Lima, 27 February 2007

S.B.S. Resolution No. 213 -2007

The Superintendent of Banking, Insurance and
Private Administrators of Pension Funds

WHEREAS:

That, by means of Law No. 28971 published in the Official Gazette “El Peruano” on 27 January 2007, the Law creating the Mortgage Administration Companies was approved;

That, in article 1 of Law No. 28971 it is stated that the Mortgage Administration Companies are specialized companies of the financial system whose exclusive purpose is to grant and acquire real estate loans on their own account and, in relation to them, issue securities, mortgage letters, mortgage bonds, mortgage instruments and negotiable mortgage credit securities, both in national and foreign currency;

That, likewise, in article 1 of Law No. 28971 it is specified that the Mortgage Administration Companies form part of the national financial system and are subject to the regulation and supervision of this Superintendency, and the provisions contained in said Law, in the General Law of the Financial System and the Insurance System and Organic Law of the Superintendency of Banking and Insurance – Law No. 26702 and its amendments, insofar as pertinent, as well as in the rules issued by this supervisory body, are applicable to them;

That, the Sole Final Provision of Law No. 28971 establishes that this Superintendency must issue the complementary provisions that are necessary for the adequate functioning of the Mortgage Administration Companies;

That, by means of SBS Resolution No. 895-98 the Accounting Manual for the Companies of the Financial System was approved;

That, it is necessary to make modifications to the Accounting Manual for the Companies of the Financial System in order to adapt it to the provisions of Law No. 28971;

In accordance with the opinion of the Deputy Superintendencies of Banking and Microfinance, of Risks and of Legal Advice, as well as of the Economic Studies Department and the Information Technologies Department; and,

In use of the powers conferred by numerals 7, 9 and 13 of article 349 of Law No. 26702;

RESOLVES:

Article One.- To approve the Regulation of the Mortgage Administration Companies, which forms an integral part of this Resolution;

Article Two.- To modify the Accounting Manual for the Companies of the Financial System, hereinafter Accounting Manual, in accordance with the Annex attached to this norm.

Article Three.- This Resolution enters into force on the day following its publication in the Official Gazette "El Peruano", except for the provisions of article two which will enter into force as of the information corresponding to the month of March 2007.

Register, communicate and publish.

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

REGULATION OF THE MORTGAGE ADMINISTRATION COMPANIES

CHAPTER I OF THE GENERAL PROVISIONS

Article 1.- Scope

The provisions of this Regulation are applicable to the Mortgage Administration Companies created by Law No. 28971.

Article 2.- Definitions

For purposes of this Regulation, consider the following definitions:

a) Real estate loan: loan granted to natural or legal persons for purposes of acquisition, refurbishment, construction, expansion, improvement or subdivision of all types of real estate; as well as to refinance or to prepay said loan.

b) EAH: Mortgage Administration Companies defined in article 1 of Law No. 28971.

c) General Law: General Law of the Financial System and the Insurance System and Organic Law of the Superintendency of Banking and Insurance - Law No. 26702 and its amendments.

d) Accounting Manual: Accounting Manual for the Companies of the Financial System approved by SBS Resolution No. 895-98 of 1 September 1998 and its amendments.

e) Superintendency: Superintendency of Banking, Insurance and Private Administrators of Pension Funds.

CHAPTER II OF THE MORTGAGE ADMINISTRATION COMPANIES

Article 3.- Corporate purpose

The EAH are specialized companies of the financial system constituted as corporations in accordance with the provisions of article 12 of the General Law, whose corporate purpose consists of granting and acquiring real estate loans on their own account and, in relation to them, issuing mortgage letters, mortgage bonds, mortgage instruments and negotiable mortgage credit securities, both in national and foreign currency. Likewise, they may grant and acquire loans on behalf of third parties, by any modality other than trust, in accordance with the provisions of article 5.

Article 4.- Constitution

For the constitution of the EAH, the provisions of article 2 of Law No. 28971 must be complied with, as well as the provisions of the Regulation for the Constitution and Establishment of Companies and Representatives of the Financial and Insurance Systems, approved by SBS Resolution No. 600-98 and its amendments, insofar as pertinent.

