Organic Law of the SMV No. 26126-2012

Ley Orgánica de la SMV

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INDEX UNIFIED TEXT OF THE ORGANIC LAW OF THE SMV.................................................................................................3 TITLE I...................................................................................................................................................... 4 ON THE NAME, PURPOSE, HEADQUARTERS AND FUNCTIONS ............................................................ 4 TITLE II................................................................................................................................................... 10 ON THE BOARD OF DIRECTORS.................................................................................................................................. 10 TITLE III.................................................................................................................................................. 14 ON THE GENERAL MANAGER ....................................................................................................................... 14 TITLE IV.................................................................................................................................................. 14 ON THE ECONOMIC AND FINANCIAL REGIME......................................................................................... 15 TITLE V................................................................................................................................................... 18 ON THE PERSONNEL REGIME.............................................................................................................. 18

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UNIFIED TEXT OF THE ORGANIC LAW OF THE SMV

Decree Law No. 26126 Includes Modifications: Law No. 27323 published on 23.07.2000 Law No. 29782 published on 28.07.2011 Law No. 30050 published on 26.06.2013 Legislative Decree No. 1451 published on 16.09.2018

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UNIFIED TEXT OF THE ORGANIC LAW OF THE SMV

DECREE LAW No. 26126

TITLE I ON THE NAME, PURPOSE, HEADQUARTERS AND FUNCTIONS

Article 1. Definition, purpose and functions of the Securities Market Superintendency (SMV) (*)

The Securities Market Superintendency (SMV) is a specialized technical body attached to the Ministry of Economy and Finance whose purpose is to ensure the protection of investors, the efficiency and transparency of the markets under its supervision, the correct formation of prices and the dissemination of all information necessary for such purposes, through regulation, supervision and promotion. It has legal personality of internal public law and enjoys functional, administrative, economic, technical and budgetary autonomy, constituting a budgetary item. Its operation is governed by the provisions contained in this Law and its regulations on organization and functions. The functions of the Securities Market Superintendency (SMV) are the following:

a. Issue the legal norms that regulate matters of the securities market, the commodities market and the collective fund system.

b. Supervise compliance with the legislation of the securities market, the commodities market and collective fund systems by natural and legal persons participating in said markets.

Natural or legal persons subject to the supervision of the Superintendency of Banks, Insurance and Private Pension Fund Administrators (SBS) are also subject to the Securities Market Superintendency (SMV) in aspects that imply participation in the securities market under the supervision of the latter.

c. Promote and study the securities market, the commodities market and the collective fund system.

Likewise, it corresponds to the Securities Market Superintendency (SMV) to supervise compliance with international auditing standards by auditing societies authorized by a college of public accountants of Peru and contracted by natural or legal persons subject to the supervision of the SMV in compliance with the norms under its competence, for which it may issue general provisions consistent with said international auditing standards and require them any information or documentation to verify such compliance.

The Securities Market Superintendency (SMV) has its legal headquarters in the city of Lima and may establish offices in any other place in the Republic for the better fulfillment of its purposes. The

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establishment of such decentralized offices does not alter the determination of its real headquarters in the city of Lima for the purposes of its summons in judicial proceedings.

(*) Article substituted by Article 2 of Law No. 29782.

Article 2. Appointment and removal of the Superintendent of the Securities Market (*)

The highest executive authority and holder of the budgetary item is the Superintendent of the Securities Market, who presides over the Board of Directors of the institution and exercises the official representation of the Securities Market Superintendency (SMV). The Superintendent is appointed by the Executive Power through a supreme resolution countersigned by the Minister of Economy and Finance.

He exercises the office for a period of six years, not renewable for the immediate period. He will continue in the exercise of the office until his successor is appointed. The exercise of the office is remunerated and exclusive dedication with the exception of teaching.

To be appointed Superintendent of the Securities Market, it is required to be a Peruvian citizen, enjoy full exercise of civil rights, have recognized moral solvency and suitability, as well as possess broad competence and experience in economics, finance and securities market.

If for any cause he does not complete the period for which he was appointed, his replacement will be appointed within sixty days following his dismissal, who will perform the office until concluding the period of his predecessor.

The removal of the Superintendent of the Securities Market is carried out by the Executive Power through a supreme resolution countersigned by the Minister of Economy and Finance, in the following cases:

1. When, in the exercise of his functions, he has committed a serious fault duly proven and justified, determined by the Minister of Economy and Finance.

2. When a firm order of definitive detention is issued against him.

Serious faults of the Superintendent of the Securities Market are the following:

a. Not adopt the necessary measures to sanction, as appropriate, those who without the corresponding authorization carry out activities exclusive to persons authorized by the Securities Market Superintendency (SMV).

b. Incur in the impediments established in letters a) to n) of article 6 and the prohibitions established in article 8.

c. Not sanction natural or legal persons who infringe the norms under the competence of the Securities Market Superintendency (SMV) when he has the duly proven information that clearly demonstrates the committed infringement.

(*) Article substituted by Article 2 of Law No. 29782.

