STANDARD REFORMING ARTICLES 9 and 13 OF THE STANDARD ON LIMITS OF DEPOSITS AND INVESTMENTS

The Board of Directors of the Superintendency of Banks and Other Financial Institutions,

WHEREAS

That Article 10, numeral 11 of Law No. 316, Law of the Superintendency of Banks and Other Financial Institutions, reformed by Law No. 552, Law of Reforms to Law No. 316, Law of the Superintendency of Banks and Other Financial Institutions; and Articles 57, numeral 1, 53 and 54 of Law No. 561, General Law of Banks, Non-Bank Financial Institutions and Financial Groups (General Law of Banks); empower the Board of Directors of the Superintendency of Banks and Other Financial Institutions to issue standards related to investments and deposits, as well as the limits for this type of operations in the country and abroad of supervised financial institutions;

In use of its powers;

HAS ISSUED

The following:

STANDARD REFORMING ARTICLES 9 and 13 OF THE STANDARD ON LIMITS OF DEPOSITS AND INVESTMENTS

CD-SIBOIF-655-1-NOV24-2010

FIRST: Reform Articles 9 and 13 of the Standard on Limits of Deposits and Investments, contained in Resolution No. CD-SIBOIF-650-2-OCT20-2010, of 20 October 2010, which shall read as follows:

Art. 9. Traded value (acquisition value).- The limits indicated in the previous article must be determined taking as a basis the traded value (Acquisition value) of the securities by depositary or issuer.

web: www.siboif.gob.ni

Managua, Nicaragua

SIBOIF Building - Km. 7 Carretera Sur

Telephone PBX: 2265-1555 P.O. Box 788

Email: correo@siboif.gob.ni

The foregoing, without prejudice to the provisions of the regulations governing the matter of concentration limits, with respect to the limits on active operations that a financial institution may carry out on a cumulative basis with its related and non-related parties.

Art. 13. Encumbrance of deposits and investments.- Financial institutions are prohibited from creating any type of encumbrance on deposits maintained in, or investments in securities issued by other entities. The following cases are excepted from the previous prohibition:

a) Encumbrances created for the purpose of obtaining direct financing or contingent operations requested by the depositing or investing institution, provided that such encumbrances are created and accounted for in accordance with the corresponding regulations.

b) Encumbrances required by the depositary entity for the confirmation of contingent operations, such as letters of credit, on behalf of clients of the depositing financial institution, provided that the aforementioned clients establish in favor of the depositing financial institution liquid collateral in an amount equal to or greater than the encumbered amount or that the operation is supported by a previously authorized loan.

In the case of deposits maintained in foreign financial entities not supervised by the Superintendency, qualified as acceptable depositary entities in accordance with this standard, the depositing financial institutions must obtain from the depositary entities, for direct remission by them to the Superintendent, a certification that the latter have been informed of the prohibition established in the previous paragraph and that they accept the deposits under the condition of complying with said prohibition. In the event that the depositary entity is a related party of the depositor, the former must also obtain, from the supervisory body of the depositary entity, for direct remission by said body to the Superintendent, a certification that said body has been informed of the prohibition established in this article.

SECOND: This standard shall enter into force upon its notification, without prejudice to its publication in the Gaceta, Diario Oficial. (f) A. Rosales B. (f) V. Urcuyo V. (f) Gabriel Pasos Lacayo (f) F. Reyes B. (f) illegible (Silvio Moises Casco Marenco) (f) U. Cerna B.

URIEL CERNA BARQUERO
Secretary Board of Directors SIBOIF