Article 5.- Permitted operations

The EAH may carry out the following operations:

a) Grant real estate loans in various modalities and terms.

b) Carry out operations with the MIVIVIENDA Fund.

c) Issue bonds (ordinary, convertible and subordinated), mortgage letters, mortgage bonds, negotiable mortgage credit securities and any other mortgage instrument, with the purpose of financing the operations of their corporate purpose, in national or foreign currency. These instruments may be issued physically or by means of book entries.

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d) Acquire, hold and sell instruments representing public debt (domestic and foreign), instruments representing private debt and instruments representing equity for the trading portfolio, which are subject to a centralized trading mechanism in accordance with the relevant law.

e) Acquire, hold and sell shares of companies whose purpose is to provide complementary or auxiliary services.

f) Acquire, sell or transfer mortgage loans.

g) Act as settlor and/or guarantor in trusts governed by Law No. 26702.

h) Act as originator and/or credit enhancer in securitization processes in accordance with the Single Ordered Text of the Securities Market Law, approved by Supreme Decree No. 093-2002-EF, and the provisions issued by the National Supervisory Commission of Companies and Securities.

i) Operate in domestic and foreign currency.

j) Acquire, hold and sell, as a participant, participation certificates in mutual funds and investment funds managed by companies supervised and regulated by the competent body.

k) Buy, hold and sell securities representing obligations of the Central Reserve Bank of Peru.

l) Obtain loans from companies in the domestic and foreign financial system, under the terms of the applicable legal provisions.

m) Make deposits in companies in the domestic and foreign financial system, under the terms of the applicable legal provisions.

n) Develop activities and participate in financial structures as structurers, placement agents and others related to the financial structures of the instruments they are authorized to issue, whether carried out domestically or abroad.

o) Take hedging positions through derivative financial products, with prior authorization from the Superintendency, which must have the opinion of the Central Reserve Bank of Peru.

p) Provide portfolio management services on behalf of third parties that do not involve acting as a trustee.

q) Others authorized by the Superintendency.

Article 6.- Governing bodies

The EAH must comply with the rules issued by the Superintendency that are applicable to the general shareholders' meeting, the board of directors, the managers, and the principal officers.

Article 7.- Shared offices and premises

For the opening, conversion, relocation or closing of offices, as well as for the use of shared premises, the EAH must comply with the provisions of the rules issued by the Superintendency.

Article 8.- Retention of information

The EAH must retain their books and documents related to their financial statements and their transactions carried out, for a period of no less than ten (10) years, observing for this purpose the rules issued by the Superintendency.

Article 9.- Approval of contracts

The EAH are obliged to submit to the administrative approval of the Superintendency the general contracting clauses they use for the granting of mortgage loans referred to in the Regulation on Transparency of Information and Provisions Applicable to Contracting with Users of the Financial System.

Without prejudice to the foregoing, they may submit jointly to the administrative approval of the Superintendency the general contracting clauses referred to in the preceding paragraph, as well as

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others in accordance with numeral 8 of article 349 of the General Law, in order to obtain the standardization of mortgage loan contracts.

Article 10.- Risk classification

The EAH are not obliged to have a risk classification; notwithstanding this, they may submit to classification by a risk rating company if they consider it convenient. When this occurs, they must comply with the provisions of the rules issued by the Superintendency on risk classification.

CHAPTER III ON PRUDENTIAL MEASURES

Article 11.- Effective equity, credit risk weighting and global and individual limits

The provisions issued by the Superintendency on effective equity, credit risk weighting and global and individual limits are applicable to the EAH, to the extent relevant.

Article 12.- Credit risk management

The rules issued by the Superintendency for the identification and management of credit risk are applicable to the EAH (Regulation for the Evaluation and Classification of the Debtor and the Requirement of Provisions approved by SBS Resolution No. 808-2003 and its amendments; Minimum Information Required for the Granting, Monitoring, Control, Evaluation and Classification of Debtors – SBS Circular No. B-2125-2003, F-0465-2003, CM-0312-2003, CR-0181-2003, EAF-0216-2003, EDPYME-0104-2003 and FOGAPI-0018-2003; among others), for the identification and management of credit foreign exchange risk, for the identification and management of the over-indebtedness risk of retail debtors, as well as for the treatment and provisions of foreclosed assets.

