Regulatory Alerts2016-03-15 | CD-SIBOIF-933-3-MAR15-2016Added · Updated
Resolution Reforming Article 12 of the Deposit and Investment Limits Standard
The Board of Directors of the Superintendence of Banks and Other Financial Institutions amended Article 12 of the Deposit and Investment Limits Standard to update risk rating equivalences for determining investment grades and sovereign risk levels. The revised article establishes specific minimum rating thresholds for Fitch, Moody's, Standard & Poor's, Dominion Bond Rating Services, Centroamerican Rating Society, and Pacific Credit Rating across issuer, short-term, long-term, and sovereign categories. It mandates that the lowest available rating applies when multiple ratings exist and requires ratings to be publicly accessible on the respective agency's website. This norm entered into force upon notification on March 15, 2016.
1 Resolution No. CD-SIBOIF-933-3-MAR15-2016 Dated March 15, 2016 NORM REFORMING ARTICLE 12 OF THE DEPOSIT AND INVESTMENT LIMITS STANDARD
The Board of Directors of the Superintendence of Banks and Other Financial Institutions,
CONSIDERING
I
That Article 10, item 11 of Law No. 316, Law of the Superintendence of Banks and Other Financial Institutions and its reforms, and Articles 57, item 1, 53, and 54 of Law No. 561, General Law of Banks, Non-Bank Financial Institutions, and Financial Groups; empower the Board of Directors of the Superintendence of Banks and Other Financial Institutions to issue norms related to investments and deposits, as well as the limits for this type of operation in the country and abroad for supervised financial institutions.
II
That it is necessary to reform Article 12 of the Deposit and Investment Limits Standard, in order to update the equivalences of the risk rating agencies' ratings regarding determining the investment grade of local or foreign financial institutions, and sovereign risk level.
In exercise of its powers,
HAS ISSUED
CD-SIBOIF-933-3-MAR15-2016
The following,
NORM REFORMING ARTICLE 12 OF THE DEPOSIT AND INVESTMENT LIMITS STANDARD
FIRST: Article 12 of the Deposit and Investment Limits Standard contained in Resolution No. CD-SIBOIF-650-2-OCT20-2010, of October 20, 2010, published in La Gaceta, Official Journal No. 2 of January 6, 2011, and its reforms, is hereby amended, which shall read as follows:
"Art. 12. Rating Parameters.- For the purpose of determining local or international rating as well as sovereign risk, the ranges established in the following table must be met:
2
| Risk Rating Agency | Rating Categories |
|---|---|
| Issuer Obligations | |
| Fitch IBCA | Rating BBB- or higher |
| Moody's Investors Services | Rating Baa3 or higher |
| Standard & Poor's Corporation | Rating BBB- or higher |
| Dominion Bond Rating Services Limited | Rating BBB- or higher |
| Centroamerican Rating Society, S.A. | Rating scr-BBB or higher |
| Pacific Credit Rating, S.A. de C.V. | Rating BBB or higher |
In the event that there is more than one risk rating, the lowest rating shall apply. The current rating shall be the one available on the website of the respective rating agency. For such purposes, the rating must be available to the public on the website of the respective rating agency, as well as on the website of the rated financial institution, on a permanent basis."
SECOND: This norm shall enter into force upon its notification, without prejudice to its subsequent publication in La Gaceta, Official Journal. (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) Antonio Morgan Pérez. Ad Hoc Secretary"
URIEL CERNA BARQUERO
3 Secretary of the Board of Directors SIBOIF