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Superintendency Resolution Adjunta SMV No. 062-2024-SMV/11

Lima, 26 September 2024

Summary: Sanction Electro Sur Este S.A.A. with a fine of 2.1 UIT for having incurred in one (1) infraction of a serious nature typified in subsection 2.19 numeral 2 of Annex I of the Sanctions Regulations.

Administered : ELECTRO SUR ESTE S.A.A.
Subject
:
Administrative Sanctioning Procedure of double instance administrative Main Type : Subsection 2.19 of numeral 2 of Annex I of the Regulations of Sanctions SERIOUS INFRACTION File No. : 2024008708

The Deputy Superintendent of Supervision of
Market Conduct

VIEWS:

Administrative file No. 2024008708 containing the administrative sanctioning procedure initiated by the General Intendancy of Conduct Compliance of the Superintendency of the Securities Market – SMV (hereinafter, the IGCC), against Electro Sur Este S.A.A. (hereinafter, Issuer); as well as Report No. 959-2024-SMV/11.2 of 04 September 2024 (hereinafter, the Report), issued by said IGCC;

CONSIDERING:

I. FUNCTION AND COMPETENCE OF THE SASCM

1. That, the IGCC —instructing body of the administrative sanctioning procedures (hereinafter, the PAS) referred to in the present case—, has brought to the knowledge of the Deputy Superintendency of Supervision of Market Conduct of the SMV (hereinafter, SASCM), the PAS of administrative file No. 2024008708 in order for it to issue a decision as sanctioning body of first administrative instance in said PAS. In this way, the SASCM assumes competence in observance of the exercise of the supervision function and the sanctioning power of the Superintendency of the Securities Market – SMV established by the Single Concorded Text of its Organic Law, Legislative Decree No. 26126 (hereinafter, LOSMV), and the Single Ordered Text of the Securities Market Law, Legislative Decree No. 861, approved by Supreme Decree No. 020-2023-EF- 11 (hereinafter, TUO LMV); 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 of Organization and Functions of the Superintendency of the Securities Market – SMV, approved by Supreme Decree No. 216-2011-EF (hereinafter, ROF-SMV), in the sense that it is a specific function of the SASCM to impose sanctions in first administrative instance for the commission of infractions whose compliance control corresponds to the referred Deputy Superintendency. Likewise; the SASCM has the powers to issue corrective measures aimed at reversing the situation altered by the commission of the infraction;

2. That, the present PAS corresponds to two (2) administrative instances in accordance with article 15 of the Sanctions Regulations, and to the provisions of numeral 26 of article 12 of the ROF-SMV, which establish that the Superintendent of the Securities Market resolves appeals against resolutions issued in first instance by the Deputy Superintendent of the SASCM, with the exception of single-instance procedures;

II. FACTS, CHARGES AND DEFENSES OF THE ADMINISTERED

2.1 Facts

3. That, it was evaluated whether the Issuer complied with its obligation to inform the registration date observing the deadlines established in the Regulations on Cut-off Date, Registration and Delivery, approved by CONASEV Resolution No. 069-2006- EF/94.10 (hereinafter, Dates Regulations);

2.2 Charges

4. That, as a result of said evaluation, by Official Letter No. 890-2024-SMV/11.2 of 02 April 2024 (hereinafter, the Charge Letter), a charge was formulated against the Issuer because it would not have complied with informing the registration date observing the deadlines established in the Dates Regulations;

2.3 Defenses

5. That, by writing presented on 16 April 2024, the Issuer presented its corresponding defenses, stating as the sole defense argument that the fact of importance for which the registration and delivery dates of 25 and 27 April 2023, respectively, were communicated; was sent via MVNet on 04 April 2023 and not on 05 April as appears in the reception charge.

[1] By 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.

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The discrepancy in dates, the Issuer attributes to a system error;

6. That, in that sense, the Issuer considers that the alleged error is evidenced in the date that appears in the material fact indicating as the date of submission, 04 April 2023. The Issuer indicates that said date cannot be typed or modified, therefore, if the submission charge was recorded with a later date, it was an error that must be attributed to the MVNet system and not to the Issuer;

7. That, finally, as part of its arguments, the Issuer attached an email that would have been sent on 11 April 2024 to atencionSMV@smv.gob.pe, by means of which it requests a report on the occurrence or not of any incident or failure in the MVNet System on 04 April 2023;

