Norm for the Implementation of the Accounting Framework for Securities Market Financial Institutions

Page 1 of 4 Resolution No. CD-SIBOIF-1024-2-NOV3-2017 Dated November 3, 2017

NORM FOR THE IMPLEMENTATION OF THE ACCOUNTING FRAMEWORK FOR SECURITIES MARKET FINANCIAL INSTITUTIONS

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

CONSIDERING

I

That Article 10, numeral 1 of Law No. 316, Law of the Superintendence of Banks and Other Financial Institutions, published in La Gaceta, Official Gazette No. 196, on October 14, 1999, and its amendments, establishes that it is the responsibility of the Board of Directors of the Superintendence of Banks and Other Financial Institutions to issue general norms to strengthen and preserve public security and confidence in institutions under the supervision, oversight, and auditing of the Superintendence of Banks and Other Financial Institutions.

II

That by Resolution No. CD-SIBOIF-465-1-FEB7-2007, dated February 7, 2007, published in La Gaceta, Official Gazette No. 68, on April 12, 2007, the "Single Chart of Accounts for Securities Market Financial Institutions" was approved. Likewise, by Resolution No. CD-SIBOIF-559-1-NOV5-2008, dated November 5, 2008, published in La Gaceta Official Gazette No. 236, on December 11, 2008, the "Norm on the Application of the Single Chart of Accounts for Securities Market Financial Institutions to Investment Funds and Securitization Funds" was approved.

III

That it is necessary to update the aforementioned accounting framework based on International Financial Reporting Standards (IFRS), which are globally recognized and based on reasonably articulated principles, and on the norms issued by this Superintendence applicable to the aforementioned institutions.

IV

That in accordance with the considerations expressed above and based on the authority established in Article 3, numeral 13) of Law No. 316, Law of the Superintendence of Banks and Other Financial Institutions, and its amendments.

In exercise of its powers,

HAS ISSUED

The following: Resolution No. CD-SIBOIF-1024-2-NOV3-2017

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NORM FOR THE IMPLEMENTATION OF THE ACCOUNTING FRAMEWORK FOR SECURITIES MARKET FINANCIAL INSTITUTIONS

CHAPTER I CONCEPTS, OBJECT, AND SCOPE

Article 1. Concepts.- For the purposes of this norm, the terms indicated in this article, both in uppercase and lowercase, singular or plural, shall have the following meanings: a) Securities Market Financial Institutions: Securities market financial institutions subject to the supervision of the Superintendence of Banks and Other Financial Institutions. b) Accounting Framework: Uniform accounting recording system for securities market financial institutions, which allows the financial statements they prepare to be presented in a homogeneous manner and to adequately reflect their financial, equity, and management results. c) Superintendence: Superintendence of Banks and Other Financial Institutions. d) Superintendent: Superintendent of Banks and Other Financial Institutions.

Article 2. Object and Scope.- The purpose of this norm is to approve the "Accounting Framework for Securities Market Financial Institutions," based on: International Financial Reporting Standards (IFRS); and the norms issued by the Superintendence, applicable to the aforementioned institutions; which is contained in the Annex of this norm, being an integral part of it.

CHAPTER II PHASES OF IMPLEMENTATION OF THE ACCOUNTING FRAMEWORK

Article 3. Guidelines for Implementation.- Securities market financial institutions must implement the Accounting Framework during a transition period from January 1 to December 31, 2018, in order to establish comparability with the 2019 period; and its adoption from January 1, 2019.

Article 4. Progress Reports on Activities for Implementation of the Accounting Framework.- Securities market financial institutions must report, upon request by the Superintendent, the progress of implementation activities for both their transition period and their adoption.

CHAPTER III RESPONSIBILITIES OF THE BOARD OF DIRECTORS

Article 5. Responsibilities of the Board of Directors.- The Board of Directors of the institution shall have, among others, the following responsibilities: a) Approve the implementation plan for the accounting framework;

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b) Approve changes or adjustments to their manuals, policies, operational procedures, models, internal control, and other topics related to the Accounting Framework established in this norm; c) Guarantee the human, technological, financial, and other resources necessary for the adoption of the Accounting Framework; and d) Ensure that the implementation activities of the Accounting Framework are carried out in a timely and proper manner to ensure compliance with what is established in this norm.

CHAPTER IV EXCLUSIONS AND TRANSITION ADJUSTMENTS

Article 6. Exclusions.- While there is no express authorization from the Superintendence and regulatory provisions, securities market financial institutions shall not carry out the following operations within the Accounting Framework: a) Securities lending, and b) Financial Derivative Instruments.

Securities market financial institutions may only carry out operations that the law or corresponding regulation permits them to carry out, complying with the respective procedures when the law indicates that any operation requires the authorization of the Superintendent.

Article 7. Transition Adjustments.- Adjustments generated by the first-time application of the accounting framework and recorded as transition adjustments may only be recognized as accumulated results when the asset or liability that generated them has been realized (sold, received, or all cash flows paid), except for the aforementioned, adjustments made for labor indemnification; such adjustments must be recognized in accumulated results.

CHAPTER V FINAL PROVISIONS

Article 8. Authority of the Superintendent.- The Superintendent is authorized to approve changes or modifications that are necessary for the adaptation and updating of the annex of this norm; being able to issue additional instructions for the correct application thereof, and must inform the Board of Directors of the Superintendence.

Article 9. Repeal.- The following provisions are repealed effective January 1, 2019: a) Norm on the Single Chart of Accounts for Securities Market Institutions, contained in Resolution No. CD-SIBOIF-465-1-FEB7-2007, dated February 7, 2007, published in La Gaceta, Official Gazette No. 68 on April 12, 2007; and b) Norm on the Application of the Single Chart of Accounts for Securities Market Financial Institutions to Investment Funds and Securitization Funds, contained in

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Resolution No. CD-SIBOIF-559-1-NOV5-2008, dated November 5, 2008, published in La Gaceta, Official Gazette No. 236, on December 11, 2008.

Article 10. Effectiveness.- This norm shall enter into force upon its notification, without prejudice to its publication in La Gaceta, Official Gazette. The Accounting Framework annexed to this norm is exempt from said publication, and it will be available on the website of the Superintendence. (f) S. Rosales (f) V. Urcuyo (f) Gabriel Pasos Lacayo (f) Fausto Reyes B. (f) illegible (Silvio Moisés Casco Marenco) (f) illegible (Freddy José Blandón Argeñal) (f) illegible (Edelberto Zelaya Castillo) Ad Hoc Secretary.

ANDELBERTO ZELAYA CASTILLO Ad Hoc Secretary SIBOIF Board of Directors