Electronic document digitally signed within the framework of Law No. 27269, Law on Digital Signatures and Certificates, its Regulations and amendments. The integrity of the document and the authorship of the signature(s) can be verified at https://apps.firmaperu.gob.pe/web/validador.xhtml

Superintendency Adjunct Resolution SMV No. 015-2024-SMV/11

Lima, 13 de marzo de 2024

Summary: The reconsideration appeal filed by Cartavio Sociedad Anónima Abierta against Superintendency Adjunct Resolution SMV No. 130-2023-SMV/11 is declared unfounded

Administrado :
CARTAVIO SOCIEDAD ANÓNIMA ABIERTA
Asunto
:
Administrative Sanctioning Procedure
Expediente N° :
2023029702

The Acting Adjunct Superintendent of Market Conduct Supervision

VISTO:

Administrative file No. 2023029702, which contains, among others, the reconsideration appeal of 30 December 2023, filed by Cartavio Sociedad Anónima Abierta (hereinafter, the Issuer) against Deputy Superintendency Resolution SMV No. 130-2023-SMV/11 of 6 December 2023 (hereinafter, the Challenged Resolution), which resolved to sanction it with a fine of 4.30 UIT equivalent to S/ 18,920.00 (Eighteen Thousand Nine Hundred Twenty and 00/100 Soles), and Report No. 51-2024-SMV/11.2 (hereinafter, the Report), issued by the General Directorate of Conduct Compliance (hereinafter, the IGCC) of the Deputy Superintendency of Market Conduct Supervision (hereinafter, the SASCM);

CONSIDERANDO:

I. FUNCIÓN Y COMPETENCIA DE LA SASCM

1. That, administrative file No. 2023029702 contains the documentation and information relating to an administrative sanctioning procedure, which has been brought to the attention of the SASCM in observance of the exercise of the supervisory function and the sanctioning power of the

Superintendency of the Securities Market – SMV, established by the Single Concordant Text of its Organic Law, Decree Law No. 26126 (hereinafter, the SMV Organic Law), and the Single Ordered Text of the Securities Market Law, Legislative Decree No. 861, approved by Supreme Decree No. 020-2023-EF (hereinafter, TUO LMV)1, as well as by the provisions of the Sanctions Regulations, approved by SMV Resolution No. 035-2018-SMV/01 (hereinafter, Sanctions Regulations), and in articles 42 and 43 of the Regulations on the Organization and Functions of the Superintendency of the Securities Market, approved by Supreme Decree No. 216-2011-EF (hereinafter, ROF-SMV), in the sense that it is a specific function of the SASCM to resolve reconsideration appeals against the resolutions it issues;

II. HECHOS

2. That, by means of the Challenged Resolution, it was resolved to sanction the Issuer with a fine of 4.30 UIT equivalent to S/ 18,920.00 (Eighteen Thousand Nine Hundred Twenty and 00/100 Soles), for having submitted out of time the Audited Consolidated Annual Financial Statements as of 31 December 2020;

3. That, by means of a document submitted on 30 December 2023, the Issuer filed a motion for reconsideration against the Challenged Resolution;

4. That, by means of Memorandum No. 040-2024-SMV/11 of 8 January 2024, the Office of the SASCM informed the IGCC of the motion for reconsideration filed against the Challenged Resolution;

5. That, the arguments of the motion for reconsideration filed by the Issuer have been evaluated in the Report by the IGCC, which has been submitted to the SASCM;

6. That, in compliance with the provisions of Article 18 of the Sanctions Regulation2, by means of Official Letter No. 189-2024-SMV/11 of 15 January 2024, the Report was sent to the Issuer, so that it may submit its arguments regarding it, within a period of five (5) business days, which were submitted and will be evaluated in this Resolution;

III. CUESTIONES A DETERMINAR

7. That, it is appropriate to determine whether or not to reconsider the decision in the Challenged Resolution;

[1] By means of Supreme Decree No. 020-2023-EF, published on 10 February 2023 in the Official Gazette El Peruano, the Single Ordered Text of the Securities Market Law, Legislative Decree No. 861, was approved.

[2] “Article 18.- Motion for reconsideration and appeal The sanctioned party may file a motion for reconsideration or appeal against the decision of the respective Deputy Superintendency, except in cases that are processed in a single instance, where only a motion for reconsideration may be filed. If a motion for reconsideration is filed, the Deputy Superintendent notifies the administered party of the report of the General Intendancy of Compliance containing the opinion on the motion filed, so that it may formulate its arguments within a period of no less than five (5) days, counted from the day following the aforementioned notification. (…)” (Underlining and emphasis added).

Electronic document digitally signed within the framework of Law No. 27269, Law on Signatures and Digital Certificates, its Regulations and amendments. The integrity of the document and the authorship of the signature(s) can be verified at https://apps.firmaperu.gob.pe/web/validador.xhtml

IV. ANÁLISIS

4.1. Of the Challenged Appeal

8. That, first, it must be specified that the administrative sanctioning procedures related to the timeliness in the submission of periodic and occasional information are to be processed in a single instance, that is, under the responsibility of the SASCM, as indicated in Article 43 of the ROF-SMV3;

9. That, in accordance with the provisions of articles 218 and 219 of the Single Ordered Text of Law No. 27444, General Administrative Procedure Law, approved by Supreme Decree No. 004-2019-JUS (TUO of the LPAG), the reconsideration appeal must be filed within a period of fifteen (15) days from notification of the challenged administrative act, and must comply with the requirements set forth in articles 1244, 2195, 2216 of the same Law;

10. That, in the present case, it is noted that the Challenged Resolution was notified to the Issuer on 7 December 2023 and the appeal

[3] «Article 43.- The specific functions of the Deputy Superintendency of Market Conduct Supervision are: (…) 14. To impose sanctions in a single administrative instance for the commission of infractions regarding the timeliness of the presentation of periodic and occasional information, whose compliance control corresponds to the Deputy Superintendency of Market Conduct Supervision; (…)».

