, and management of a market, as well as, the closure or suspension of its activity, outside the cases and terms provided legally.
   ii. Manipulation and falsification of prices.
   iii. Admission, suspension, and exclusion of securities and derivative instruments for trading in violation of what is established by Law No. 587 or its general rules.
   iv. Carrying out secondary market operations on securities and derivative instruments not admitted, not standardized, or under conditions different from those registered.
   v. Carrying out operations without the intervention of a market member, as well as, the practice of these operations and forward stock business without the required guarantees.
   vi. Lack of publicity and transparency of contracting.
   vii. Discriminatory treatment towards investors and market members.
   viii. Violation of regulations on corporate names, prohibition of intermediation, and exclusive object of societies that administer markets.
   ix. Any other infractions of equal or similar gravity committed against legal, regulatory, and other applicable provisions, as well as Superintendent's instructions.
   The practice of custody of clearing and settlement operations and of securities lending to comply with it, concurrently with violation of the norms and principles enshrined in Law No. 587, shall always be considered serious infractions.
5. Regarding intermediaries.
   i. The habitual exercise of activities and operations reserved by law to other societies and persons authorized for that purpose.
   ii. The acquisition or transfer of securities or instruments subject to Law No. 587 carried out on their own account by those who are only authorized to operate on behalf of others, the violation of any other limitation established in the activity declaration, and non-compliance with the legal duty to guarantee operations failed by the client established in Law No. 587, always that they have occurred more than once.
   iii. The redu

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