Resolution SBS No. 11698-2008: Approves the "Regulation for the Expansion of Operations" Applicable to Multiple Operation Companies of the Financial System

Lima, November 28, 2008

Resolución S.B.S.
No. 11698 -2008

The Superintendent of Banking, Insurance and Private Pension Fund Administrators

CONSIDERING:

That Articles 283° through 289° of the General Law of the Financial System and of 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, specify the operations that may be carried out by multiple operation companies of the financial system;

That Legislative Decree No. 1028 approved modifications to the General Law related to the elimination of the modular operation scheme referred to in Article 290° of said law and to the change in the authorization process so that multiple operation companies of the financial system can carry out a greater number of operations, as indicated in Articles 283° through 289°; modifications that will enter into effect on December 1, 2008.

That, although as a consequence of the approval of said Legislative Decree, the operations that different financial institutions may carry out were expanded immediately starting from December 1, 2008, there are other operations that still require prior authorization from the Superintendency, as stated in Articles 283° through 289° of the General Law, and therefore, it is necessary to regulate this procedure;

That likewise, the Thirty-First Final and Complementary Provision of the General Law, approved by said Legislative Decree No. 1028, provides that the authorization issued by the Superintendency for the expansion of operations of the companies of the financial system, in accordance with what is provided in the aforementioned Articles 283° through 289°, will require the prior opinion of the Central Reserve Bank of Peru when it concerns certain operations linked mainly to monetary policy and payment systems;

That by Resolution SBS No. 1122-2006, the regulation for the expansion of operations applicable to multiple operation companies of the financial system other than banking ones was approved, which requires modification in accordance with the modifications to the General Law cited above;

Being in accordance with the opinion of the Adjunct Superintendencies of Banking and Microfinance, Risks, and Legal Advice, as well as the Economic Studies Department; and,

In exercise of the powers conferred under items 2, 6, and 9 of Article 349° of the General Law:

RESOLVES:

Los Laureles Nº 214 - Lima 27 - Perú Tel.: (511)2218990 Fax: (511) 4417760 2

Article First.- Approve the new "Regulation for the Expansion of Operations", applicable to multiple operation companies of the financial system, which forms an integral part of this Resolution.

Article Second.- Modify Procedure No. 102 of the Single Text of Administrative Procedures – TUPA of the Superintendency of Banking, Insurance and Private Pension Fund Administrators approved by Resolution SBS No. 131-2002 of February 11, 2002, in accordance with the text attached to this Resolution and published as provided in Supreme Decree No. 004-2008-PCM, regulation of Law No. 29091. (Institutional Portal: www.sbs.gob.pe).

Article Third.- This Resolution will enter into effect on December 1, 2008, date from which the regulation for the expansion of operations applicable to multiple operation companies of the financial system other than banking ones, approved by Resolution SBS No. 1122-2006 of August 29, 2006, shall cease to have effect.

Register, communicate, and publish.

FELIPE TAM FOX
Superintendent of Banking, Insurance and Private Pension Fund Administrators

Los Laureles Nº 214 - Lima 27 - Perú Tel.: (511)2218990 Fax: (511) 4417760 3

REGULATION FOR THE EXPANSION OF OPERATIONS

Article 1°.- Scope
This Regulation governs the process of expanding the operations of Multiple Operation Companies indicated in item A of Article 16° of the General Law, hereinafter referred to as Companies.

Article 2°.- Definitions
For the application of this Regulation, the following definitions shall be considered:
a) General Law.- General Law of the Financial System and of the Insurance System and Organic Law of the Superintendency of Banking and Insurance, Law No. 26702 and its amendments; b) Superintendency.- Superintendency of Banking, Insurance and Private Pension Fund Administrators; c) Central Bank.- Central Reserve Bank of Peru.

Article 3°.- Authorization to carry out additional operations and/or services
Companies wishing to carry out new operations and/or services indicated in Article 221° of the General Law must have prior authorization from the Superintendency. For this purpose, companies must submit to the Superintendency an authorization request signed by the General Manager, attaching a certified copy of the agreement of the competent social body where the decision to carry out the requested operation(s) is recorded, and the following documentation, without prejudice to the requirements established in specific regulations existing regarding the requested operation and/or service:
a) Report prepared by the General Management and approved by the Board of Directors, presenting: i) the estimated investment required to assume the additional operations and cost/benefit evaluation and/or ii) the adjusted business plan, as applicable. b) Report from the Risk Unit or equivalent area, incorporating the identification of risks generated by the new operation(s) and/or service(s), indicating the methods and systems for their measurement as well as the necessary measures for their administration and/or mitigation. c) Report containing the opinion of the Internal Audit Unit, according to what is established in the Regulation governing the function of said Unit. d) The Policies and Procedures Manuals and the Risk Management Manuals for the new operations and for the management of the risks they generate, must be clearly defined and adequately documented, taking into consideration the Integral Risk Management Regulation, approved by Resolution SBS No. 37-2008. e) Agreement modifying the corporate statutes approved by the General Shareholders' Meeting, if applicable. f) Minutes signed by the authorized representative(s) and a lawyer recording the modification indicated in the previous item, if applicable. g) Other documentation that the company considers necessary for the adequate implementation of the additional operations and/or services. h) Other requirements that the Superintendency deems pertinent, in order to evaluate the company's capacity to operate additional products and/or services.

Article 4°.- Communication to the Central Bank
In accordance with what is provided in the Twentieth and Thirty-First Final and Complementary Provisions of the General Law, the Superintendency, once the complete documentation indicated in the preceding paragraphs has been received and the corresponding evaluation has been made, must forward it to the Central Bank, for the purpose that said entity may issue its opinion, when the request refers to any of the following operations:
a) Item 1 of Article 221°: Receive demand deposits; b) Item 2 of Article 221°: Receive time and savings deposits, as well as custody; c) Item 3a) of Article 221°: Grant overdrafts or advances in current accounts; d) Item 30a) of Article 221°: Issue manager's checks;

Los Laureles Nº 214 - Lima 27 - Perú Tel.: (511)2218990 Fax: (511) 4417760 4 e) Item 30b) of Article 221°: Issue payment orders; f) Item 31 of Article 221°: Issue traveler's checks; and g) Item 16 of Article 221: Carry out operations with commodities and with financial derivative products, such as forwards, futures, swaps, options, credit derivatives or other instruments or contracts of derivatives.

Article 5°.- Authorization period
Within a maximum period of ninety (90) business days calculated from the presentation of the complete documentation indicated in Article 3°, and after the corresponding evaluation, the Superintendency, if deemed appropriate, issues the Resolution granting the respective authorization. The Superintendency may order, before the issuance of the authorization, the carrying out of an on-site verification regarding compliance with the requirements established in this Regulation in order to evaluate the company's capacity to operate the additional products and/or services. This verification will be mandatory for the operations described in items a), b), and c) of Article 4°.

Article 6°.- Exception in the required documentation
When the request refers to any of the following operations: issuing payment orders or issuing debit cards, indicated in items 30 b) and 34 of Article 221° of the General Law, the company only needs to present the documentation described in items b), c), e), and f) of Article 3°.

Article 7°.- Authorization processes in progress
Authorization processes in progress shall be adapted to the provisions of this Regulation.
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