[4] «Article 124.- Requirements of writings Every writing submitted to any entity must contain the following: 1. Full names and surnames, domicile and National Identity Document number or foreigner's card of the administered party, and, where applicable, the capacity of representative and of the person represented. 2. The concrete expression of what is requested, the factual grounds supporting it and, when possible, the legal grounds. 3. Place, date, signature or digital fingerprint, in case of not knowing how to sign or being impeded. 4. The indication of the body, entity or authority to which it is addressed, understood as such, as far as possible, the authority closest in rank to the user, according to the hierarchy, with competence to hear and resolve it. 5. The address of the place where notifications of the procedure are to be received, when different from the real domicile stated under numeral 1. This designation of domicile takes effect from its indication and is presumed to subsist, as long as its change is not expressly communicated. 6. The list of documents and annexes accompanying it, indicated in the TUPA. 7. The identification of the case file of the matter, in the case of procedures already initiated.»

[5] «Article 219.- Reconsideration appeal The reconsideration appeal shall be filed before the same body that issued the first act that is the subject of the challenge and must be supported by new evidence. In the cases of administrative acts issued by bodies that constitute a single instance, new evidence is not required. This appeal is optional and its non-filing does not prevent the exercise of the appeal».

[6] «Article 221.- Requirements of the appeal The written appeal must state the act being appealed and must comply with the other requirements set forth in article 124».

Electronic document digitally signed within the framework of Law No. 27269, Law on Signatures and Digital Certificates, its Regulation and amendments. The integrity of the document and the authorship of the signature(s) can be verified at https://apps.firmaperu.gob.pe/web/validador.xhtml

of reconsideration was filed on 30 December 2023, that is, within the established legal period;

11. That, it must be indicated that the other requirements for the filing of the reconsideration appeal, established by article 221 in conjunction with article 124 of the TUO of the LPAG, have been verified and complied with; therefore, the evaluation of this reconsideration appeal is appropriate;

4.2. Evaluation of the Reconsideration Appeal

12. That, next, each of the arguments contained in the appeal filed by the Issuer is analyzed and evaluated:

1. ON THE NATIONAL STATE OF EMERGENCY DUE TO COVID-19 AS A CASE OF FORCE MAJEURE

In this part of its appeal, the Issuer states the following:

“During the development of this procedure we have proven that my client does not have the status of repeat offender, since we have no record of sanctions; however, with the COVID-19 pandemic our staff was hit very hard, which caused the late compliance with the obligation to submit the Annual Audited Consolidated Financial Information Statements, since the staff responsible for handling said obligation was on medical leave, a situation that we consider has not been adequately assessed as a cause of force majeure, since it is only indicated that it was not considered as such because, when evaluating the national reality, the SMV did not consider it necessary to extend the deadlines provided in the schedule for compliance with said obligation, which does not exempt the entity from making a specific evaluation of the particular case, since at the time of the commission of the infraction (1 May 2021), the National State of Emergency declared due to COVID-19 did meet the requirements of being an extraordinary, unforeseeable and irresistible event, provided in article 1315 of the Civil Code, which caused the company to comply late with the obligation.”

It must be indicated that in its supplementary arguments brief, the Issuer reiterates what was stated in its reconsideration brief and summarily adds the following:

“(…) It seems that the absence of intent is not understood and that, rather, we are facing a case of fortuitous event and force majeure, defined in the very “pandemic regulations” that suspended and extended deadlines in all areas including specifically the ADMINISTRATIVE one.

(…)

We are facing an indolent position in which a requirement is placed before health and life, which even the Entity itself concludes does not generate a risk to the protected legal interest of investors or the market because it does not reflect significant movements or transactions that could alter the stock market system.

(…)

Both in the Resolution challenged by our reconsideration and in the report, which we now challenge, a statement of the “COVID” regulations is made

Documento electrónico firmado digitalmente en el marco de la Ley N° 27269, Ley de Firmas y Certificados Digitales, su Reglamento y modificatorias. La integridad del documento y la autoría de la(s) firma(s) pueden ser verificadas en https://apps.firmaperu.gob.pe/web/validador.xhtml

y, a pesar de su expreso conocimiento, se pretende reglamentar lo que debe entenderse por caso fortuito o fuerza mayor, para de esta forma concluir que la no presentación de la información merece una sanción confiscatoria de 4.30 UIT por no configurar supuestos de fuerza mayor”.

EVALUACIÓN

El Emisor sostiene nuevamente que la pandemia del COVID-19 ocasionó el incumplimiento en la presentación oportuna de su información financiera consolidada auditada correspondiente al ejercicio 2020, configurándose una causal de fuerza mayor, que a su criterio no ha sido valorada adecuadamente en la Resolución Impugnada. Asimismo, considera que no se ha realizado una evaluación específica al caso concreto.

Al respecto, corresponde indicar que en el considerando 19 de la Resolución Impugnada (p. 6 – 8) se evaluó detalladamente “(…) si al momento de la comisión de la infracción (1 de mayo de 2021), el Estado de Emergencia declarado por el COVID–19 calificaba como un supuesto de fuerza mayor, considerando las circunstancias del caso concreto”, concluyendo que el Emisor, dentro de un actuar diligente, contó con un tiempo prudente en que el debió acondicionar sus procedimientos internos a efectos de garantizar el cumplimiento de las obligaciones de presentación de información durante el ejercicio 2021, no configurándose en el caso concreto un supuesto de fuerza mayor.