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Article 3. Powers of the Superintendent of the Securities Market (*)

The powers or faculties of the Superintendent of the Securities Market are the following:

1. Grant the respective organizational and operating authorizations to legal persons subject to his supervision.

2. Authorize the operation of centralized trading mechanisms.

3. Keep the Public Registry of the Securities Market and others necessary for the fulfillment of its functions.

4. Exercise consolidated supervision of the legal persons to whom it grants operating authorization and the companies controlled by said authorized person. This provision does not extend to companies whose consolidated supervision corresponds to the Superintendency of Banks, Insurance and Private Pension Fund Administrators, according to Law 26702, General Law of the Financial System and of the Insurance System and Organic Law of the Superintendency of Banks and Insurance, and other complementary norms.

5. Require from the legal persons it has authorized, information about the private offers they make or those they make on behalf of the assets under their administration.

6. Summon and interrogate any person who may contribute to the success of the investigations carried out by the Securities Market Superintendency (SMV) or another supervisory body of the securities market abroad with whom it has signed an inter-institutional collaboration agreement. The person who, without justification, does not appear at the summons or refuses to answer the interrogation will be compelled through the automatic imposition of a coercive fine of up to five tax units (UIT). Said fine must be paid within the term of five business days of notification, after which its forced collection will be ordered. If the obliged party persists in non-compliance, a new coercive fine will be imposed doubling successively and unlimitedly the amount of the last coercive fine imposed until he appears or answers the interrogation, as the case may be, and without prejudice to reporting him to the Public Ministry so that it initiates the corresponding criminal process. The coercive fines imposed, since they do not have a sanctioning nature, do not prevent the Securities Market Superintendency (SMV) from imposing a sanction at the end of the procedure, if applicable.

The Securities Market Superintendency (SMV) may use technical and legal means to generate a complete and faithful record of the statements, for which it may record the declarations or manifestations.

7. Order investigations and inspections with prior notice, or without it.

For the development of the inspection faculty referred to in the previous paragraph, the Securities Market Superintendency (SMV) may examine, by the means it considers necessary, books, accounts, files, documents, correspondence and, in general, any other information that is necessary for the fulfillment of its functions. There is for this the obligation of the company and its representative to provide the personnel in charge of the inspections all the facilities they require for the fulfillment of their mission.

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The refusal, resistance or non-compliance of the obliged parties, provided that it is duly accredited, gives rise to the imposition of any of the sanctions mentioned in Legislative Decree 861, Law of the Securities Market.

Likewise, it may require all the antecedents it deems necessary to inform itself about its financial situation, resources, administration or management, performance of its representatives, degree of security and prudence with which investments are made and, in general, any other matter that, in its opinion, should be clarified.

The SMV can additionally receive the testimony of third parties and request them to exhibit books and documents. In the framework of the celebration of agreements and/or for the fulfillment of its institutional purposes, the SMV as the authority of the securities market can, within or outside an investigation or inspection, require any auditing society, the documentation related to the audit or review of financial statements that they had carried out, including copies of any information or documentation related to this service, of any legal person or autonomous patrimony, even if they do not participate in the securities market. This information can be shared with other authorities in the framework of reciprocal cooperation agreements or memorandums of understanding of the International Organization of Securities Commissions to which the SMV has adhered. (**)

The veracity of the acts recorded by the officials of the Securities Market Superintendency (SMV) designated for the purposes of the present and the following paragraph is presumed. The SMV, through general provisions, will regulate this faculty. (***)

8. Administratively intervene the premises or offices where it is presumed that activities exclusive to persons authorized by the Securities Market Superintendency (SMV) are being carried out, without counting with said authorization, and proceed to the closure of their premises or offices. For this effect, the faculties referred to in paragraphs 6 and 7 will be available.

For these proceedings, the SMV is authorized to require the intervention of the Public Ministry.

Likewise, the seizure of the documentation and information found in them may be ordered, for which it is authorized to directly demand the support of the public force. If unlocking is necessary, it must have judicial authorization, which must be resolved within a maximum term of one business day.

Whoever disregards the request referred to in the previous paragraph incurs in the crime provided for in the first paragraph of article 378 of the Penal Code.

In order to comply with the obligation indicated in letter a) of article 2 of this Law, through the public procuratorship the criminal complaint will be formulated with the object of promoting criminal action against the infringers, a process in which the SMV will be considered as aggrieved and, therefore, may constitute itself as a civil party.

The regular exercise of the faculties of intervention and closure of the premises or offices referred to in this paragraph does not generate any responsibility for the Superintendent.(****)

9. Impose sanctions on those who contravene the norms under its competence.

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The Securities Market Superintendency (SMV) may dictate precautionary or corrective measures ex officio or at the request of a party, as well as abstain from initiating a sanctioning procedure in the case of minor infringements if, at the moment of detecting the infringement, it has been reversed or remedied, provided that the conditions of procedency established in the corresponding regulation are met and said fact is communicated to the administrator, or if the corrective measures dictated by the Securities Market Superintendency (SMV) in application of article 358 of Legislative Decree 861, Law of the Securities Market, have been complied with.