Article 13.- Management of interest rate and liquidity risks

The EAH must adequately manage the interest rate and liquidity risks they face. For this purpose, the provisions of SBS Circular No. F-464-2003, CM-311-2003, CR-180-2003, EDPYME-103-2003 and EAF-214-2003 and the provisions of SBS Circular No. EAF-215-2003 shall be applicable to the EAH.

Article 14.- Treatment of investments

The EAH must comply with the provisions of the Regulation for the Classification, Valuation and Provisions of Investments of Financial System Enterprises, approved by SBS Resolution No. 1914-2004; in the Rules for Investment in Instruments Traded Through Non-Centralized Negotiation Mechanisms, approved by SBS Resolution No. 964-2002 and its amendments; and in the Regulation of Repo Operations and Repurchase Agreements, approved by SBS Resolution No. 1067-2005.

Article 15.- Serial issuance of financial instruments

The EAH must comply with the provisions of SBS Circular No. B-2074-2000, F-0414-2000, S-0583-2000, CM-0261-2000, CR-0131-2000, EDPYME-0070-2000 and EAF-0194-2000.

Article 16.- Mortgage bonds and mortgage notes

The rules issued by the Superintendency on mortgage bonds and mortgage notes are applicable to the EAH, to the extent relevant.

Article 17.- Treatment of trusts

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The rules on trusts issued by the Superintendency are applicable to the EAH, to the extent relevant in their capacity as trustors.

Article 18.- Transfer and acquisition of loan portfolio

The Regulation for the Transfer and Acquisition of Loan Portfolio, approved by SBS Resolution No. 1114-99 and its amendments, is applicable to the EAH.

Article 19.- Financing contracts with loan portfolio guarantee

The Regulation of Financing Contracts with Loan Portfolio Guarantee, approved by SBS Resolution No. 1027-2001 and its amendments, is applicable to the EAH.

Article 20.- Transactions with related parties

The Prudential Rules for Transactions with Related Parties to Financial System Enterprises, approved by SBS Resolution No. 472-2006, are applicable to the EAH.

CHAPTER IV INFORMATION TO BE SUBMITTED TO THE SUPERINTENDENCY

Article 21.- Accounting record

The EAH must record their operations and prepare their financial information in accordance with the provisions of the Accounting Manual and other accounting rules issued by the Superintendency.

Article 22.- Submission of information

The EAH must submit to the Superintendency the following information contemplated in the Accounting Manual, to the extent corresponding to the operations they are authorized to carry out, in accordance with the periodicity and deadlines set forth in Circular No. B-2108-2002, F-0447-2002, CM-0294-2002, EAF- 0206-2002, CR-0163-2002, EDPYME-0092-2002, FOGAPI-0011-2002, ESF-001-2002 and their updates:

Form A - Balance Sheet.

Form B - Profit and Loss Statement.

Form C – Cash Flow Statement.

Form D – Statement of Changes in Net Equity.

Form F – Trial Balance of Balances.

Annex 1 (Annexes A, B, C, D and E) – Investments.

Annex 2 – Direct and Indirect Loans by Type of Guarantee.

Annex 3 - Credit Flow by Type of Loan.

Annex 4-A – Foreclosed and Recovered Assets.

Annex 4-B – Information on Sale or Delivery under Financial Lease of Foreclosed and Recovered Assets.

Annex 5 - Report on Classification of Debtors and Provisions.

Annex 5-B (Sections I and II) - Report on Classification of Debtors and Provisions - Transfer of Loan Portfolio.

Annex 5-C - Report on Classification of Debtors Transferred in Trust.

Annex 5-D - Report on Classification of Debtors of the Portfolio of Loans, Contingents and Financial Leases that Back Financing or Credit Lines.

