Resolution No. CD-SIBOIF-697-2-OCTU12-2011
Dated 12 October 2011

REFORM STANDARD TO ARTICLE 1 OF THE STANDARD THAT REGULATES TRUST OPERATIONS CARRIED OUT BY FINANCIAL INSTITUTIONS

The Board of Directors of the Superintendency of Banks and Other Financial Institutions.

WHEREAS

I

That article 62, literal b) of Law No. 741, Law on the Trust Contract, published in La Gaceta, Official Gazette, No. 11 of 19 January 2011, mandates this Board of Directors to issue general standards to regulate trust operations carried out by financial institutions authorized and supervised by the Superintendency of Banks and Other Financial Institutions.

II

That article 54 of Law No. 561, General Law of Banks, Non-Bank Financial Institutions and Financial Groups, published in La Gaceta No. 232, of 30 November 2005, establishes that all banks may act as trustees of trusts constituted by virtue of special laws, provided that in these operations the bank does not undertake to pay fixed or determined yields nor to make the full return of the trust capital.

III

That in accordance with the considerations set forth above and based on the provisions of article 4 and article 10, numeral 1), of Law 316, Law of the Superintendency of Banks and Other Financial Institutions, and its reforms.

In exercise of its powers,

HAS ISSUED

The following,

Resolution No. CD-SIBOIF-697-2-OCTU12-2011

REFORM STANDARD TO ARTICLE 1 OF THE STANDARD THAT REGULATES TRUST OPERATIONS CARRIED OUT BY FINANCIAL INSTITUTIONS

FIRST: Reform article 1 of the Standard that Regulates Trust Operations carried out by Financial Institutions, contained in Resolution No. CD-SIBOIF-677-2-MAY16-2011, of 16 May 2011, published in La Gaceta, Official Gazette No. 131, of 14 July 2011, which shall read as follows:

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

a. Trust: According to Law 741, it refers to the operation by virtue of which the settlor transfers ownership over a determined asset or set of assets or rights to the trustee, who undertakes to administer them in favor of the beneficiary and transfer them to the trust beneficiary or to the settlor when a term, condition or other cause of extinction of the obligation is fulfilled.

b. Settlor: Natural or legal person, private, public or mixed, national or foreign, or entities endowed with legal personality with capacity to transfer ownership of the assets or rights object of the trust, as the case may be.

c. Trustee: Natural or legal person to whom ownership of the trust assets or rights is transferred and who is responsible for the execution of what is agreed in the trust contract for the achievement of its purposes.

d. Trust beneficiary: Person to whom the rights, fruits and benefits obtained from the execution of the trust are destined.

e. Investment fund: Investment fund, financial or non-financial, to which the Capital Markets Law and the regulations governing the matter on management companies and investment funds refer.

f. Securitization fund: Securitization fund to which the Capital Markets Law and the regulations governing the matter on management companies and securitization funds refer.

g. Risk management: Set of objectives, policies, procedures and actions implemented to identify, measure, monitor, limit, control, mitigate, report and disclose the different types of risks to which financial institutions are exposed.

h. Economic interest group: Related parties, significant linkages and indirect manifestations of the financial institution, 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.

i. Institution or Financial Institution: Banks and non-bank financial institutions; Bank for the Promotion of Production (Banco Produzcamos); brokerage firms; as well as, securities central depositories, investment fund management companies and securitization fund management companies, that carry out trust operations. These last three entities, solely and exclusively, in the case that said operations are related to their corporate purpose and line of business.

j. General Law of Banks: Law No. 561, General Law of Banks, Non-Bank Financial Institutions and Financial Groups, published in La Gaceta No. 232, of 30 November 2005.

k. Law 741: Law on the Trust Contract, published in La Gaceta, Official Gazette, No. 11 of 19 January 2011.

l. Capital Markets Law: Law 587, Capital Markets Law, published in La Gaceta, Official Gazette, No. 222 of 15 November 2006.

m. AML/CFT: Prevention of money laundering and/or financing of terrorism.

n. Trust risks: It is the risk resulting from incurring losses caused by fault or negligence of the trustee in the administration of the trust assets.

o. Superintendency: Superintendency of Banks and Other Financial Institutions.

p. Superintendent: Superintendent of Banks and Other Financial Institutions.

SECOND: This standard shall enter into force as of its notification, without prejudice to its subsequent publication in La Gaceta, Official Gazette.

(f) Gabriel Pasos Lacayo (f) V. Hurtado (f) Fausto Reyes (f) illegible ( Silvio Moisés Casco Marenco) (f) U. Cerna B.

URIEL CERNA BARQUERO
Secretary Board of Directors SIBOIF