Regulation for Operating ACH Type Electronic Payment Systems

FINANCIAL STABILITY AND PUBLIC POLICIES DEPARTMENT APRIL 2024 REGULATION FOR OPERATING ACH TYPE ELECTRONIC PAYMENT SYSTEMS

SEPTIEM

INDEX

1. GENERALITIES...... 1
   1.1 BACKGROUND...... 1
   1.2 LEGAL BASIS ...... 2
   1.3 SCOPE OF APPLICATION...... 2
2. OBJECTIVE...... 2
3. DEFINITIONS ...... 2
4. GENERAL RULES...... 7
5. SPECIFIC RULES...... 8
   5.1 TRANSACTIONS AND PROCESSES...... 8
   5.2 REQUIREMENTS FOR OPERATORS...... 9
   5.3 OBLIGATIONS OF OPERATORS...... 14
   5.4 REQUIREMENTS FOR EFPs...... 16
   5.5 OBLIGATIONS OF EFPs...... 17
   5.6 HOURS...... 18
   5.7 SETTLEMENT...... 19
   5.8 RELEASE OF FUNDS OR APPLICATION OF TRANSACTIONS IN
   ORIGINATOR AND RECIPIENT ACCOUNTS...... 20
   5.9 MECHANISMS FOR COVERAGE OF SETTLEMENT RISK ...... 20
   5.10 RE-ENTRY OF AN EFP...... 22
   5.11 NON-COMPLIANCE REPORTS TO THE CENTRAL BANK ...... 22
   5.11 OPERATOR EXIT FROM OPERATION...... 22
   6 SPECIAL PROVISIONS ...... 23
   7 VALIDITY, DISTRIBUTION AND DISCLOSURE ...... 24
   MODIFICATION CONTROL TABLE...... 25

CENTRAL BANK OF RESERVE OF EL SALVADOR
REGULATION FOR OPERATING ACH TYPE ELECTRONIC PAYMENT SYSTEMS FINANCIAL STABILITY AND PUBLIC POLICIES DEPARTMENT
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1. GENERALITIES
   1.1 BACKGROUND
   The Central Bank of Reserve of El Salvador (BCR) contemplates within its payment systems modernization strategy, the development of Electronic Payment Transaction Clearing Houses known internationally as ACH, by its acronym in English (Automated Clearing House) to refer to an Automated Clearing House, which process the clearing of interbank operations that come from retail payments of electronic instructions for direct debits and credits. Considering the experiences regarding the development of electronic payment systems and their contribution to the modernization of the financial system, as well as the recommendations contained in international principles for payment systems, it is necessary to establish the regulatory framework applicable to such transactions. In this context, the Board of Directors of the Central Bank of Reserve of El Salvador in Session No. CD-29/2003 of August 25, 2003, approved the Regulation for Operating ACH Type Electronic Payment Systems, which has been modified on several occasions according to Sessions Nos. CD-41/2004 of November 15, 2004, CD-46/2010 of December 6, 2010, CD-24/2016 of May 30, 2016; CD-47E/2019 of December 6, 2019 and CD-16/2022 of July 28, 2022. The modifications made during the year 2019 were due to changes in the processing of transactions from checking accounts in an immediate manner in the ACH System of the ACH Society of El Salvador; as well as the payment systems modernization projects executed by the Central Bank of Reserve. On the other hand, in the year 2022, the adjustments to the regulations correspond to the addition of provisions concerning the management of collection of services and fees applied by Participating Financial Entities of ACH Type Electronic Payment Systems.

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1.2 LEGAL BASIS
The legal basis for the issuance of this Regulation are the following provisions:
1.2.1 Treaty on Payment Systems and Securities Settlement in Central America and the Dominican Republic.
1.2.2 Art. 3 letters g) and h); Art. 67 of the Organic Law of the Central Bank of Reserve of El Salvador.
1.2.3 Articles 24 and 60 of the Banks Law.
1.2.4 Law Against Money Laundering and Asset Laundering.
1.2.5 Regulation of the Law Against Money Laundering and Asset Laundering.
1.2.6 Instruction of the Financial Investigation Unit for the Prevention of Money Laundering and Asset Laundering.
1.2.7 Administrative Procedures Law.
1.2.8 Regulation of the Real-Time Settlement System (LBTR)

1.3 SCOPE OF APPLICATION
The provisions of this Regulation must be complied with by the operators that administer electronic payment transaction clearing systems and by the financial institutions that participate in said payment systems.

