Resolution SBS No. 3004-2023: Amending the Regulation for the Consolidated Supervision of Financial and Mixed Conglomerates

Los Laureles Nº 214 - Lima 27 - Perú Telf. : (511)2218990 Lima, September 13, 2023 S.B.S. Resolution No. 3004-2023 The Superintendent of Banks, Insurance and Private Pension Fund Administrators:

CONSIDERING:

That, through Resolution SBS No. 11823-2010 and its amendments, the Regulation for the Consolidated Supervision of Financial and Mixed Conglomerates, hereinafter the Consolidated Supervision Regulation, was approved, which established the capital requirements and concentration limits at the consolidated level;

That, through Law No. 31380, Law that delegates to the Executive Branch the power to legislate in tax, fiscal, financial, and economic reactivation matters in order to contribute to closing social gaps, the Congress of the Republic delegated to the Executive Branch the power to legislate, among others, in financial matters;

That, through Legislative Decree No. 1531, the Executive Branch modified the General Law of the Financial System and the Insurance System and the Organic Law of the Superintendence of Banks and Insurance – Law No. 26702 and its amendments, hereinafter the General Law, in order to strengthen the solvency and stability of the financial system in safeguarding depositors, within the framework of the powers granted by Law No. 31380;

That, through the aforementioned Legislative Decree, the applicable regulations for companies in the financial system are adjusted, related to the composition of effective capital to the Basel III standard: Global regulatory framework to strengthen banks and banking systems of December 2010 and revised in June 2011 of the Basel Committee on Banking Supervision, in order to improve the quality of effective capital;

That, therefore, it is necessary to make modifications to the Regulation for the Consolidated Supervision of Financial and Mixed Conglomerates, to adapt it to what is established in Legislative Decree No. 1531, regulating the method of calculation at the different levels and sublevels of consolidated effective capital, according to the specific characteristics of each element;

That, in order to collect public opinions on the proposal, the pre-publication of the draft regulation was ordered on the electronic portal of the Superintendence, under the provisions of the Thirty-Second Final and Complementary Provision of the General Law and Supreme Decree No. 001-2009-JUS and its amendments;

Having the approval of the Adjunct Superintendencies of Banking and Microfinance, Insurance, Risks, Economic Studies and Legal Advice; and,

Los Laureles Nº 214 - Lima 27 - Perú Telf. : (511)2218990 2 In exercise of the powers conferred by numbers 7, 9 and 13 of article 349 of the General Law;

RESOLVES:

Article First.- Modify the Regulation for the Consolidated Supervision of Financial and Mixed Conglomerates, approved by Resolution SBS No. 11823-2010 and its amendments, in the terms indicated below:

Substitute Chapters I, II and III of Title II "On Prudential Measures", with the following:

TITLE II
ON PRUDENTIAL MEASURES

CHAPTER I
ON THE CAPITAL REQUIREMENTS OF CONSOLIDATABLE GROUPS

SUBCHAPTER I
ON THE CAPITAL REQUIREMENTS OF THE CONSOLIDATABLE GROUP OF THE FINANCIAL SYSTEM

Article 5-A°.- Minimum solvency requirements of the consolidatable group of the financial system

The Tier 1 Common Equity of the consolidatable group of the financial system must be equal to or greater than the sum of 45% of the capital requirement of the consolidatable group of the financial system as defined in article 6-B° and 100% of the combined buffer requirement referred to in the fourth paragraph of this article.

The Tier 1 Effective Capital of the consolidatable group of the financial system must be equal to or greater than the sum of 60% of the capital requirement of the consolidatable group of the financial system as defined in article 6-B° and 100% of the combined buffer requirement.

The Effective Capital of the consolidatable group of the financial system must be equal to or greater than the sum of 100% of the capital requirement of the consolidatable group of the financial system as defined in article 6-B°, 100% of the combined buffer requirement, and 100% of the Effective Capital requirement for additional risks referred to in the fifth paragraph of this article.

The consolidated combined buffer requirement is the sum of the conservation, economic cycle, and market concentration risk buffers of the companies that make up the consolidatable group of the financial system and whose legislation under which they operate establishes this type of requirement. For the calculation of this requirement, those buffers generated by operations carried out between companies of the conglomerate that belong to the same consolidatable group are not considered, nor are those generated by operations that have been deducted from the Effective Capital of the consolidatable group of the financial system.

The consolidated Effective Capital requirement for additional risks is the sum of the Effective Capital requirements for risks other than those contemplated in article 6-B° and those contemplated in the combined buffer requirement, of the companies that make up the consolidatable group of the financial system and whose legislation under which they operate establishes this type of requirement.

For the calculation of these minimum solvency requirements, the Effective Capital corresponding to the same period to which the information is submitted must be used.

Article 5-B°.- Calculation of the Effective Capital of the consolidatable group of the financial system

The Effective Capital of the consolidatable group of the financial system is determined based on the consolidated financial statements of the consolidatable group of the financial system, which are calculated by aggregating the individual or separate financial statements, but considering adjustments that allow aggregation and eliminating the effects of operations between companies of the same consolidatable group.

The Effective Capital of the consolidatable group of the financial system is determined by summing the Tier 1 Effective Capital and the Tier 2 Effective Capital, according to the following procedure:

A. The Tier 1 Effective Capital of the consolidatable group of the financial system is composed as follows:

The Tier 1 Common Equity which is constituted as follows:

a) Common shares and other instruments representing capital that meet the conditions established in the Regulation for the Calculation of Reserves, Profits, Donations and Instruments Representing Capital in the Effective Capital of Companies in the Financial System to be counted in Tier 1 Common Equity.

The issue premium of the aforementioned capital-representing instruments is included.

Capital in process corresponding to the aforementioned instruments is also included. The deadline for registering capital in process in the corresponding records is sixty (60) calendar days counted from the date of approval of the capital increase by the competent body. If the deadline expires without the registration having been made, the aforementioned capital in process will not be computable in the consolidated Effective Capital. The aforementioned deadline may be extended by the Superintendence at the request of the company responsible for submitting the consolidated information.

b) In the case of a consolidatable group that is formed entirely under one or more holding companies, the portion of the profits of the current year or prior years of the holding company(ies) that comes from companies of the consolidatable group that comply with the accounting regulations for companies in the financial system of this Superintendence, without exceeding the consolidated profits corresponding to the holding part(s). Likewise, the profits of the current year or prior years of the companies that comply with the accounting regulations for companies in the financial system of this Superintendence and that correspond to non-controlling interests of the companies that are under the holding company(ies) will be added.

In the case of a consolidatable group that is not formed entirely under one or more holding companies, for the sub-group under holding company(ies) the treatment described in the previous paragraph will be given; and for the companies that are not under any holding company, the sum of the individual profits of the current year or prior years of the companies that comply with the accounting regulations for companies in the financial system of this Superintendence will be considered.

The profits of the current year or prior years computed in the Effective Capital cannot be reduced on their own initiative if such reduction generates non-compliance with any of the minimum solvency requirements of the consolidatable group of the financial system established in article 5-A° of this Regulation.

c) In the case of a consolidatable group that is formed entirely under one or more holding companies, the portion of the profits of the current year and prior years of the holding company(ies) that comes from companies of the consolidatable group that do not comply with the accounting regulations for companies in the financial system of this Superintendence and have capitalization agreements from the competent corporate bodies. Likewise, the profits of the current year or prior years committed by the competent corporate bodies corresponding to non-controlling interests of the companies that are under the holding company(ies) that do not comply with the aforementioned regulations will be added.

In the case of a consolidatable group that is not formed entirely under one or more holding companies, for the sub-group under holding company(ies) the treatment described in the previous paragraph will be given; and for the companies that are not under any holding company, the sum of the individual profits of the current year or prior years of the companies that do not comply with the accounting regulations for companies in the financial system of this Superintendence and have capitalization agreements from the competent corporate bodies will be considered.

A copy of the aforementioned agreements must be sent to the Superintendence at the time the quarterly financial statements corresponding to the period in which such agreements were adopted are submitted.

With regard to the profits of the current year, the companies in the consolidatable group will have a maximum deadline of ninety (90) calendar days to execute the capitalization agreement of such profits, counted from the date on which the financial statements of that year are approved.

