Resolution Reforming Articles 13, 14, 85, 86 and Adding Annex 5 to the Standard on Administrative Companies and Investment Funds

Page 1 of 7 Resolution No. CD-SIBOIF-1056-1-MAY15-2018 Dated May 5, 2018

STANDARD REFORMING ARTICLES 13, 14, 85, 86 AND ADDING AN EXHIBIT TO THE STANDARD ON ADMINISTRATIVE COMPANIES AND INVESTMENT FUNDS

The Board of Directors of the Superintendence of Banks and Other Financial Institutions, after deliberations on the matter,

CONSIDERING

I That on August 8, 2014, the Standard on Administrative Companies and Investment Funds (SAFI Standard), contained in Resolution No. CD-SIBOIF-847-1-AGOST8-2014, was approved, published in La Gaceta, Official Gazette No. 180, on September 24, 2014.

II That it is necessary to adapt the provisions contained in Articles 13, 14, 85, and 86 of the aforementioned standard, regarding the determination of net worth, coverage for management risk, valuation of real estate, and periodicity, in accordance with the new accounting framework applicable to financial institutions in the securities market, which is based on a combination of International Financial Reporting Standards (IFRS) and prudential regulations issued by this Superintendence.

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

In exercise of its powers,

HAS ISSUED

The following,

Resolution No. CD-SIBOIF-1056-1-MAY15-2018 STANDARD REFORMING ARTICLES 13, 14, 85, 86 AND ADDING AN EXHIBIT TO THE STANDARD ON ADMINISTRATIVE COMPANIES AND INVESTMENT FUNDS

FIRST: Articles 13, 14, 85, and 86 of the Standard on Administrative Companies and Investment Funds, contained in Resolution No. CD-SIBOIF-847-1-AGOST8-2014, published in La Gaceta, Official Gazette No. 180, on September 24, 2014, are hereby amended, and shall read as follows:

“Article 13. Determination of Net Worth.- Administrative companies must maintain net worth in accordance with what is established in this Chapter. The net worth of administrative companies is determined by the difference between the items specified in letter a) and the items specified in letter b):

Page 2 of 7 a) Items that add up: i. Equity (excludes items subject to distribution). ii. Provisions reflected as liabilities in accounting records, as stipulated in IFRS/IAS. b) Items that subtract: i. 100% of the balance of intangible asset accounts, net of impairment and amortization. ii. 50% of the balance of the property, plant, and equipment account, net of depreciation and impairment, that are necessary for the fulfillment of the corporate purpose. iii. 100% of accounts receivable from partners and related parties, net of provision. iv. 100% of other miscellaneous accounts receivable, net of provision. Items not subject to distribution must be backed by minutes of the general shareholders' meeting, which will be available for consultation by the Superintendent.

Article 14. Coverage for Management Risk.- In order to back the commitments undertaken with fund participants, administrative companies must maintain net worth available in cash, demand deposits, and savings deposits, in public offering securities of national or foreign issuers, in property, plant, and equipment, in bank guarantees payable on first demand in favor of investment fund participants, as well as sureties and civil liability policies. In these cases, administrative companies must designate as the representative of the beneficiaries of the bank guarantee, surety, or policy, the entity that provides custody services to the investment fund. The investments of said resources must respect sound principles of diversification, adequate risk management, and be valued in accordance with the respective accounting regulations.

The net worth of administrative companies shall be equivalent to the amount resulting from the greater of the following two parameters: a) The minimum share capital. b) The amount corresponding to the coverage of the risk generated by the administration of the funds at a proportion of one percent (1%) of the net asset value of the investment funds they manage.

Net worth requirements are calculated at the end of the month, and the net asset base for the calculation is the average of assets managed during the month.

Net worth must be used, partially or totally, to respond to contractual breaches declared by a court, of the administrative company with the participants of the funds it manages; or in case the company incurs in proven negligence in the development of its activities that cause harm to the investment fund.

In the event that these resources are used, payment to the harmed parties will be made proportionally to the number of participations they hold in the fund, and the administrative company will be obligated to their immediate replenishment, in order to maintain the amount established in this article.