2. OBJECTIVE
   To establish the general rules for the administration and operation of electronic payment transaction clearing systems, as well as to regulate the rights and obligations of the operator and the participating financial entities in said System, so that payments are safe and efficient, in accordance with international principles for payment systems.

3. DEFINITIONS
   3.1 ACH or ACH System: Electronic Payment Transaction Clearing House or Automated Clearing House, is a

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System through which, payment orders are exchanged between participating financial entities, mainly through magnetic media or telecommunications networks and are administered by a data processing center.

3.2 Central Bank or BCR: Central Bank of Reserve of El Salvador

3.3 Beneficiary or Final Beneficiary: Natural or Legal Person to whom funds are credited in the bank product reference by the destination participant.

3.4 Clearing: Process by which the mutual obligations of the participants in a system are calculated, generally on a net basis in an operation cycle. This process is carried out before settlement.

3.5 Operation Cycle: Time during which, the clearing process is completed, which starts with the sending of transactions or a fund reservation and ends with a settlement. During the clearing process, the operator calculates the net positions of each Participating Financial Entity, in relation to the others and concludes with the consolidation and definition of results for each of said entities and carry out their respective settlement.

3.6 Direct Credit: Is the operation by which, the Originator sends through the ACH System a credit order to move funds from its bank product reference to the bank product reference of the recipient.

3.7 Deposit Account: Account that Participating Financial Entities maintain at the Central Bank for the settlement of their operations as on-demand obligations.

3.8 Direct Debit: Is the operation by which, the Originator sends through the ACH System a debit order to the bank product reference of the recipient, according to an agreement made between both parties, the results of which are credited to the bank product reference of the Originator.

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3.9 Returns: Refers to the return to Originating Financial Entities of instructions not accepted, after settlement, between Participating Financial Entities and that could not be applied to the bank product reference of the recipient or final beneficiary, for not meeting the legal or operational requirements for their application.

3.10 Business Days: Monday to Friday of each week, except for banking closure dates established by the Superintendency of the Financial System and applied by the Central Bank of Reserve of El Salvador.

3.11 EFP: Participating Financial Entity, is the financial institution authorized as such by the Superintendency of the Financial System, to carry out financial intermediation activities, which has agreed to participate within ACH type systems. Depending on the type of transaction it sends, the EFP can also be designated as:

3.11.1 EFO or Origin Participant: Originating Financial Entity, is the financial entity that issues the debit or credit instruction at the request of the Originator and sends it to the operator.

3.11.2 EFR or Destination Participant: Receiving Financial Entity, is the financial entity that receives the debit or credit instruction from the Operator and applies it to the bank product reference of the recipient.

3.12 Firm: State that the payment instruction acquires when validly accepted by the system, in which it cannot be challenged or annulled for any cause. The determination of the moment of firmness must be clearly defined in the internal functioning rules of each ACH type system.

3.13 GOF or Financial Operations Management: Financial Operations Management of the Central Bank.

3.14 Irrevocable: State of a fund transfer that cannot be revoked by its orderer or by third parties from the moment determined by the internal functioning rules of the System.

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3.15 ISO 20022: ISO standard for the development of messaging in financial transactions and that allows the electronic exchange of information between Financial Institutions.

3.16 ISO/IEC 27001: ISO standard that specifies the requirements necessary to establish, implement, maintain and improve an information security management system.

3.17 LBTR: Real-Time Gross Settlement System administered by the Central Bank for the settlement of payments in the deposit accounts of EFPs.

3.18 Settlement: Process by which, a payment obligation between two EFPs is extinguished which is perfected through the registration in the deposit accounts that the EFPs maintain at the Central Bank.

3.19 Deferred Time Settlement: Payment operation that is carried out in a defined time period from when the transaction starts until its application, not greater than t+1.