With regard to the profits of prior years, the companies will have a maximum deadline of ninety (90) calendar days to execute the capitalization agreement of such profits, counted from the date on which the referred agreement is approved.

When it is identified that any company in the consolidatable group has disregarded or invalidated any capitalization agreement of profits of the current year or prior years referred to in this letter, the Superintendence has the power not to consider any future agreement of this type from said company for purposes of its computation in the consolidated Effective Capital for a period of two (2) years counted from the expiration of the maximum deadline in which such agreement should have been executed.

If, after the situation described in the previous paragraph has been presented, within a period of five (5) years following the first date of non-compliance, it is again identified that any company in the consolidatable group has disregarded or invalidated any capitalization agreement of profits of the current year or prior years referred to in this letter, the Superintendence has the power not to consider any future agreement of this type from said company for purposes of its computation in the consolidated Effective Capital for a period of five (5) years counted from the expiration of the maximum deadline in which such agreement should have been executed.

d) Unrealized gains attributable to available-for-sale investments corresponding to bonds and debt securities issued by the Government of Peru or Governments of foreign countries with investment grade, and to bonds and debt securities issued by the Central Reserve Bank of Peru that come from companies in the consolidatable group that comply with the accounting regulations for companies in the financial system of this Superintendence, without exceeding the unrealized gains attributable to available-for-sale investments consolidated corresponding to the aforementioned bonds and securities.

e) Legal reserves and discretionary reserves constituted by agreement of the General Shareholders' Meeting or equivalent body based on audited (with favorable or unqualified opinion) and approved Financial Statements. In the case of discretionary reserves, these cannot be reduced if such reduction generates non-compliance with the minimum solvency requirements of the consolidatable group of the financial system indicated in article 5-A° of this Regulation.

f) Cash donations, and exceptionally in other assets that are reliably valued, are entirely under the control of the company that records them in its equity account and do not expose that company directly or indirectly to the credit risk of the donor, are authorized by the Superintendence; cannot be reduced without prior authorization, serve to absorb losses, and have the commitment to be transferred to discretionary reserves in the General Shareholders' Meeting or equivalent body in which the financial statements corresponding to the economic year in which the donation was made are approved. Donations that do not meet the aforementioned conditions do not count in the Effective Capital of the consolidatable group of the financial system.

A copy of the aforementioned commitments must be sent to the Superintendence at the time the quarterly financial statements corresponding to the period in which the commitments were adopted are submitted.

g) Regulatory adjustments comprising the following deductions from Tier 1 Common Equity:

i. In the case of a consolidatable group of the financial system that is formed entirely under one or more holding companies, the consolidated losses of the current year or prior years corresponding to the holding part(s) will be deducted; likewise, the sum of the losses corresponding to the non-controlling interests of each of the companies that are under the holding company(ies) will be deducted.

In the case of a consolidatable group of the financial system that is not formed entirely under one or more holding companies, for the sub-group under holding companies the treatment described in the previous paragraph will be given and for the companies that are not under any holding company, the sum of the individual losses of the current year or prior years of each of these companies in the consolidatable group will be deducted.

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ii. The consolidated unrealized losses corresponding to the holding part(s) attributable to available-for-sale investments corresponding to bonds and debt securities issued by the Government of Peru or Governments of foreign countries with investment grade, and to bonds and debt securities issued by the Central Reserve Bank of Peru, plus the consolidated unrealized losses attributable to available-for-sale investments in other instruments. The unrealized losses corresponding to non-controlling interests will be deducted by each of the companies in the consolidatable group.

iii. Individual deficits of provisions that have been determined in the companies in the consolidatable group of the financial system, without considering those associated with operations carried out between companies of the same consolidatable group, nor to the assets that have been deducted from the Effective Capital of the consolidatable group.

iv. Commercial credits (goodwill) resulting from the reorganization of the companies in the consolidatable group, as well as from the acquisition of investments.

v. Intangible assets other than those indicated in item iv.

vi. Deferred income tax assets arising from loss carryforwards.

vii. Deferred income tax assets, net of deferred income tax liabilities, arising from temporary differences that exceed the 10% threshold of the Tier 1 Common Equity of the consolidatable group. The aforementioned Tier 1 Common Equity will be calculated taking into consideration all the deductions referred to in this number 1, which do not depend on the 10% threshold.

viii. Investment in instruments representing capital issued by other companies in the financial system or the insurance system of the country or abroad, that meet the requirements to be counted in consolidated Tier 1 Common Equity, that do not belong to the conglomerate. For the set of investing companies that comply with the accounting regulations for companies in the financial system of this Superintendence, the total amount of profits and losses registered in the results of the year of the investing companies will be reversed, provided that this amount is profit and does not exceed the profits of the year of said set that were not computed in the consolidated Effective Capital; likewise, the total amount of unrealized gains and losses registered in equity accounts of the investing companies will be reversed, considering that this amount, when it is a gain, does not exceed the unrealized gains of said set that were not computed in the consolidated Effective Capital, and when it is a loss, does not exceed the unrealized losses of said set that did not affect the consolidated Effective Capital.

ix. For those companies in the consolidatable group of the financial system that apply internal models for the calculation of the Effective Capital requirement for credit risk, the difference between expected loss and the total provisions constituted for credit risk must be considered, when this difference results positive.

x. Direct or indirect holding of instruments representing capital computable in consolidated Tier 1 Common Equity, that have been issued by the companies in the consolidatable group and that are held in treasury. The own instruments computable in consolidated Tier 1 Common Equity for which there is a present or contingent obligation to acquire them by the companies in the consolidatable group by virtue of contractual obligations must also be deducted.

xi. The amount of the deductions of Additional Tier 1 Capital (letter c of number 2 of section A of this article) that exceeds the amount of the additions of Additional Tier 1 Capital (letters a and b of number 2 of section A of this article).

xii. Investment in instruments representing capital computable in consolidated Tier 1 Common Equity issued by other companies in the conglomerate that do not belong to the consolidatable group. For the set of investing companies that comply with the accounting regulations for companies in the financial system of this Superintendence, the total amount of profits and losses registered in the results of the year of the investing companies will be reversed, provided that this amount is profit and does not exceed the profits of the year of said set that were not computed in the consolidated Effective Capital nor previously used in the computation of any reversal; likewise, the total amount of unrealized gains and losses registered in equity accounts of the investing companies will be reversed, considering that this amount, when it is a gain, does not exceed the unrealized gains of said set that were not computed in the consolidated Effective Capital nor previously used in the computation of any reversal, and when it is a loss, does not exceed the unrealized losses of said set that did not affect the consolidated Effective Capital nor previously used in the computation of any reversal.

xiii. The portion of the difference between the consolidated Effective Capital and the minimum solvency requirements of the consolidatable group that comes from any element of Tier 1 Common Equity that does not correspond to holders of controlling participations of the companies that are part of the consolidatable group that are subject to regulatory capital based on risk. The aforementioned portion will be calculated according to the following procedure:

a) For each company that is part of the consolidatable group that is subject to regulatory capital based on risk and that in turn contributes to the consolidated Effective Capital with any element of Tier 1 Common Equity that does not correspond to holders of controlling participations, consider its Effective Capital or similar according to the applicable individual legislation.

b) Calculate the excess between the amount considered in a) and the total of the minimum solvency requirements of that company calculated according to the applicable individual legislation.

c) If the result obtained in b) is greater than zero, calculate the sum of the Tier 1 Common Equity elements of the company computed in the consolidated Effective Capital that do not correspond to holders of controlling participations, otherwise consider zero.

d) Divide the result obtained in c) by the amount considered in a) and multiply that ratio by the amount obtained in b).

e) Sum the results obtained in d).

The Additional Tier 1 Capital of the consolidatable group of the financial system, which is constituted as follows:

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Los Laureles Nº 214 - Lima 27 - Perú Telf. : (511)2218990 8

a) Capital instruments that meet the conditions established in the Regulation for the Calculation of Reserves, Profits, Donations and Capital Instruments in the Effective Equity of Financial System Companies, to be counted in additional Level 1 capital.

The issue premium of the aforementioned capital instruments is included.