8. That, by Supreme Decree No. 004-2019-JUS, the Single Ordered Text of the General Administrative Procedure Law, Law No. 27444 (hereinafter, TUO de la LPAG), was approved, which contains common rules for the actions of the administrative function of the State and regulates all administrative procedures developed in the entities, including special procedures. Likewise, numeral 3) of article 248 of the TUO de la LPAG, indicates the criteria regarding the graduation of the sanction: (a) The illicit benefit resulting from the commission of the infraction, (b) The probability of detection of the infraction, (c) The severity of the damage to the public interest and/or protected legal interest, (d) The economic damage caused, (e) The recidivism for the commission of the same infraction within the term of one (1) year from the date the resolution that sanctioned the first infraction became final, (f) The circumstances of the commission of the infraction, and (g) The existence or not of intentionality in the conduct of the offender;

9. That, the charge formulated and the criteria regarding the graduation of the sanction have been subject to evaluation in the Report, which has been brought to the attention of the SASCM;

10. That, in observance of the provisions of numeral 5 of article 255 of the TUO de la LPAG, by means of Oficio No. 3969-2024-SMV/11 of 10 September 2024, the Report was sent to the Issuer, so that it formulates its allegations within the term of five (5) business days, that is, until 16 September 2024;

11. That, on 16 September 2024, within the term to present allegations to the Report, the Issuer presented a document by means of which it expressly acknowledges responsibility regarding the infraction subject to charge;

III. ISSUES TO BE DETERMINED

12. That, in the present PAS it corresponds to determine the following:

(i) Whether the Issuer incurred or not in the infraction indicated in the Charge Letter and Report;

(ii) Whether it corresponds or not to impose a sanction on the Issuer;

IV. ANALYSIS

4.1 Applicable regulations

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Financial information

13. That, the second paragraph of article 13 of the TUO de la LMV establishes the following: “(…) The legal entities registered in the Registry and the issuer of registered securities are obliged to present the information that this law and other general provisions establish, being responsible for the veracity of said information”;

14. That, according to the above, article 7 of the Regulation of Dates, states: “The issuer must inform the registration date within the term of fifteen days from the corporate agreement or, if applicable, from the corresponding registration in the Public Registries. Additionally, whether it is a registrable act or a non-registrable act, the registration date must be informed at least twelve days before the day determined by the issuer as the registration date. Said term does not include the day of communication as a material fact nor the day established as the registration date. The delivery date that is not related to a registration date must be informed within the term of fifteen days after the corresponding registration in the Public Registries. The delivery date referred to in the preceding paragraph must be informed as a material fact at least five days before the day determined by the issuer as the delivery date. Said term does not include the day of communication as a material fact nor the day established as the delivery date.” (Underlines added);

15. That, for the purposes of determining the possible sanction, this infraction is typified in subsection 2.19 of numeral 2 of Annex I of the Regulation of Sanctions, which states that it constitutes a serious infraction: “Informing the registration and delivery dates without observing the terms and other provisions established in the regulation of the matter”;

16. That, according to article 38 of the Regulation of Sanctions, said infraction is sanctionable with a fine greater than twenty-five (25) UIT and up to fifty (50) UIT;

4.2 Evaluation of the case

17. That, in administrative file No. 2024008708, which contains the documentation of this PAS, it is noted that by Memorandum No. 3067-2023-SMV/11.1 of 24 July 2023 (File No. 2023031695), the General Superintendence of Conduct Supervision (hereinafter, IGSC) —an organ of the Superintendency of the Securities Market – SMV which has among its functions and powers the supervision of compliance with the rules applicable to audit firms contracted by companies with securities registered in the RPMV, evaluating indications of possible infractions, and forwards, for its consideration, the respective reports of indications of infraction, to the IGCC—, forwarded to the IGCC the result of its evaluation, and specifically that referred to the present case;

18. That, it must be borne in mind that the procedures and legal forms with which the IGSC conducts its inspection and/or supervision activity and, upon concluding it with a report of indications of infraction, determine that its pronouncement or opinion on a specific supervision matter —which may even contain a decision, such as, for example, the adoption of corrective measures— is an opinion on the merits of the matter; it being necessary to specify that said opinion and the IGSC's report of indications of infraction are not binding on the IGCC, as established in the second paragraph of article 9 of the Sanctions Regulation2 3 ;

19. That, in this way, it follows that in the evaluation of the facts related to this PAS, two (2) other organs of the Superintendency of the Securities Market – SMV, functionally independent from each other and from this Office, have intervened and participated prior to the issuance of this Resolution; first the IGSC, which in due course reported the indications of infraction, and then the IGCC, which, as a result of its evaluation, formulated the Statement of Charges and the Report; and at this point of the PAS it corresponds to the Office of the SASCM to issue a pronouncement containing its decision regarding the aforementioned charges, it being necessary to state that, by its nature, as previously indicated, it will be a first-instance administrative decision;

20. That, in relation to the arguments presented by the Issuer, the following must be stated:

(i) As indicated above, the Issuer stated as its sole argument that the material fact for which the registration and delivery dates of 25 and 27 April 2023, respectively, were communicated; was sent via MVNet on 04 April 2023 and not on 05 April 2023 as appears in the receipt acknowledgment. The Issuer has attributed this discrepancy to an error in the SMV's MVNet system.