In the present case, it is noted that at the time of the commission of the infringement (1 May 2021), the National State of Emergency declared by Supreme Decree N° 184-2020-PCM had been extended on five (5) occasions, by means of Supreme Decrees Nos. 201-2020-PCM, 008-2021-PCM, 036-2021-PCM, 058-2021-PCM and 076-2021-PCM7. It is also noted that the commission of the infringement (1 May 2021) occurred during the fourteenth month of the National State of Emergency.

In that sense, it is considered that at the time of the commission of the infringement (1 May 2021), the National State of Emergency was repeatedly present over time, that is, said event was of a permanent nature.

On this point, it must be taken into account that a case of force majeure must be transitory or temporary and is not of a permanent nature, since that would be contrary to the requirements of being extraordinary, unforeseeable and irresistible.

In relation to this, the Permanent Constitutional and Social Law Chamber of the Supreme Court of the Republic of Peru, in Casación N° 1764-2015 of 15 September 2015, has ruled on this matter in the following terms (p. 9 and 10):

"THIRD: Interpretation of article 1315 of the Civil Code (...)

[7] Supreme Decree No. 076-2021-PCM, in force as of 19 April 2021, extended the National State of Emergency for a period of thirty-one (31) calendar days, as of Saturday 1 May 2021.

3.6 In such context, for the qualification of the interruption of electric power supply due to force majeure that electric power concessionaire companies are obliged to communicate to users and the Supervisory Entity by virtue of article 87 of the Electric Concessions Law, consideration must be given to the unforeseeable, irresistible and extraordinary nature of the event (specified in the preceding rule N1), related to the frequency of the occurrence of the event (described in rule N2), in such a way that if the event that interrupts or varies the conditions of the electric supply becomes frequent, being repetitive, usual and common, it defeats the unforeseeability of the fact, insofar as the frequency and reiteration of the facts contributes to the possibility of foreseeing and the extraordinary character resides in the event being outside the ordinary and common; therefore the frequency will imply as a legal consequence that the event is not qualified by the competent Organism as one of force majeure, because the habitual and ordinary character of the event ceases to be unforeseeable and extraordinary; due to its reiteration, it can be foreseen, resulting foreseeable and ordinary, and the concessionaire must take adequate measures to avoid the event." (Resaltado agregado).

According to Cassation No. 1764-2015, if an event that becomes frequent, that is, repetitive, usual and common, the extraordinary and unforeseeable characters of the fact are defeated. Likewise, the frequency and reiteration of a fact allows it to be foreseen, resulting foreseeable and ordinary, and adequate measures must be taken to avoid it.

On the other hand, Superintendent Resolution No. 058-2011-EF/94.01.2 of 30 November 2011 has stated the following within the framework of the obligation to submit periodic or occasional information (p. 4):

"That, although GYRASA alleges being in the same circumstances that led the Administrative Tribunal to sanction it with a warning by Resolution No. 041-2009-EF/94.01.3 dated 30 January 2009, it must be taken into account that exceptional situations by their own nature do not subsist for a prolonged time, because if they did, they would leave their exceptional character to become a permanent situation;

That, this is so insofar as exceptionality is characterized by the occurrence of an unexpected situation that, in this case, would prevent compliance with the obligations to submit information in a timely manner. However, in the present case, the circumstances that GYRASA was going through were known in advance and the fact that they have been prolonged necessarily means that the company could have adopted preventive measures to comply with its obligation to submit information;

That, indeed, the extraordinary nature refers mainly to the fact that the circumstance that prevents compliance with an obligation is unexpected and unforeseeable, which does not apply in the case of GYRASA, since the situation it is going through is not strange to it, but, on the contrary, has been known for a considerable time;

That, therefore, to the extent that GYRASA was in a position to adopt suitable measures to avoid non-compliance with its obligations,

its situation cannot be classified as unforeseeable and, in that sense, the fine imposed by the sanctioning body cannot be annulled in application of the “Exceptional Situations” regulated in the Sanction Criteria; (…)” (Highlight added).

According to Superintendent Resolution No. 058-2011-EF/94.01.2, exceptional situations by their very nature do not persist for a prolonged time; if they did, they would lose their exceptional character and become a permanent situation. Likewise, the fact that the circumstance preventing compliance with the obligation to submit information is prolonged necessarily means that an issuer can adopt preventive measures to comply with said obligation.

As previously indicated, it is considered that at the time of the commission of the infringement (1 May 2021), the National State of Emergency was occurring repeatedly over time, that is, said event had a permanent character.

Thus, at the time of the commission of the infringement (1 May 2021), the National State of Emergency was a frequent event, and therefore did not meet the requirements of extraordinary, unforeseeable and irresistible; in that sense, it was a common and foreseeable event and it was possible to prevent said event from preventing compliance with the Issuer's obligation.

According to the foregoing, considering that the National State of Emergency was an event of a permanent or frequent nature at the time of the commission of the infringement (1 May 2021), in the present case a case of force majeure would not have been configured, and therefore the Issuer would not be exempt from liability for the infringement referred to in this report.

In accordance with the provisions of Superintendent Resolution No. 058-2011- EF/94.01.2, the fact that the National State of Emergency has been prolonged necessarily means that the Issuer could adopt preventive measures to comply with its obligation to timely submit financial information.

In this regard, account must be taken of the provisions of recital 19 of the Challenged Resolution (p. 8):

“(…) although the National State of Emergency was in force at the time of the commission of the infringement (1 May 2021), within the framework of diligent action, it is considered that the Issuer, in its capacity as issuer of securities, had a prudent time in which it should have adapted its internal procedures in order to guarantee compliance with the information submission obligations during fiscal year 2021.”