Capital in process corresponding to the aforementioned instruments is also included. The deadline for registering the capital in process in the corresponding records is sixty (60) calendar days counted from the date of approval of the capital increase by the competent body. If the deadline expires without the registration having been made, the aforementioned capital in process will not be computable in the consolidated effective equity. The aforementioned deadline may be extended by the Superintendency at the request of the company responsible for submitting the consolidated information.

b) Subordinated debt instruments issued by companies of the consolidable group of the financial system that meet the conditions established in the Subordinated Debt Regulation applicable to Financial System Companies, to be counted in additional Level 1 capital.

c) Regulatory adjustments comprising the following deductions from additional Level 1 capital:

i. Investment in capital instruments or subordinated debt instruments issued by other companies of the financial system or insurance system of the country or abroad, which meet the requirements to be counted in consolidated additional Level 1 capital, that do not belong to the conglomerate. For the set of investing companies that comply with the accounting regulations for financial system companies of this Superintendency, the total amount of profits and losses recorded in the income statement of the investing companies will be reversed, provided that this amount is profit and does not exceed the profits of the period of said set that were not computed in the consolidated effective equity nor previously used in the computation of any reversal; likewise, the total amount of unrealized gains and losses recorded in equity accounts of the investing companies will be reversed, considering that this amount, when it is a gain, does not exceed the unrealized gains of said set that were not computed in the consolidated effective equity nor previously used in the computation of any reversal, and when it is a loss, does not exceed the unrealized losses of said set that did not affect the consolidated effective equity nor previously used in the computation of any reversal.

ii. Direct or indirect holding of capital instruments or subordinated debt instruments computable in consolidated additional Level 1 capital, which have been issued by the companies of the consolidable group and are held in treasury. Instruments own to the consolidable group computable in consolidated additional Level 1 capital for which there is a present or contingent obligation to acquire them by the companies of the consolidable group by virtue of contractual obligations must also be deducted.

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iii. The amount of deductions from Level 2 effective equity (numeral 4 of section B of this article) that exceeds the amount of additions to Level 2 effective equity (numerals 1, 2 and 3 of section B of this article).

iv. Investment in capital instruments or subordinated debt instruments computable in additional Level 1 capital issued by other companies of the conglomerate that do not belong to the consolidable group. For the set of investing companies that comply with the accounting regulations for financial system companies of this Superintendency, the total amount of profits and losses recorded in the income statement of the investing companies will be reversed, provided that this amount is profit and does not exceed the profits of the period of said set that were not computed in the consolidated effective equity nor previously used in the computation of any reversal; likewise, the total amount of unrealized gains and losses recorded in equity accounts of the investing companies will be reversed, considering that this amount, when it is a gain, does not exceed the unrealized gains of said set that were not computed in the consolidated effective equity nor previously used in the computation of any reversal, and when it is a loss, does not exceed the unrealized losses of said set that did not affect the consolidated effective equity nor previously used in the computation of any reversal.

v. The portion of the difference between the consolidated effective equity and the minimum solvency requirements of the consolidable group that comes from any element of additional Level 1 capital that does not correspond to holders of controlling participations of the companies that are part of the consolidable group that are subject to risk-based regulatory capital. The aforementioned portion will be calculated according to the following procedure:

a) For each company that is part of the consolidable group that is subject to risk-based regulatory capital and that in turn contributes to the consolidated effective equity with any element of additional Level 1 capital that does not correspond to holders of controlling participations, consider its effective equity or similar according to the applicable individual legislation.

b) Calculate the excess between the amount considered in a) and the total minimum solvency requirements of that company calculated according to the applicable individual legislation.

c) If the result obtained in b) is greater than zero, calculate the sum of the additional Level 1 capital elements of the company computed in the consolidated effective equity that do not correspond to holders of controlling participations, otherwise consider zero.

d) Divide the result obtained in c) by the amount considered in a) and multiply that ratio by the amount obtained in b).

e) Sum the results obtained in d).

B. The Level 2 effective equity of the consolidable group of the financial system is composed as follows:

Capital instruments that meet the conditions established in the Regulation for the Calculation of Reserves, Profits, Donations and Capital Instruments in the Effective Equity of Financial System Companies, to be counted in Level 2 effective equity.

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The issue premium of the aforementioned capital instruments is included.

Subordinated debt instruments issued by companies of the consolidable group of the financial system that meet the conditions established in the Subordinated Debt Regulation applicable to Financial System Companies, to be counted in Level 2 effective equity.
For each company of the consolidable group of the financial system subject to equity requirements for credit risk, generic provisions are added up to one point two five percent (1.25%) of their risk-weighted assets and contingencies for credit risk by asset portfolios subject to equity requirements for credit risk by the standard method; and by the difference between provisions constituted and total expected loss, added up to six tenths percent (0.6%) of their risk-weighted assets and contingencies for credit risk by asset portfolios subject to equity requirements for credit risk by internal models. For this calculation, provisions corresponding to credits made to other companies of the same consolidable group nor to credits that are deducted from the effective equity of the consolidable group must not be included.
Regulatory adjustments comprising the following deductions from Level 2 effective equity:

a) Investment in capital instruments or subordinated debt instruments issued by other companies of the financial system or insurance system of the country or abroad, which meet the requirements to be counted in consolidated Level 2 effective equity, that do not belong to the conglomerate. For the set of investing companies that comply with the accounting regulations for financial system companies of this Superintendency, the total amount of profits and losses recorded in the income statement of the investing companies will be reversed, provided that this amount is profit and does not exceed the profits of the period of said set that were not computed in the consolidated effective equity nor previously used in the computation of any reversal; likewise, the total amount of unrealized gains and losses recorded in equity accounts of the investing companies will be reversed, considering that this amount, when it is a gain, does not exceed the unrealized gains of said set that were not computed in the consolidated effective equity nor previously used in the computation of any reversal, and when it is a loss, does not exceed the unrealized losses of said set that did not affect the consolidated effective equity nor previously used in the computation of any reversal.

b) Direct or indirect holding of capital instruments or subordinated debt instruments computable in consolidated Level 2 effective equity, which have been issued by the companies of the consolidable group and are held in treasury. Instruments own to the consolidable group computable in consolidated Level 2 effective equity for which there is a present or contingent obligation to acquire them by the companies of the consolidable group by virtue of contractual obligations must also be deducted.

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c) Investment in capital instruments or subordinated debt instruments computable in consolidated Level 2 effective equity, issued by other companies of the conglomerate that do not belong to the consolidable group. For the set of investing companies that comply with the accounting regulations for financial system companies of this Superintendency, the total amount of profits and losses recorded in the income statement of the investing companies will be reversed, provided that this amount is profit and does not exceed the profits of the period of said set that were not computed in the consolidated effective equity nor previously used in the computation of any reversal; likewise, the total amount of unrealized gains and losses recorded in equity accounts of the investing companies will be reversed, considering that this amount, when it is a gain, does not exceed the unrealized gains of said set that were not computed in the consolidated effective equity nor previously used in the computation of any reversal, and when it is a loss, does not exceed the unrealized losses of said set that did not affect the consolidated effective equity nor previously used in the computation of any reversal.

d) The portion of the difference between the consolidated effective equity and the minimum solvency requirements of the consolidable group that comes from any element of Level 2 effective equity that does not correspond to holders of controlling participations of the companies that are part of the consolidable group that are subject to risk-based regulatory capital. This portion will be calculated according to the following procedure:

i. For each company that is part of the consolidable group that is subject to risk-based regulatory capital and that in turn contributes to the consolidated effective equity with any element of Level 2 effective equity that does not correspond to holders of controlling participations, consider its effective equity or similar according to the applicable individual legislation.

ii. Calculate the excess between the amount considered in i) and the total minimum solvency requirements of that company calculated according to the applicable individual legislation.

iii. If the result obtained in ii) is greater than zero, calculate the sum of the Level 2 effective equity elements of the company computed in the consolidated effective equity that do not correspond to holders of controlling participations, otherwise consider zero.

iv. Divide the result obtained in iii) by the amount considered in i) and multiply that ratio by the amount obtained in ii).

v. Sum the results obtained in iv).

Article 6-A°.- Limits in the calculation of the effective equity of the consolidable group of the financial system

To determine the effective equity of the consolidable group of the financial system, the following limits for its components must be respected:

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Additional Level 1 capital must not exceed one third of ordinary Level 1 capital. The excess over this limit may be computable as Level 2 effective equity.
Level 2 effective equity must not exceed two thirds of Level 1 effective equity. The excess over this limit is not computable in the effective equity.

