Norm on Authorization and Regulation of Financial Leasing Entities

RESOLUTION CDMF-XIX-3-25
Dated June 4, 2025

NORM ON AUTHORIZATION AND REGULATION OF FINANCIAL LEASING ENTITIES

The Monetary and Financial Board Council,

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 Superintendence 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 FINANCIAL LEASING ENTITIES

CHAPTER I
GENERAL PROVISIONS

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) Financial Leasing: Contract by which a person, the "Lessor," grants the right to use and enjoy a good to one or more persons designated as the "Lessee" for a determined period in exchange for a lease payment, with an option to purchase. b) Lessor: Person who, through the signing of a financial leasing contract, grants the right to use and enjoy a good to a lessee, in exchange for a lease payment. c) Lessee: Person who, through the signing of a financial leasing contract and payment of a lease payment, acquires the right to use and enjoy a good. d) Lease Payment: Sum of money composed of a capital portion and an interest portion, payable periodically by the lessee to the lessor, agreed upon in the financial leasing contract. e) Board of Directors: Monetary and Financial Board of Directors. f) FLE: Financial Leasing Entity. g) 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. 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) Purchase Option: Irrevocable preferential option granted by the lessor to the lessee, which allows the lessee to acquire the good for an agreed or determinable price between the parties, provided that the lessee has fulfilled all its contractual obligations towards the lessor and decides to exercise the granted option. k) Superintendent: Superintendent of Banks and Other Financial Institutions. l) Superintendence: Superintendence of Banks and Other Financial Institutions.

Article 2. Objective.- This norm aims to regulate financial leasing operations carried out by legal entities other than banks and financial companies, in accordance with what is provided in Article 32 bis of Law No. 977.

CHAPTER II
AUTHORIZATION AND OPERATION REQUIREMENTS

Article 3. Requirements for incorporation.- Persons interested in carrying out financial leasing operations must incorporate as anonymous societies with a single social object and submit an application to the Superintendent, who will establish the legal documentation, feasibility study and its content, promoter information, as well as the documentation that evidences 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 persons interested in carrying out financial leasing operations that is in a language other than Spanish must be presented with its corresponding translation, which must comply with what is stipulated in the national laws on the matter or with the laws of the country where the translation is carried out. Likewise, documents coming from abroad must comply with the requirements established by the laws on the matter for them to have legal effects in the country.

Those interested in becoming part of the society must authorize the Superintendent in writing so that he can request information from the corresponding natural and legal persons, with the purpose of proving their honorability and competence.

Article 4. Authorization of incorporation.- Once all the documents referred to in the previous article have been presented, the Superintendent will submit the application to the consideration of the Board of Directors, who will grant or deny the authorization to incorporate as an FLE, all within a period that does not exceed 120 days from the presentation of the application.

In case of a positive resolution, the notary must mention the edition of La Gaceta, Official Journal, in which the resolution of authorization to incorporate as an FLE, issued by the Board of Directors, was published, and insert the certification of said resolution in its entirety in the deed. 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, FLEs must comply with the requirements established by the Superintendence, 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 money laundering and/or asset laundering and/or terrorism financing and/or financing of the proliferation of weapons of mass destruction. All of the above in correspondence with the size of the company, its nature, complexity, and volume of transactions and its own risk profile, as well as, in accordance with the legal framework applicable to the operations that FLEs 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 will become void.

Article 6. Operational authorization.- The Superintendent will verify if the applicants have completed all the requirements demanded for operation as an FLE 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 from the date of subsanation. 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 FLE must present to the Superintendence, 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 financial leasing operations shall be twenty million córdobas (C$20,000,000.00), an amount that may be reviewed and adjusted by the Board of Directors, 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.- FLEs 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 companies.

Article 9. External Audit.- Financial leasing companies must hire annually, 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, monitoring of audit work, authorization, and publications, established in the regulation governing the matter on external auditing.

CHAPTER IV
ON THE FINANCIAL LEASING CONTRACT

Article 10. Financial leasing contract.- Financial leasing contracts must contain the following minimum elements:
a) Name, trade name or corporate name, domicile, and other general details of the parties; b) Date and place of celebration of the contract; c) Period of validity of the contract; d) The interest rate of the contract and the method for determining it; e) The terms, forms, and conditions of payment of the installments; f) Commissions and charges to be collected, if applicable; g) The contract must be executed on goods acquired at the client's request; h) Specifications and characteristics of the goods subject to financial leasing; i) The commitments acquired by both the Lessee and the Lessor, which cannot be modified unilaterally during the validity of the contract; j) Conditions under which the financial leasing contract can be rescinded; k) The option, to be exercised by the Lessee upon termination of the contract, to extend the term to continue with the use, enjoyment, or economic exploitation of the leased good or to purchase it at a price lower than its acquisition value, which must be fixed in the contract.

Any modification to the financial leasing contract must be made by mutual agreement of the parties, and such modifications must always be subject to what is provided in this norm and what is provided by the regulation governing the topic of transparency in financial operations.

CHAPTER V
SUPERVISION

Article 11. Inspections and corrective measures.- In accordance with the current legal framework, the Superintendence may, in the exercise of its attributes, carry out general or partial inspections, in situ or extra situ, to FLEs; 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 risks of terrorism financing and financing of the proliferation of weapons of mass destruction.

Article 12. Cessation of operations.- The Superintendence, without prejudice to the corresponding sanctions, will request the cessation of operations of the FLE whenever any or all of the following circumstances occur:
a) If the entity persists in violating the provisions of applicable laws and norms, those of its articles of incorporation or its own statutes or regulations, those issued by the Board of Directors, 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) Being in a situation 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 process of cessation of operations will be carried out, insofar as applicable, in accordance with what is established in Articles 93 to 108 of Law No. 561.

CHAPTER VI
FINAL PROVISIONS

Article 13. Financial leasing companies in operation.- FLEs 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 Superintendence.

Additionally, they must present an action plan to comply with the requirements established in this norm and those set by the Superintendence, 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, if the company has not met all the established requirements, the Superintendent will have a period of 15 business days to rule by resolution, ordering the cessation of financial leasing operations of said society.

All of the above, without prejudice to the legal responsibilities in which they might incur according to what is established in Article 167 of Law No. 561.

Article 14. Power of the Superintendent.- The Superintendent is authorized to establish the minimum guidelines to be complied with by FLEs for the purposes of managing risks associated with their operations, the accounting treatment of financial leasing contracts, and the information they must submit according to the official calendar for the delivery of information required by the Superintendence, as well as aspects related to the supply of information to the risk center of the Superintendence. Likewise, he is authorized to issue the necessary provisions for the implementation of this Norm.

Article 15. Validity.- This Resolution will enter into force starting from June 18, 2025.

Publish in the media determined by the Superintendence of Banks.

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