Superintendency Resolution No. 066-2025-SMV/10

PERÚ Ministry of Economy and Finance

SMV
Superintendency of the Securities Market
"Decade of Equal Opportunities for Women and Men" "Year of recovery and consolidation of the Peruvian economy" Electronically signed document in the framework of Law No. 27269, Law of 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

Adjunct Superintendent Resolution SMV
No. 066-2025-SMV/10
Lima, December 31, 2025

Subject: Partially founded reconsideration appeal filed by Popular S.A. Investment Fund Administrator Company against Adjunct Superintendent Resolution SMV No. 055-2021-SMV/10.

Administered Entity: Popular S.A. Investment Fund Administrator Company.
Subject: Reconsideration appeal against Adjunct Superintendent Resolution SMV No. 055-2021-SMV/10.
File No.: 2021008834

The Adjunct Superintendent of Prudential Supervision

SEEN:

The administrative file No. 2021008834, the challenging appeal presented by Popular S.A. Investment Fund Administrator Company and Report No. 834-2024-SMV/10.3, issued by the General Superintendent of Prudential Compliance; and

CONSIDERING:

1. In accordance with Article 1 of Law No. 29782, Law for the Strengthening of Securities Market Supervision, the name of the National Commission for the Supervision of Companies and Securities (CONASEV) is replaced by that of the Superintendency of the Securities Market (SMV), so that any reference to CONASEV in legal norms shall be understood as referring to the SMV;

I. BACKGROUND

2. By Adjunct Superintendent Resolution SMV No. 55-2021-SMV/10 of December 9, 2021 (hereinafter, RESOLUTION), it was resolved to sanction Popular S.A. Investment Fund Administrator Company (hereinafter, POPULAR SAFI) with a fine of 30 UIT for having committed six (6) infractions: one (1) very serious offense classified in Annex VI, item 1, subsection 1.5 of the Sanctions Regulation, approved by CONASEV Resolution No. 055-2001-EF/94.10 and its amendments (hereinafter SANCTIONS REGULATION), in force at the time the facts occurred, for not having carried out the impairment assessment of the investments of a fund it administers; three (3) serious offenses classified in Annex VI, item 2, subsection 2.18 of the SANCTIONS REGULATION, for not having complied with provisions regarding the guarantee execution process; the limitation that should have been observed in the composition of the audit team for the financial statements; and the compliance with the requirement for the appraisal of real estate given as collateral for the approval of investments; one (1) serious offense classified in Annex VI, item 2, subsection 2.17 of the SANCTIONS REGULATION, for having made charges to a fund instead of charging the administrator for third-party service contracting; one (1) serious offense classified in Annex I, item 2, subsection 2.12 of the SANCTIONS REGULATION, for having prepared its audited financial statements as of December 31, 2017 without observing the regulations established for that purpose;

3. By writing presented on December 30, 2021, POPULAR SAFI filed a reconsideration appeal against the RESOLUTION;

4. By writing presented on January 20, 2022, POPULAR SAFI informed the SMV about the execution of the corrective measure established by the RESOLUTION;

5. On July 16, 2024, POPULAR SAFI presented its oral report before this Adjunct Superintendency;

II. FORMAL REQUIREMENTS

6. In accordance with Article 218 of the Single Text of the General Administrative Procedure Law No. 27444, approved by Supreme Decree No. 004-2019-JUS (hereinafter, TUO LPAG), establishes that the term for filing administrative appeals is fifteen (15) peremptory days. In concordance with what is stated in Article 16 of the TUO LPAG, the aforementioned period shall begin to run from the day following the legal notification of the challenged administrative act;

7. Regarding this, it has been verified that the reconsideration appeal was filed within the fifteen (15) days established by Article 218 of the TUO LPAG;

III. ARGUMENTS EXPRESSED BY POPULAR SAFI

8. POPULAR SAFI requests that the RESOLUTION be revoked and declared void, and that it be declared that POPULAR SAFI has not committed the infractions attributed to it regarding its obligations derived from the "Capital Emprendedor Investment Fund" (hereinafter, FUND), leaving the imposed sanction and corrective measure without effect, by virtue of the facts and legal arguments developed in its reconsideration;

