Resolution SBS No. 0945-2006: Approves the Price Vector Regulation

Lima, July 25, 2006
Resolution S.B.S.
No. 945-2006

The Superintendent of Banking, Insurance and Private Pension Fund Administrators

CONSIDERING:

That, as stated in Article 345 of the General Law of the Financial System and the Insurance System and Organic Law of the Superintendency of Banking and Insurance, Law No. 26702 and its amendments, hereinafter referred to as the General Law, the Superintendency of Banking, Insurance and Private Pension Fund Administrators, hereinafter referred to as the Superintendency, is a constitutionally autonomous institution with public law personality, whose object is to protect the interests of the public within the financial and insurance systems;

That, by Law No. 27328, Private Pension Fund Administrators (AFP) were incorporated under the supervision of the Superintendency, authorizing this control body, in the exercise of supervision of said entities, to use all prerogatives granted by the General Law;

That, paragraph 13 of Article 349 of the General Law states that the Superintendency has the authority to issue general norms to specify the preparation, presentation, and publicity of financial statements, and any other complementary information, ensuring that the real economic-financial situation of the companies under its supervision is reflected;

That, paragraph 2 of Article 254 of the General Law authorizes the Superintendency to require that investments and other positions subject to market risk be adjusted to their market value, according to the methodology it establishes.

That by Resolution SBS No. 1882-2005 of December 20, 2005, the Price Vector Committee was created, responsible for the approval of policies, criteria, methodologies, and manuals for the generation of the Price Vector.

That, in the fifth session of the Price Vector Committee held on July 20, 2006, the "Methodological Manual and Procedures of the Price Vector" was approved, which describes the main methodological and process aspects used in the preparation of the Price Vector.

Given the opinion of the Deputy Superintendencies of Private Pension Fund Administrators, Banking, Insurance, Risks, and Legal Advice, as well as the Economic Studies Department; and,

In exercise of the powers conferred by paragraphs 3, 7, 9, 13, and 18 of Article 349 of the General Law;

RESOLVES:

Article First.- Approve the Price Vector Regulation, which forms an integral part of this Resolution.

Article Second.- This Resolution shall enter into force the day following its publication in the Official Gazette El Peruano.

Register, communicate, and publish.

JUAN JOSÉ MARTHANS LEÓN
Superintendent of Banking, Insurance and Private Pension Fund Administrators

PRICE VECTOR REGULATION

Article 1st.- Scope
This Regulation establishes the provisions that regulate the determination of the Price Vector.

Article 2nd.- Definition
For the purposes of this Regulation, understand that the following terms refer to:
a) Committee: Price Vector Committee created by Resolution SBS No. 1882-2005 of December 20, 2005; b) Companies: Private Pension Fund Administrators that have the obligation to value the investments they make with managed resources based on the Price Vector, as established in Title VI of the Compilation of Regulatory Supervision Norms of the Private Administration of Pension Funds System approved by Resolution No. 052-98-EF/SAFP, as well as companies from the financial and insurance systems that have the obligation to value their investments using the Price Vector as disposed by the Superintendency. c) Price Vector Manual: Methodological and Procedural Manual of the Price Vector, where the criteria, methodologies, and procedures for valuing investment instruments are established. d) Superintendency: Superintendency of Banking, Insurance and Private Pension Fund Administrators;

Article 3rd.- Responsibilities of the Committee
The Committee is the body responsible for the approval of policies, criteria, methodologies, and manuals for the generation of the Price Vector. The Committee is governed by its internal regulations and is composed of:
a) Officials of the Superintendency; and, b) Independent representatives of the companies.

Article 4th.- General Criteria for Valuation
Valuation will be carried out daily following the policies, criteria, methodologies, and procedures established in the Price Vector Manual approved by the Committee.
Additionally, the following criteria will be respected:
a) The process of searching for information for the capture and determination of prices of investment instruments must be continuous and will be carried out using the most appropriate information sources. b) The criteria and procedures used in the purification and filtering of data as well as in the valuation of assets must adhere to the principles of transparency, independence, and suitability. c) Valuation must be based on market values and only in cases where these do not exist or there is a well-founded doubt about them, will proceed to their best estimate or using surveys among the most representative and reliable participants in the market. d) The frequency of valuation of investment instruments must be daily, except in those cases where due to the characteristics of the investment instrument or operation, information is received with periodic frequency, which will be expressly indicated in the Price Vector Manual.

Article 5th.- Policies for the Production of the Price Vector
For the generation of the Price Vector, the Superintendency establishes the following policy:
a) Establish a contingency plan that guarantees the continuity of the daily provision of prices, which will be reviewed and updated at least once a year. b) Periodically, a specialized firm in valuation will be hired to audit the policies, criteria, methodologies, and procedures established in the Price Vector Manual.

Article 6th.- Challenge of Prices
Companies may express their disagreement with the determination of prices to the Superintendency. To do so, they must follow the procedure described in the Procedure Manual for Challenges approved by the Price Vector Committee.

Article 7th.- Information to the Superintendency
Companies must send to the Superintendency the information regarding investment instruments on the day the operation is carried out, when these are made in Non-Centralized Trading Mechanisms and there are no available information sources.

Article 8th.- Valuation of New Investment Instruments
Companies must coordinate with the Superintendency the aspects related to the valuation of new investment instruments, prior to their acquisition.