Norm on Authorization and Regulation of Non-Bank Providers of Fiduciary Services

RESOLUTION CDMF-XIX-2-25
Dated June 4, 2025

NORM ON AUTHORIZATION AND REGULATION OF NON-BANK PROVIDERS OF FIDUCIARY SERVICES

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 Gazette No. 153, of August 20, 2024, amended by Law No. 1215, Law of Reforms and Additions to the aforementioned Law No. 977, published in La Gaceta, Official Gazette No. 166, of September 6, 2024, establishes that: “The Superintendency of Banks and Other Financial Institutions (SIBOIF) will regulate Factoring, Financial Leasing, and Fiduciary Service Providers’ Operations…”

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 Gazette No. 241, of December 30, 2024.

In exercise of its powers,

HAS ISSUED

The following,

NORM ON AUTHORIZATION AND REGULATION OF NON-BANK PROVIDERS OF FIDUCIARY SERVICES

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 of Directors: Monetary and Financial Board of Directors.

b) Trustee: A natural or legal person, distinct from banks and financial companies, to whom the ownership of the trust assets or rights is transferred and who is in charge of executing what is agreed upon in the Trust Agreement to achieve its purposes.

c) Group of Economic Interest: Related parties, significant linkages, and indirect manifestations of the natural or legal persons indicated in the scope of this norm, to which Article 55 of Law 561, General Law of Banks, Non-Bank Financial Institutions, and Financial Groups, and the regulations governing the matter on concentration limits refer.

d) 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 Gazette No. 153, of August 20, 2024, and its reforms.

e) Law No. 741: “Law on the Trust Agreement,” contained in Law No. 1175, “Law of the Nicaraguan Legal Digest on Banking and Finance Matters,” published in La Gaceta, Official Gazette No. 153, of August 20, 2024.

f) 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 Gazette No. 153, of August 20, 2024, and its reforms.

g) Superintendent: Superintendent of Banks and Other Financial Institutions.

h) Superintendency: Superintendency of Banks and Other Financial Institutions.

Article 2. Purpose.- This norm aims to regulate fiduciary services performed by natural or legal persons other than banks and financial companies, in accordance with what is provided in Article 32 bis of Law No. 977.

All aspects of the trust agreement figure that were not modified by Law No. 977 will continue to be governed by Law No. 741.

CHAPTER II
AUTHORIZATION AND OPERATIONAL REQUIREMENTS FOR NON-BANK PROVIDERS OF FIDUCIARY SERVICES

Article 3. Requirements to constitute themselves as trustees.- Natural and legal persons interested in constituting themselves as trustees must submit an application to the Superintendent. In the case of legal person applicants, they must constitute themselves as single-purpose anonymous companies and present written authorization to the Superintendent to request information from the natural and legal persons who will make up the company, in order to prove the honorability and competence of the proposed shareholders and administrators.

The Superintendency will establish the legal documentation, feasibility study, its content, and other information that applicants must provide to obtain the authorization to constitute, such as evidence to prove the lawful origin of the patrimony to be invested.

All information and/or documentation required from those interested in constituting themselves as trustees 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 originating from abroad must comply with the requirements established by the laws on the matter for them to have legal effects in the country.

Article 4. Authorization to constitute.- Once all documents referred to in the previous article are presented, the Superintendent will submit the application to the consideration of the Board of Directors, who will grant or deny the authorization to constitute themselves as trustees, all within a period not exceeding 120 days from the presentation of the application.

In the event of a positive resolution, for applications to constitute legal person trustees, the notary must mention the edition of La Gaceta, Official Gazette, in which the authorization resolution to constitute themselves as trustees, issued by the Board of Directors, was published, and insert the certification of said resolution in its entirety into the deed. The registration in the Public Mercantile Registry will be null if this requirement is not met.

Article 5. Requirements to start operations as a trustee.- To start operations, trustees 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 main officials, as well as contract models, infrastructure, technology, human resources, and policies, manuals, and/or regulations approved by the board of directors, if applicable, for the management of risks inherent to operations, such as credit risk, technological risk, and money laundering and/or assets and/or terrorism financing and/or financing of the proliferation of weapons of mass destruction; all in correspondence with the nature, complexity, volume of transactions, risk profile of the trustee, and in accordance with the applicable legal framework for the operations to be carried 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 authorizing their constitution, it will become void.