If the statement were true, the Issuer would not be in breach since, if it had communicated it as a material fact on 04 April 2023, it would have complied with the second paragraph of article 7 of the Dates Regulation, which states that the registration date must be informed

[2] Article 245 of the TUO of the LPAG states as forms or modes in which the inspection activity could be concluded the following: 1) Record of conformity of the activity carried out by the administered party; 2) Recommendation of improvements or corrections to the activity carried out by the administered party; 3) The warning of the existence of non-compliances not susceptible of warranting the determination of administrative responsibilities; 4) The recommendation to initiate a procedure in order to determine the corresponding administrative responsibilities; 5) The adoption of corrective measures and 6) Other forms as established by special laws.

[3] «Article 9.- PRELIMINARY INQUIRIES AS A CONSEQUENCE OF SUPERVISION ACTIONS (…) When said organs conclude that there are sufficient indications of possible administrative infractions, they forward the corresponding reports to the General Intendancies of Compliance, which determine whether or not to initiate an administrative sanctioning procedure. If applicable, the General Intendancies of Compliance may carry out additional inspections or investigations of the reported indications. In the case of possible infractions in the scope of the Regulation of the Financial Participatory Financing Activity and its Managing Companies, the preliminary inquiries are carried out by the General Intendancy of Research and Innovation, a dependency that, if there are sufficient indications of possible administrative infractions, will determine whether or not to initiate an administrative sanctioning procedure. (…)».

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at least twelve days before the day determined by the issuer as the registration date.

Since the Issuer had stated that on 11 April 2024, it sent an email to atencionSMV@smv.gob.pe requesting a report on the occurrence or not of any failure or incident, the IGCC proceeded to contact the OTI to learn the status of the request. However, the OTI indicated that the request had not been executed since that class of requests had to be made by the Issuer's authorized personnel and not by personnel external to it.

(ii) In view of said situation, Memorandum No. 2498-2024-SMV/11.2 of 24 June 2024 was sent, requesting technical support from the OTI so that it could indicate whether or not there was an error in the system as alleged by the Issuer in its arguments, so that by Memorandum No. 2827-2024- SMV/09 of 09 July 2024, the OTI forwarded its Technical Report in order to analyze the actions that the Issuer carried out in the MVNet System on 04 and 05 April 2023. In this regard, part of the OTI's Technical Report is transcribed:

Image No. 1: Technical Report of the OTI of 09 July 2024

“Day 04/04/2023

The last actions carried out on this date were the creation of the letter CartaB40005_3_20230404153732.pdf and access to the “Sign and send” option at 15:37:40 pm (events highlighted in yellow)

After this time, no other actions have been carried out in the system.

Day 05/04/2023

On this date, the system is accessed for the first time at 09:35:14 am (event “Successful Login to MVNET”)

The following activities carried out in the system are as follows:

“Sign and send” is accessed at 09:35:18 am (event “Entry to Sign and Send”, highlighted in green)

The option to sign the prepared document is entered at 09:35:42 am (event “Entry to Sign Information”)

The system shows confirmation of the document signature at 09:36:01 am (event “Sign Information”, highlighted in orange)

The user initiates the information sending process at 09:36:23 am (event “Start of Information Sending”)

The system generates the receipt of the information sent at 09:36:30 am (event “Generation of MVNet Receipt”)

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What is stated in the technical report of the OTI clearly shows that what the Issuer said in its defense is not correct and that the reason why the material fact states the date as 04 April 2023 is because the Issuer, in effect, generated the structured letter of the material fact on 04 April 2023 at 15:37 hours (“Generation of structured PDF letter”), however, said document was not signed or sent on the same date, as can be seen from the events of 04 April 2023, described in the Technical Report of the OTI.

