Resolution Reforming Article 9 of the Regulation on Authorization and Operation of Stock Exchanges

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Resolution No. CD-SIBOIF-840-1-JUN27-2014
Dated June 2014
REGULATION REFORMING ARTICLE 9 OF THE REGULATION ON AUTHORIZATION AND OPERATION OF STOCK EXCHANGES

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

CONSIDERING

I

That Articles 1 and 4 of Law 587, the Capital Market Law (Law 587), published in La Gaceta, Official Gazette No. 222, of November 15, 2006, establish that it is the responsibility of the Superintendence of Banks and Other Financial Institutions to regulate, supervise, and audit the securities markets, the activities of natural or legal persons who intervene directly or indirectly in them, and the acts or contracts related to them; and to promote the conditions of transparency and competitiveness that make possible the proper functioning of the market, through the dissemination of all information necessary for this purpose, seeking the protection of investors;

II

That Article 43 of Law 587 establishes that Stock Exchanges may participate, through Stock Exchange Brokers, in stock transactions carried out within their own premises, and must announce such fact at the time of negotiation to the rest of the participants; empowering the Superintendent to impose limits on such investments in order to prevent possible conflicts of interest.

In exercise of its powers,

HAS ISSUED

The following:

CD-SIBOIF-840-1-JUN27-2014
REGULATION REFORMING ARTICLE 9 OF THE REGULATION ON AUTHORIZATION AND OPERATION OF STOCK EXCHANGES

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FIRST: Article 9 of the Regulation on Authorization and Operation of the Stock Exchange, contained in Resolution No. CD-SIBOIF-492-1-AGOS2-2007, dated August 2, 2007, published in La Gaceta, Official Gazette No. 178, of September 18, 2007, is hereby amended, to read as follows:

"Article 9.- Regime for investments on own account by stock exchanges.- Stock exchanges may invest on their own account in securities traded within their own premises. These investments shall not exceed, in a combined manner, 10% of the issuance nor 10% of the total assets of the stock exchange.

Exempt from the above limits are investments in securities issued by the Ministry of Finance and Public Credit and the Central Bank of Nicaragua; securities issued by similar organs of Central American governments; as well as securities traded in other stock exchanges.

Investments on own account carried out within their own premises, in addition to complying with the above limits, must be carried out through a member stock exchange broker, and must be announced to the rest of the participating brokers at the same moment they are executed. For these purposes, stock exchanges must establish policies containing mechanisms aimed at preventing possible conflicts of interest, and procedures for the selection of the stock exchange broker(s) that will intermediate in the operations, which must ensure that all stock exchange brokers can participate in the selection process on equal terms.

In all cases, the securities in which the stock exchange may invest must have a first-order risk rating, local or international, according to the table contained in Annex 3 of this regulation, which becomes an integral part of it."

SECOND.- This regulation shall enter into force upon its notification, without prejudice to its subsequent publication in La Gaceta, Official Gazette. (signed) Sara Rosales C. (signed) V. Urcuyo V. (signed) illegible (Silvio M. Casco Marenco) (signed) Gabriel Pasos Lacayo (signed) Fausto Reyes B. (signed) illegible (Freddy Blandón Argeñal) (signed) Uriel Cerna Barquero. Secretary.

URIEL CERNA BARQUERO
Secretary of the Board of Directors SIBOIF