Norm on Cancellation of Registration of Public Offering Securities by Issuer Request

Resolution No. CD-SIBOIF-540-1-JUL2-2008
Date: July 2, 2008

NORM ON CANCELLATION OF REGISTRATION OF PUBLIC OFFERING SECURITIES BY ISSUER REQUEST

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

CONSIDERING

I
That Article 4 of Law No. 587, "Capital Markets Law," published in La Gaceta, Official Journal No. 222, of November 15, 2006, establishes that the Superintendence of Banks and Other Financial Institutions, in compliance with said Law, will ensure the transparency of securities markets and the protection of investors, regulating, supervising, and auditing said markets, as well as the activities of natural and legal persons who intervene directly or indirectly in them.

II
That Title II of the aforementioned Law empowers the Board of Directors of the Superintendence to regulate general aspects related to procedures and requirements for the placement and negotiation of securities subject to public offering in the primary market; as well as to establish provisions applicable to issuers and intermediaries of said securities.

III
That in order to preserve order in the securities market, as well as transparency through information to be given to the public, it is necessary to establish procedures that allow for the cancellation of registration of those issuances that were not placed, or, when they are, if the percentage of investors established in the relevant regulations requires the voluntary cancellation of these.

In exercise of its powers,

HAS ISSUED

The following:

Resolution No. CD-SIBOIF-540-1-JUL2-2008

NORM ON CANCELLATION OF REGISTRATION OF PUBLIC OFFERING SECURITIES BY ISSUER REQUEST

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. Capital Markets Law: Law No. 587, Capital Markets Law, published in La Gaceta, Official Journal, No. 222 of November 15, 2006. b. Registry: Registry of Securities of the Superintendence of Banks and Other Financial Institutions.
c. Superintendence: Superintendence of Banks and Other Financial Institutions.
d. Superintendent: Superintendent of Banks and Other Financial Institutions.

Article 2. Object and Scope.- This Norm aims to establish the general guidelines that issuers of securities registered in the Registry of the Superintendence must follow to voluntarily request the cancellation of registration of issuances authorized for public offering.

Article 3. Prior Authorization Regime.- Issuers of securities may request the Superintendent to cancel the registration of one, several, or all of their issuances authorized for public offering. Such request must comply with the minimum requirements set forth in this Norm. The cancellation of registration is subject to prior authorization by the Superintendent. Issuances in circulation will require the authorization of investors as specified in the following articles. In any case, the proposal for cancellation of registration must include the exit mechanisms provided for the protection of investors and guarantee equal treatment for all of them.
The cancellation of registration of the issuance will be carried out once it is verified that there is no stock exchange forward operation that uses securities of this issuance as the underlying asset, as well as that no investment or securitization fund holds securities of this issuance in its portfolios.

CHAPTER II
CANCELLATION OF REGISTRATION OF FIXED-INCOME SECURITIES

Article 4. Requirements for the cancellation of registration of unplaced issuances.- For the cancellation of registration of unplaced issuances, the issuer must present the following minimum information to the Superintendent:

a) Formal request, which must indicate the reasons motivating the decision to cancel the registration. b) Notarial certification of the minutes of the general shareholders' meeting, board of directors, or competent body that decided to request the cancellation of registration of the authorized issuance. c) Draft of the notice in which the cancellation of registration of the issuance will be communicated. d) Certificate from the corresponding stock exchange stating that the issuance has not been placed. This requirement applies to both private issuers and public issuers who intended to carry out the placement through the stock exchange.

In the case of fixed-income securities issuances by the Central Bank of Nicaragua and the Ministry of Finance and Public Credit, said issuers shall only comply with what is stipulated in letter a) of this article and attach a certificate issued by their competent authority stating that the issuance has not been placed.
The Superintendent shall grant the authorization for cancellation of registration of the issuance within a maximum period of fifteen (15) business days counted from the date of compliant presentation of all information requirements provided for in this article; otherwise, it shall communicate to the petitioners the deficiencies noted so that they fill in the omitted requirements, and, once the deficiency is remedied, it shall grant the requested authorization within a term of five (5) business days counted from the date of subsanation. The authorization for cancellation of registration of issuances granted by the Superintendent must be made public through two notices, with ten (10) days of difference between each publication, in a newspaper of wide national circulation, at the expense of the issuer. In said medium, they must use a font size equal to or similar to "Arial 11". Likewise, said authorization must be published on the website of the respective stock exchange, the issuing entity, and the stock exchange booth representing the issuer.

