Regulation Reforming Articles 16 and 17 and Annexes I and III of the Regulation on Public Offering of Securities in the Primary Market

Resolution No. CD-SIBOIF-1046-1-MAR13-2018
Dated March 13, 2018

REGULATION REFORMING ARTICLES 16 AND 17; AND ANNEXES I AND III OF THE REGULATION ON PUBLIC OFFERING OF SECURITIES IN THE PRIMARY MARKET

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

CONSIDERING

I
That Title II of Law No. 587, "Capital Markets Law," published in La Gaceta, Official Gazette No. 222, on November 15, 2006, referred to above, empowers the Board of Directors of the Superintendence to regulate general aspects related to the procedures and requirements for the placement and trading of securities subject to public offering in the primary market; as well as the requirements applicable to issuers and intermediaries of said securities.

II
That by virtue of the above consideration, it is appropriate to reform Articles 16 and 17 of the Regulation on Public Offering of Securities in the Primary Market, contained in Resolution CD-SIBOIF-692-1-SEP7-2011, published in La Gaceta No. 210, on November 7, 2011; referring to the placement period for issuance programs, and to the revolving nature of said programs, respectively, with the aim of reducing operational costs for issuers.

III
That it is also appropriate to modify Annex I of the aforementioned regulation, regarding the manner in which the information prospectus must be updated annually; as well as Annex III, concerning the minimum information that the "Simplified Prospectus" applicable to financial institutions must contain. The foregoing, with the aim of facilitating the placement process of securities registered with the Superintendence, while maintaining the quality of information received by investors for their decision-making.

In exercise of its powers,

HAS ISSUED

The following:

CD-SIBOIF-1046-1-MAR13-2018
REGULATION REFORMING ARTICLES 16 AND 17; AND ANNEXES I AND III OF THE REGULATION ON PUBLIC OFFERING OF SECURITIES IN THE PRIMARY MARKET

FIRST: Articles 16 and 17 of the Regulation on Public Offering of Securities in the Primary Market, contained in Resolution CD-SIBOIF-692-1-SEP7-2011, published in La Gaceta No. 210, on November 7, 2011, are hereby reformed, which shall read as follows:

"Article 16. Issuance Programs.- Issuers may register issuance programs for debt with a global amount, composed of more than one issuance, and whose placement must be distributed within the four years following the date of registration of the program in the Securities Registry. The global amount of the program must be specified prior to registration. However, the quantity and characteristics of each of the issuances that will form part of the program, related to the issuance date, maturity date, term, amount, and currency of the series, denomination or face value, interest rate, periodicity, and governing law, may be defined subsequently to the registration of the program, but prior to placement, by the means and within the timeframe defined by the Superintendent. The Superintendent may authorize, upon justified request, an extension of the program's term.

Issuances carried out as part of a program may be revolving, meaning that payments made for the maturity, amortization, or repurchase of these issuances will be restored to the program's outstanding balance, so that the issuer can negotiate other issuances starting from the available amount resulting from the revolving nature. In any case, the sum of the amounts of the current issuances corresponding to the program may never exceed the approved global amount. Notwithstanding the foregoing, the placement of the program must be distributed within the same term established in the preceding paragraph.

When short-term issuances not exceeding 360 days are carried out as part of a program, no additional rights to the return of principal and interest shall be conferred upon the creditor, in the case of securities with coupons; that is, they may not incorporate characteristics such as early redemption clauses or convertibility.

In the case of issuance programs for securities carried out by banks and/or financial societies that are authorized by the General Banking Law to capture public deposits, the Stock Exchanges that effect the placement of these instruments must inform their clients that these securities are not covered by the Deposit Guarantee Fund (FOGADE), a condition that must be prominently stated in the issuance prospectuses and in public offering notices.

Issuers must comply with the conditions established in Article 10 and meet the registration requirements referred to in Article 18 of this regulation. The procedure shall be governed by what is provided in Articles 38 and 49 of this Regulation.

In the particular case of the Central Bank of Nicaragua and the Ministry of Finance and Public Credit, these entities must comply with the conditions established in Article 10 and meet the registration requirements indicated in Article 26 of this regulation. The procedure shall be governed by what is provided in Articles 38 and 49 of this Regulation, insofar as applicable."

"Article 17 Short-term debt issuance programs.- Repealed"

SECOND: The section titled "Prospectus Update" of Annex I - MINIMUM CONTENT OF THE PROSPECTUS, of the Regulation on Public Offering of Securities in the Primary Market, referred to in point "FIRST" of this resolution, is hereby reformed, which shall read as follows:

"Prospectus Update
The prospectus update must be carried out annually through the publication of a supplement containing the information that was modified during the period, indicating the sections, subsections, or fragments of the original prospectus that were modified. In no case may the update modify the conditions or characteristics of the securities issuances.
The content of the prospectus must remain updated during the placement process of the issuance in the primary market. Relevant events that occur during the placement period of the issuance in the primary market must be supplied to the investor at the time of acquiring the securities, along with the latest update of the prospectus; indicating the sections, subsections, or fragments of the original prospectus that were modified by the aforementioned relevant events. The issuer must present an original of the prospectus, with the notarized declaration, signed and stamped on each of its pages, and a copy. The signature of the legal representative on each of the pages (including the annexes) of the original prospectus may be delegated to a trusted person, provided that a special power of attorney is granted and attached as part of the respective documentation at the time of presenting the definitive version of the prospectus."

THIRD: Subparagraph "k" - Periodicity of information to investors - of Annex III - MINIMUM CONTENT OF THE SIMPLIFIED PROSPECTUS, of the Regulation on Public Offering of Securities in the Primary Market, referred to in point "FIRST" of this resolution, is hereby reformed, which shall read as follows:

"k. Periodicity of information to investors

• In accordance with what is established in subsection j.2 of Annex I of this regulation. Cash flows are excluded."

FOURTH: For securities issuers who, upon the entry into force of this regulation, have issuance programs registered in the Securities Registry of the Superintendence, the four-year placement term referred to in Article 16 as reformed according to subsection "FIRST" of these provisions, shall begin to run from the date of the resolution registering the corresponding program in the aforementioned registry.

FIFTH: This regulation shall enter into force upon its notification, without prejudice to its subsequent publication in La Gaceta, Official Gazette. (f) S. Rosales C. (f) M. Díaz O. (f) Gabriel Pasos Lacayo (f) Fausto Reyes B. (f) illegible (Silvio Moisés Casco Marenco) (f) illegible (Freddy José Blandón Argeñal) (f) Uriel Cerna Barquero. Secretary.

EDELBERTO ZELAYA CASTILLO
Ad Hoc Secretary
Board of Directors SIBOIF