3.20 Immediate Time Settlement: Payment operation that is carried out in an instantaneous time period from when the transaction starts until its application to the final beneficiary.

3.21 Multilateral Netting: Agreement between three or more parties to clear their obligations prior to the settlement process.

3.22 OVSP: Payment Systems Surveillance Office of the Central Bank

3.23 Operator: Entity in charge of administering an ACH type System.

3.24 Originator: Natural or legal person who initiates transactions within the ACH System and generates fund transfer instructions from or to a recipient.

3.25 Net Multilateral Position: Consists of the sum of the value of all transactions of an EFP in the ACH System that imply credits to its deposit account, minus the charges against its deposit account. If the result is

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3.25.1 Preliminary Net Multilateral Position: Is the position that is calculated with the sessions that the Operator determines and is used for the calculation of fund reserves.

3.25.2 Definitive Net Multilateral Position: Is the position that is calculated including the rejection session and is sent for the settlement process.

3.26 Bank Product Reference: Identification code related to a bank account, credit or debit cards, loans, among others; to which a transaction will be applied.

3.27 Recipient: Natural person or legal person who has authorized verbally or in writing the Originator to initiate a transaction in the ACH System with charge or credit to the bank product reference in the EFR.

3.28 Rejections: Refers to the return to Originating Financial Entities of instructions not accepted, before their settlement, between Participating Financial Entities and that could not be applied to the bank product reference of the recipient or final beneficiary, for not meeting the operational requirements established in their internal regulations.

3.29 Superintendency: Superintendency of the Financial System.

3.30 Operation Times: Time periods in which each of the operations necessary to carry out the final application of electronic transactions must be developed, starting with the sending of the instruction by the EFO until finishing with its application in the recipient's or originator's bank account, depending on whether it is a direct credit or debit operation and according to the business model of each system, which cannot exceed t+1.

3.30.1 t+0: First business day in which the transactions originate, which, in some business models, may reach the final application to the beneficiary.

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3.30.2 t+1: Business day following the start of the transaction.

3.31 Unwinding: Process of exclusion or recomposition of results, excluding all operations (debits and credits) that make up the bilateral net result of the debtor participant who does not have sufficient funds to settle its payments. This process can be total or partial.

4. GENERAL RULES
   4.1 The Central Bank will carry out the function of surveillance of the ACH System, which consists of promoting the objectives of efficiency and security through its respective monitoring, evaluation of compliance with said objectives and induction of the changes that are necessary.

4.2 EFPs may process through the ACH System, direct debit and credit transactions to be settled in an immediate or deferred time manner.

4.3 The Operator and the EFPs must have a Deposit Account at the Central Bank and must maintain sufficient resources at the time of carrying out the settlement process.

4.4 The operator must guarantee the integrity and confidentiality of the transactions carried out in the ACH System, without prejudice to the provisions emanating from the competent authority.

4.5 The Operator and EFP must comply with what is established in the Law Against Money Laundering and Asset Laundering and its Regulation and the Instruction of the Financial Investigation Unit for the Prevention of Money Laundering and Asset Laundering.

4.6 Any rejection process not defined within the causes established in the internal regulations of each ACH type System, will be evaluated by the Central Bank and sent to the Superintendency of the Financial System for opinion and evaluation.

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5. SPECIFIC RULES
   5.1 TRANSACTIONS AND PROCESSES
   5.1.1 The verbal authorization granted by the Recipient to the Originator, indicated in item 3.26, applies only to direct credit operations.

5.1.2 For direct debit instructions, the Recipient will authorize the Originator in writing or contractually, to affect its bank product reference.

5.1.3 The operation cycle in the ACH System must be detailed in the internal regulations of each system and as a minimum must involve, according to its business model, the following steps:

5.1.3.1 The EFO sends the direct debit or credit transactions to the Operator, who distributes them among the EFRs to which they are destined.

5.1.3.2 Both types of transactions will be validated by the EFRs based on the parameters defined by the operator; the EFRs will report to the operator the rejected or returned transactions with their respective reasons for return or rejection.