With regard to what was stated in the supplementary arguments, the foregoing paragraphs are reiterated and the following is specified:

Regarding the fact that no risk has been generated to the protected legal interest of investors or the market, nor are significant transactions involved that could alter the stock market system, it must be indicated that such circumstances do not affect the determination of the existence or non-existence of the infringement, but rather correspond properly to the analysis of the grading of the sanction for the

infringement previously determined; therefore, what is stated in this regard is not admissible.

As to the fact that the imposed sanction of 4.30 UIT would be confiscatory because a case of force majeure has not been configured, it must be indicated that, in accordance with the legal grounds set forth in the Challenged Resolution and in this resolution, in the present case there have been no cases of force majeure or fortuitous event, whereby the Issuer's liability for the imputed infringement was determined as a charge and the sanction was calculated in full observance of the provisions of article 3478 of the TUO LMV, article 359 of the Sanctions Regulation and the “Criteria applicable to the administrative sanctioning procedure for non-compliance with the rules governing the submission of periodic or occasional information”, approved by SMV Resolution No. 006-2012- SMV/01 and its amendments. Thus, it can be seen that the calculation of the sanction was made respecting the Principle of Reasonableness and the aforementioned rules, without incurring the confiscatory nature alleged by the Issuer.

For the foregoing reasons, it is considered that the reconsideration appeal must be declared unfounded in this regard.

2. ON THE REMEDIATION OF THE INFRINGEMENT

At this point of its appeal, the Issuer again maintains that the exemption from liability for voluntary correction, set forth in literal f) of numeral 1 of article 257 of the TUO of the LPAG, is applicable to this administrative sanctioning procedure, stating that “(…) because the Annual Audited Consolidated Financial Statements as of 31.12.2020, which should have been submitted by 30.04.2021, were sent on 10.05.2021 voluntarily and prior to any imputation of charges or the initiation of the administrative sanctioning procedure, we request that the ground for exemption from liability for voluntary correction provided in literal f) of numeral 1 of article 257 of the TUO of the General Administrative Procedure Law be evaluated.”

In this regard, the Issuer states: “(…) we invoke the analysis set forth in Cassation No. 8716-2022 LIMA, in which it is indicated that, since the plaintiff corrected the infringement incurred ‘voluntarily and prior to the inspection action and the imputation of charges, by virtue of the provisions of numeral 1 of article 255 of the aforementioned single text, which establishes the conditions exempting from liability for infringements, stating in literal f) as a ground for exemption the voluntary correction by the possible sanctioned party of the act or omission imputed as constituting an administrative infringement, prior to the notification of the imputation of charges referred to in subsection 3)

[8] “Article 347.- Minor Infringements.- For the commission of minor infringements, one of the following sanctions shall be imposed on the infringer: a) Warning; and, b) Fine of not less than one (1) UIT and up to twenty-five (25) UIT”.

[9] “Article 35.- SANCTIONS FOR MINOR INFRINGEMENTS For the commission of minor infringements, one of the following sanctions is imposed on the infringer: a) Warning; and, b) Fine of not less than one (1) UIT and up to twenty-five (25) UIT”.

of article 253, the plaintiff should be exempted from the fine imposed (…)’,”

Likewise, the Issuer states the following:

“Despite this, the challenged Resolution states that because the cited LAW ‘does not contemplate the case of any infringement that is not subject to correction’, article 28 of the Sanctions Regulations has provided that certain conducts in the securities market are not subject to voluntary correction, among which is the late submission of financial information, adding that said ‘Sanctions Regulations is a rule in force and of mandatory compliance for both the Issuer and this Deputy Superintendency’. That is, the Administration is acknowledging that the exception provided in article 28 of the Sanctions Regulations EXCEEDS THE SCOPE PROVIDED IN ARTICLE 257 OF THE TUO OF THE GENERAL ADMINISTRATIVE PROCEDURE LAW, incorporating a case not provided for in the aforementioned Law, distorting it; for let us remember that the LAW has only provided as a condition for applying voluntary correction that it be carried out before the inspection action and the imputation of charges, that is, before the initiation of the administrative sanctioning procedure.”

Finally, the Issuer states: “(…) we reiterate that the regulation implemented by the SMV departs from the provisions of literal f) of numeral 1 of article 257 of the TUO of the General Administrative Procedure Law, as well as violates the provisions of subsection 2, article ll of the aforementioned normative body, since it regulates conditions less favorable to the administered in the regime of special procedures, distorting the provisions of the LPAG.”

It should be noted that in its complementary arguments brief, the Issuer reiterates what was stated in its reconsideration brief and summarily adds the following:

“(…) Despite this, in the challenged Resolution it is stated that because the cited LAW “does not contemplate the assumption of any infraction that is not subject to correction”, article 28 of the Sanctions Regulation has provided that certain conducts in the securities market are not subject to voluntary correction, among which is the late submission of financial information, adding that said “Sanctions Regulation is a current norm and of mandatory compliance both for the Issuer and for this Deputy Superintendence”. That is, the Administration is recognizing that the exception provided in article 28 of the Sanctions Regulation EXCEEDS THE SCOPE PROVIDED IN ARTICLE 257 OF THE TUO OF THE GENERAL ADMINISTRATIVE PROCEDURE LAW. (…) The application of criteria of diffuse administrative control is not being requested, but rather due attention to normative hierarchy. (…) It is not about requesting that an involuntary conduct be rewarded, it is about not punishing a conduct that has been voluntarily corrected. If we accept the interpretation that it is not correctable, then ¿CARTAVIO S.A.A. by not sending the information within the deadline should have stopped sending it? May this question serve

Electronic document digitally signed within the framework of Law No. 27269, Law of Signatures and Digital Certificates, its Regulation and amendments. The integrity of the document and the authorship of the signature(s) can be verified at https://apps.firmaperu.gob.pe/web/validador.xhtml

to your Office so that it concludes whether or not our loyal and formal conduct constitutes the application of a criterion exempting from responsibility and to leave without effect one based on a regulation that fails to observe the T.U.O. of the LPAG and that transgresses constitutional principles and rights”.

