Modifications to the Securities Market Regulations Regarding Investment Funds - Articles 162, 216, 219 and 314 on Share Value, Portfolio Integration and Composition, and Reporting Frequency by Fund Administrators

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Montevideo, June 11, 2025

Ref: COMPILATION OF SECURITIES MARKET REGULATIONS - MODIFICATIONS TO THE REGULATIONS RELATING TO INVESTMENT FUNDS - ARTICLES 162, 216, 219 AND 314 REGARDING SHARE VALUE, PORTFOLIO INTEGRATION AND COMPOSITION, AND REPORTING FREQUENCY BY FUND ADMINISTRATORS.

The market is informed that the Superintendence of Financial Services adopted Resolution SSF No. 2025-261 on June 6, 2025.

CRISITINA RIVERO

Superintendent of Financial Supervision

2025-50-1-00863

Diagonal Fabini 777 - C.P. 11100 - Tel.: (598 2) 1967 - Montevideo, Uruguay - www.bcu.gub.uy

CIRCULAR NO. 2480

SUPERINTENDENCE OF FINANCIAL SERVICES – RESOLUTION SUPERINTENDENCE OF FINANCIAL SERVICES

VIEWING: The initiative included in the 2024 Regulations Plan linked to the review and valuation of the need for adjustments in the banking-centralist regulations regarding the integration and periodicity of the valuation of the portfolios of closed-end investment funds and the determination of the share value, in order to take into account the current market reality.

RESULTING:
I) That this regulatory project introduces modifications to the Compilation of Securities Market Regulations regarding closed-end investment funds.
II) That the proposed regulatory design has provided for relaxing, in certain closed-end investment funds, the periodicity with which fund administrators must update the valuation of the portfolios of such funds and the determination of the share value. III) That in this sense, in the original proposal put out for public consultation, it was established that for closed-end investment funds integrated entirely by assets of an illiquid nature or with less than 75% liquid assets, the share value and portfolio composition will be determined monthly. For closed-end investment funds whose asset portfolio is composed of at least 75% liquid assets, as well as for all open-end investment funds, the requirement for daily determination of the share value and portfolio composition is maintained. IV) That this proposal incorporates the definition of liquid assets for the purpose of determining the periodicity with which fund management companies must update the information on share value and portfolio composition in closed-end investment funds. V) That, likewise, based on the proposed change regarding the determination of the calculation of the share value and the composition of the investment portfolio, the information regime to which fund management companies must adhere is adjusted. VI) That, in another order, it was deemed pertinent to clarify in this project the wording given to Article 162 of the Compilation of Securities Market Regulations, regarding the integration of portfolios in closed-end investment funds, in order to clarify the timing at which the same will be analyzed by this Superintendence of Financial Services. VII) That the wording given to Article 216 of the Compilation of Securities Market Regulations was also clarified, in order to be in consonance with Article 19 of the current Securities Market Law (No. 18.627 of December 2, 2009). VIII) That the aforementioned regulatory proposal was put out for consultation to supervised institutions and the general public on November 27, 2024, with comments from the industry received until December 18, 2024.

CONSIDERING:
I) That this regulatory modification aims to contribute to the development of the securities market, seeking to dynamize the current offer of collective investment instruments and incentivize the creation of closed-end investment funds, which are not currently used in the local market. II) That the proposed relaxation is based on the nature of closed-end investment funds, which, according to our regulations, are constituted with a maximum number of shares, and once placed, cannot be redeemed until the date of dissolution of the fund or the fulfillment of the specific objective established in the fund's regulations (without prejudice to the exception established in Article 20 of Law 16.774), as well as the nature of the assets that compose them, which could present liquidity problems or complexity for their valuation. III) That in consonance with the above, the differences in international regulations regarding the periodicity of asset valuation in open-end and closed-end investment funds are based on the nature of each type of fund and the assets that compose it, as well as on the need to guarantee liquidity for investors. In this sense, for open-end investment funds, more frequent valuation is usually required, with the objective of guaranteeing the determination of the share value, due to the fact that these funds allow the subscription and redemption of shares continuously by investors. In contrast, in closed-end investment funds, where investors cannot directly redeem their shares (except for some exceptions) and must negotiate them in secondary markets (if that possibility exists), comparative regulations generally admit a lower frequency in the valuation of their assets and in the determination of the share value. IV) That, having carried out the analysis of the comments received from the industry, they did not warrant modifications to the originally circulated proposal. V) That notwithstanding this, an additional analysis was also carried out that considered it convenient to establish in Article 219 of the Compilation of Securities Market Regulations that for certain closed-end investment funds, the share value and portfolio composition may be determined in a period longer than a month, but never exceeding six months.

