Resolution Reforming Article 8 of the Regulation on Deposit and Investment Limits

Resolution No. CD-SIBOIF-1003-2-JUN20-2017
Dated June 20, 2017

REGULATION REFORMING ARTICLE 8 OF THE REGULATION ON DEPOSIT AND INVESTMENT LIMITS

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

CONSIDERING

SOLE PROVISION

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 regulations related to investments and deposits, as well as the limits for this type of operations in the country and abroad for supervised financial institutions.

In exercise of its powers,

HAS ISSUED

The following,

CD-SIBOIF-1003-2-JUN20-2017

REGULATION REFORMING ARTICLE 8 OF THE REGULATION ON DEPOSIT AND INVESTMENT LIMITS

FIRST: Article 8 of the Regulation on Deposit and Investment Limits contained in Resolution No. CD-SIBOIF-650-2-OCT20-2010, of October 20, 2010, published in La Gaceta, Official Newspaper No. 2 of January 6, 2011, and its reforms, is hereby amended, which shall read as follows:

"Art. 8. Limits per Depository or Issuer.- In operations carried out in accordance with Articles 5, 6, and 7 of this regulation, depository and investing financial institutions shall be governed by the following limits:

a) In serial negotiable securities issued in national or foreign currency by the Central Government or Central Bank of Nicaragua indicated in Article 5 of this regulation, without limit.

b) In demand deposits (checking and savings accounts) or time deposits, as well as in serial negotiable securities indicated in item a) of Article 6 of this regulation, up to thirty percent (30%) of the calculation base of the investing or depository institution, per issuer or depository.

c) In investments in public debt securities referred to in item b) of Article 6 of this regulation, up to 10% of the calculation base of the investing institution, per issuer.

d) In checking, savings, MMDA/MMSA, and time deposits of up to seven (7) days in banks with first-rate international rating, indicated in items 1), 2), and 3) of item a) of Article 7 of this regulation, according to their operational and/or treasury needs. In those cases where the limit of thirty percent (30%) of the calculation base of the capital of the depository institution is exceeded per depository, such operations must be duly justified at the discretion of the Superintendent.

e) In non-negotiable time deposit certificates for periods greater than seven (7) days and not greater than one year in banks with first-rate international rating, indicated in item 4) of item a) of Article 7 of this regulation, up to thirty percent (30%) of the calculation base of the investing institution, per depository.

f) In Debt Instruments and/or Negotiable Serial Deposit Certificates in banks with first-rate international rating, which are traded on the stock exchange or regulated market of the corresponding country referred to in Article 7, item a), item 5), up to fifteen percent (15%) of the calculation base of the issuing or depository institution, per issuer or depository.

g) In checking account deposits maintained in unranked banks referred to in Article 7, item b), up to ten percent (10%) of the calculation base of the depository institution, per depository.

Exceeding the aforementioned limit shall not be considered a breach when it is exceeded by deposits made by persons or entities external to the institution, provided that such excess is regularized within a period not exceeding three (3) business days, duly justified in communication sent to the Superintendent.

h) In checking account deposits maintained in banks with first-rate local rating, referred to in Article 7, item c) of this regulation, up to fifteen percent (15%) of the calculation base of the depository institution, per depository.

Exceeding the aforementioned limit shall not be considered a breach when it is exceeded by deposits made by persons or entities external to the institution, provided that such excess is regularized within a period not exceeding three (3) business days, duly justified in communication sent to the Superintendent.

i) In Money Market accounts maintained in stock exchange positions indicated in item d), of Article 7 of this regulation, up to fifteen percent (15%) of the calculation base of the depository institution, per depository.

Exceeding the aforementioned limit shall not be considered a breach when it is exceeded by temporary operations connected with pending investments, duly justified in communication sent to the Superintendent.

j) In serial negotiable debt securities issued or guaranteed by the Department of the Treasury or by institutions or companies of the Federal Government of the United States of America, indicated in Article 7, item e), item 1), of this regulation, up to one hundred percent (100%) of the calculation base of the investing institution, per issuer.

k) In serial negotiable debt securities issued by Multilateral Credit Organizations (IDB, World Bank, CABEI) of which the country is a member, indicated in Article 7, item e), item 2), of this regulation, up to fifty percent (50%) of the calculation base of the investing institution, per issuer.

l) In serial negotiable debt securities issued by Central Banks and Central Governments, indicated in Article 7, item e), item 3) of this regulation, up to fifteen percent (15%) of the calculation base of the investing institution, per issuer."

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

URIEL CERNA BARQUERO
Secretary, Board of Directors SIBOIF