Regulation Reforming Articles 21 and 29 and Annex 2 of the Regulation on the Operation of Stock Exchanges and Their Agents

Resolution No. CD-SIBOIF-1021-1-OCT13-2017
Dated October 13, 2017
REGULATION REFORMING ARTICLES 21 AND 29, AND ANNEX 2 OF THE REGULATION ON THE OPERATION OF STOCK EXCHANGES AND THEIR AGENTS

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

CONSIDERING

I

That on October 13, 2010, the Regulation on the Operation of Stock Exchanges and Their Agents was approved, contained in Resolution No. CD-SIBOIF-649-2-OCTU13-2010, published in La Gaceta No. 241 and 244, on December 17 and 22, 2010, which aims to establish the authorization requirements for stock exchanges and their agents; as well as the requirements they must meet regarding the services they provide.

II

That it is necessary to reform Articles 21 and 29, and Annex 2 of the aforementioned regulation so that stock exchanges can transmit information related to their clients' operations via physical or electronic means, as agreed with them; establishing auditable mechanisms that allow evidence of the transmission thereof.

III

That in accordance with the considerations expressed above and based on the powers established in Article 6, letter b); Article 63, letter g); and Article 208, of Law No. 587, Capital Markets Law, published in La Gaceta No. 222, on November 15, 2006.

In exercise of its powers,

HAS ISSUED

CD-SIBOIF-1021-1-OCT13-2017

The following,

REGULATION REFORMING ARTICLES 21 AND 29, AND ANNEX 2 OF THE REGULATION ON THE OPERATION OF STOCK EXCHANGES AND THEIR AGENTS

FIRST: Articles 21 and 29 of the Regulation on the Operation of Stock Exchanges and Their Agents, contained in Resolution No. CD-SIBOIF-649-2-OCTU13-2010, published in La Gaceta No. 241 and 244, on December 17 and 22, 2010, are hereby reformed, which shall read as follows:

"Article 21. Client Files.- Stock exchanges must maintain a physical file for each of their clients containing, at a minimum, the following documentation:

a) Service contract, which must comply with the minimum content established in Article 28 of this Regulation.

b) Client profile, which must comply with the information requirements established by law and the regulations governing the matter of anti-money laundering and counter-terrorism financing; as well as the personal and financial information about the client that allows the stock exchange to provide adequate service to their investment objectives and risk profile.

The profile must contain information on the client's sources and levels of income, their objectives and investment horizon, investment experience and risk preference, as well as the terms and means agreed upon, whether physical or electronic, for the sending of information related to their operations. The stock exchange must establish auditable mechanisms that allow evidence of the transmission of said information by any of the aforementioned means.

Without prejudice to any other information deemed necessary for the preparation of the profile, this shall comprise, at a minimum, the following: total assets, source of income, destination of invested resources, self-evaluation regarding their knowledge of the securities market, whether they have had previous investment experiences, what their individual consideration of risk is, what their personal disposition to risk is, what their inclination for currency investment is, what their investment objective is, what percentage of their assets they would dedicate to investing, and any other information that helps determine the level of risk the investor is willing to assume.

c) Legal documentation required by the regulations governing the matter of anti-money laundering and counter-terrorism financing for the proper identification of the client.

d) In the event that there are persons authorized to order operations on behalf of the client, sufficient power of representation must be attached. The stock exchange must know the following minimum location data of the attorney-in-fact: identification document, home address, telephone, fax, and email.

e) Investment orders.

f) The settlement slip for the operation in accordance with the minimum content required in Annex 2 of this Regulation, which is an integral part thereof.

Article 29. Duty of Information.- In the performance of authorized activities, stock exchanges have a duty of information towards their clients.

Without prejudice to the parties agreeing additional obligations for a specific service, such agreement must entail, at a minimum, compliance with the following obligations:

a) Obligation of the stock exchange to take necessary measures to ensure that, prior to the start of service provision, the investor has received adequate information about each service and the conditions under which it will be provided, including remuneration and risk topics. This obligation shall be deemed fulfilled with the signing of the corresponding contract, prior to the start of service provision.

b) Obligation to keep the client updated on the status of the accounts for the services provided to them and their investment portfolio both periodically and immediately, in cases where facts of relevance arise that must be communicated to them immediately.

The minimum content of the account statement shall be that established in Annex 3 of this Regulation, which is an integral part thereof.

c) Obligation to inform the client about each operation executed on their behalf, according to the terms and means agreed upon in the client profile. However, in any case, the client's right to demand information from the stock exchange at any time regarding the execution of their operations shall remain.

This obligation shall not apply to individual portfolio management contracts with discretion, unless otherwise established contractually.

d) Obligation to respond promptly to specific information requests from their clients."

SECOND: Annex 2 of the Regulation on the Operation of Stock Exchanges and Their Agents referred to above is hereby reformed, which shall read as follows:

ANNEX 2
OPERATION SLIP

a. Name of the stock exchange b. Client account number
c. Investment order number
d. System operation number e. Date of the operation f. Settlement date g. Market type h. Type of Confirmation (buy or sell)
i. Face value of the instrument or number of units
j. Yield k. Price
l. Commission
m. Total to pay or receive n. Ownership (how the stock exchange acts, on its own account or on behalf of third parties) o. Observations

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

EDELBERTO ZELAYA CASTILLO
Ad Hoc Secretary
Board of Directors