Norm on Authorization and Regulation of Factoring Entities

RESOLUTION CDMF-XIX-4-25
Dated June 4, 2025
NORM ON AUTHORIZATION AND REGULATION OF FACTORING ENTITIES

The Monetary and Financial Board,

CONSIDERING

I
That Article 32 bis of Law No. 977, "Law Against Money Laundering, Terrorism Financing, and Financing of the Proliferation of Weapons of Mass Destruction," contained in Law No. 1175, "Law of the Nicaraguan Legal Digest on Banking and Finance Matters," published in La Gaceta, Official Journal No. 153, on August 20, 2024, reformed by Law No. 1215, Law of Reforms and Additions to the aforementioned Law No. 977, published in La Gaceta, Official Journal No. 166, on September 6, 2024, establishes that:

"The Superintendency of Banks and Other Financial Institutions (SIBOIF)" will regulate Factoring Operations, Financial Leasing, and Fiduciary Service Providers…"

II
That in accordance with what is established in Article 17, subsection c, numbers 1, 2, 4, 5, and 13 of Law No. 1232 "Law on the Administration of the Monetary and Financial System," published in La Gaceta, Official Journal No. 241, on December 30, 2024.

In exercise of its powers,

HAS ISSUED

The following,

NORM ON AUTHORIZATION AND REGULATION OF FACTORING ENTITIES

CHAPTER I
GENERAL PROVISIONS

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

a) Board: Monetary and Financial Board.

b) Factoring Company: Legal entities that act as factors. c) Factor: Legal entities that offer factoring services. d) Factoring: Specialized credit service that allows short-term financing for natural or legal persons with commercial or business activity, who sell or assign as collateral their accounts or receivables, partially or totally, administration, custody, and collection services, carried out by a factoring company in exchange for a determined or determinable price, facilitating cash within a determined period of time. e) AML/CFT/CPF: Money Laundering and/or Asset Laundering and/or Terrorism Financing and/or Financing of the Proliferation of Weapons of Mass Destruction. f) Law No. 561: "General Law of Banks, Non-Bank Financial Institutions, and Financial Groups," contained in Law No. 1175, "Law of the Nicaraguan Legal Digest on Banking and Finance Matters," published in La Gaceta, Official Journal No. 153, on August 20, 2024, and its reforms. g) Law No. 740: "Factoring Law," contained in Law No. 1175, "Law of the Nicaraguan Legal Digest on Banking and Finance Matters," published in La Gaceta, Official Journal No. 153, on August 20, 2024. h) Law No. 977: "Law Against Money Laundering, Terrorism Financing, and Financing of the Proliferation of Weapons of Mass Destruction," contained in Law No. 1175, "Law of the Nicaraguan Legal Digest on Banking and Finance Matters," published in La Gaceta, Official Journal No. 153, on August 20, 2024, and its reforms. i) Law No. 1232: "Law on the Administration of the Monetary and Financial System," published in La Gaceta, Official Journal No. 241, on December 30, 2024. j) Superintendent: Superintendent of Banks and Other Financial Institutions. k) Superintendency: Superintendency of Banks and Other Financial Institutions.

Article 2. Objective.- This norm aims to regulate factoring operations carried out by legal entities other than banks and financial societies, in accordance with what is provided in Article 32 bis of Law No. 977.
The figure of the factoring contract shall be governed in accordance with what is provided in the Factoring Law.

CHAPTER II
AUTHORIZATION AND OPERATION REQUIREMENTS

Article 3. Requirements for Incorporation.- Interested parties wishing to carry out factoring operations must incorporate as single-purpose anonymous societies and submit an application to the Superintendent, who will establish the legal documentation, feasibility study, and its content, promoter information, as well as documentation to evidence the lawful origin of the capital to be invested in the new society, among other aspects, which must be fulfilled to obtain the authorization for incorporation.
All information and/or documentation required from interested parties wishing to carry out factoring operations that is in a language other than Spanish must be presented with its corresponding translation, which must comply with what is stipulated in national laws on the matter or with the laws of the country where the translation is carried out. Likewise, documents originating from abroad must comply with the requirements established by the laws on the matter for them to have legal effects in the country. Interested parties who wish to become part of the society must authorize the Superintendent in writing, so that he may request information from the corresponding natural and legal persons, with the purpose of proving their honorability and competence.

Article 4. Authorization for Incorporation.- Once all documents referred to in the previous article have been presented, the Superintendent will submit the application to the Board for consideration, who will grant or deny the authorization to incorporate as a factoring company, all within a period not exceeding 120 days from the presentation of the application.
In the event of a positive resolution, the notary must mention the edition of La Gaceta, Official Journal, in which the resolution of authorization to incorporate as a factoring company, issued by the Board, was published, and insert in full in the deed the certification of said resolution. The registration in the Public Mercantile Registry will be null if this requirement is not met.

Article 5. Requirements to Commence Operations.- To commence operations, factoring companies must comply with the requirements established by the Superintendency, related, among other aspects, to the legal formalization of the company, opening balance sheet, appointments of principal officials, contract models, and with the infrastructure, technology, human resources, policies, manuals, and/or regulations approved by the board of directors for the management of risks inherent to the operations, such as credit risk, technological risk, and AML/CFT/CPF. All of the foregoing in correspondence with the size of the company, its nature, complexity, and volume of its transactions and its own risk profile, as well as, in accordance with the legal framework applicable to the operations that factoring companies will carry out.