Annex 6 - Credit Report of Debtors.

Annex 7 (A and B) applicable to Financieras, Cajas Municipales, Cajas Rurales, EDPYME and EAF – Measurement of Interest Rate Risk in MN and ME.

Annex 10 – Deposits, Placements and Personnel by Offices.
Annex 12-II – Control of Subordinated Debt – Law No. 26702.
Annex 12-III – Subordinated Debt Assigned to Effective Equity.
Annex 16 applicable to Financial Leasing Enterprises – Liquidity Table by Maturity
Terms.
Report 1 – Transfer of Shares of Financial System Enterprises.
Report 2 (Annexes A and B) – Risk-Weighted Assets and Contingent Credits, and Summary of Assets and Contingent Credits Weighted by Credit Risk and Capital Requirements for Market Risk. Report 3 – Effective Equity. Report 6-D – Active Interest Rates of Daily Operations. The EAH shall submit this report monthly no later than 13:00 hours of the day, both in printed form and through SUCAVE, sending a copy thereof to the Central Reserve Bank of Peru. Report 13 – Control of Global and Individual Limits Applicable to Financial System Enterprises. Report 14 – Loans According to Days of Non-Compliance. Report 19 – Report on the Economic Group of the Enterprise. Report 19-A – Information on Legal Entities Members of the Economic Group. Report 21 – Financing to Related Parties of the Enterprise. Report 21-A – Information on Legal Entities Related to the Enterprise. Report 24 – Information on Claims Received from Users. Report 24-B – Detail of Other Operations – Services or Products and Other Reasons for Claim. Report 25 – Information on Write-offs and Forgiveness of Loans. Report 28 - Information on Financial Statements of Commercial Debtors. Report 29 – Report of Debtor Economic Groups.

The Forms, the Annexes (except Annex No. 6, which shall be submitted in the manner established in the corresponding rules) and the aforementioned Reports must be submitted to the Superintendency in printed form, and via SUCAVE in the cases indicated by Circular No. B-2108-2002, F-0447-2002, CM-0294-2002, EAF-0206-2002, CR-0163-2002, EDPYME-0092-2002, FOGAPI-0011-2002, ESF-001-2002 and their updates.

Additionally, the EAH must send to the Superintendency the "Registry of Interest Rates, Commissions and Other Costs" (RETASAS) referred to in Circular SBS No. B-2149-2005, F-0489-2005, CM-0336-2005, CR-0205-2005 and EDPYME-0120-2005, insofar as it corresponds to the operations they are authorized to carry out.

The Superintendency may request, by Official Letter, additional information to that indicated above, if it deems it convenient for the purposes of its supervision and control work.

FINAL PROVISION

Sole.- Other applicable regulations

The provisions contained in the General Law referring to companies of the financial system are applicable to the EAH, insofar as relevant.

The EAHs are subject, to the extent applicable, to any rule or provision issued by the Superintendency that refers to them in its scope or that is applicable to financial system companies, the companies covered in Article 16° of the General Law, or the specialized companies covered in letter B of Article 16° of the same Law (Regulation on Transparency of Information and Provisions Applicable to Contracting with Users of the Financial System approved by Resolution

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SBS N° 1765-2005 and its amendments, Sanctions Regulation approved by Resolution SBS N° 816-2005 and its amendments, Complementary Rules for the Prevention of Money Laundering approved by Resolution SBS N° 1725-2003 and its amendments, Regulation for the Administration of Operational Risks approved by Resolution SBS N° 006-2002 and its amendments, Special Rules on Affiliation and Economic Group approved by Resolution SBS N° 445-2000 and its amendments, Regulation for the Consolidated Supervision of Financial and Mixed Conglomerates approved by Resolution SBS N° 446-2000, Internal Control System Regulation approved by Resolution SBS N° 1040-99, Internal Audit Regulation approved by Resolution SBS N° 1041-99 and its amendments, External Audit Regulation approved by Resolution SBS N° 1042-99 and its amendments, Regulation on Special Regimes and the Liquidation of Financial System and Insurance System Companies approved by Resolution SBS N° 455-99 and its amendments, provisions relating to User Service – Circular SBS N° G-0110-2003, provisions relating to the identification and management of Information Technology Risks – Circular SBS N° G-105-2002 and its amendments, among other rules).