EVALUATION

The Issuer again maintains that in this administrative sanctioning procedure the exemption from liability for voluntary correction, set out in literal f) of numeral 1 of article 257 of the TUO of the LPAG10, is applicable.

In this regard, it should be noted that the Challenged Resolution has been clear in stating in its recital 19 (p. 9) the following:

"(...) although it is true that literal f) of numeral 1 of article 257 of the TUO of the LPAG has recognized as a condition exempting from liability the voluntary correction of the act or omission charged as constituting an administrative infraction, prior to notification of the statement of charges; it is no less true that at the regulatory level, article 28 of the Sanctions Regulation has provided that certain conducts in the securities market are not eligible for voluntary correction, among which is the late submission of financial information."

In that sense, by the Principle of Legality contained in numeral 1.1, subsection 1, of article IV of the TUO of the LPAG, and by the Principle of Singular Inderogability of Regulations11, article 28 of the Sanctions Regulation, by which infractions related to the late submission of financial information are considered non-correctable, is mandatory for the administered and for this Deputy Superintendency.

By way of illustration, the legal grounds of the Report that justify the regulatory specification of the infractions that are considered non-correctable in the securities market are cited:

"Regarding this argument, in principle it must be recalled and established that the SMV is a specialized technical body attached to the Ministry of Economy and Finance whose purpose is to safeguard the protection of investors, the efficiency and transparency of the markets under its supervision, it being necessary to highlight that for this purpose, it has legal powers to issue the legal norms that regulate matters of the securities market, products market and collective funds system, as well as to supervise compliance with the aforementioned legislation by the natural and legal persons participating in said markets. Accordingly, the SMV approves the securities market regulations and defines the infringing conducts

[10] "Article 257.- Exemptions and mitigating circumstances of liability for infractions 1.- The following constitute conditions exempting from liability for infractions: (...) f) The voluntary correction by the possible sanctioned party of the act or omission charged as constituting an administrative infraction, prior to the notification of the statement of charges referred to in subsection 3) of article 255."

[11] Morón, J (2003). The defect of singular derogation of regulatory norms. In Ius Et Veritas, No. 26, Page 86 et seq.

Electronic document digitally signed within the framework of Law No. 27269, Law on Digital Signatures and Certificates, its Regulation and amendments. The integrity of the document and the authorship of the signature(s) can be verified at https://apps.firmaperu.gob.pe/web/validador.xhtml

of those who participate in the securities market. See for these purposes, literals a) and b) of article 1 and literals b) and d) of article 5 of the Organic Law of the SMV.

Well then, having stated the foregoing, it is appropriate to determine whether the SMV could or could not make differences from the point of view of administrative infractions in the securities market, based on the provisions of literal f) of numeral 1) of article 257 of the TUO of the LPAG referring to the exemption from liability for voluntary correction, also known in doctrine as an absolute excuse.

Although it is not intended to develop from a doctrinal perspective regarding this absolute excuse, it is necessary to point out that the SMV has among its powers that of determining which infringing conducts in the securities market could be eligible for correction and which conducts should not be within this exemption. For this, it has obviously taken into consideration the essential element of this exemption from liability, which is correction, it being understood that we are dealing with a typical, unlawful and culpable act.

A second aspect to take into consideration is that the LPAG does not expressly state that every administrative infraction can be the subject of an absolute excuse, since if that were so, the LPAG would become a distorting norm, which would seriously affect compliance with sectoral norms, through which the State is organized and functions.

A third aspect to be considered is that the LPAG is a norm transversal to general administrative procedures and that in accordance with the provisions of article 248 of the TUO of the LPAG, the administrative sanctioning power is indisputably governed in accordance with eleven (11) principles that every public entity must observe: legality, due procedure, reasonableness, typicity, non-retroactivity, concurrence of infractions, continuation of infractions, causality, presumption of lawfulness, culpability and non bis in idem. e.g. the structure of the SMV Sanctions Regulation fully complies with these principles.

In this sense, given that there are certain infringing conducts whose consequences cannot be repaired, the Sanctions Regulation has established, based on criteria of protection of the legal interest protected by the Securities Market Law, non-compliances that are not eligible for correction, which does not imply that this regulation entails conditions less favorable to the administered, even more so when the Sanctions Regulation fully observes those principles of administrative sanctioning power referred to in article 248 of the TUO of the LPAG.

In that regard, and in accordance with the provisions of numeral 247.2 of article 247 of the TUO of the LPAG12, the inclusion of these exceptions does not violate any of

[12] “Article 247.- Scope of application of this chapter (…) 247.2. The provisions contained in this Chapter apply on a supplementary basis to all procedures established in special laws, including tax procedures, which must observe

the principles of administrative sanctioning power referred to in article 248 of the TUO of the LPAG, nor does it contravene the structure and guarantees provided for the administrative sanctioning procedure. Likewise, it must be reiterated that the inclusion of these exceptions in no way implies imposing less favorable conditions on the administered.

Having said the foregoing, there is no legal impediment for the SMV, within its policy of applying the rules that regulate the activity of the securities market, like other State entities, to make distinctions as to in which cases of infraction conduct voluntary rectification does not apply as an exemption from liability. Read the provisions of the second paragraph of article 28 of the Sanctions Regulation: “The following are not subject to rectification for the purposes of the provisions of literal f) of article 27: a) The presentation of inaccurate or false information or documentation to the SMV and/or that is disclosed to the market; b) The contravention of market abuse rules, referring to the improper use of privileged information and market manipulation; c) The late or incomplete presentation, or the non-presentation of material facts, financial information and annual reports; d) The carrying out of activities not permitted or providing services or performing activities not authorized by the SMV, in cases where the regulations require having the respective authorization; e) The carrying out of activities that involve the disposal of funds, financial instruments or any asset owned by clients without their authorization or the breach of custody, administration or fiduciary duties that entities authorized by the SMV have.” (Highlight added).

