Resolution 106/2011

BOARD RESOLUTION NO. 106/2011 SUBJECT: MONETARY OPERATIONS MANAGEMENT – APPROVES REGULATION FOR THE SALE OF PUBLIC SECURITIES REGISTERED IN ACCOUNTS ISSUED BY THE CENTRAL BANK OF BOLIVIA THROUGH PLACEMENT AGENTS.

VIEWED: The Law No. 1670 of October 31, 1995 of the Central Bank of Bolivia (BCB) and its modifications. The Law No. 1834 of March 31, 1998 on the Securities Market and its modifications. The Law No. 1488 of April 14, 1993 on Banks and Financial Entities. The Statute of the BCB approved by Board Resolution No. 128/2005 of October 21, 2005 and its modification approved by Board Resolution No. 031/2006 of April 18, 2006. The Open Market Operations Regulation approved by Board Resolution No. 127/2003 of November 11, 2003 and its modifications approved by Board Resolutions No. 017/2004 of February 10, 2004, No. 070/2005 of May 24, 2005, No. 108/2007 of August 21, 2007 and No. 130/2007 of October 16, 2007. Board Resolution No. 073/2011 of June 14, 2011, which authorizes the Open Market Operations Committee to establish a commission for the transfer and transfer of securities placed through direct sale mechanisms. The Technical Report from the Monetary Operations Management BCB-GOM-SOMA-2011-031 of August 10, 2011. The Report from the Legal Affairs Management BCB-GAL-SANO-INF-2011-274 of August 16, 2011.

CONSIDERING: That Article 6 of Law No. 1670 authorizes the BCB to execute monetary policy and regulate the amount of money and the volume of credit according to its monetary program, being able to issue, place, and acquire securities and carry out other open market operations for this purpose. That Article 54 subsection d) of Law No. 1670 and numeral 4) of Article 11 of the BCB Statute authorize the Board of the Issuing Entity to issue rules for open market operations.

//2. R.D. N° 106/2011 That Article 87 of Law No. 1670 establishes that within the scope of its functions as the monetary authority, and in its capacity as the government's financial agent, the BCB may, under the conditions determined by its Board, deposit, custodian, register, administer, transact, compensate, and settle securities issued, guaranteed, or administered by the BCB and by the General Treasury of the Nation (TGN). That Article 7 of Law No. 1834 establishes that both BCB and TGN issuances are exempt from public offering authorization by the Superintendence of Pensions, Securities, and Insurance (SPVS), with their own legal norms backing their issuance and public offering being sufficient. That Law No. 1834 in its article 19 subsections a) and g) determines that Stock Agencies are authorized to carry out securities intermediation activities on behalf of third parties, as well as to carry out public offerings on behalf of issuers. That article 3 numeral 2) of Law No. 1488 establishes that the issuance, discounting, or negotiation of securities and other documents representing obligations are financial intermediation activities and auxiliary services of the financial system. That numeral 12) of article 39 of Law No. 1488 determines that banking financial entities are authorized to act as intermediaries on behalf of their clients in the subscription, placement, and purchase-sale of securities, prior to the deposit of funds. That the last paragraph of article 39 of Law No. 1488 establishes that the activities mentioned in numeral 12) must be carried out through companies with majority ownership by the entity. That the Administrative Resolution of the Financial System Supervision Authority SPVS/IV/ No. 1250 regulates the activities of Stock Agencies carried out through services provided by entities authorized by the Superintendence of Pensions, Securities, and Insurance or by the Superintendence of Banks and Financial Entities. That Board Resolution 127/2003 of the Open Market Operations Regulation states that these operations may be carried out through the mechanism known as Market Makers, for which it is established that the conditions of this mechanism will be defined by a specific Regulation approved by the Board of the Issuing Entity. That Board Resolution 073/2011 authorizes the Open Market Operations Committee to establish a commission for the transfer and transfer of securities placed through direct sale mechanisms.

//3. R.D. N° 106/2011 That the Technical Report from the Monetary Operations Management BCB-GOM-SOMA-2011-031 concludes that with the objective of supporting interest rate signaling and incentivizing financial savings among natural persons nationwide, and of democratizing the population's access to sovereign securities, it recommends to the Board to approve the Regulation for the Sale of Public Securities issued by the Central Bank of Bolivia through Placement Agents. That in Report BCB-GAL-SANO-INF-2011-274 it concludes that the draft Regulation for the Sale of Public Securities issued by the Central Bank of Bolivia through Placement Agents proposed by the Monetary Operations Management is legally appropriate as it does not contravene the legal framework, being the competence of the BCB Board to consider its approval by two-thirds of the votes of all its members, in accordance with what is established in article 54 subsection o) of Law No. 1670 and article 24 of the BCB Statute.