The Superintendency may determine the application to the EAHs of other rules and provisions issued by it that are not mentioned in this Regulation.

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ANNEX AMENDMENTS TO THE ACCOUNTING MANUAL

I. Chapter I “General Provisions” of the Accounting Manual shall be amended as follows:

1. The second paragraph of item 1 of letter B shall be replaced as follows:

“This Manual must be applied for the accounting record of the operations permitted to Banks, Finance Companies, Municipal Savings and Credit Houses, Municipal Popular Credit Houses, Development Entities for Small and Micro Enterprises – EDPYMEs, Savings and Credit Cooperatives Authorized to Collect Funds from the Public, Rural Savings and Credit Houses, Mortgage Administration Companies, Real Estate Capitalization Companies, Financial Leasing Companies, Trust Service Companies, the Small Industry Loan Guarantee Fund – FOGAPI, Banco de la Nación, Banco Agropecuario, Corporación Financiera de Desarrollo - COFIDE, Fondo MIVIVIENDA S.A., and in the case of other companies when their application is required by the Superintendency.”

II. Chapters III “Chart of Accounts” and IV “Description and Dynamics of Accounts” of the Accounting Manual shall be amended as follows:

1. The following analytical accounts and analytical subaccounts shall be incorporated into heading 14 “Credits”:

1401.01.27	REAL ESTATE CREDITS
1401.02.27	REAL ESTATE CREDITS
1401.03.27	REAL ESTATE CREDITS
1403.01.27	REAL ESTATE CREDITS
1403.02.27	REAL ESTATE CREDITS
1404.01.27	REAL ESTATE CREDITS
1404.02.27	REAL ESTATE CREDITS
1404.03.27	REAL ESTATE CREDITS
1405.01.27	REAL ESTATE CREDITS
1405.01.19.27	REAL ESTATE CREDITS
1405.01.22.27	REAL ESTATE CREDITS
1405.02.27	REAL ESTATE CREDITS
1405.02.19.27	REAL ESTATE CREDITS
1405.02.22.27	REAL ESTATE CREDITS
1405.03.27	REAL ESTATE CREDITS
1405.03.19.27	REAL ESTATE CREDITS
1406.01.27	REAL ESTATE CREDITS
1406.01.19.27	REAL ESTATE CREDITS
1406.01.22.27	REAL ESTATE CREDITS
1406.02.27	REAL ESTATE CREDITS
1406.02.19.27	REAL ESTATE CREDITS

1406.02.22.27
REAL ESTATE CREDITS
1406.03.27
REAL ESTATE CREDITS
1406.03.19.27
REAL ESTATE CREDITS

2. The following shall be incorporated as the description of analytical account 1401.01.27 “Real Estate Credits”:

“Records the credits granted for the purpose of acquisition, renovation, construction, expansion, improvement or subdivision of all types of real property.”

3. The description of subaccount 1401.04 “Mortgage Credits for Housing” shall be replaced with the following terms:

“Records the credits granted to natural persons for the acquisition, construction, renovation, remodeling, expansion, improvement and subdivision of their own housing, provided that such credits are granted secured by duly registered mortgages. The aforementioned credits that do not have duly registered mortgages shall be considered consumer credits.

Claims resulting from real estate capitalization contracts shall also be recorded in this subaccount, provided that such operation was intended for the acquisition or construction of one's own housing; as well as MIVIVIENDA mortgage credits”.

For the analytical accounts of this subaccount, the description of the analytical accounts of subaccount 1401.01 Commercial Credits shall apply, as applicable.”

4. The following analytical subaccounts shall be incorporated into account 5104 “Interest on Credits”:

5104.01.01.27 INTEREST ON REAL ESTATE CREDITS
5104.01.02.27 INTEREST ON REAL ESTATE CREDITS
5104.01.03.27 INTEREST ON REAL ESTATE CREDITS