5.1.3.3 The Operator will carry out the preliminary and definitive multilateral clearing or netting process, from the latter the final debtor or creditor balances of the EFPs will be obtained, which will be settled in the LBTR, in one or more sessions per day, as determined by the internal regulations of the ACH System.

5.1.3.4 The Operator, through the LBTR, will send fund reservation instructions, which will be used as backing to execute the final settlement once the definitive results are established at the close of each operation cycle or clearing session.

5.1.3.5 The Operator will send the final positions to the LBTR, generating payment obligations for EFPs with debtor balances.

5.1.3.6 The distribution of balances will take place once the funds of the debtor EFPs are concentrated in the operator's deposit account, this will proceed to debit its account and credit the deposit accounts of the creditor EFPs.

5.1.3.7 EFPs must apply the direct debit or credit instructions to the bank product reference of the originators and recipients.

5.2 REQUIREMENTS FOR OPERATORS
5.2.1 To constitute itself as an Operator of an ACH System, the entity must request authorization from the Superintendency for its constitution and subsequent registration in the Commerce Register, complying with the following requirements:

5.2.1.1 Be constituted based on what is provided in Art. 24 of the Banks Law; that is, as Salvadoran capital societies in which banks are holders of more than fifty percent (50%) of the shares individually or jointly with other banks or controlling societies of exclusive purpose. Banks and other institutions legally authorized to capture demand deposits withdrawable by means of checks or other means that participate as shareholders in said societies must request authorization from the Superintendency to make said investment.

5.2.1.2 Must comply with the legal requirements established for obligated subjects of the Law Against Money Laundering and

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BANCO CENTRAL DE
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Assets and its Regulation; as well as, what is contemplated in the instruction of the Financial Investigation Unit for the Prevention of Money Laundering and of Assets.

5.2.1.3 It must indicate in its articles of incorporation that its main
activity will be: "Administer and operate an electronic payment system through which transactions and documents are compensated from and to any financial institution duly authorized within the financial system of El Salvador, whose results will be applied in bank accounts of end users in deferred or immediate time, according to the business model established in its internal regulations. Such Companies may carry out complementary operations to their main activity as long as they are of the nature that the Bank Law allows for them to be practiced by Joint Investment Companies of Banks or Exclusive Purpose Holding Companies.

5.2.2 The companies constituted and registered as operators, in addition to
complying with those requirements established by the Superintendency, must present for approval by the Central Bank, an Internal Regulation of the ACH System, through a formal letter addressed to the Presidency of the Central Bank, attaching the regulation to be evaluated.

5.2.3 Upon receipt of the documentation in proper form and satisfying the previous
requirements, the OVSP will proceed to analyze said regulation, being able to request information from the Operator that may be missing or relevant clarifications, within a maximum time of 120 calendar days. Likewise, it may request additional information or meetings with the Operator to enrich the analysis. Subsequently, the OVSP will inform the Operator about the observations found in its regulation, which must be corrected.

5.2.4 The Operator will have a maximum deadline of 30 calendar days to
correct the observations issued by the Central Bank and manage approval by its Board of Directors.

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5.2.5 The Central Bank may grant an extension to the Operator for up to another
ten business days, to the deadline indicated in paragraph 5.2.4, when the nature of the preventive observations so requires.

5.2.6 Once the observations have been corrected, the Operator will submit a request
to the Presidency of the Central Bank to submit its Internal Regulation for approval. Such request must include two copies of the New version of the Regulation and the Certification of the point of Act of approval by its Board of Directors, as well as, the No Objection to the system by the SSF.

5.2.7 The Central Bank will submit the Regulation to the Board of Directors for
approval within the next 30 calendar days and subsequently communicate within the next 3 business days to the Operator the resolution.

5.2.8 In case such request is denied by the Board of Directors, the Central
Bank will notify the Operator of the reasons and if appropriate, restart the process indicated in paragraph 5.2.2.

