SBS Resolution No. 1913-2004: Supplementary Rules on the Selection of Directors, Managers and Internal Auditors

Lima, November 23, 2004

SBS Resolution
No. 1913 -2004

The Superintendent of Banking and Insurance

CONSIDERING:

That, pursuant to paragraph 2 of Article 134 of the General Law of the Financial System and the Insurance System and Organic Law of the Superintendency of Banking and Insurance, Law No. 26702, hereinafter referred to as the General Law, it is the responsibility of the Superintendency to supervise that companies in the financial system are properly organized and administered by competent personnel;

That Articles 81 and 82 of the General Law establish the impediments to serving as a director, as well as the obligation of companies in the financial and insurance systems to inform this Superintendency, within a period not exceeding one (01) day from occurrence, of any election and vacancy of directors, respectively, and that said impediments and information obligation are also applicable to managers as provided by Article 92 of the General Law;

That the impediments and information obligation indicated in the preceding consideration apply to all supervised entities for the adequate exercise of comprehensive supervision referred to in paragraph 3 of Article 349 of the General Law;

That it is considered convenient to issue supplementary rules regarding the selection of directors, managers, and internal auditors, in order to clarify aspects related to competence referred to in the first consideration of this Resolution;

Having heard the opinion of the Adjunct Superintendencies of Banking, Insurance, Risks, and Legal Advice; and,

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

RESOLVES:

ARTICLE FIRST.- Approve the "Supplementary Rules on the Selection of Directors, Managers and Internal Auditors," which form an integral part of this Resolution.

ARTICLE SECOND.- Modify the second paragraph of Article 22 of the "Regulation on the conversion to joint-stock companies and shareholding participation of Municipal Savings and Credit Caisses" approved by SBS Resolution No. 410-97 and its modifying norms, hereinafter the Regulation, according to the following text:

“The CMAC must communicate to the Superintendency the appointment of directors, within a period not exceeding (1) one business day from occurrence, attaching the information indicated in Annex II of this norm. In the case of the curriculum vitae referred to in paragraph 1 of said annex, its transmission and filing shall be carried out in accordance with specific norms on the matter issued by the Superintendency.”

ARTICLE THIRD.- Modify the second requirement of the definition of technical competence contained in letter f. of section 1 “Definitions” of Annex I of the Regulation, according to the following text:

“Have an appropriate professional track record for the position, understood as experience in specialized and/or managerial activities related to their profession, in the financial system, in national or foreign companies or institutions linked to said system, and/or experience in managerial or executive positions in companies with a relevant level of organization or size for the Municipal Caisse, to the satisfaction of the Superintendency.”

ARTICLE FOURTH.- This rule enters into force from the day following its publication in the Official Gazette El Peruano, from which date Circulars G-017-98 of October 14, 1998 and G-035-99 of April 19, 1999 are repealed.

Register, communicate, and publish.

JUAN JOSÉ MARTHANS LEÓN
Superintendent of Banking and Insurance

SUPPLEMENTARY RULES ON THE SELECTION OF DIRECTORS, MANAGERS AND INTERNAL AUDITORS

Article 1°. - Scope 1
These rules apply to the companies indicated in Articles 16° and 17° of the General Law of the Financial System and the Insurance System and Organic Law of the Superintendency of Banking and Insurance, Law No. 26702, hereinafter General Law, as well as to the Guarantee Fund for Small Industry Loans (FOGAPI), the National Bank, the Agricultural Bank, the Development Financial Corporation (COFIDE), and the Benefit Distributions and Benefit Funds under the control of this Superintendency, hereinafter, supervised companies.

Article 2°. – Communication to the Superintendency
Supervised companies must inform this Superintendency of the election of their directors and the appointment of their managers and internal auditors, as well as the respective vacancies, within a period not exceeding one (1) business day from occurrence.

In cases where the internal auditor is designated by the Comptroller General of the Republic, the aforementioned period is calculated from the moment the respective supervised company takes official knowledge of the designation.

For the purposes of this provision, the term “manager” includes the general manager and first-level managers, the Internal Auditor, the Compliance Officer, and persons performing functions equivalent to those of said managers, regardless of the title given to the position. First-level managers are understood to be those managers who are direct collaborators of the General Manager in the execution of policies and decisions of the Board of Directors.