Article 85. Valuation of Real Estate.- Valuations of real estate must be carried out directly by two experts registered in the Register of Appraisers (REPEV) maintained by the

Page 3 of 7 Superintendence, who must be natural or legal persons with professional experience and independent of the institution, or by a professional subcontracted by said experts for these purposes. These valuations must comply with what is established in IFRS 13 – Fair Value or its successors, and other IFRS/IAS related to real estate assets. The final value of the real estate is the lower value determined as fair value in these valuations. The valuation report must specify that it was carried out in accordance with IFRS/IAS and, in the event that the services of another professional were required, must indicate their name.

Within five (5) business days following the purchase of a real estate property, the administrative company must send the respective valuations to the Superintendent, which cannot be older than six (6) months. Investors will have access to the valuations of the real estate properties.

The registration of the real estate value in the financial statements of the investment fund is carried out in accordance with the accounting framework, using the fair value model. Additionally, a reserve must be constituted in the equity accounts of the fund, corresponding to the amount of unrealized losses or gains derived from a change in fair value, net of taxes. This reserve cannot be subject to distribution among investors, only until the sale or disposal of the real estate property has been realized.

Experts or professionals must value real estate in accordance with the general guidelines established in Annex 5 of this standard, which is an integral part of it.

Article 86. Timeframe for Valuation of Real Estate.- Real estate properties must be valued at least once a year, for which the date on which they were acquired must be considered. The existence of a purchase option in lease contracts does not exempt the performance of these valuations.

Without prejudice to what is established in the preceding paragraph, real estate properties must be valued in a period shorter than a year, in the following cases: a) Prior to the issuance of participations subsequent to the initial one, for the purpose of determining the placement price thereof. b) Prior to the sale of a real estate property, for the purpose of determining the offering price thereof. c) After the occurrence of accidents, natural disasters, or other events beyond the control of administrative companies that could affect fund participants. This valuation must be carried out no later than thirty (30) business days after the event occurred.

SECOND: ANNEX 5 - GENERAL GUIDELINES FOR CARRYING OUT REAL ESTATE VALUATIONS – is added to the Standard on Administrative Companies and Investment Funds, referred to in the first section of this resolution, which shall read as follows:

ANNEX 5 GENERAL GUIDELINES FOR CARRYING OUT REAL ESTATE VALUATIONS

SECTION I PROFESSIONALS RESPONSIBLE FOR APPRAISALS

Page 4 of 7 The administrative company must have the necessary controls to guarantee that professionals hired to prepare appraisals and financial valuations issue a reasoned and impartial opinion, in order to arrive at a correct valuation of the real estate assets in the portfolio or, before buying/selling a real estate asset, to evaluate the correct value of the fund's equity. The administrative company considers at minimum the following aspects:

1. Curriculum vitae (complete and updated).
2. Experience and legal qualification of the hired professional in the type of real estate asset to be valued.
3. Independence of the hired professional with respect to the administrative company, the investment funds it manages, its financial and/or economic group, and the persons interested in the purchase or sale of the real estate asset to be valued. The same requirement will apply to professionals subcontracted during the valuation process.
4. Whether the professional has the competence and capacity to perform the real estate valuation service in a reliable and professional manner.
5. The appraisal must indicate that it was carried out for financial reporting purposes, based on International Financial Reporting Standards (IFRS), adopted in the Accounting Framework of supervised institutions.

SECTION II GUIDELINES TO BE APPLIED IN THE PRACTICE OF THE APPRAISAL

The purpose of the appraisal is to determine a fair value of the real estate, understood as the value at which a real estate asset should be exchanged between a buyer and a seller, willing in a transaction under full competition conditions, after adequate marketing where the parties have acted with knowledge, prudence, and without coercion.

The appraisal must include aspects necessary for the correct identification and location of the real estate and clearly, precisely, and justifiedly indicate all assumptions that form the basis of the valuation and must comprise, at least, the following elements:

1. Analysis of the characteristics of the real estate, which includes at least: a) Legal status: detail the registration and legal aspects of the real estate. b) Physical characteristics: description of the data necessary to allow correct identification of the real estate and indicate its general characteristics as of the valuation date (condition, type of construction quality, structure, useful life and age, among others). c) Area characteristics: description of the area where the real estate is located and of the services and other facilities that are available.

Page 5 of 7 d) Other characteristics: any other characteristic or information about the real estate that, according to the professional's criterion, could significantly impact the level of occupancy, the value of the property, or could be relevant for making an investment or divestment decision.