Article 6-B°.- Calculation of the equity requirement of the consolidable group of the financial system

For the calculation of the equity requirement of the consolidable group of the financial system mentioned in article 5-A° of this Regulation, the following must be added:

For the companies that are part of the consolidable group of the financial system whose applicable legislation establishes equity requirements or regulatory capital based on the risk assumed in their operations, the equity requirements for credit, market, and operational risk are added for each company, without considering those generated by operations carried out between companies of the conglomerate that belong to the same consolidable group of the financial system nor by operations that have been deducted from the effective equity of the consolidable group of the financial system.
For the companies that are part of the consolidable group of the financial system whose applicable legislation does not establish equity requirements or regulatory capital based on the risk assumed in their operations, the greater of the amounts resulting from comparing a) and b).

a) Ten percent (10%) of the total assets without considering those generated by operations carried out between companies of the conglomerate that belong to the same consolidable group of the financial system, nor the assets that have been deducted from the effective equity of the consolidable group of the financial system.

b) The amount resulting from multiplying: the percentage of the total assets that do not correspond to those generated by operations carried out between companies of the conglomerate that belong to the same consolidable group of the financial system nor to assets that have been deducted from the effective equity of the consolidable group of the financial system; and the sum of share capital, legal and discretionary reserves, and profits computed in the effective equity of the consolidable group, deducting losses from previous periods and the current period.

SUBCHAPTER II
OF THE EQUITY REQUIREMENTS OF THE CONSOLIDABLE GROUP OF THE INSURANCE SYSTEM

Article 7-A°.- Minimum solvency requirement of the consolidable group of the insurance system

The effective equity of the consolidable group of the insurance system must be equal to or greater than 100% of the equity requirement of the consolidable group of the insurance system as defined in article 8-B°.

For the calculation of this minimum solvency requirement, the effective equity corresponding to the same period in which the information is submitted must be used.

Article 7-B°.- Calculation of the effective equity of the consolidable group of the insurance system

The effective equity of the consolidable group of the insurance system is determined based on the consolidated financial statements of the consolidable group, which are determined by aggregating the individual or separate financial statements and including adjustments that allow the aggregation and elimination of the effects of operations between companies of the same consolidable group.

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The effective equity of the consolidable group of the insurance system is composed as follows:

Common shares, perpetual preferred shares with non-accumulative dividend rights and other capital instruments that meet the conditions established in the regulations of this Superintendency.

The issue premium of the aforementioned capital instruments is included.

Cash donations, and exceptionally in other assets that are reliably valued, are entirely under the control of the company that records them in its equity account and do not expose that company directly or indirectly to the credit risk of the donor, that are authorized by the Superintendency; that cannot be reduced without prior authorization, that serve to absorb losses, and that have a commitment to be transferred to discretionary reserves in the General Shareholders' Meeting or equivalent body in which the financial statements corresponding to the economic period in which the donation was made are approved.

A copy of the aforementioned commitments must be sent to the Superintendency at the time the quarterly financial statements corresponding to the period in which the commitments were adopted are submitted.

Legal reserves and discretionary reserves constituted by agreement of the General Shareholders' Meeting or equivalent body based on audited (with favorable or unqualified opinion) and approved Financial Statements. In the case of discretionary reserves, these cannot be reduced if such reduction generates non-compliance with the minimum solvency requirement of the consolidable group.
In the case of a consolidable group that is formed entirely under one or more controlling companies, the portion of the profits of the current period or previous periods of the controlling company(ies) that have an agreement for capitalization by the competent corporate bodies. Likewise, these profits committed by the competent corporate bodies corresponding to non-controlling interests of the companies that are under the controlling company(ies) will be added.

In the case of a consolidable group that is not formed entirely under one or more controlling companies, for the subgroup under controlling company(ies), the treatment described in the previous paragraph will be given, and for the companies that are not under any controlling company, the sum of the individual profits of the current period or previous periods of each of these companies with an agreement for capitalization by the competent corporate bodies will be considered.

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Los Laureles Nº 214 - Lima 27 - Perú Telf. : (511)2218990 14 A copy of the aforementioned agreements must be sent to the Superintendency at the time the quarterly financial statements corresponding to the period in which such agreements were adopted are submitted.

With respect to the profits of the current fiscal year, the companies of the consolidable group will have a maximum period of ninety (90) calendar days to execute the agreement to capitalize such profits, counted from the date on which the financial statements of that year are approved.

With respect to the profits of previous fiscal years, the companies of the consolidable group will have a maximum period of ninety (90) calendar days to execute the agreement to capitalize such profits, counted from the date on which the referred agreement is approved.

When it is identified that any company of the consolidable group has disregarded or rendered ineffective any agreement to capitalize profits of the current fiscal year or of previous years referred to in this section, the Superintendency has the authority not to consider any future agreement of this type from said company for the purposes of its computation in the consolidated effective equity for a period of two (2) years counted from the expiration of the maximum period in which such agreement should have been executed.

If, after the situation described in the previous paragraph has occurred, within a period of five (5) years following the first date of non-compliance, it is again identified that any company of the consolidable group has disregarded or rendered ineffective any agreement to capitalize profits of the current fiscal year or of previous years referred to in this section, the Superintendency has the authority not to consider any future agreement of this type from said company for the purposes of its computation in the consolidated effective equity for a period of five (5) years counted from the expiration of the maximum period in which such agreement should have been executed.

Instruments representing subordinated debt and instruments with characteristics of capital and debt issued by companies of the consolidable group that meet the conditions established in the regulations of this Superintendency.
Regulatory adjustments comprising the following deductions:

a) In the case of a consolidable group formed entirely under one or more controlling companies, the losses of the current fiscal year or of previous years consolidated corresponding to the controlling part(s) will be deducted; likewise, the sum of the losses corresponding to the non-controlling interests of each of the companies of the consolidable group will be deducted.

b) In the case of a consolidable group formed entirely under one or more controlling companies, the excess of unrealized losses attributable to investments available for sale over the profits of the current fiscal year and of previous years that do not have a capitalization agreement, corresponding to the controlling company(ies), will be deducted.

In the event that there are no profits of the current fiscal year and of previous years without a capitalization agreement,

Los Laureles Nº 214 - Lima 27 - Perú Telf. : (511)2218990 15 the total of the unrealized losses attributable to investments available for sale of the controlling company(ies) will be deducted. Likewise, the sum of the aforementioned excesses or, in the event that there are no committed profits, the sum of the total of the unrealized losses, corresponding to the non-controlling interests of each of the companies that are under the controlling company(ies), will be deducted.

In the case of a consolidable group that is not formed entirely under one or more controlling companies, for the sub-group under controlling companies, the treatment described in the previous paragraph will apply, and for the companies that are not under any controlling company, the excess of the unrealized losses attributable to investments available for sale over the profits of the current fiscal year and of previous years that do not have a capitalization agreement, of each of these companies of the consolidable group, will be deducted. In the event that there are no profits of the current fiscal year and of previous years without a capitalization agreement, the total of the unrealized losses attributable to investments available for sale of each of these companies of the consolidable group will be deducted.

c) Individual deficits of provisions, without considering those associated with operations carried out between companies of the consolidable group, nor with the assets that have been deducted from the effective equity of the consolidable group.

d) Goodwill resulting from the reorganization of the companies of the consolidable group, as well as from the acquisition of investments.

e) Investment in instruments representing capital and in subordinated debt issued by other companies of the insurance system of the country or abroad, that do not belong to the conglomerate; reversing the net unrealized gains or net unrealized losses recorded in equity accounts and/or the net profits or net losses recorded in the results of the fiscal year, which did not affect the consolidated effective equity, respectively.

f) Investment in instruments representing capital and in subordinated debt issued by other companies of the conglomerate that do not belong to the consolidable group, reversing the net unrealized gains or net unrealized losses recorded in equity accounts and/or the net profits or net losses recorded in the results of the fiscal year that did not affect the consolidated effective equity, respectively.

g) The portion of the difference between the consolidated effective equity and the minimum solvency requirements of the consolidable group that comes from any equity element or subordinated debt that does not correspond to holders of controlling participations of the companies that are part of the consolidable group that are subject to regulatory capital based on risk. This portion will be calculated according to the following procedure:

i. For each company that is part of the consolidable group that is subject to regulatory capital based on risk and that in turn contributes to the consolidated effective equity with any equity element or debt that does not correspond to holders of controlling participations, consider its effective equity or similar according to the applicable individual legislation.

ii. Calculate the excess between the amount considered in i) and the total of the minimum solvency requirements of that company calculated according to the applicable individual legislation.

