Norm for the Distribution of Profits of General Warehouses

Page 1 of 3 Resolution No. CD-SIBOIF-1077-2-OCTU16-2018 Dated October 16, 2018

NORM FOR THE DISTRIBUTION OF PROFITS OF GENERAL WAREHOUSES

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

CONSIDERING

I

That Article 28 of Law 734, the General Warehouses Law, provides that profit distribution may only occur with prior authorization from the Superintendent, based on a general norm issued by the Board of Directors of the Superintendence of Banks and Other Financial Institutions.

II

That based on the powers conferred by Articles 2 and 139 of Law 734, the General Warehouses Law; and Article 2, fourth paragraph, Article 3, item 13), and Article 10, items 2) and 7) of Law 316, the Law of the Superintendence of Banks and Other Financial Institutions, and its reforms; both legal frameworks contained in Law No. 974, the Nicaraguan Legal Digest of the Banking and Finance Sector, published in La Gaceta, Official Gazette No. 164, on August 27, 2018.

In exercise of its powers,

RESOLVES

To issue the following:

CD-SIBOIF-1077-2-OCTU16-2018

NORM FOR THE DISTRIBUTION OF PROFITS OF GENERAL WAREHOUSES

CHAPTER I CONCEPTS, OBJECT, AND SCOPE

Article 1. Concepts.- For the application of this norm, the concepts indicated in this article, whether in uppercase or lowercase, singular or plural, shall have the following meanings:

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a) Warehouses: General Warehouses, authorized by the Superintendence as non-bank financial institutions auxiliary to credit. b) Board of Directors: Board of Directors of the Superintendence of Banks and Other Financial Institutions. c) General Warehouses Law: Law No. 734, General Warehouses Law, published in the Official Gazette No. 201 and 202, on October 21 and 22, 2010, respectively; and contained in Law No. 974, the Nicaraguan Legal Digest of the Banking and Finance Sector, published in La Gaceta, Official Gazette No. 164, on August 27, 2018. d) Superintendence: Superintendence of Banks and Other Financial Institutions. e) Superintendent: Superintendent of Banks and Other Financial Institutions.

Article 2. Object and Scope.- This norm aims to establish the guidelines to be complied with by warehouses to obtain authorization for profit distribution from the Superintendent, in accordance with what is established in Article 28 of the General Warehouses Law.

CHAPTER II CONDITIONS FOR THE DISTRIBUTION OF PROFITS

Article 3. Conditions.- For the authorization of profit distribution, warehouses must submit an authorization request to the Superintendent and comply with the following:

a) Minimum social capital. b) Not being in a transitional regime regarding the constitution of provisions for any asset, that is, those to which the Board of Directors has approved gradualness or deferral to create their provisions, whether resulting from their own calculations or from inspections by the Superintendence. c) Not having pending adjustments ordered by the Superintendence, or determined by themselves. d) Not having generated losses that affected part of their paid-in capital and that such losses have not been restored to capital, unless it was resolved to reduce their capital, as established in Articles 22 and 27 of the General Warehouses Law. e) Not having pending the constitution of mandatory reserves as established in the General Warehouses Law and norms issued by the Board of Directors.

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f) The last external audit report must not contain qualifications or be subject to disclaimers of opinion. g) Other situations that, in the judgment of the Superintendent, warrant restricting the distribution of profits, when, in the opinion of said official and as a prudential measure, such distribution could harm the stability or solidity of the institution.

Art. 4. Authorization.- Without prejudice to what is established in Article 28 of the General Warehouses Law and what is established in the preceding article, Warehouses that decree the distribution of profits may not make such distribution effective under any modality until they have obtained written authorization from the Superintendent.

CHAPTER III FINAL PROVISIONS

Article 5. Validity.- This norm shall enter into force upon its notification, without prejudice to its subsequent publication in La Gaceta, Official Gazette. (Signed) S. Rosales C. (Signed) V. Urcuyo V. (Signed) Fausto Reyes B. (Signed) Illegible (Silvio Moisés Casco Marenco) (Signed) Illegible (Rafael Ángel Avellán Rivas).

RAFAEL ÁNGEL AVELLÁN RIVAS Secretary of the Board of Directors SIBOIF