If the application for operational authorization, with evidence of compliance with the aforementioned requirements, is not presented within one hundred eighty (180) days counted from the resolution that authorizes its incorporation, it shall become void.

Article 6. Operational Authorization.- The Superintendent will verify whether the applicants have completed all the requirements required for operation as a factoring company and, if found compliant, will grant the operational authorization within a maximum period of 15 business days after the completion of said verification; otherwise, it will communicate to the petitioners the deficiencies noted so that they fill in the omitted requirements, and, once the deficiency is remedied, it will grant the authorization within a term of five (5) business days counted from the date of correction. The authorization must be published in La Gaceta, Official Journal, at the expense of the authorized company and must be registered in the corresponding Public Mercantile Registry, also at its expense.
The authorized factoring company must present to the Superintendency, at the latest within a period of 30 days, counted from the receipt of the notification of the corresponding authorization, a notarially certified copy of the registration as an Obligated Subject before the Financial Analysis Unit (UAF). The aforementioned period may be extended through a reasoned request by the interested party.

Article 7. Minimum Share Capital.- The minimum share capital of legal entities interested in carrying out factoring operations shall be twenty million córdobas (C$20,000,000.00), an amount that may be reviewed and adjusted by the Board, at least every two years, according to exchange rate variations of the national currency or by other factors determined by it.

CHAPTER III
CONTROL ASPECTS

Article 8. Internal Auditor.- Factoring companies must have an Internal Auditor, who must comply with the minimum guidelines established in the regulation governing the matter on internal control and auditing of banks and financial societies.

Article 9. External Audit.- Factoring companies must annually hire, at the latest within the third quarter of the year to be audited, the services of External Audit Firms, complying with the selection process, minimum requirements for contracting, follow-up on audit work, authorization, and publications, established in the regulation governing the matter on external auditing.

CHAPTER IV
SUPERVISION

Article 10. Inspections and Corrective Measures.- In accordance with the current legal framework, the Superintendency may, in the exercise of its attributes, carry out general or partial inspections, on-site or off-site, to factoring companies; issue any of the corrective measures indicated in Article 88 of Law No. 561 and Article 141 of Law No. 1232, as well as, apply the corresponding sanctions according to the gravity of the offense, in accordance with what is provided in Articles 164 and 168 of Law No. 561 and regulations governing the matter on the imposition of fines and on sanctions for non-compliance in matters of management and prevention of terrorism financing and financing of the proliferation of weapons of mass destruction risks.

Article. 11. Cessation of Operations.- The Superintendency, without prejudice to the corresponding sanctions, will request the cessation of operations of the factoring company whenever any or all of the following circumstances occur:

a) If the company persists in violating the provisions of applicable laws and norms, its articles of incorporation, or its own statutes or regulations, those issued by the Board, as well as the instructions and resolutions of the Superintendent or if it persists in administering its business in an unauthorized manner, in contradiction with this norm. b) To be in a state of insolvency due to non-compliance with liquid, due, and enforceable obligations or if there are indications of an imminent state of suspension of payments. c) The decrease of net equity to two-thirds of the share capital. The cessation of operations process will be carried out, insofar as applicable, in accordance with what is established in Articles 93 to 108 of Law No. 561.

CHAPTER V
FINAL PROVISIONS

Article 12. Factoring Companies in Operation.- Factoring companies that are currently operating will have a period of up to ninety (90) days, counted from the entry into force of this norm, to submit the registration application to the Superintendency.
Additionally, they must present an action plan to comply with the requirements established in this norm and those set by the Superintendency, with compliance dates and responsible parties, which will be approved by the Superintendent.
Upon completion of the execution deadlines of the adaptation plan indicated in the previous paragraph, without the company having met all the established requirements, the Superintendent will have a period of 15 business days to rule by resolution, ordering the cessation of factoring operations of said society.
All of the foregoing, without prejudice to the legal responsibilities in which they may incur according to what is established in Article 167 of Law No. 561.

Article 13. Power of the Superintendent.- The Superintendent is authorized to establish the minimum guidelines to be complied with by factoring companies for the purposes of managing risks associated with their operations, the accounting treatment of factoring contracts, and the information they must submit according to the official calendar for the delivery of information required by the Superintendency, as well as aspects related to the supply of information to the risk center of the Superintendency.
Likewise, it is authorized to issue the necessary provisions for the implementation of this Norm.

Article 14. Validity.- This Resolution will enter into force from June 18, 2025.
Publish in the media determined by the Superintendency of Banks.

(f) legible, Ovidio Reyes R. President of the Board; (f) Illegible, Luis Ángel Montenegro Espinoza, Vice President of the Board; (f) Illegible, Bruno Gallardo, Minister of Finance, Owner Member; (f) Illegible, Roberto Rivas, Non-executive Owner Member; (f) Illegible, Hugo Ortega, Non-executive Owner Member. (End of Resolution text). (f) Illegible, Ruth Elizabeth Rojas Mercado, Secretary of the Board.