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iii. If the result obtained in ii) is greater than zero, calculate the sum of the elements computed in the consolidated effective equity that do not correspond to holders of controlling participations; otherwise, consider zero.

iv. Divide the result obtained in iii) by the amount considered in i) and multiply that ratio by the amount obtained in ii).

v. Sum the results obtained in iv).

h) Unrealized losses due to variation of the mathematical reserve due to interest rate movements.

Article 8-A°.- Limits in the computation of the effective equity of the consolidable group of the insurance system

The limits between components of effective equity approved by the Superintendency for insurance companies also apply to the consolidable group of the insurance system.

Article 8-B°.- Calculation of the equity requirement of the consolidable group of the insurance system

For the calculation of the equity requirement of the consolidable group of the insurance system mentioned in article 7-A° of this Regulation, the following must be added:

For the companies that are part of the consolidable group of the insurance system whose applicable legislation establishes equity requirements or regulatory capital based on the risk assumed in their operations, the requirements associated with solvency equity, guarantee fund, equity requirements for credit risk, and the effective equity requirement for additional risks are added for each company, without considering those generated by operations carried out between companies of the conglomerate that belong to the same consolidable group, nor the operations that have been deducted from the effective equity of the consolidable group.
For the companies that are part of the consolidable group of the insurance system whose applicable legislation does not establish equity requirements or regulatory capital based on the risk assumed in their operations, the greater of the amounts resulting from comparing a) and b).

a) Ten percent (10%) of the total assets without considering those generated by operations carried out between companies of the conglomerate that belong to the same consolidable group of the insurance system, nor the assets that have been deducted from the effective equity of the consolidable group of the insurance system.

b) The amount resulting from multiplying: the percentage of the total assets that do not correspond to those generated by operations carried out between companies of the conglomerate that belong to the same consolidable group of the insurance system nor to assets that have been deducted from the effective equity of the consolidable group of the insurance system; and the sum of share capital, legal and discretionary reserves, and profits computed in the effective equity of the consolidable group, deducting from it the losses of previous years and of the current fiscal year.

In the event that the indebtedness of the supervised company that is part of the consolidable group of the insurance system is higher than its equity requirement, the equity requirement of such company will be its level of indebtedness.

CHAPTER II
ON THE EQUITY REQUIREMENTS OF THE FINANCIAL GROUP

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Article 9°.- Minimum solvency requirements of the financial group

When the responsible company defined in article 21° of this Regulation belongs to the consolidable group of the financial system, the Tier 1 ordinary capital of the financial group must be equal to or greater than the sum of 45% of the equity requirement of the financial group and 100% of the combined buffer requirement; the Tier 1 effective equity of the financial group must be equal to or greater than the sum of 60% of the equity requirement of the financial group and 100% of the combined buffer requirement; and the effective equity of the financial group must be equal to or greater than the sum of 100% of the equity requirement of the financial group, 100% of the combined buffer requirement, and 100% of the equity requirement for additional risks. The aforementioned combined buffer and equity requirement for additional risks are those referred to in the third paragraph of this article.

When the responsible company defined in article 21° of this Regulation belongs to the consolidable group of the insurance system, the effective equity of the financial group must be equal to or greater than the sum of 100% of the equity requirement of the financial group as defined in article 11° of this Regulation.

The combined buffer requirement of the financial group is the sum of the conservation, economic cycle, and market concentration risk buffers of the companies that make up the financial group and whose legislation under which they operate establishes this type of requirement.

For the calculation of this requirement, those buffers generated by operations carried out between companies of the conglomerate that belong to the same financial group nor by operations that have been deducted from the effective equity of the financial group are not considered. The effective equity requirement for additional risks of the financial group is the sum of the effective equity requirements for risks other than those contemplated in article 11° of this Regulation and those contemplated in the combined buffer requirement, of the companies that make up the financial group whose legislation under which they operate establishes this type of requirement. The equity requirement of the financial group is defined in article 11° of this Regulation.

For the computation of these minimum solvency requirements, the effective equity corresponding to the same period in which the information is submitted must be used.

Article 10°.- Calculation of the effective equity of the financial group

The effective equity of the financial group is determined based on the consolidated financial statements of the financial group, which are calculated by aggregating the individual or separate financial statements, but considering adjustments that allow aggregation and eliminating the effects of operations between companies of the financial group.

When the responsible company defined in article 21° of this Regulation belongs to the consolidable group of the financial system, the effective equity of the financial group is determined by summing the Tier 1 effective equity and the Tier 2 effective equity, according to the following procedure:

A. The Tier 1 effective equity of the financial group is composed as follows:

The Tier 1 ordinary capital which is constituted as follows:

a) Common shares and other instruments representing capital that meet the conditions established in the Regulation for the Computation of Reserves, Profits, Donations, and Instruments Representing Capital in the Effective Equity of the Companies of the Financial System, to be computed in the Tier 1 ordinary capital.

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The issue premium of the aforementioned instruments representing capital is included.

The capital in process corresponding to the aforementioned instruments is also included. The deadline for registering the capital in process in the corresponding records is sixty (60) calendar days counted from the date of approval of the capital increase by the competent body. If the deadline expires without the registration having been made, the aforementioned capital in process will not be computable in the consolidated effective equity. The aforementioned deadline may be extended by the Superintendency at the request of the company responsible for submitting the consolidated information.

b) In the case of a financial group that is formed entirely under one or more controlling companies, the portion of the profits of the current fiscal year or of previous years of the controlling company(ies) that comes from companies of the financial group that meet the accounting regulations for companies of the financial system of this Superintendency, without exceeding the consolidated profits corresponding to the controlling part(s). Likewise, the profits of the current fiscal year or of previous years of the companies that meet the accounting regulations for companies of the financial system of this Superintendency and that correspond to non-controlling interests of the companies that are under the controlling company(ies) will be added.

In the case of a financial group that is not formed entirely under one or more controlling companies, for the sub-group under controlling company(ies), the treatment described in the previous paragraph will apply, and for the companies that are not under any controlling company, the sum of the individual profits of the current fiscal year or of previous years of the companies that meet the accounting regulations for companies of the financial system of this Superintendency will be considered.

The profits of the current fiscal year or of previous years computed in the effective equity cannot be reduced on their own initiative if such reduction generates non-compliance with any of the minimum solvency requirements of the financial group established in article 9°.

c) In the case of a financial group that is formed entirely under one or more controlling companies, the portion of the profits of the current fiscal year and of previous years of the controlling company(ies) that comes from companies of the financial group that do not meet the accounting regulations for companies of the financial system of this Superintendency and have capitalization agreements from the competent corporate bodies. Likewise, these committed profits corresponding to non-controlling interests of the companies that are under the controlling company(ies) that do not meet the aforementioned regulations will be added.

In the case of a financial group that is not formed entirely under one or more controlling companies, for the sub-group under controlling company(ies), the treatment described in the previous paragraph will apply; and for the companies that are not under any controlling company, the sum of the individual profits of the current fiscal year or of previous years of the companies that do not meet the accounting regulations for companies of the financial system of this Superintendency and have capitalization agreements from the competent corporate bodies will be considered.

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A copy of the aforementioned agreements must be sent to the Superintendency at the time the quarterly financial statements corresponding to the period in which such agreements were adopted are submitted.

With respect to the profits of the current fiscal year, the companies of the financial group will have a maximum period of ninety (90) calendar days to execute the agreement to capitalize such profits, counted from the date on which the financial statements of that year are approved.

With respect to the profits of previous fiscal years, the companies will have a maximum period of ninety (90) calendar days to execute the agreement to capitalize such profits, counted from the date on which the referred agreement is approved.

When it is identified that any company of the financial group has disregarded or rendered ineffective any agreement to capitalize profits of the current fiscal year or of previous years referred to in this subsection, the Superintendency has the authority not to consider any future agreement of this type from said company for the purposes of its computation in the consolidated effective equity for a period of two (2) years counted from the expiration of the maximum period in which such agreement should have been executed.