Article 5. Requirements for the cancellation of registration of issuances in circulation.- The authorization for cancellation of registration of issuances in circulation is conditioned to compliance with the following minimum requirements:

a) The requirements established in letters a) and c) of the preceding article. b) Notarial certification of the minutes of the general shareholders' meeting, board of directors, or competent body of the issuer that agrees to propose to its investors the cancellation of registration. Likewise, notarial certification of the minutes of the general assembly of investors that unanimously approves the request for cancellation of registration proposed by the issuer. This must state that the investors have agreed that prior to the presentation of the cancellation request to the Superintendent and during the respective authorization process, they will not negotiate the securities in public offering; as well as that they have known and accepted that once said registration is cancelled, they will not have regulated periodic information nor will they be able to negotiate the securities in the secondary market. c) Notarial certification of the minutes of the general shareholders' meeting, board of directors, or competent body of the issuer that agrees to propose to its investors the early redemption of the securities, as well as certification of the minutes of the general assembly of investors that unanimously approves said redemption, as well as the price thereof and the source of resources that will be used. Likewise, the financial valuation performed by an independent expert registered in the Registry of Appraisers of the Superintendence must be presented, which incorporates the foundations and methodology used for the determination of that price. In any case, the issuer must respect equal treatment to investors. Those issuances in which early redemption of the securities at a predetermined price has been contractually established are exempt from the provisions of this letter. d) Early redemption plan or description of the protection mechanisms that will be used to guarantee the total and timely payment of securities in circulation. The Superintendent shall grant the authorization for cancellation of registration of the issuance within a maximum period of fifteen (15) business days counted from the date of compliant presentation of all information requirements provided for in this article; otherwise, it shall communicate to the petitioners the deficiencies noted so that they fill in the omitted requirements, and, once the deficiency is remedied, it shall grant the requested authorization within a term of five (5) business days counted from the date of subsanation.

The authorization for cancellation of registration of issuances granted by the Superintendent must be made public through two notices, with ten (10) days of difference between each publication, in a newspaper of wide national circulation, at the expense of the issuer. In said medium, they must use a font size equal to or similar to "Arial 11". Likewise, said authorization must be published on the website of the respective stock exchange, the issuing entity, and the stock exchange booth representing the issuer.

CHAPTER III
CANCELLATION OF REGISTRATION OF VARIABLE-INCOME SECURITIES

Article 6. Requirements for the cancellation of registration of unplaced issuances.- For the cancellation of registration of unplaced issuances, the issuer must comply with what is established in Article 4 of this Norm, insofar as applicable.

Article 7. Minimum requirements for the cancellation of registration of issuances in circulation.- The issuer must comply with the conditions indicated in Article 3 of this Norm and additionally with the following:

a) Formal request, which must indicate the reasons motivating the decision to cancel the registration. b) Certified copy of the summons to the extraordinary general shareholders' meeting and of the notices for publication referred to in this letter. In these cases, the summons must be made by certified mail to the address that each of the shareholders has indicated for their notifications, in which it must expressly state as the agenda the decision on the exclusion of the issuance from the securities market. Additionally, the notice of the summons must be published in a newspaper of wide national circulation fifteen (15) days in advance of the date of celebration of the extraordinary general shareholders' meeting. This publication will have supplementary effects when the personal notification mentioned in the previous paragraph cannot be carried out for causes not attributable to the issuer and so states it to the Superintendent. c) Draft of the notice for publication in the national circulation newspaper in which the cancellation of registration of the issuance will be communicated. d) In the event that the variable-income securities have not been placed in public offering in the primary market, the agreement of the general shareholders' meeting must be approved by a number of votes representing more than fifty percent (50%) of the capital; otherwise, the agreement of all shareholders will be required. In both cases, the notarial certification of the agreement must be presented, stating that the cancellation proposal was approved in these terms and additionally indicating the percentages of dissenting shareholders and those absent from the meeting. e) The agreement must state that the shareholders have agreed that prior to the presentation of the cancellation request to the Superintendent and during the respective authorization process, they will not negotiate the securities in public offering; as well as that they know and accept that once the registration of the issuance is cancelled, they will not have regulated periodic information nor will they be able to negotiate the securities in the secondary market. Likewise, the agreement must contain the description of the mechanisms provided for the protection of the interests of dissenting and absent investors from the meeting with their respective approval. The Superintendent shall grant the authorization for cancellation of registration of the issuance within a maximum period of fifteen (15) business days counted from the date of compliant presentation of all information requirements provided for in this article; otherwise, it shall communicate to the petitioners the deficiencies noted so that they fill in the omitted requirements, and, once the deficiency is remedied, it shall grant the requested authorization within a term of five (5) business days counted from the date of subsanation. The authorization for cancellation of registration of issuances granted by the Superintendent must be made
public through two notices, with ten (10) days of difference between each publication, in a newspaper of wide national circulation, at the expense of the issuer. In said medium, they must use a font size equal to or similar to "Arial 11". Likewise, said authorization must be published on the website of the respective stock exchange, the issuing entity, and the stock exchange booth representing the issuer.

CHAPTER IV
FINAL PROVISIONS

Article 8. Validity.- This Norm shall enter into force from its publication in La Gaceta, Official Journal.

(f) Antenor Rosales B. (f) V. Urcuyo V. (f) Gabriel Pasos Lacayo (f) Roberto Solórzano Ch. (f) A. Cuadra G. (f) U. Cerna B.

URIEL CERNA BARQUERO
Secretary of the Board of Directors SIBOIF