3.1 First Infraction: NON-COMPLIANCE WITH THE FUND PARTICIPATION REGULATION

3.1.1 On the non-execution of the guarantee associated with the TCHN

9. POPULAR SAFI states that the attribution revolves around whether it complied with executing the corresponding guarantee regarding some Negotiable Mortgage Credit Titles ("TCHN") with respect to the Fund that were in a situation of payment default. This, by virtue of subsection d) of section II of Article 19 of the Participation Regulation of the FUND (hereinafter, PARTICIPATION REGULATION) in force at that time, which stated that "The FUND will necessarily initiate a guarantee execution process associated with the TCHN when the ENTREPRENEUR, obligated constituent has not paid six (06) consecutive or alternating installments of its payment schedule (...)";

10. In summary, POPULAR SAFI indicates that the position of the RESOLUTION is that not having strictly complied with the execution of the guarantee associated with the TCHN constitutes a breach of the PARTICIPATION REGULATION. Likewise, it is observed that it has not been proven that the fund participants knew about the operational procedures regarding the execution of the guarantee associated with the TCHN or the existence of debtors with more than six unpaid installments against whom a guarantee execution process has not been initiated;

11. POPULAR SAFI exposes that the RESOLUTION highlights that the PARTICIPATION REGULATION contains relevant information about the operation of the FUND, thus constituting fundamental information on the basis of which an investor decides whether to invest or not in a particular fund, and by doing so, assumes that the conditions indicated therein - which in turn define the degree of risk exposure assumed - will be diligently complied with by the fund administrator;

12. Indeed, POPULAR SAFI highlights that it agrees that the PARTICIPATION REGULATION sets the terms that frame the activities and functions of the administering entity, and provides predictability to the participants. However, the administration and management functions of the FUND entrusted to POPULAR SAFI are not reduced exclusively to rigid parameters foreseen in the PARTICIPATION REGULATION; likewise, the relationship between POPULAR SAFI and the participants is not limited to said text;

13. Evidently, POPULAR SAFI maintains that there are acts or decisions that it cannot perform or agree upon because they constitute a clear violation or contravention of the terms of the PARTICIPATION REGULATION. For example, investing in instruments or activities not permitted by the PARTICIPATION REGULATION;

14. However, there would also be acts or decisions that POPULAR SAFI can perform or agree upon because they are linked to the very essence of its work as administrator and manager of the FUND. Such would be the case of the execution of guarantees associated with the TCHN. As expressed in its defense writing - without prejudice to the strict provisions of the PARTICIPATION REGULATION - the execution of guarantees is not a formal and automatic issue; it responds to an analysis of the debtor's situation and the debt owed;

15. POPULAR SAFI clarifies that the main objective of its work as administrator of the FUND must not be lost sight of: to generate value for the participants in compliance with the PARTICIPATION REGULATION and current laws. This objective is present in POPULAR SAFI's decisions and determines its acts;

16. POPULAR SAFI emphasizes that there is always the possibility that the fund participants question its conduct as an administering entity, for example, for not immediately executing the guarantees associated with the TCHN. Regarding this, it manifests under sworn declaration that POPULAR SAFI has not been notified by any fund participant regarding any complaint or questioning about how POPULAR SAFI has proceeded against debtors with more than six installments in arrears. Despite the participants being informed about the fund's delinquency structure, through the presentations made in all the Assemblies it attaches as Annex 1 (Assemblies of the years 2016 and 2017) and Investment Statements mentioned in its previous Defense Writing;

17. The foregoing is also related to the fact that POPULAR SAFI's commercial decisions regarding the execution of guarantees associated with the TCHN have indeed generated value for the fund participants. Proof of this are the payment records by the debtors mentioned in Table No. 1 of Letter No. 951-2021-SMV/10.3 (hereinafter, CHARGES LETTER), of the full amounts owed, generating profit for the Fund, which it details below and attaches as Annex 2:

TCHN Code IRR Operation Cancellation Date Amount paid for final cancellation TCHN06424 36% 31/10/2018 S/23,000.00 TCHN07051 35% 03/10/2018 S/79,563.43 TCHN08222 35% 16/01/2018 S/80,796.79