If, after the situation described in the previous paragraph has occurred, within a period of five (5) years following the first date of non-compliance, it is again identified that any company of the financial group has disregarded or rendered ineffective any agreement to capitalize profits of the current fiscal year or of previous years referred to in this subsection, the Superintendency has the authority not to consider any future agreement of this type from said company for the purposes of its computation in the consolidated effective equity for a period of five (5) years counted from the expiration of the maximum period in which such agreement should have been executed.

d) The unrealized gains attributable to investments available for sale corresponding to bonds and debt securities issued by the Government of Peru or Governments of foreign countries with investment grade, and to bonds and debt securities issued by the Central Reserve Bank of Peru that come from companies of the consolidable group of the financial system that meet the accounting regulations for companies of the financial system of this Superintendency without exceeding the consolidated unrealized gains attributable to investments available for sale corresponding to the aforementioned bonds and securities.

e) Legal reserves and discretionary reserves constituted by agreement of the General Shareholders' Meeting or equivalent body based on audited (with favorable or unqualified opinion) and approved Financial Statements. In the case of discretionary reserves, these cannot be reduced if such reduction generates non-compliance with the minimum solvency requirements of the financial group indicated in article 9° of this Regulation.

f) Cash donations, and exceptionally in other assets that are reliably valued, are entirely under the control of the company and do not expose the company directly or indirectly to the credit risk of the donor, that are authorized by the Superintendency; that cannot be reduced without its prior authorization, that serve to absorb losses, and that have a commitment to be transferred to discretionary reserves in the

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Shareholders' General Meeting or equivalent body in which the financial statements corresponding to the economic year in which the donation was made are approved. Donations that do not comply with the above shall not be counted in the effective equity of the financial group.

g) Regulatory adjustments comprising the following deductions from Tier 1 common capital:

i. In the case of a financial group formed entirely under one or more holding companies, the consolidated losses of the current or prior years attributable to the controlling part(s) shall be deducted; likewise, the sum of the losses corresponding to the non-controlling interests of each of the companies under the holding company(ies) shall be deducted.

In the case of a financial group not formed entirely under one or more holding companies, for the sub-group under holding companies, the treatment described in the previous paragraph shall apply, and for the companies not under any holding company, the sum of the individual losses of the current or prior years of each of these companies in the financial group shall be deducted.

ii. Consolidated unrealized losses attributable to the controlling part(s) related to investments available for sale corresponding to bonds and debt securities issued by the Government of Peru or Governments of foreign countries with investment grade, and to bonds and debt securities issued by the Central Reserve Bank of Peru, plus consolidated unrealized losses attributable to investments available for sale in other instruments. Unrealized losses corresponding to non-controlling interests shall be deducted by each of the companies in the financial group.

iii. Individual deficits of provisions that have been considered in the effective equity of both consolidable groups, without considering those associated with operations carried out between companies of the financial group, nor with assets that have been deducted from the effective equity of the financial group.

iv. Commercial credits (goodwill) resulting from the reorganization of the companies in the financial group, as well as from the acquisition of investments.

v. Intangible assets other than those indicated in item iv and originating from the companies of the consolidable group of the financial system.

vi. Deferred income tax assets arising from loss carryforwards and originating from the companies of the consolidable group of the financial system.

vii. Deferred income tax assets, net of deferred income tax liabilities, arising from temporary differences exceeding the 10% threshold of the Tier 1 common capital of the financial group and originating from the companies of the consolidable group of the financial system. The aforementioned Tier 1 common capital shall be calculated taking into consideration all deductions referred to in this numeral 1 that do not depend on the 10% threshold.

viii. Investment in capital-representative instruments issued by other companies in the financial system or insurance system of the country or abroad, which meet the requirements to be counted in consolidated Tier 1 common capital, that do not belong to the conglomerate. For the set of investing companies that comply with the accounting standards of this Superintendency, the total amount of profits and losses recorded in the results of the period of the investing companies shall be reversed, provided that this amount is profit and does not exceed the profits of the period of said set that were not counted in the consolidated effective equity; likewise, the total amount of unrealized gains and losses recorded in equity accounts of the investing companies shall be reversed, considering that this amount, when it is a gain, does not exceed the unrealized gains of said set that were not counted in the consolidated effective equity, and when it is a loss, does not exceed the unrealized losses of said set that did not affect the consolidated effective equity.

ix. For those companies in the financial group that apply internal models for the calculation of the effective equity requirement for credit risk, the difference between expected loss and the total provisions constituted for credit risk shall be considered, when this difference is positive.

x. Direct or indirect holding of capital-representative instruments countable in consolidated Tier 1 common capital, which have been issued by the companies in the financial group and are held in treasury. Also, own instruments countable in consolidated Tier 1 common capital for which there is a present or contingent obligation to acquire them by the companies in the financial group by virtue of contractual obligations must be deducted.

xi. The amount of deductions from additional Tier 1 capital (letter c of numeral 2 of section A of this article) that exceeds the amount of additions to additional Tier 1 capital (letters a and b of numeral 2 of section A of this article).

xii. Investment in capital-representative instruments countable in consolidated Tier 1 common capital issued by other companies in the conglomerate that do not belong to the financial group. For the set of investing companies that comply with the accounting standards of this Superintendency, the total amount of profits and losses recorded in the results of the period of the investing companies shall be reversed, provided that this amount is profit and does not exceed the profits of the period of said set that were not counted in the consolidated effective equity nor previously used in the calculation of any reversal; likewise, the total amount of unrealized gains and losses recorded in equity accounts of the investing companies shall be reversed, considering that this amount, when it is a gain, does not exceed the unrealized gains of said set that were not counted in the consolidated effective equity nor previously used in the calculation of any reversal, and when it is a loss, does not exceed the unrealized losses of said set that did not affect the consolidated effective equity nor previously used in the calculation of any reversal.

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xiii. The portion of the difference between consolidated effective equity and the minimum solvency requirements of the financial group that originates from any element of Tier 1 common capital that does not correspond to holders of controlling participations of the companies comprising the financial group that are subject to risk-based regulatory capital. The aforementioned portion shall be calculated according to the following procedure:

a) For each company comprising the financial group that is subject to risk-based regulatory capital and that in turn contributes to consolidated effective equity with any element of Tier 1 common capital that does not correspond to holders of controlling participations, consider its effective equity or similar according to the applicable individual legislation.

b) Calculate the excess between the amount considered in a) and the total minimum solvency requirements of that company calculated according to the applicable individual legislation.

c) If the result obtained in b) is greater than zero, calculate the sum of the Tier 1 common capital elements of the company counted in consolidated effective equity that do not correspond to holders of controlling participations, otherwise consider zero.

d) Divide the result obtained in c) by the amount considered in a) and multiply that ratio by the amount obtained in b).

e) Sum the results obtained in d).

The additional Tier 1 capital of the financial group, which is constituted as follows:

a) Capital-representative instruments that meet the conditions established in the Regulation for the Calculation of Reserves, Profits, Donations and Capital-Representative Instruments in the Effective Equity of the Companies of the Financial System, to be counted in additional Tier 1 capital.

The issue premium of the aforementioned capital-representative instruments is included.