2. Comparative market analysis: a) Disclosure of information regarding the value of closed transactions of similar properties carried out recently. The professional must disclose which characteristics and age they considered as reasonable elements to perform the comparison. b) If market information is obtained solely from sale listings and not from closed transactions, such limitation to the scope of the study performed must be disclosed.

3. The financial valuation of the real estate, in which an estimate of the value of the real estate asset will be obtained based on the method of net cash flows that they will generate, the uncertainty associated with those flows, as well as the expected evolution of these in the future. The value of the real estate will be the present value of the net cash flows for the investor.

The financial valuation must clearly, precisely, and justifiedly indicate all assumptions that form the basis of the valuation and comprise, at least, the following elements: a) Discount rate: Clearly and explicitly include and justify the assumptions used in the determination of the discount rate or rates, explain how this rate reflects the professional's assessments regarding specific risks of the asset, for which future cash flow estimates are made. If the fund's target rate is used for discounting, it must be adjusted when the investment risk deviates from what the professional considers normal for those real estate properties. b) Terms: Clearly and explicitly include and justify the projection term of the flows used by the professional. c) Description of assumptions used: Clearly and explicitly show the assumptions used in the determination of expected income and expense cash flows associated with the real estate, calculation of perpetuity, terminal or residual value, expected occupancy rates, as well as assumptions regarding the term in which new real estate or vacant real estate will begin to generate rents. d) Description of lease contract characteristics: in case the contracts included purchase options, the conditions agreed upon and the manner in which this information was incorporated into the valuation of the real estate must be disclosed. e) Risk analysis: Clearly and explicitly show a description of the effect of changes in the fundamental variables of the projection on the theoretical value of the asset and on the estimated return. Any other factor that, in the professional's criterion, could impact the result of the valuation and, consequently, investment decisions, must also be included.

Page 6 of 7 f) Occupancy and income history: provide aggregated statistical information on the historical behavior of the actual occupancy level of the real estate, for a period comprising at least the two years prior to the valuation date, when applicable. g) Cash flow.

4. Other aspects that the professional performing the appraisal considers necessary to apply, based on best practices and/or international standards.
5. Summary of the valuation process. Clearly refer to its scope, limitations, and difficulties that may have significantly impacted the results, including the existence of purchase options, if any. In valuations subsequent to the initial one, the assumptions and relevant elements that changed compared to the previous period and that significantly affected the new determined value must be indicated.

SECTION III INFORMATION TO BE DISCLOSED BY THE PROFESSIONAL PERFORMING THE APPRAISAL

The professional or firm of professionals must disclose as part of the report they present on the real estate, a section referring to the following aspects:

1. The experience they possess in real estate valuation.
2. Whether they have the necessary independence with respect to the administrative company, the investment funds it manages, its financial and/or economic group, and the persons (natural or legal) offering to sell or buy the real estate to be valued. The same requirement will apply to professionals subcontracted during the valuation process.

Indicate prominently whether the professional considers the quality of the existing information on the real estate asset subject to valuation, provided by the administrative company or third parties assisting them, to be satisfactory. If the professional considers that there are only limited historical data, they must prominently indicate the limitations that such situation generated on the opinion they issue in their report.

THIRD: The provisions established in this standard shall take effect as of January 1, 2019; however, for the purposes of implementing IFRS 1 - First-time Adoption of International Financial Reporting Standards, financial institutions must apply these provisions to the first financial statements generated during the transition period, as referred to in the regulations governing the matter on the implementation of Accounting Frameworks.

The provisions contained in the first paragraph of Article 14, referred to maintaining net worth available in bank guarantees payable on first demand in favor of investment fund participants, as well as sureties and civil liability policies; and what is provided in Article 86, both reformed by this resolution, are excepted from the foregoing paragraph, and shall be applicable as of the notification of this standard.

Page 7 of 7 FOURTH: This standard shall enter into force as of its notification, without prejudice to its subsequent publication in La Gaceta, Official Gazette. (f) S. Rosales C. (f) V. Urcuyo V. (f) Fausto Reyes B. (f) illegible (Silvio Moisés Casco Marenco) (f) U. Cerna B.

URIEL CERNA BARQUERO Secretary of the Board of Directors SIBOIF