18. POPULAR SAFI specifies that RESOLUTION in item 37 states that the cancellation of the debt does not constitute "having complied with the norm subject of attribution, since the observation raised refers to the closing of the 2017 exercise, and not January or October 2018." On this matter, the support for the payments seeks to accredit the theory of administration or commercial strategy applied by POPULAR SAFI regarding the non-immediate execution of guarantees, and that no harm was generated to the participants or the market;

19. POPULAR SAFI emphasizes that the fact that the Fund Participants' Assembly, dated July 3, 2020, agreed to modify the Fund Regulation, with respect to the elimination of the obligation to initiate judicial actions for non-payment of six or more installments, is the formalization of the practice known and accepted by the fund participants;

20. The current FUND REGULATION grants POPULAR SAFI - formally - a wide field of action regarding the execution of the guarantee associated with the TCHN; that is, the possibility of initiating legal actions exists, but it is expressly subordinated to the administrator's criterion regarding the debtor's attitude and willingness to pay, as well as market conditions that may exist at the time of possible execution;

21. Additionally, POPULAR SAFI indicates that items 39 and 40 of the Resolution state that an exemption for voluntary remediation would not correspond, as it is required that no communication demanding compliance with the obligation issued has been sent. In the present case, they state that through Letter No. 4439-2018-SMV/10.2 of November 29, 2018 (hereinafter, OBSERVATIONS LETTER), the non-compliance with the PARTICIPATION REGULATION is warned, referring to the non-performance of actions for the execution of fund guarantees for unpaid debts; however, it must be clarified that in the OBSERVATIONS LETTER in point 1, what is observed and literally says is the following:

1. Of the investment conditions in the Participation Regulation
"..."

The ADMINISTRATOR has not proven having carried out actions for the extrajudicial execution of the respective guarantee, as established in Article 5 of the Fund's internal regulation (underlining added) "..."

22. Then, POPULAR SAFI reiterates that the OBSERVATIONS LETTER never pointed to Article 19°, which is the article that referred to before necessarily initiating a guarantee execution process in case the six (06) consecutive or alternating installments of its payment schedule have not been paid. In this sense, the administrator argues that the OBSERVATIONS LETTER only refers to the fact that it was carrying out judicial processes when it should have carried out extrajudicial processes, indicating even that this faculty stands out in the PARTICIPATION REGULATION (despite that this does not depend on the SAFI but on another entity accepting it), it even points out a table with various codes that were at the time of the inspection in judicial process and protested (not clients with unpaid debts of more than 6 installments);

23. Now, POPULAR SAFI highlights that in no case does the OBSERVATIONS LETTER indicate anything about the non-execution of TCHN with more than 6 unpaid installments as the CHARGES LETTER No. 951-2021-SMV/10.3 of March 8, 2021 does in considering 1 subsection 1 which literally says:

1. Of the non-compliance with the Participation Regulation of the Capital Emprendedor Investment Fund
1.1 Of the non-execution of the guarantee associated with the TCHN
"..."

Below, the cases that at the time of the Inspection were in payment default (including capital and interests), with delays equal to or greater than six (6) installments, and regarding which Popular SAFI had not carried out the process of execution of the guarantee associated with the TCHN are shown.
"..";

24. In that sense, and by virtue of Article 27° of the Sanctions Regulation, approved by SMV Resolution No. 035-2018-SMV/01 and its amendments (hereinafter, CURRENT SANCTIONS REGULATION), indicates that there was indeed a voluntary remediation by not having issued communication demanding compliance with said obligation. On the other hand, the administrator states that as it already indicated in its previous writing, the assembly of the 2019 exercise, dated July 3, 2020, before the notification of the CHARGES LETTER, modified the possibility of initiating legal actions when the default is greater than two installments, completely eliminating the obligation to initiate judicial actions for non-payment of six or more installments, this last only observed in the CHARGES LETTER of March 8, 2021 (3 years after said Inspection and almost 1 year after the modification to the PARTICIPATION REGULATION);

25. As new proof, POPULAR SAFI attaches the table that was sent in the OBSERVATIONS LETTER and all the charges of income from lawsuits that were at the time of the inspection which would demonstrate its affirmation according to Annex 3 of its reconsideration appeal.