5.2.9 Such Regulation will be mandatory for the EFP and the
Operator, will be in harmony with the LBTR regulation and will contemplate compliance with at least the following:
a) Rights and obligations of the Operator and of the EFP. b) Firmness and irrevocability of the operations. c) Participation requirements in the ACH System. d) Schedules to carry out the processes. e) Internal provisions on non-compliance by the EFP. f) Method of compensation or netting to be used. g) Risk mitigation mechanisms. h) Process to follow in case of non-payment of a debtor EFP. i) Mechanisms for exclusion and re-entry of participants. j) Provisions on the publications on the Operator's Website of the tariffs or commissions to be charged by the EFP to users.

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5.2.10 Furthermore, the Operator must prepare an Operational Instruction of the
ACH System approved by its Board of Directors, which must include the following aspects related to information security and information technology:
a) Evaluation and administration of risk. b) Internal organization of information security and its relationship with third-party accesses. c) Responsibility and classification of information assets participants in the ACH System. d) Security in the lifecycle (before, during and completion) of Human Resource contracting. e) Security in involved areas and equipment. f) Security in communications and operations, which includes the procedures and operational responsibilities of the ACH, the protection against malicious software, backup and recovery management, network security management, information exchange and monitoring. g) Security in the handling of access control, which includes the access control policy, user access administration, user responsibilities and access control to the network, operating system, applications and information. h) Development and maintenance of information systems, which includes the definition of system security requirements, the handling of cryptographic controls, the security of system files, the security of development and support processes. i) Handling of security incidents. j) Administration of business continuity. k) Compliance with legal requirements.

5.2.11 The companies constituted and registered as Operators may
begin operations once their internal regulation is authorized by the Board of Directors of the Central Bank and prior verification by the Superintendency of the following requirements:

5.2.11.1 Compliance with minimum conditions relative to the
reliability, integrity and availability of the infrastructure of

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5.2.11.2 Demonstrate compliance with the accounting regulation
established by the Standards Committee of the Central Bank of El Salvador.

5.2.11.3 For information and supervision purposes, the models of contracts that the
Operator will sign with the EFP will be deposited with the Superintendency.

5.2.12 Once the Central Bank authorizes the regulation, the Operator may
begin operations, for which it must:

5.2.12.1 Sign a contract with the Central Bank in which
the necessary provisions for the adequate management of the deposit account and its participation in the LBTR will be established.

5.2.12.2 Sign contracts with the EFP in the ACH System.

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5.3 OBLIGATIONS OF OPERATORS

5.3.1 Admit, under equal conditions, the entry into the ACH System of the
EFP that request it, regardless of whether they have or do not have equity participation in the company constituted for the ACH System.

5.3.2 Electronically channel the collection or payment instructions issued
by the EFO to the EFR for verification and firm application, after excluding the transactions that were rejected.

5.3.3 Consolidate the results obtained from the electronic
collection and payment transactions between the EFP and execute the cycle of operation.

5.3.4 Calculate the preliminary multilateral net positions, as well as the
definitive ones of each EFP and inform them of these results in the schedules established.

5.3.5 Send to the Central Bank and by electronic means, the fund reserve,
as well as the final results of the operation cycle, according to what is established in the internal regulation of each system, authorized by the Central Bank.

5.3.6 Register the fund reserves and apply the final settlement in the
deposit accounts that the EFP maintain at the Central Bank, in both cases through the LBTR, considering for this the schedules previously established by the Central Bank in the LBTR. In case of not being possible the electronic sending, it will be sent according to what is established in the LBTR regulation, related to contingencies.

5.3.7 In the case of updates or modifications to the Internal Regulations and
to the contract models between the Operator and the EFP, the Operator must inform the Central Bank of these changes, with due advance for their approval.

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5.3.8 Send to the Superintendency for its review, the changes or
modifications regarding technology, internal operational procedures, information systems and contingency mechanisms that may interrupt any of the stages of processing of the payment instructions; likewise, inform with due advance to the Central Bank in case it could affect the daily operations of settlement.

5.3.9 Ensure compliance with contractual obligations acquired by the
EFP.

5.3.10 Guarantee computer mechanisms with security measures in accordance with
ISO/IEC 27001 Standards or subsequent updates, as well, to guarantee the electronic exchange of data between the Participating Entities it must use the ISO 20022 Standards or subsequent updates.

5.3.11 Have the regulation that allows activating a Contingency Plan in
case of failures, in coordination with the EFP and the Central Bank.