ATTENTIVE: To what is provided in Article 38 of Law No. 16.696 of March 30, 1995 in the wording given by Article 2 of Law No. 20.345 of September 19, 2024 and in Law No. 16.774 of September 27, 1996 and its amendments.

IT IS RESOLVED:

1. SUBSTITUTE in Chapter II – Investment Policy, of Title III – Fund Management Companies, of Book II – Stability and Solvency of the Compilation of Securities Market Regulations, Article 162 with the following:

ARTICLE 162 (CLOSED-END INVESTMENT FUNDS - PORTFOLIO INTEGRATION).
The portfolio integration of closed-end investment funds will be analyzed at the time of authorizing the fund. However, the fund management company interested in the registration of funds of this type may submit a note specifying the characteristics of the assets that will compose the fund for prior validation by the Superintendence of Financial Services prior to the authorization request. The issuer limits established in this Chapter will not be applicable to closed-end investment funds.

2. SUBSTITUTE in Chapter V – Fund Administration, of Title I – Client Relationship, of Book IV – Protection of Financial Service Users of the Compilation of Securities Market Regulations, Articles 216 and 219 with the following:

ARTICLE 216 (CHARACTERISTICS OF SHARES).
The shares of each investment fund will all be of equal value and characteristics, and may be represented by physical securities or book entries (book-entry securities).
The shares of publicly offered investment funds must be represented by book entries.

ARTICLE 219 (SHARE VALUE AND PORTFOLIO COMPOSITION).
Fund management companies must make available to investors the share value, the composition of the investment portfolio of each of the funds they manage, and a copy of the Fund Regulations including the latest modifications, if any. In the case of closed-end investment funds whose portfolio is composed of at least 75% (seventy-five percent) liquid assets, as well as for all open-end investment funds, this information must be kept updated on a daily basis. In the case of closed-end investment funds integrated entirely by assets of an illiquid nature or by liquid assets that do not reach the percentage mentioned in the previous paragraph, the share value and the composition of the investment portfolio will be determined on a monthly basis. However, if the composition of the portfolio of such closed funds justifies it at the discretion of the Superintendence of Financial Services, and is established in the regulations, the share value and portfolio composition may be determined in a period longer than a month, but never exceeding six months. For these purposes, liquid assets are understood to be cash and those that can be easily converted into cash without significant loss of value and that are traded in formal markets, according to the instructions that will be issued. Formal trading markets, both local and foreign, are understood to be regulated and supervised markets by the financial authorities of the country where they are located.

3. SUBSTITUTE in Chapter II – Accounting and Financial Statements, of Title I – Information Regime, of Part VII – Fund Management Companies, of Book VI – Information and Documentation of the Compilation of Securities Market Regulations, Article 314 with the following:

ARTICLE 314 (ACCOUNTING AND MANAGEMENT INFORMATION).
Fund Management Companies must adhere to the following information regime:

1. Regarding periodicity:
   a. With annual periodicity:
   a.1 Within 3 (three) months following the date of closing of the fiscal year:
   i. Consolidated Financial Statements of the group to which the Management Company belongs, accompanied by External Audit Report, duly signed and with the corresponding professional stamps.
   ii. In cases where consolidation is not required, a sworn declaration indicating the reasons why the company does not prepare Consolidated Financial Statements must be presented.
   iii. Individual Financial Statements accompanied by External Audit Report, duly signed and with the corresponding professional stamps.
   iv. Financial Statements of each of the Funds managed, signed by the Trustee or oversight body if any, accompanied by External Audit Report, duly signed and with the corresponding professional stamps.
   a.2 Within 4 (four) months following the date of closing of the fiscal year:
   i. Certified copy of the Minutes of the Shareholders' Meeting approving the Financial Statements.
   ii. Original duly signed or certified copy of the Annual Report of the Board of Directors on the management of the business affairs and performance in the last period, according to the minimum content established in Article 92 of Law 16.060 on Commercial Companies, duly signed.
   iii. Original duly signed or certified copy of the Trustee's Report or oversight body report if any.
   iv. Update of the risk rating of each of the Closed-End Investment Funds issued by a rating institution registered in the Securities Market Registry.
   b. With semi-annual periodicity, within 2 (two) months following the closing of the first semester of the fiscal year:
   i. Consolidated Financial Statements of the group to which it belongs, accompanied by Limited Review Report, duly signed and with the corresponding professional stamps.
   ii. In cases where consolidation is not required, a sworn declaration indicating the reasons why the company does not prepare Consolidated Financial Statements must be presented.
   iii. Individual Financial Statements, accompanied by Limited Review Report, duly signed and with the corresponding professional stamps.
   iv. Financial Statements of each of the Funds managed, signed by the Trustee or oversight body if any, accompanied by Limited Review Report, duly signed and with the corresponding professional stamps.
   c. With quarterly periodicity, within the month following the closing of the first and third quarters of the fiscal year:
   i. Consolidated Financial Statements of the group to which the Management Company belongs, accompanied by Compilation Report, duly signed and with the corresponding professional stamps.
   ii. In cases where consolidation is not required, a sworn declaration indicating the reasons why the company does not prepare Consolidated Financial Statements must be presented.
   iii. Individual Financial Statements, accompanied by Compilation Report, duly signed and with the corresponding professional stamps.
   iv. The Financial Statements of each of the Funds managed, signed by the Trustee or oversight body if any, accompanied by Compilation Report and with the corresponding professional stamps.
   d. With monthly periodicity, within 2 (two) business days following the closing of each month, according to the form models that will be provided:
   i. Daily or monthly evolution as appropriate according to what is provided in Article 219 of the share value, number of shares in circulation, and an extract of the composition of the investment portfolio.
   ii. Detail of the assets that compose the investment portfolio of the managed funds at the end of each month.
   iii. Daily compliance with the investment limits established in the regulations and in their regulations.
   iv. Profitability of each of the funds, calculated according to the methodology provided by the Superintendence of Financial Services.

2. Regarding content:
   a. Fund Management Companies must present their Financial Statements, as well as those corresponding to the funds they manage, in accordance with the accounting standards established in the current legislation for commercial companies and its regulations. b. The External Auditor or Audit Firm that sign the corresponding reports must demonstrate compliance with the requirements contained in Article 76. The Financial Statements must be signed by representatives of the Management Company. The timely and proper presentation of the information provided for in this article constitutes an indispensable requirement for the quotation of publicly offered closed-end investment funds. Upon verification of the omission, automatic suspension of the quotation will occur, a circumstance that will be declared by the Superintendence of Financial Services, and the securities will not be able to quote again until the situation that caused the suspension is regularized. In the case of open-end investment funds, the omission of the timely and proper presentation of the information provided for in this article will give rise to the application of the daily fine established in Article 358.

3. COMMUNICATE what is established in the preceding numbers by Circular.

JUAN PEDRO CANTERA
Superintendent of Financial Services

RR-SSF-2025-261 Date: 06/06/2025 17:26:00
Exp. 2025-50-1-00863
Publishable: Yes - Signatory: JUAN PEDRO CANTERA SENCIÓN CIRCULAR NO. 2480