Also, capital in process corresponding to the aforementioned instruments is included. The deadline for registering the capital in process in the corresponding records is sixty (60) calendar days counted from the date of approval of the capital increase by the competent body. If the deadline expires without the registration having been made, the aforementioned capital in process will not be countable in consolidated effective equity. The aforementioned deadline may be extended by the Superintendency at the request of the company responsible for submitting the consolidated information.

b) Subordinated debt-representative instruments considered in the effective equity of each consolidable group that meet the conditions established in the Subordinated Debt Regulation applicable to the Companies of the Financial System, to be counted in additional Tier 1 capital.

c) Regulatory adjustments comprising the following deductions from additional Tier 1 capital:

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i. Investment in capital-representative instruments or subordinated debt-representative instruments issued by other companies in the financial system or insurance system of the country or abroad, which meet the requirements to be counted in consolidated additional Tier 1 capital, that do not belong to the conglomerate. For the set of investing companies that comply with the accounting standards of this Superintendency, the total amount of profits and losses recorded in the results of the period of the investing companies shall be reversed, provided that this amount is profit and does not exceed the profits of the period of said set that were not counted in the consolidated effective equity nor previously used in the calculation of any reversal; likewise, the total amount of unrealized gains and losses recorded in equity accounts of the investing companies shall be reversed, considering that this amount, when it is a gain, does not exceed the unrealized gains of said set that were not counted in the consolidated effective equity nor previously used in the calculation of any reversal, and when it is a loss, does not exceed the unrealized losses of said set that did not affect the consolidated effective equity nor previously used in the calculation of any reversal.

ii. Direct or indirect holding of capital-representative instruments or subordinated debt-representative instruments countable in consolidated additional Tier 1 capital, which have been issued by the companies in the financial group and are held in treasury. Also, own instruments countable in consolidated additional Tier 1 capital for which there is a present or contingent obligation to acquire them by the companies in the financial group by virtue of contractual obligations must be deducted.

iii. The amount of deductions from Tier 2 effective equity (numeral 4 of section B of this article) that exceeds the amount of additions to Tier 2 effective equity (numerals 1, 2 and 3 of section B of this article).

iv. Investment in capital-representative instruments or subordinated debt-representative instruments countable in additional Tier 1 capital issued by other companies in the conglomerate that do not belong to the financial group. For the set of investing companies that comply with the accounting standards of this Superintendency, the total amount of profits and losses recorded in the results of the period of the investing companies shall be reversed, provided that this amount is profit and does not exceed the profits of the period of said set that were not counted in the consolidated effective equity nor previously used in the calculation of any reversal; likewise, the total amount of unrealized gains and losses recorded in equity accounts of the investing companies shall be reversed, considering that this amount, when it is a gain, does not exceed the unrealized gains of said set that were not counted in the consolidated effective equity nor previously used in the calculation of any reversal, and when it is a loss, does not exceed the unrealized losses of said set that did not affect the consolidated effective equity nor previously used in the calculation of any reversal.

v. The portion of the difference between consolidated effective equity and the minimum solvency requirements of the financial group that originates from any element of additional Tier 1 capital that does not correspond to holders of controlling participations of the companies comprising the financial group that are subject to risk-based regulatory capital. The aforementioned portion shall

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be calculated according to the following procedure:

a) For each company comprising the financial group that is subject to risk-based regulatory capital and that in turn contributes to consolidated effective equity with any element of additional Tier 1 capital that does not correspond to holders of controlling participations, consider its effective equity or similar according to the applicable individual legislation.

b) Calculate the excess between the amount considered in a) and the total minimum solvency requirements of that company calculated according to the applicable individual legislation.

c) If the result obtained in b) is greater than zero, calculate the sum of the additional Tier 1 capital elements of the company counted in consolidated effective equity that do not correspond to holders of controlling participations, otherwise consider zero.

d) Divide the result obtained in c) by the amount considered in a) and multiply that ratio by the amount obtained in b).

e) Sum the results obtained in d).

B. The Tier 2 effective equity of the financial group is composed as follows:

Capital-representative instruments that meet the conditions established in the Regulation for the Calculation of Reserves, Profits, Donations and Capital-Representative Instruments in the Effective Equity of the Companies of the Financial System, to be counted in Tier 2 effective equity.

The issue premium of the aforementioned capital-representative instruments is included.

Subordinated debt-representative instruments considered in the effective equity of each consolidable group that meet the conditions established in the Subordinated Debt Regulation applicable to the Companies of the Financial System, to be counted in Tier 2 effective equity.
Generic provisions counted in the Tier 2 equity of the consolidable group of the financial system. For this calculation, provisions corresponding to credits made between companies of the financial group nor those corresponding to credits that are deducted from the effective equity of the financial group shall not be included.
Regulatory adjustments comprising the following deductions from Tier 2 effective equity:

a) Investment in capital-representative instruments or subordinated debt-representative instruments issued by other companies in the financial system or the system of

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insurance of the country or abroad, which meet the requirements to be counted in consolidated Tier 2 effective equity, that do not belong to the conglomerate. For the set of investing companies that comply with the accounting standards of this Superintendency, the total amount of profits and losses recorded in the results of the period of the investing companies shall be reversed, provided that this amount is profit and does not exceed the profits of the period of said set that were not counted in the consolidated effective equity nor previously used in the calculation of any reversal; likewise, the total amount of unrealized gains and losses recorded in equity accounts of the investing companies shall be reversed, considering that this amount, when it is a gain, does not exceed the unrealized gains of said set that were not counted in the consolidated effective equity nor previously used in the calculation of any reversal, and when it is a loss, does not exceed the unrealized losses of said set that did not affect the consolidated effective equity nor previously used in the calculation of any reversal.

b) Direct or indirect holding of capital-representative instruments or subordinated debt-representative instruments countable in consolidated Tier 2 effective equity, which have been issued by the companies in the financial group and are held in treasury. Also, own instruments countable in consolidated Tier 2 effective equity for which there is a present or contingent obligation to acquire them by the companies in the financial group by virtue of contractual obligations must be deducted.

c) Investment in capital-representative instruments or subordinated debt-representative instruments countable in consolidated Tier 2 effective equity issued by other companies in the conglomerate that do not belong to the financial group. For the set of investing companies that comply with the accounting standards of this Superintendency, the total amount of profits and losses recorded in the results of the period of the investing companies shall be reversed, provided that this amount is profit and does not exceed the profits of the period of said set that were not counted in the consolidated effective equity nor previously used in the calculation of any reversal; likewise, the total amount of unrealized gains and losses recorded in equity accounts of the investing companies shall be reversed, considering that this amount, when it is a gain, does not exceed the unrealized gains of said set that were not counted in the consolidated effective equity nor previously used in the calculation of any reversal, and when it is a loss, does not exceed the unrealized losses of said set that did not affect the consolidated effective equity nor previously used in the calculation of any reversal.

d) The portion of the difference between consolidated effective equity and the minimum solvency requirements of the financial group that originates from any element of Tier 2 effective equity that does not correspond to holders of controlling participations of the companies comprising the financial group that are subject to risk-based regulatory capital. Such portion shall be calculated according to the following procedure:

i. For each company comprising the financial group that is subject to risk-based regulatory capital and that in turn contributes to consolidated effective equity with any element of Tier 2 effective equity that does not correspond to holders of controlling participations, consider its effective equity or similar according to the applicable individual legislation.

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ii. Calculate the excess between the amount considered in i) and the total minimum solvency requirements for that company calculated according to the applicable individual legislation.

iii. If the result obtained in ii) is greater than zero, calculate the sum of the level 2 effective equity elements of the company computed in the consolidated effective equity that do not correspond to controlling shareholders; otherwise, consider zero.

iv. Divide the result obtained in iii) by the amount considered in i) and multiply that ratio by the amount obtained in ii).

v. Sum the results obtained in iv).

When the responsible company defined in article 21 of this Regulation belongs to the consolidable group of the insurance system, the effective equity of the financial group is determined as defined in article 7-B of this Regulation, understanding financial group where consolidable group is indicated, plus the generic provisions computed in the level 2 equity of the consolidable group of the financial system without including those corresponding to credits made between companies of the financial group nor those corresponding to credits that are deducted from the effective equity of the financial group. In case the financial group contains companies that apply internal models for the calculation of the effective equity requirement for credit risk, the difference between the expected loss and the total provisions constituted for credit risk must be additionally deducted from their effective equity, when this difference results positive.

Article 11th.- Calculation of the financial group's capital requirement

For the calculation of the financial group's capital requirement mentioned in article 9 of this Regulation, the capital requirements of both consolidable groups must be summed without considering those generated by operations carried out between companies of the conglomerate that belong to the same financial group nor by operations that have been deducted from the effective equity of the financial group.

CHAPTER III
DEFICIT WITH RESPECT TO THE CAPITAL REQUIREMENT

Article 12th.- Capital deficits

When a consolidable group or a financial group presents a deficit with respect to any of the minimum solvency requirements established in articles 5-A, 7-A or 9 of this Regulation, the supervised company responsible for the submission of information according to article 21 of this Regulation must communicate such situation to this Superintendency at the moment it submits the quarterly information according to the deadline indicated in numeral 1 of article 20 of this Regulation and must present for its approval an adaptation plan in accordance with what is provided in article 18 of this Regulation within a period not greater than forty (40) calendar days following the date of closing of the quarter in which the deficit was recorded, unless it is the fourth quarter in which case the maximum period will be fifty (50) calendar days.