The Securities Market Superintendency (SMV) may impose sanctions in a single instance through the Administrative Tribunal or body determined in the regulations on organization and functions.

The preliminary inquiries prior to the start of the sanctioning procedure have a reserved character.

10. Require from the legal persons to whom it grants operating authorization a minimum level of operating capital based on the risks assumed in accordance with the general provisions approved. The Securities Market Superintendency (SMV) regulates the concepts that integrate the operating capital of said companies, as well as the requirements that said concepts must meet.

11. Require from the legal persons to whom it grants operating authorization amounts greater than the guarantees required in Legislative Decree 861, Law of the Securities Market; Legislative Decree 862, Law of Investment Funds and their Managing Societies; Law 26361, Law on Commodities Exchange; and Decree Law 21907, To the Collective Fund Managing Companies Controlled CNSEV; based on the operations and risks they assume, or the substitution of these when there are circumstances that put their validity, efficacy or execution at risk, the Securities Market Superintendency (SMV) being authorized to execute them when the causes of execution are verified or if the substitution of the same is not produced after the term granted for it. These guarantees are unseizable.

Through general norms, the SMV regulates the situations where higher amounts of guarantees are required and the concepts that can integrate them.

12. Authorize the transfer of ownership of shares issued by the legal persons to whom it grants operating authorization, as well as the acquisition of shares by capital increases that involve the entry of a new shareholder and any act of encumbrance, trust, management agreements or other legal act regarding said securities that grants to a third party directly or indirectly the capacity for management or the exercise of voting rights in the authorized society in accordance with the general norms that the Securities Market Superintendency (SMV) approves. The SMV, through general norms, will regulate this article, being able to establish minimum share percentages from which the authorization referred to must be requested, as well as the situations in which said authorization is not justified.

13. Impose, through a justified resolution, coercive fines for the execution of certain acts, of up to twenty-five (25) tax units (UIT). This fine must be paid within the term of five (5) business days of notification, after which its forced collection will be ordered. At the time of its imposition, the term that the administrator will have to comply with the act whose execution is required will be established. If after said term the obliged party persists in non-compliance, a new coercive fine will be imposed successively doubling the amount of the last fine which in no case will exceed seven hundred (700) UIT until the required act is executed. (****)

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14. Suspend automatically the operating authorization granted to legal persons under its supervision and control, without it being necessary to start a sanctioning administrative procedure, in the following cases: i) When they cease to observe any of the necessary requirements for their operation or to operate; ii) When any of its shareholders incurs in an impediment or ceases to meet the requirements established by the regulations; iii) When there is non-compliance with the precautionary or corrective measures ordered by the Securities Market Superintendency (SMV); and iv) When there is non-observance of what is indicated in paragraphs 10 and 11. This decision is unappealable in the administrative route. In case the non-compliance that originates said suspension persists, the SMV may revoke the operating authorization without it being necessary to start a sanctioning administrative procedure. (****)

15. Celebrate agreements, memorandums of understanding and contracts that are necessary with national and international bodies, for the fulfillment of the institutional purposes of the Securities Market Superintendency (SMV).

16. Share information regarding its supervised entities with the Central Reserve Bank of Peru for the exclusive use of said entity, within the framework of its respective competence and always that there is a collaboration and reciprocal information exchange agreement. This information does not include that protected by the duty of identity reserve contemplated in Legislative Decree 861, Law of the Securities Market.

17. Share information regarding its supervised entities with other supervisory bodies abroad with which the Securities Market Superintendency (SMV) has signed reciprocal cooperation agreements or memorandums of understanding. This information may include that protected by the duty of reserve and also the testimonial declarations that had been taken in the exercise of the functions of the SMV.

18. Hire, suspend, remove or dismiss the personnel of the Securities Market Superintendency (SMV), as well as fix their remunerations, within the framework of the prevailing legal provisions.

19. Designate, among the deputy superintendents, the official who must replace him in case of absence or temporary impediment.

20. Program, formulate and propose to the Board of Directors, for its approval, the annual budget of the Securities Market Superintendency (SMV), as well as execute it within the framework of the prevailing regulations.

21. Approve, through a resolution of the Superintendent of the Securities Market, the personnel assignment chart (CAP), the Single Text of Administrative Procedures (TUPA) and other internal norms of the institution, based on the guidelines that regulate the prevailing norms of the matter.

22. Approve, through a resolution of the Superintendent of the Securities Market, the regulations on organization and functions according to the guidelines that regulate the prevailing norms of the matter. (****)

23. Require from the public departments and state entities the reports it considers necessary, as well as hire the services of experts and technicians.

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24. Administer and collect contributions for the maintenance of the Securities Market Superintendency (SMV), as well as its interests and late fees.

25. Approve the operational policies, programs and the General Supervision and Inspection Plan.

26. Exercise the faculties of forced execution on natural or legal persons subject to supervision, in accordance with what is provided in Law 26979, Law of Forced Execution Procedure.

27. Exercise the other faculties and attributes delegated to it by the Board of Directors.

28. Delegate any of the attributes previously established in the officials or bodies it deems convenient.

(*) Article substituted by Article 2 of Law No. 29782.

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