This attribution, which has been supported through sanction resolutions, has the purpose of not generating impunity and preventing the accused in the administrative action from failing to comply with the deadlines for submitting information. If Cartavio's argument were accepted, a perverse incentive would be created not to comply with the rules on information transparency, turning these obligations into harmless or anodyne regulations and, therefore, these breaches would become a permanent violation of the protected legal interest, which is the transparency of the securities market, which is the backbone of any securities market. Thus, the maintenance and functioning of a transparent market would be seriously affected.

Well then, further to the above, it must be taken into account that the constitutive elements of the infraction of late presentation of audited consolidated financial information refer to a presentation of information outside the period established in the regulations on the matter, specifically article 8 of the Rules on Preparation and Presentation of Financial Statements and Annual Report by Entities Supervised by the Superintendency of the Securities Market, approved by SMV Resolution No. 016-2015-SMV/01

[…] necessarily the principles of administrative sanctioning power referred to in article 248, as well as the structure and guarantees provided for the administrative sanctioning procedure. Special procedures cannot impose less favorable conditions on the administered than those provided in this Chapter. (…)”

(hereinafter, Rules on Preparation and Presentation of Financial Statements)13, in force at the time the events occurred14. This conduct is typically a breach of a certain period established in the rule, therefore, when its breach occurs, rectification of the infraction is not possible, since the failure to present timely cannot be rectified with a late presentation. The infraction is non-rectifiable, based on the simple factual verification that the information was not provided within the established period. That is, if the negative effects of the conduct cannot be reversed, by definition, there can be no rectification of the conduct.

With regard to the requirements demanded for the application of voluntary rectification as well as the exemption from liability, it is important to mention the Practical Guide on the administrative sanctioning procedure, prepared by the General Directorate of Development and Legal Order of the Ministry of Justice and Human Rights (MINJUS), which states regarding voluntary rectification as an exemption from liability, the following15:

“2.4. Exemptions and mitigating circumstances of administrative liability When exercising its sanctioning power, the administrative authority must assess a series of circumstances linked to the specific case that will allow it to determine whether a case of exclusion of liability has been configured (exempting conditions) (…) in the cases where applicable.

(…)

The case provided for in literal f) has a nature different from the previous ones, since it provides for typical and unlawful conduct, with intent or negligence, in which the administered party decides to remedy its infraction before the administrative authority decides to exercise its sanctioning power. It is a case based on a punitive policy decision to protect the legal interest, preferring the spontaneous reparative action of the responsible administered party over carrying out preliminary proceedings and initiating the sanctioning procedure with all the costs that this involves.

[13] “Article 8.- Deadline for submission of annual consolidated financial statements of the parent company The parent company of issuing companies with securities registered in the RPMV, of legal entities registered in the RPMV, and of collective fund management companies is obliged to submit to the SMV its audited annual consolidated financial statements when said parent company or its securities are registered in the RPMV; and, if applicable, to the entities responsible for the operation of centralized trading mechanisms, on the day it has been approved by the corresponding corporate body, the deadline for said approval being 30 April of each year, except for parent companies of collective fund management companies, in which case the deadline is 15 May of each year.”

[14] By SMV Resolution No. 013-2023-SMV/01, published in the Official Gazette El Peruano on 10 December 2023, the Rules on the Preparation, Submission and Dissemination of Financial Statements, Annual Report and Management Report applicable to entities supervised by the Superintendency of the Securities Market were approved. SMV Resolution No. 013-2023-SMV/01 entered into force on 11 December 2023.

[15] MINJUS. Practical guide on the administrative sanctioning procedure. 2nd edition, approved by Directoral Resolution No. 002-2017-JUS/DGDOJ of 07 June 2017, p. 45 and 47.

It should be noted that this case consists not only of the cessation of the infringing conduct, but that, where applicable, the remediation implies the repair of the harmful consequences or effects to the protected legal interest derived from the infringing conduct. This is for the purpose of not generating impunity and preventing the accused from appropriating the benefit unlawfully obtained through the infraction.” (Highlight added)

From the text it is inferred that for the application of voluntary remediation as an exemption from liability, the administrative authority must not only evaluate the timeliness and voluntariness of the remediation, aspects to which Cartavio refers, but, as has been indicated, whether the infringing conduct is remediable, an aspect to which Cartavio does not refer.

On this matter, Hebert Tassano Velaochaga states: “Under this perspective, not only will the concurrence of the described requirements be evaluated (before the start of the PAS), but also the remediable nature of the detected non-compliance, from the nature of the infringing conduct and from the effects it produces, taking into account that there are infractions that, due to their own nature or by express legal provision, are not susceptible to being remedied.” 16 (Highlight added)

As can be seen, this author not only highlights the importance of evaluating the remediable nature of the infringing conduct for the application of voluntary remediation as an exemption from liability, but also recognizes that due to the very nature of the infraction or express legal provision there may be cases in which remediation does not apply.

In this sense, taking into account what has been indicated, the infraction that is the subject of this administrative sanctioning procedure is not capable of being remedied, since it is not possible to repair the consequences or effects of the non-compliance in the timely submission of audited consolidated financial information, given the nature of the infringing conduct. As previously indicated, the constitutive elements of the infraction of late submission of audited consolidated financial information refer to the submission of information outside the deadline established in the Rules on Preparation and Submission of Financial Statements. This conduct is typically a breach of a certain deadline established in the rule, so the lack of timely submission could not be remedied with a late submission.