(iii) Furthermore, as can be observed from the events of 05 April 2023, on that day no other structured PDF letter was generated with the correct date (05 April 2023). On the contrary, the letter of 04 April 2023, generated the previous day, was signed. According to the Technical Report, the signing and sending of the material fact occurred on 05 April 2023 at 09:36 hours, as indicated in the Receipt of Information, which is inserted below:

Image No. 2: Receipt of Information of 05 April 2023

Receipt of the Material Fact of 05 April 2023 (File No. 2023015346)

21. That, likewise, by means of a document presented on 16 September 2024, the Issuer, within the period granted to formulate arguments to the

PERU Ministry of Economy and Finance
SMV
Superintendency of the Market of Securities

“Decade of Equal Opportunities for Women and Men” "Year of the Bicentennial, of the consolidation of our Independence, and of the commemoration of the heroic battles of Junín and Ayacucho"

instruction report, expressly acknowledged responsibility for the infraction;

22. That, consequently, the conduct constituting the infraction is proven by having communicated the material fact that contained the registration date, on 05 April 2023, that is, without observing the period established by the Regulation of Dates; and the administrative responsibility of the Issuer is determined, so it corresponds to analyze the proposed sanction in accordance with the provisions of the principle of reasonableness and the sanction criteria, which will be evaluated in the following section;

V. DETERMINATION OF THE SANCTION

23. That, it should be specified that failures to inform registration dates without observing the periods are typified in numeral 2.19 of subsection 2 of Annex I of the Regulation of Sanctions, approved by SMV Resolution No. 035-2018-SMV/01 (hereinafter, Regulation of Sanctions), which states that it constitutes a serious infraction: “Informing registration and delivery dates without observing the periods and other provisions established in the regulation of the matter”. (Underline added);

24. That, according to article 34 of the Regulation of Sanctions, said infraction is punishable with a fine greater than twenty-five (25) UIT and up to fifty (50) UIT;

25. That, in order to determine the sanction to be imposed on the Issuer, the sanction criteria established in article 344 of the TUO of the LMV, numeral 3) of article 248 of the TUO of the LPAG and the provisions of article 25 of the Sanctions Regulation (hereinafter, Sanction Criteria) must be taken into account;

SANCTION CRITERIA

26. That, with respect to the seriousness of the damage to the public interest and/or protected legal interest, it must be indicated that according to the explanatory memorandum of the Dates Regulation, the obligations contained therein are of an informative nature, so in accordance with the principle of information quality (article 13 of the TUO of the LMV), the information must be truthful, sufficient and timely. In this way, investors are protected and the asymmetry in access to information is reduced; therefore, the protected legal interest is the transparency of the securities market, which, when transgressed, affects the public interest. In that sense, it is required that securities market participants publish or submit information under the standards of truthfulness, sufficiency and timeliness;

27. That, in relation to the sanction antecedents, article 25 of the Sanctions Regulation establishes that the antecedents of the offender are the sanctions imposed on them by the SMV and that became final within the four (04) years prior to the moment of the commission of the infraction to be sanctioned; likewise, the commission of the same infraction in the year prior to the infraction to be sanctioned is not considered an antecedent, since this commission would be classified as recidivism. Accordingly, it has been verified that the Issuer has sanction antecedents, as indicated in the Report;

28. That, in relation to recidivism for the commission of the same infraction, literal b) of article 25 of the Sanctions Regulation establishes that the final sanction imposed by the Superintendency of the Securities Market – SMV within a period of one (1) year prior to the commission of the infraction to be sanctioned is taken into account. In this regard, it has been verified that there is no recidivism on the part of the Issuer in relation to the infraction referred to reporting the registration dates without observing the deadlines established in the regulations, according to what was evaluated in the Report;

29. That, in relation to the circumstances of the infraction, it has been verified that the Issuer, by establishing 25 April 2023 as the registration date, would not have complied with the second paragraph of article 7 of the Dates Regulation, since between the day on which it communicated the registration date (05 April 2023) and the date established as the registration date (25 April 2023), only eleven (11) days elapsed, when the Dates Regulation states twelve (12) days;

30. That, with respect to the economic harm caused and its repercussion on the market, it has not been evidenced that the non-compliance has produced a quantifiable harm, understood as an economic damage caused to one or several investors;

31. That, as regards the illicit benefit resulting from the commission of the infraction, it can be stated that there are not sufficient elements to indicate that the Issuer obtained an illegal benefit as a consequence of the commission of the infractions under evaluation;

32. That, on the other hand, with respect to the probability of detection of the infraction, it must be noted that the probability of detection of the infraction committed is high, because this class of non-compliances are detected by the SMV itself through periodic control actions;

33. That, with respect to the existence or not of intent in the conduct of the offender, it is considered that the Issuer's action was not intentional, but negligent, by not having acted with due diligence in complying with its obligations;

APPLICATION OF A SANCTION CORRESPONDING TO A CLASSIFICATION LOWER THAN THE ONE PROVIDED FOR

34. That, the last paragraph of article 25 of the Sanctions Regulation states that, when from the evaluation of the aforementioned criteria it is noted that there is no proportionality between the sanction to be imposed and the imputed facts, by exception and by means of a reasoned resolution, a sanction corresponding to a classification lower than the one provided for may be imposed;