Article 3°. – Director Information
Regarding communication on the election of their directors, companies must attach to such communication:

3.1 The certified copy by the Secretary of the Board of Directors or his/her substitute, of the pertinent part of the session minutes where such election is recorded, as well as the remuneration agreed upon as provided in Articles 114° and 166° of the General Companies Law. The supporting documentation used to take the agreements of the referenced minutes must be filed appropriately and securely, and be available to this Superintendency, so that in accordance with its supervisory powers, it can verify that the remuneration maintains coherence with the level of responsibility, knowledge, and other conditions inherent to the performance of the director's position, as well as with the nature of the operations and business results of the respective company. Any modification to the terms of the aforementioned remuneration must also be recorded in minutes, whose respective certified copy by the aforementioned persons must be sent to this Superintendency, within five business days of the aforementioned modifications being made. 2

3.2 The curriculum vitae of the elected director.

3.3 The respective sworn declaration stating that they are not subject to the impediments established in Article 81° of the General Law or in Article 25° of the Regulation of the SPP Law, as applicable. 2

1 Scope extended to AFPs by SBS Resolution No. 352-2005 of 02/03/2005 2 Paragraphs modified by SBS Resolution No. 352-2005 of 02/03/2005

Article 4°. – Manager and Internal Auditor Information
Regarding communication on the appointment of a manager or internal auditor, companies must attach to such communication:

4.1 The certified copy by the Secretary of the Board of Directors or his/her substitute, of the pertinent part of the session minutes where the appointment and contract terms are recorded, such as: Remuneration, benefits received due to their link with the company and upon termination, among others. The supporting documentation used to take the agreements of the referenced minutes must be filed appropriately and securely, and be available to this Superintendency, so that in accordance with its supervisory powers, it can verify that the aforementioned terms maintain coherence with the level of responsibility, knowledge, and other conditions inherent to the performance of the manager or internal auditor's position, as well as with the nature of the operations and business results of the respective company. Any modification to the terms of the aforementioned employment contracts must also be recorded in minutes, whose respective certified copy by the aforementioned persons must be sent to this Superintendency, within five business days of the aforementioned modifications being made. 2

4.2 The curriculum vitae of the appointee.

4.3 The respective sworn declaration stating that they are not subject to the impediments established in Article 92° of the General Law or in Article 32° of the Regulation of the SPP Law, as applicable. 2

Article 5°. – Update of sworn declarations
The sworn declarations referred to in the previous paragraphs must be updated annually within the twenty (20) first calendar days following the date of the Mandatory Annual Shareholders' Meeting referred to in Article 114º of Law No. 26887 «General Companies Law».

Article 6°. – Prior verification of competence 3
The bodies responsible for the election of directors, as well as the designation/appointment of managers, must previously to such acts, verify compliance with the required technical and moral competence to assume said positions. To this end, they must verify the corresponding Curricula Vitae (CV) and their supporting documentation, as well as the sworn declarations on impediments referred to in Articles 3° and 4° of these Supplementary Rules. In the case of Municipal Savings and Credit Caisses (CMAC), according to their special law, the responsibility for prior verification in the case of directors corresponds to the respective appointers. 4

The supervised company must file and keep the supporting documentation of the CVs available to the Superintendency for control actions deemed necessary. CVs in any language other than Spanish must additionally be translated into this language.

3 Repealed by SBS Resolution No. 211-2021, effective from 01.02.2021, adaptation 01.11.2021 4 Paragraph replaced by SBS Resolution No. 5581-2013 of 13/09/2013

For the case of Municipal Savings and Credit Caisses and the Popular Credit Municipal Caisse of Lima, the specific norms issued by the Superintendency in conformity with their respective special laws will additionally apply.

Article 7°. – Use of REDIR software
The obligation to transmit CVs established in the second paragraph of Article 22 of the Regulation approved by SBS Resolution No. 410-97, in paragraphs 3.2 of Article 3° and 4.2 of Article 4°, as well as to inform about the vacancies referred to in the first paragraph of Article 2° of these Supplementary Rules, shall be carried out through the adequate and timely completion of the software named REDIR, complying with the corresponding specifications and deadlines established by the Superintendency.

The update or modification of the information contained in the CVs must also be carried out through the REDIR software, in accordance with the specifications and deadlines that the Superintendency establishes through Multiple Office.

Transitional Provisions.-
For the case of Benefit Distributions and Benefit Funds, the use of REDIR will be determined at the appropriate time, through a Multiple Office of the SBS.

1. For the case of Benefit Distributions, Benefit Funds, and Private Pension Fund Administrators, the use of REDIR will be determined at the appropriate time, through a Multiple Office of the Superintendency.

2. In the case of Private Pension Fund Administrators, compliance with the transmission of the CV referred to in paragraphs 3.2 and 4.2 is suspended until the opportunity when the Multiple Office indicated in the previous Transitional Provision is transmitted.

3. From the effectiveness of the Multiple Office indicated in the previous Transitional Provision, the CV information transmitted by Private Pension Fund Administrators will constitute a source of information for sections “I) Directors” and “J) Managers” referred to in Article 12° of Title VIII “Registers” of the Compilation of Regulatory Supervision Norms of the Private System for the Administration of Pension Funds, approved by Resolution No. 115-98-EF/SAFP of March 24, 1998.

5 Transitional Provisions modified by SBS Resolution No. 352-2005 of 02/03/2005