5.3.12 Collect and send within the established deadlines and by electronic means the
statistical and monitoring information requested by the Central Bank and the Superintendency for purposes of surveillance or supervision of the ACH System, respectively.

5.3.13 Establish in the Internal Regulation of the ACH System the mechanisms,
procedures and instances within the Operator for the resolution of differences that may arise between the parties involved in the ACH System and attend requests from government entities responsible for protecting consumer rights.

5.3.14 Safeguard information about transactions carried out in secure storage media in compliance with its internal policies
regarding backup and information recovery and according to what is disposed in the Commercial Code, as well as supply the statistical information requested by the EFP.

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5.3.15 Define rejection causes in the transactions that are applied,
establishing their implementation in the ACH System; in no case will they constitute a generating event for charging a commission to the Originator.

5.3.16 Define causes for the exclusion of an EFP different from those stipulated in
paragraph 5.9.3.2.

5.3.17 Define the requirements for the re-entry of an EFP.

5.3.18 Comply with other provisions issued by the Central Bank that are applicable to it.

5.3.19 Send to the OVSP logs of the ACH System, which allow following up on the different incidents or contingencies that arise in the
operability of the ACH; according to the format and deadlines that the Central Bank indicates.

5.3.20 Send and inform the Compliance Office of the Central Bank about
aspects of the integral system for the prevention of money laundering and of assets and terrorist financing or any other aspect or information related, according to the deadlines and forms established by BCR.

5.3.21 In case the EFP establishes tariffs or commissions for the use of the
service of the ACH System, the Operator must guarantee that the EFP notifies clearly to the Originator, the tariff to apply to its transaction, before the latter authorizes it.

5.4 REQUIREMENTS FOR THE EFP

5.4.1 Comply with the admission requirements established by the Operator to
access its services.

5.4.2 Have a deposit account at the Central Bank that must maintain
sufficient resources for the settlement process.

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5.4.3 Agree to participate in payment compensation schemes between
financial institutions, accepting the obligations for the net results that derive from such mechanisms and the settlement of the same in the deposit accounts that the EFP maintain at the Central Bank.

5.4.4 Sign a participation contract with the Operator in which it manifests
its agreement to participate in the compensation processes and comply with the provisions contained in this Regulation and in the Internal Regulation of the ACH System issued by the Operator.

5.4.5 Have the technological means that the Operator and the Central Bank
establish to access the services of transmission of electronic instructions, compensation and settlement of transactions, which must comply with the same information security standards of the ACH System.

5.4.6 Comply with the provisions contained in the Law Against
Money Laundering and of Assets, its Regulation, the Special Law Against Acts of Terrorism and the Instruction of the Financial Investigation Unit for the Prevention of Money Laundering and of Assets and its
Appendix No. 1; in this sense, they must incorporate into the payments
made through the ACH System the necessary internal controls.

5.5 OBLIGATIONS OF THE EFP

5.5.1 The EFO must:

5.5.1.2 Contractually back the transactions that are
originated within the ACH System.

5.5.1.3 Ensure the non-alteration of data provided by the
Originator regarding the Recipient's account, the amount of the transaction, the day it must be reported to the Operator and comply with these instructions.

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5.5.1.4 Receive transactions rejected or returned by other EFP
in the ACH System and communicate, immediately or at the latest on the same day, this situation to the Originator so that he makes it known to the recipient.

5.5.2 The EFR must:

5.5.2.1 Verify the contractual backing of the debit or credit transactions that are
applied to the Recipient's bank account.

5.5.2.2 Ensure the non-alteration of data provided by the EFO,
regarding the recipient's account, the amount of the transaction and the day it must be applied to the recipient's account.

5.5.2.3 Execute the verification and validation process of the
previous information and communicate, immediately at the latest, the same day of receipt of the instruction to the Operator, reporting to it the transactions that are rejected for non- compliance with the parameters contained in paragraph
5.5.2.2 and the legal aspects that apply.

5.5.2.4 Make effective the application to the Recipient's account,
according to what is established in the internal regulation of the ACH type System.