35. That, in the present PAS and in the assessment of the sanction criteria, that is, that although the Issuer has a history of sanctions, it does not have the condition of a repeat offender, no economic harm or serious impact on the market is observed, it has not obtained an illegal benefit and there was no intent in the commission of the infringement; and above all, its error in calculating the twelve days between the communication of the registration date (05 April 2023) and the date established as the registration date (25 April 2023) was a bookkeeping error of one (01) day; it is considered that, by exception, a sanction corresponding to a classification lower than the one provided for may be imposed, that is, to sanction the infringement attributed to the Issuer as if it were a minor infringement, which pursuant to article 35 of the Sanctions Regulations, is punishable by a reprimand or a fine of not less than one (1) UIT and up to twenty-five (25) UIT;

36. That, in view of the Sanction Criteria and the assessment made by this Deputy Superintendency, it is appropriate to impose on the Issuer as a sanction, a fine of 3.00 UIT equivalent to S/ 14,850.00 (Fourteen Thousand Eight Hundred Fifty and 00/100 Soles);

ACKNOWLEDGMENT OF LIABILITY FOR INFRINGEMENT

37. That, pursuant to article 26 of the Sanctions Regulations, in conjunction with numeral 2 of article 257 of the TUO of the LPAG, the express and written acknowledgment of liability by the infringer constitutes a mitigating factor;

38. That, as has been indicated, by means of a document submitted on 16 September 2024, the Issuer, within the period granted to submit arguments to the Report, expressly acknowledged liability for the infringement;

39. That, in view of this, it is appropriate to apply a reduction of the fine by 30%, as provided in numeral 2 of article 26 of the Sanctions Regulations: “2. If the acknowledgment is submitted after the expiry of the period granted for the submission of defenses and before the expiry of the period granted for submitting arguments to the instruction report, the amount of the reduction shall be thirty percent (30%).”;

40. That, consequently, applying the discount for the acknowledgment of liability for the infringement, it is appropriate to impose on the Issuer as a sanction a total fine of 2.1 UIT equivalent to S/ 10,395.00 (Ten Thousand Three Hundred Ninety-Five and 00/100 Soles), and;

In accordance with the provisions of numerals 13 and 36 of article 43 of the Regulations on the Organization and Functions of the Superintendency of the Securities Market, approved by Supreme Decree N° 216-2011-EF;

RESOLVES:

Article 1º.- To declare that Electro Sur Este S.A.A. has committed one (1) infringement of a serious nature typified in subsection 2.19 of numeral 2 of Annex I of the Sanctions Regulations, approved by Resolution SMV N° 035-2018-SMV/01, for having failed to report the registration date observing the periods established in the Regulations on Cut-off Date, Registration and Delivery, approved by Resolution CONASEV Nº 069-2006-EF/94.10.

Article 2º.- To sanction Electro Sur Este S.A.A. with a fine of 2.1 UIT equivalent to S/ 10,395.00 (Ten Thousand Three Hundred Ninety-Five and 00/100 Soles), for the provisions of Article 1° of this Resolution.

Article 3º.- This Resolution does not exhaust the administrative remedy, and may be challenged before this Deputy Superintendency of

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Market Conduct Supervision by filing a motion for reconsideration or an appeal, administrative remedies recognized in article 218 of the Single Ordered Text of Law N° 27444, General Administrative Procedure Law, approved by Supreme Decree N° 004-2019-JUS, within a period of fifteen (15) business days counted from the day following its notification, as it is a procedure of two administrative instances. In the event that this Resolution is not challenged, the corresponding sanction reduction regime may be applied for.

Article 4º.- In the event that this Resolution is not subject to challenge, it must be published on the “SMV Institutional Page on the Single Digital Platform of the Peruvian State for Citizen Guidance (www.gob.pe/smv)”, in observance of the provisions of numeral 1 of article 7 of the “Policy on the dissemination of draft regulations, legal norms of a general nature, early agenda and other administrative acts of the SMV”, approved by Resolution SMV N° 014-2014-SMV/01, and pursuant to the provisions of the last paragraph of article 14 of the Sanctions Regulations, approved by Resolution SMV N° 035-2018-SMV/01.

Article 5º.- To transcribe this Resolution to Electro Sur Este S.A.A.

Reason:

Signed by: RIVERO ZEVALLOS Carlos Fabian FAU 2013

Carlos Rivero Zevallos
Deputy Superintendent
Deputy Superintendency of Market Conduct Supervision