Article 6. Operational authorization.- The Superintendent will verify if applicants have completed all requirements required for their operation and, if found compliant, will grant the operational authorization within a maximum period of 15 business days after the completion of said verification; otherwise, they will communicate to the petitioners the deficiencies noted so that they fill in the omitted requirements, and once the deficiency is remedied, they will grant the authorization within a term of five (5) business days from the date of correction. The authorization must be published in La Gaceta, Official Gazette, and registered in the Public Mercantile Registry in the corresponding book, depending on whether they are legal or natural persons, both processes at the expense of the authorized party.

Authorized trustees must present to the Superintendency no later than within a period of 30 days, counted from the acknowledgment of receipt of the corresponding authorization notification, 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 social capital.- The minimum social capital of natural and legal persons carrying out trustee activities shall be five million five hundred thousand córdobas (C$5,500,000.00), 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
SUPERVISION

Article 8. Information requirements.- Trustees must inform the Superintendent about the trusts they constitute each month, according to the detail established semi-annually in the Official Calendar for the delivery of information required by the Superintendency; without prejudice to the rest of the information or periodic or specific statistics that may be requested from them on an extraordinary basis for supervision and/or compliance purposes with requirements of authorities and/or competent bodies.

Article 9. 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, on-site or off-site inspections of trustees; issue the necessary instructions to remedy deficiencies or irregularities found; and adopt measures within its competence to correct infractions committed; 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 the matter of sanctions for non-compliance in the area of management and prevention of risks of terrorism financing and financing of the proliferation of weapons of mass destruction.

Article 10. Prohibitions.- In addition to the prohibitions established in Law 741, trustees may not, in the exercise of their activities as trustees:

a) Assume risks or commitments of the trust on their own account.

b) Carry out, through the trust, and on their own account and risk, activities or operations that are prohibited to them or for which they are not authorized.

c) Respond on their own behalf for the results of the trust, for the partial or total loss of the trust patrimony, except that the loss was caused by their fault or negligence in the administration of the trust assets.

d) Guarantee in any way to the settlor or the beneficiary the result of the trust or the operations, acts, and contracts carried out with the trust assets.

e) In the case of trusts administered in a discretionary manner, grant them credits, guarantees, or sureties, nor sell them their own securities or by any member of their group of economic interest. They may not sell them movable or immovable assets, or their representative titles.

f) Carry out operations, acts, or contracts with the trust assets for the benefit of their shareholders, directors, chief executive, spouses, and relatives up to the second degree of consanguinity and second degree of affinity of the aforementioned natural persons; as well as legal persons with which such spouses and relatives maintain direct or indirect significant linkages, in accordance with what is established in the General Law of Banks.

g) Coincide as trustee and beneficiary.

Article 11. Bond or insurance policy of trustees.- As established in Article 30, subsection e), of Law No. 741, trustees must have a bond or insurance policy that guarantees the fulfillment of their fiduciary obligations or compensates for damages caused by deficiencies in their management. The aforementioned bond or policy must meet the following minimum conditions:

a) It will have no deductible;

b) The beneficiaries must be the beneficiaries of the trusts they administer;

c) The validity must be for one year, renewed annually, and must contain a special clause stipulating that it will respond for up to one year after its expiration for imputable facts that could have occurred during the original validity period, or until judicial actions filed against the trustee by the alleged harmed parties for such facts and within the aforementioned period are resolved by a final judgment; and

d) The policy must be automatically renewable and with an insured sum of nine million one hundred fifty thousand córdobas (C$9,150,000.00). This amount may be updated every two years in case of exchange rate variations of the national currency or by other factors determined by the Superintendency.

Once the bond or insurance policy referred to in this article is presented to the Superintendency, it will be reviewed by the Superintendent, who may instruct modifications to it when deemed necessary. This bond or policy must be presented in original to the Superintendency, which will safeguard it and return it to the trustee upon request, once the time established in subsection c) of this article has been fulfilled.

Article 12. Cancellation of registration.- In the event that the trustee incurs in the prohibitions established in Law No. 741 and this norm, the Superintendency may cancel the trustee's registration and their authorization to exercise activities as such.

CHAPTER IV
FINAL PROVISIONS

Article 13. Trustees in operation.- Trustees 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 adapt to 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.

After the execution deadlines of the adaptation plan indicated in the previous paragraph have ended, without the trustee having met all the established requirements, the Superintendent will have a period of 15 business days to rule by resolution, ordering the cessation of this entity's operations.

All of the above, without prejudice to the legal responsibilities in which they may 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 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 Superintendency of Banks.

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