5.6 SCHEDULES

5.6.1 The operating schedule must be established in such a way that the
validation, processing and application of the transaction in the account of the Originator or Recipient, can be completed in t+0, or at the latest at the start of t+1, depending on the business model of each system. The above must be indicated in its internal operating regulation.

5.6.2 In the Internal Regulation of the ACH System, the Operator must define the
schedules in which the different stages of the process will be carried out:
a) Sending of instructions by the EFO.

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b) Reception, validation and distribution of instructions to the EFR by the Operator. c) Validation by the EFR and sending of rejections or returns to the Operator. d) Sending of instructions for fund reserve to the LBTR. e) Compensation, multilateral netting and consolidation of results preliminary or final. f) Application of credit or debit instructions by the EFP in the banking product references of the Originators and Recipients. g) Settlement of results in the accounts of the EFP at the Central Bank.

5.7 SETTLEMENT

5.7.1 The Operator and the EFP must comply with the procedures and
operational mechanisms necessary to effect the final settlement of the daily transactions in the deposit accounts they maintain at the Central Bank and adhere to the schedules established by the same for the performance of these operations in the LBTR.

5.7.2 The Operator's account, which it has at the Central Bank for the settlement
of operations coming from the ACH System, must end the day with a zero balance.

5.7.3 The Operator will effect automatic settlement at the Central Bank,
considering the following:

5.7.3.1 It must send the results to be settled, being the one who
debits automatically the accounts of the EFP with debtor balances, and subsequently will credit the EFP with creditor balances.

5.7.3.2 It must send to the Central Bank the authorization of all the
EFP, in which they accept the automatic debit of the debtor balance by the operator, prior to the start of operations.

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5.8 RELEASE OF FUNDS OR APPLICATION OF TRANSACTIONS IN
ACCOUNTS OF THE ORIGINATOR AND RECIPIENT The EFP must reflect immediately or at the latest, at the start of T+1, the release of the funds of the transaction in the reference of the banking product of the Originators or Recipients, whether they are credit or debit.

5.9 MECHANISMS FOR COVERAGE OF SETTLEMENT RISK

5.9.1 Operators must incorporate into their Internal Regulation of the ACH
System the risk mitigation mechanisms established based on the volume and value of the transactions, with the purpose of avoiding non- payment of its obligations by any of the EFP in the ACH System.

5.9.2 Operators must comply with these mechanisms and others that they
find convenient, in order to administer the different risks financial, operational, money laundering and assets and terrorist financing.

5.9.3 Before the entry into operation of the ACH System, the Operator must
have incorporated into its ACH System and Internal Regulation at least one of the following risk mitigation mechanisms:

5.9.3.1 Fund Reserve in Central Bank Accounts.

5.9.3.1.1 The Operator must send to the Central Bank the results
of the EFP with debtor balance obtained from the compensation plus a percentage for rejection purposes, which must be defined in its internal regulation, at the designated time, effect to make fund reserves in the accounts that the EFP maintain at the Central Bank, with the purpose of guaranteeing the settlement of the operations of that cycle.

5.9.3.1.2 When an EFP does not manage to cover the amount of the
fund reserves for the ACH System with the balance

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5.9.3.2 Exclusion of operations or of an EFP.

5.9.3.2.1 Exclusion of operations: If upon arrival at settlement time and
having exhausted the relevant management detailed in the paragraph 5.9.3.1.2 of this Regulation, the debtor EFP still does not have sufficient funds to make the payment, the unwinding process will be carried out, either partial or total, according to what is established in the internal regulations of the ACH System.

5.9.3.2.2 Exclusion of an EFP: The Operator will exclude EFPs that
incur in any of the following causes:

5.9.3.2.2.1 Fail to meet some of the requirements
established in paragraph 5.4.

5.9.3.2.2.2 Have been subject to the exclusion process of
operations described in paragraph 5.9.3.2.1 the previous business day and has not settled the pending obligation.

5.9.3.2.2.3 That the EFP is in a regularization process
due to solvency or liquidity problems.

5.9.3.2.3 The exclusions made will be communicated by the
Operator to the rest of the EFPs, to the Financial Operations Management, OVSP and to the Superintendency, for the corresponding effects.