Without prejudice to the foregoing, it is appropriate to indicate that according to the Criteria applicable to the administrative sanctioning procedure for non-compliance with the rules regulating the submission of periodic or occasional information, approved by SMV Resolution No. 006-2012-SMV/01, in force at the time the events occurred17, the lack of timely submission

[16] TASSANO VELAOCHAGA, Herbert. The voluntary remediation of infractions as an exemption from liability. The case of the SUSALUD Tribunal. Dimensión Mercantil, 04 June 2022. Link: https://dimensionmercantil.pe/la-subsanacion-voluntaria-de-infracciones-como-eximente-de-responsabilidad-el-caso-del-tribunal-de-sanciones-de-susalud/

[17] By SMV Resolution No. 007-2023-SMV/01, published in the Official Gazette El Peruano on 08 September 2023, the Graduality Regime for Sanctions for late submission was approved

of periodic information, as is the case of financial information, constitutes an administrative infraction of an instantaneous nature18, and that precisely the non-remediable character is typical of this class of infractions, as pointed out by Natalia Zuñiga Arbildo:

“Thus, cases may arise in which the impossibility of reversing the effects of an infraction is impossible. Basically, this would happen with those infractions with instantaneous effects, in which “the injury or endangerment of the protected legal interest occurs at a specific moment, in which the infraction is consummated, without producing a lasting unlawful situation.” (BACA ONETO, Victor Sebastián. The statute of limitations of infractions and their classification in the General Administrative Procedure Law. Derecho & Sociedad Journal No. 37, Lima, 2012, p. 268).”19 (Highlight added).

In that sense, it can be argued that there is no remediation, since there is no spontaneous cessation of the conduct constituting the breach, because its submission outside the established deadline will always be untimely.

With regard to Cassation No. 8716-2022-LIMA issued by the Fifth Transitory Constitutional and Social Law Chamber of the Supreme Contentious Administrative Court, to which Cartavio refers to support that the SMV must recognize voluntary remediation in the infraction subject of this administrative sanctioning procedure, and which was previously submitted as part of its arguments before the SASCM, it is reiterated that the Sanctions Regulation, by having determined which infracting conducts are not capable of being remedied, does not contravene any of the principles of the administrative sanctioning power.

With regard to Cartavio's argument, that the regulation implemented by the SMV violates the provisions of numeral 2 of article ll of the Preliminary Title of the TUO of the LPAG20, given that “it regulates conditions less favorable to the

[18] of financial information, annual report and material events, and the Criteria applicable to the administrative sanctioning procedure for non-compliance with the rules regulating the submission of periodic or occasional information, approved by SMV Resolution No. 006- 2012-SMV/01, were repealed. SMV Resolution No. 007-2023-SMV/01 entered into force on 01 January 2024. 18 “4.1. CRITERIA (…) Fourth Criterion: Repetition and/or continuity in the commission of the infraction (…) The criterion of continuity in the commission of the infraction is not applicable to this type of infractions since the failure to timely submit periodic or occasional information constitutes an administrative infraction of an instantaneous nature. (…)”

[19] ZUÑIGA ARBILDO, Natalia. Apologizing is not enough: OEFA's interpretation regarding the ground for exemption from liability for voluntary correction. Link: https://agnitio.pe/articulo/no-basta-con-pedir-perdon-la-interpretacion-de-oefa-respecto-a-la-causal-de-eximente-de-responsabilidad-por-subsanacion-voluntaria/

[20] "Article II.- Content (…) 2. Laws that create and regulate special procedures may not impose conditions less favorable to the administered than those provided in this Law. (…)"

administered in the regime of special procedures", it is appropriate to reiterate that the fact that the SMV has determined or differentiated in which infractions voluntary correction does not apply does not violate or transgress the provisions of the aforementioned norm. The reasoning is simple, since this determination, which responds to a sectoral policy, does not impose conditions less favorable to the administered, insofar as, as has been stated, it complies with the standard of a norm that safeguards the principles of administrative sanctioning power and, by way of addition, with the general principles of administrative law; therefore, the SMV, when regulating its special procedures, complies with observing the administrative principles, as well as the rights and duties of the subjects of the procedure, established in the LPAG.

It should be noted that various administrative entities, such as the Supervisory Agency for Investment in Energy and Mining (OSINERGMIN)21, the Supervisory Agency for Private Investment in Telecommunications (OSIPTEL)22, the National Superintendence of Labor Inspection (SUNAFIL)23, among others, have specially regulated, according to the nature of each sector, the application of the exemption from liability for voluntary correction, so it is not only the SMV that has determined this difference.

Furthermore, what the SMV has determined regarding which infractions are or are not correctable is also in accordance with the provisions of numeral 8 of article 86 of the TUO of the LPAG, which provides that it is the duty of authorities to interpret administrative norms in the way that best serves the public purpose to which they are directed, reasonably preserving the rights of the administered.

In the present case, the public purpose involved is the protection of investors, the efficiency and transparency of the securities market, the correct formation of prices and the dissemination of all information necessary for such purposes, in accordance with the first paragraph of article 1 of the Organic Law of the SMV24. Accordingly, it is not possible to ensure compliance with this purpose by assuming that every breach in the securities market should be correctable, without considering exceptions, taking into account that there are certain cases in which it is not possible to correct the infraction, by its very nature.