When a deficit is presented with respect to any of the minimum solvency requirements established in articles 5-A or 9 of this Regulation in a consolidable group of the financial system or a financial group whose supervised company responsible for the submission of information according to article 21 of this Regulation belongs to the consolidable group of the financial system, respectively, the supervised companies belonging to said groups may distribute profits only according to the maximum limits established below:

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Deficit with respect to any of the minimum solvency requirements established in article 5-A or 9	Maximum limit for profit distribution
Less than or equal to 25% of the combined buffer requirement	60%
Greater than 25% and less than or equal to 50% of the combined buffer requirement	40%
Greater than 50% and less than or equal to 75% of the combined buffer requirement	20%
Greater than 75% of the combined buffer requirement or if the group has no combined buffer requirement	0%

When there is more than one capital deficit with respect to the minimum solvency requirements established in articles 5-A or 9 of this Regulation, the largest of them will be taken into account as a percentage of the combined buffer requirement to establish the profit distribution limit.

When a deficit is presented with respect to any of the minimum solvency requirements established in articles 7-A or 9 of this Regulation in a consolidable group of the insurance system or a financial group whose supervised company responsible for the submission of information according to article 21 of this Regulation belongs to the consolidable group of the insurance system, respectively, the supervised companies belonging to said groups must submit the distribution of their profits to the prior authorization of the Superintendency when the referred deficit is less than or equal to twenty percent (20%) of the capital requirements. Likewise, in case said deficit results greater than said percentage, the supervised companies belonging to said groups must allocate all profits to capitalization to overcome the deficit.

Substitute letter e. of the first paragraph of article 18 of Chapter V of Title II "On Prudential Measures", with the following:

"Article 18th.- Adaptation Plans

The Adaptation Plans referred to in articles 12 and 17 of this Regulation must meet the following requirements:
(...) e. The Plan must contemplate measures that involve the overcoming of capital deficits or excesses of limits referred to in articles 12 and 17, respectively, within a period not greater than twelve (12) calendar months. Likewise, they must detail the deadlines corresponding to the stages that the referred Plan involves. This period may be modified, as the particular case may warrant, at the discretion of the Superintendency.
(...)"

Substitute letter b) of the Complementary Information of subsection B of article 20 of Chapter I of Title III "On Information for Consolidated Supervision", with the following:

"b) Calculation of effective equity, quarterly, according to Appendices No. 8-A and No. 8-A.2 or No. 8-B and No. 8-B.2, as applicable.
(...)"

Substitute letter a) of the Complementary Information of subsection C of article 20 of Chapter I of Title III "On Information for Consolidated Supervision", with the following:

"a) Calculation of effective equity, quarterly, according to Appendices No. 8-A, No. 8-A.1 and No. 8-A.3 (...)"

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Substitute letter a) of the Complementary Information of subsection D of article 20 of Chapter I of Title III "On Information for Consolidated Supervision", with the following:

"a) Calculation of effective equity, quarterly, according to Appendices No. 8-B and No. 8-B.1 (...)"

Substitute the heading of the penultimate paragraph of article 20 of Chapter I of Title III "On Information for Consolidated Supervision", with the following:

"The information indicated in letters B, C and D must be submitted according to the following instructions:
(...)"

Substitute numeral 3 of article 24 of Chapter II of Title III "On Information for Consolidated Supervision", with the following:

"(...)
3. "Significant accounting policies must be harmonized among the companies of the consolidable group and/or financial group. Such policies must be harmonized with the accounting standards issued by the Superintendency, to the extent practicable, and in that not contemplated in said regulation, the accounting model of the International Financial Reporting Standards (IFRS) will be applied. If such harmonization is not possible due to being impracticable, the necessary disclosures must be made through notes to the financial statements of the consolidable group or when applicable of the financial group".

Substitute article 29 of Title V "On Collaborators in Consolidated Supervision", with the following:

"Article 29th.- Internal Audit

The Internal Audit Unit of the company responsible for submitting information to this Superintendency must analyze the mechanisms for the comprehensive risk management of the financial group, taking into account the risk exposure from operations carried out with natural persons, legal persons or legal entities linked and companies of the conglomerate. Likewise, said unit must evaluate the significant accounting policies used in the consolidation of the financial statements of the financial group and of the consolidable groups, as well as evaluate compliance with the provisions established in this Regulation for the calculation of the components of effective equity, capital requirements and exposures subject to consolidated limits."

Substitute the third paragraph of the Final Provision First, with the following:

"(...)
The referred exceptional treatment will also be applicable in those cases where in a consolidable group the only companies included in the scope of the first paragraph of article 1 are Credit Companies.
(...)"

Incorporate as Final Provision Fifth, the following:

"Fifth.- Preferred shares and instruments representing subordinated debt issued by companies of the financial system that are acquired by the State within the framework of Urgency Decree No. 037-2021 and its amendments, and Urgency Decree No. 013-2023

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Preferred shares and instruments representing subordinated debt that are issued by companies of the financial system that are acquired by the State within the framework of Urgency Decree No. 037-2021 and its amendments, and Urgency Decree No. 013-2023, are considered computable in ordinary level 1 capital while the State's participation in said companies lasts."

Incorporate as Transitional Provision Sixth, the following:

"Sixth.- Adaptation period for deductions of consolidated ordinary level 1 capital

For the deductions of consolidated ordinary level 1 capital of the consolidable group of the financial system and of the financial group that come from the consolidable group of the financial system indicated in items v, vi and vii of letter g) of articles 5-B and 10 of this Regulation, respectively, as well as for the assets that are recognized by the difference between the fair value and the nominal value of the acquired credit portfolio of the consolidable group of the financial system and of the financial group that come from the consolidable group of the financial system, the following adaptation period applies:

Date	Deduction Percentage
January 2023	70%
January 2024	80%
January 2025	90%
January 2026	100%

For cases where the assets corresponding to items v and vi of letter g) of articles 5-B and 10 of this Regulation, as well as the assets that are recognized by the difference between the fair value and the nominal value of the acquired credit portfolio, have been registered after December 2022, they will correspond to the deduction percentage of the row "January 2026" of the previous table.

The deduction percentages indicated in the previous table for the deductions of ordinary level 1 capital indicated in items v, vi and vii of letter g) of articles 5-B and 10 of this Regulation, as well as for the assets that are recognized by the difference between the fair value and the nominal value of the acquired credit portfolio, are deducted from the consolidated effective equity. From the deduction percentage, ordinary level 1 capital must represent, at minimum, what is established in the following schedule:

Date	Minimum Deduction Percentage of Ordinary Level 1 Capital with respect to the Deduction Percentage
January 2023	30%
January 2024	60%

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January 2025	80%
January 2026	100%
."

Eliminate the First and Fifth Transitional Provisions.

Article Second.- Repeal Appendices No. 8, 8-C and 8-D, incorporate Appendices No. 8-A.1, 8-A.2, 8-A.3, 8-B.1 and 8-B.2 and substitute Appendices No. 2, 2-A, 2-B, 6, 6-A, 6-B, 8-A, 8-B, 9, 10 and 14-B of the Regulation for the Consolidated Supervision of Financial and Mixed Conglomerates, approved by Resolution SBS No. 11823-2010 and its amendments, according to the formats attached to this Resolution and published on the Institutional Portal (www.sbs.gob.pe), in accordance with what is provided in Supreme Decree No. 001-2009-JUS and its amendments.

Article Third.- Substitute article six of Resolution SBS No. 3955-2022, with the following:

"Article Sixth.- For the deduction of the portion of the difference in consolidated effective equity with respect to the total minimum solvency requirements of the consolidable groups or of the financial group that comes from any element of ordinary level 1 capital, additional level 1 capital or effective level 2 equity, which does not correspond to controlling shareholders of the companies comprising the consolidable groups or financial group that are subject to regulatory capital based on risk, the following adaptation period applies:

Date	Deduction Percentage
January 2023	30%
January 2024	60%
January 2025	100%
."

Article Fourth.- This Resolution will enter into force from January 1, 2024.

MARIA DEL SOCORRO HEYSEN ZEGARRA
Superintendent of Banks, Insurance and AFP

Resolution SBS No. 3004-2023: Amending the Regulation for the Consolidated Supervision of Financial and Mixed Conglomerates

Lineage: In force

Timeline

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