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5.10 RE-ENTRY OF AN EFP

5.10.1 To re-enter the ACH System, the EFP in addition to complying with what
is provided in paragraph 5.4, must comply with the following requirements:
a) Request authorization from the Operator to re-enter the ACH System. b) Meet the requirements that the Operator establishes for its re-entry.

5.10.2 The Operator will verify that the EFP is not under the situations
that gave rise to its exclusion.

5.11 REPORTS OF NON-COMPLIANCE TO THE CENTRAL BANK
The Internal Regulations of the ACH System must consider sending reports to the GOF and to the OVSP, immediately or at the latest on the same day, related to:
a) Non-compliance with schedules by the EFPs. b) Lack of required funds in the account that the EFPs maintain at the Central Bank to effect the fund reserve or the final settlement of daily operations. c) Exclusion of an EFP and its causes. d) Other information required by the Central Bank for surveillance purposes of payment systems.

5.12 OPERATOR EXIT FROM OPERATION

5.12.1 Voluntary Exit: The Operator may request the revocation of
authorization to operate, having to present a written request to the Central Bank no less than ninety (90) business days in advance of the date, from which the withdrawal will take effect, having to for such effect present a voluntary exit plan that must contain among other aspects, the date of completion of operations and the disclosure of the exit from operations to the EFPs. Such request must be signed by the Legal Representative of the Operator.

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5.12.2 Forced Exit: If the Operator incurs unjustifiably 3 times
within a calendar month, in any of the circumstances mentioned below, the Central Bank in exercise of its power of Surveillance of Payment Systems, may require the Operator to comply with a mandatory adjustment plan, these being:
a) Fail to meet the schedules established for the stages defined for the ACH System. b) Present technical problems or failures that affect its capacity for connection or communication with the LBTR.

5.12.3 The Central Bank in its function of Surveillance of Systems of
Payments, may also require compliance with a plan of mandatory adjustment if in audits performed by the Superintendency, unjustified non-compliances or situations that could affect the normal functioning of the ACH System are found. If there is non-compliance by the Operator to said plan in an unjustified manner, the Central Bank will revoke the authorization to operate.

6 SPECIAL PROVISIONS

6.1 The operational or contingency aspects that arise in the execution
of this Regulation will be resolved by the Financial Operations Management.

6.2 The non-operational aspects and not contemplated in this present Regulation
will be resolved by the Board of Directors of the Central Bank at the proposal of the Financial Stability and Public Policies Management of the Central Bank.

6.3 The Central Bank of Reserve of El Salvador, in order to promote the good
functioning of Payment Systems and Securities Settlement, can implement and administer ACH-type systems, for which it will issue the corresponding internal operating rules, adopting international standards and the necessary measures to guarantee the separation of these functions from those derived from its duty of surveillance over the systems.

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7 VALIDITY, DISTRIBUTION AND DISCLOSURE

7.1 This Regulation will enter into force starting from April 23, 2024 and
will repeal the version approved in Session No. CD-16/2022 of July 28, 2022.

7.2 The Board of Directors will keep a copy of this Regulation as backup
to the Approval Act and will send the original to the Risk and Strategic Management Management, for custody; deliver electronic copy to the Financial Stability and Public Policies Management and authorizes it to deliver electronic copies to the following units:

7.2.1 Legal Management

7.2.2 Financial Operations Management

7.2.3 Payments and Securities Department

7.2.4 Payment Systems Surveillance Office

7.3 The Financial Stability and Public Policies Management, through the
OVSP, will disclose this Regulation to the Administrative Units of the Central Bank corresponding.

7.4 Authorization is granted to the Risk and Strategic Management Management to publish
this Regulation in the Administrative Instruments System, for general consultation.

7.5 Authorization is granted to the Presidency to send this Regulation to the
Operators and to each of the EFPs; likewise, publish it fully on the Web page of the Central Bank for knowledge of the general public.

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MODIFICATION CONTROL TABLE
No.
Review Previous Version Approved Version Approver and date

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Manager of Financial Stability and
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Session No. CD-11/2024 of April 22,
2024