THEREFORE, THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA RESOLVES: Article 1. Approve the Regulation for the Sale of Public Securities Registered in Accounts issued by the Central Bank of Bolivia through Placement Agents, which, as an annex, forms part of this Resolution. Article 2. This Regulation shall enter into force from the date of its approval. Article 3. Repeal Board Resolution 131/2007 Regulation for the sale of public securities issued by the Central Bank of Bolivia through market makers. Article 4. The Presidency and General Management are charged with the execution and compliance of this Resolution. La Paz, August 23, 2011

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Marcelo Zabalaga Estrada

//4. R.D. N° 106/2011

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Hugo Dorado Araníbar Ernesto Yáñez Aguilar

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Rolando Marín Ibáñez Gustavo Blacutt Alcalá

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Rafael Boyán Téllez

//5. R.D. N° 106/2011 ANNEX REGULATION FOR THE SALE OF PUBLIC SECURITIES REGISTERED IN ACCOUNTS ISSUED BY THE CENTRAL BANK OF BOLIVIA THROUGH PLACEMENT AGENTS

CHAPTER I GENERALITIES Article 1. (Object) This Regulation aims to establish the conditions for the sale of public securities to natural persons through Placement Agents. Article 2. (Sale of Public Securities through Placement Agents) The sale of public securities through Placement Agents is a mechanism by which authorized entities receive securities from the BCB to sell them to natural persons. This sale is the exclusive responsibility of the Placement Agent. Article 3. (Authorized Entities) All intermediaries authorized with a license to operate by the ASFI, within the framework of article 19 subsections a) and g) of Law No. 1834, and as provided in article 39 numeral 12) of Law No. 1488, authorized to negotiate with securities registered in the Securities Market Registry, may act as Placement Agents. Article 4. (Eligibility Criteria) The status of Placement Agent will be granted based on eligibility criteria determined by the Open Market Operations Committee of the BCB (COMA). The chosen entities must coordinate with the Monetary Operations Management of the BCB all necessary operational aspects, which will be established by said Management in an Operational Guide.

CHAPTER II CONDITIONS FOR THE SALE OF SECURITIES Article 5. (Delivery of Securities from the BCB to Placement Agents) Placement Agents will receive from the BCB on the days decided by the COMA, the following public securities registered in accounts for their sale in the primary market: Discount Securities: At the price or rate determined by the COMA, for each of the terms enabled for public sale. Yield Securities: At the yield rate determined by the COMA, for each of the terms enabled for public sale. The defined prices and rates will be published at the conclusion of the COMA session.

//6. R.D. N° 106/2011 Article 6. (Sale of Public Securities to Natural Persons) The sale of public securities to natural persons through Placement Agents shall be governed by the following conditions: The placement modality in the primary market will be according to the order of arrival of purchase orders. The prices and sales rates of public securities to natural persons cannot be different from those established in Article 5. The minimum and maximum number of securities for sale will be defined by the COMA. The operational procedures for placement, transfer, early redemption, and cancellation at maturity of securities issued by the BCB and placed through Placement Agents will be specified in the aforementioned Operational Guide. Public securities will be sold in all agencies and sales branches enabled by Placement Agents that have been previously defined with the BCB. The conditions for the sale of public securities to clients must be displayed in a visible place in each of the agencies and sales branches mentioned in subsection e). Article 7. (Payment of Public Securities at Maturity) The payment of economic rights to the holders of public securities will be carried out through the Paying Agent, which for these purposes will be the same Placement Agent, under its exclusive responsibility; or the BCB. The payment procedures will be specified in the Operational Guide. Article 8. (Loss of Placement Agent Status) The sale of public securities to natural persons through Placement Agents cannot be discriminatory in rate, term, or place. If any of these conditions or those determined in the Operational Guide are not met, the BCB may determine the loss of the Placement Agent status. Article 9. (Service Provision) For the performance of the operations that make up the Placement Agent's services, the BCB will pay a commission on the gross monthly placements. -°-