[21] https://www.gob.pe/institucion/osinergmin/normas-legales

[22] https://www.gob.pe/institucion/osiptel/normas-legales?filter%5Bterms%5D=sanci%C3%B3n&filter%5Btype%5D=&sheet=

[23] https://www.gob.pe/institucion/sunafil/normas-legales/1996815-190-2021

[24] “Article 1. Definition, purpose and functions of the Superintendence of the Securities Market (SMV) The Superintendence of the Securities Market (SMV) is a specialized technical body attached to the Ministry of Economy and Finance whose purpose is to ensure the protection of investors, the efficiency and transparency of the markets under its supervision, the correct formation of prices and the dissemination of all information necessary for such purposes, through regulation, supervision and promotion. It has legal personality under internal public law and enjoys functional, administrative, economic, technical and budgetary autonomy, constituting a budgetary unit. Its operation is governed in accordance with the provisions contained in this Law and its organization and functions regulations (…)”.

On the other hand, it is important to indicate that it is reasonable that the special rules of the administrative entities are those that establish the exceptions in which voluntary rectification does not apply as an exemption from liability, given the diversity of administrative infractions that the various administrative entities may impose.

In this regard, Natalia Zuñiga Arbildo25 states the following:

“It is clear that although the law does not make distinctions (ie. it would be impossible for the law to cover all cases of potential infractions), practice does limit the possibility of rectifying, and there are situations in which it is not appropriate. Thus, cases may arise in which it is impossible to reverse the effects of an infraction (…)” (Underlining and highlighting added)

“(…) it would seem that it is up to each entity to carry out an analysis of each infraction, in order to verify whether the effects of the infraction in question can be reversed through subsequent actions, called rectification. Or, if, on the contrary, we are facing an infraction in which rectification is materially impossible to comply with (…)” (Highlight added).

13. With regard to the complementary arguments, the foregoing paragraphs are reiterated and additionally the following is stated:

(i) The Issuer alleges that the Challenged Resolution, by stating that article 28 of the Sanctions Regulation is mandatory for both the Issuer and the SASCM, would supposedly be recognizing that the exception provided for in said article exceeds the scope of article 257 of the TUO of the LPAG. In this regard, it should be noted that this lacks basis, since the mention of the mandatory nature of the Sanctions Regulation could in no way imply, under any interpretation, that it is being recognized that it exceeds the scope of article 257 of the TUO of the LPAG or that it establishes less favorable conditions for the administered. The mention of the mandatory nature of article 28 of the Sanctions Regulation was intended to make clear that said rule is in force in the Peruvian legal system and that, therefore, its compliance is required by the administrative authorities from the subjects included under its scope of application.

(ii) Additionally, the Issuer states that it does not request diffuse administrative control but does request due attention to the normative hierarchy. In this regard, the Issuer is reminded that the action of preferring the application of a rule with legal rank over what is stated in a regulatory rule on the grounds of an alleged violation of constitutional or legal precepts is to exercise diffuse control of the rules, which is prohibited in the administrative venue, as indicated in the Challenged Resolution.

(iii) Finally, with regard to the fact that conduct that has been voluntarily rectified should not be punished and to the question “Should CARTAVIO S.A.A., by not sending the

[25] ZUÑIGA ARBILDO, Natalia. Op. cit. Link: https://agnitio.pe/articulo/no-basta-con-pedir-perdon-la-interpretacion-de-oefa-respecto-a-la-causal-de-eximente-de-responsabilidad-por-subsanacion-voluntaria/

information within the deadline, stop sending it?”; it must be reiterated that the timely presentation of financial information is not rectifiable through a late presentation of the information as previously detailed in the Challenged Resolution and in this Resolution.

And in response to the question raised by the Issuer, it is imperative to remember that, in its capacity as a participant in the securities market, it is its obligation to know the rules referring to the deadline for the presentation of periodic and occasional information, as well as the consequences that the violation of said rules generates for the Issuer and for the securities market. The question raised by the Issuer reflects nothing but a clear level of ignorance with regard to the securities market regulations and the very functioning of the market, in which transparency of information is one of the key pillars in the efficient allocation of financial resources between investors and Issuers; and where the role of the information disclosed to the market by the Issuers themselves is crucial for the correct pricing of securities. Therefore, the late submission of periodic or occasional information is considered a minor infraction, while the non-submission (omission) of said information is classified as a serious infraction in numeral 2.1026 of Annex I of the Sanctions Regulation and corresponds to a fine of no less than twenty-five (25) UIT and up to fifty (50) UIT, in accordance with article 34 of the Sanctions Regulation;

Based on the foregoing, it is considered that the reconsideration appeal must be declared unfounded in this respect.

14. That, considering the analysis carried out in the Report and the evaluation carried out by this Deputy Superintendency, it is considered that the reconsideration appeal must be declared unfounded in its entirety in consideration of the arguments set forth in this Resolution; and,

In accordance with the provisions of numerals 14, 22 and 36 of article 43 of the Regulation of Organization and Functions of the Superintendency of the Securities Market, approved by Supreme Decree No. 216-2011-EF;

RESOLVES:

Article 1.- Declare UNFOUNDED the reconsideration appeal filed by Cartavio Sociedad Anónima Abierta against Deputy Superintendency Resolution SMV No. 130-2023-SMV/11 of 06 December 2023.

Article 2.- Confirm Deputy Superintendency Resolution SMV No. 130-2023-SMV/11 of 06 December 2023, which sanctioned Cartavio Sociedad Anónima Abierta with a fine of 4.30 UIT equivalent to S/ 18,920.00 (Eighteen Thousand Nine Hundred Twenty and 00/100 Soles), for having submitted late the Audited Consolidated Annual Financial Statements as of 31 December 2020.

[26] “Failure to communicate material facts or failure to submit audited individual or consolidated financial information, interim individual or consolidated financial statements, management report or special audit report and annual reports”.

Article 3.- Declare the administrative remedy exhausted.

Article 4.- Transcribe this to Cartavio Sociedad Anónima Abierta.

Carlos Rivero Zevallos
Deputy Superintendent (e)
Deputy Superintendency of Market Conduct Supervision