TCHN Holder Amount S/ Disbursement Date Judicial Process Start Observations 4538 HOLDER1 129,286.33 13/03/2013 08/09/2014 Pending to date 4845 HOLDER2 88,309.73 10/07/2013 28/02/2017 Pending to date 7763 HOLDER3 73,155.98 26/03/2015 09/05/2017 Pending to date 10249 HOLDER4 84,044.28 06/06/2017 Protested on 20/12/2017 Pending to date

3.1.2 On the audit of the Financial Statements of the Fund as of December 31, 2017

26. Regarding this attribution, POPULAR SAFI states that it has not been adequately assessed the fact that the participants and the Surveillance Committee had full knowledge of the audit team's work;

27. POPULAR SAFI points out that as it was proven in its defense writing, on August 1, 2017, it was communicated that, through a Surveillance Committee held on the same date, Pazos, López de Romaña, Rodriguez Sociedad Civil de Responsabilidad Limitada (BDO) was unanimously elected as the external independent audit firm to perform the external independent audit of the financial statements of the 2017 exercise of the FUND. This, by virtue of the powers delegated by the participants through the General Assembly dated April 5, 2017;

28. POPULAR SAFI adds that through the General Assembly of Fund Participants of the 2017 exercise, dated March 6, 2018 (which it attached to its defenses), the participants of the FUND unanimously approved the external independent audit report on the financial information of the 2017 exercise. Therefore, it is demonstrated that the participants of the FUND had full knowledge and unanimously approved, in the respective General Assembly of Fund Participants of the FUND, the audit report for the financial statements of the 2017 exercise. In other words, the participants of the FUND were aware of the team in charge of the audit;

29. In addition to the foregoing, to date, POPULAR SAFI manifests under sworn declaration that it has not received any complaint or challenge from fund participants regarding the participation of the audit team formed by LADY1 in the periods mentioned in the CHARGES LETTER;

30. POPULAR SAFI maintains that the lack of opposition by the participants demonstrates that the choice of the audit firm has not generated any harm to the FUND and its interests - nor has it benefited POPULAR SAFI in any way - limiting itself only to not having complied with a provision of the PARTICIPATION REGULATION of internal corporate order;

31. POPULAR SAFI considers that there is no affectation by the work performed by the audit team considering that the participants and the Surveillance Committee were aware of it, and Resolution SMV No. 029-2014-SMV/01 always recognized as the maximum period, during which the fund could be audited by the same audit team, five consecutive years?

32. POPULAR SAFI alludes that the participants' conformity with the conduct regarding the audit team's work was also materialized through the Ordinary General Assembly of the 2018 exercise, dated March 29, 2019, where it was agreed to modify the scope of Article 14 of the PARTICIPATION REGULATION. This article now provides that the maximum period during which the FUND can be audited by the same audit team is five consecutive years;

3.1.3 On the compliance with the requirements for the approval of investments

33. POPULAR SAFI points out that the attribution is reduced to a formal observation regarding the verification that all the necessary elements were available to decide on an investment. Specifically, the RESOLUTION warns that POPULAR SAFI has not proven that, regarding the four observed cases, at the date of approval of the respective agreements, the FUND's Investment Committee had the value of the property delivered by an appraiser;

34. POPULAR SAFI maintains that the RESOLUTION states that the PARTICIPATION REGULATION is clear in requiring as part of the necessary elements for the FUND's Investment Committee to adopt a financing decision, having the value of the property delivered by an appraiser;

35. POPULAR SAFI emphasizes that new proof that supports the fact that the investments were made subsequent to the receipt and evaluation of the appraisal, without prejudice to the error in the drafting and dating of the Investment Committee minutes in which they were deliberated, is that no disbursement was made prior to the appraisal reports, as presented below:

TCHN Code Date of appraisal report Date of disbursement TCHN10842 20/11/2017 07/12/2017 TCHN10557 04/08/2017 31/08/2017 TCHN10549 04/07/2017 21/08/2017 TCHN10678 15/09/2017 29/09/2017

36. For the purpose of verifying this information, POPULAR SAFI attaches as Annex 4 to its reconsideration appeal the aforementioned appraisal reports, as well as the disbursement records where it is verified that these were made subsequently;

37. POPULAR SAFI points out as another new proof that supports the fact that the Investment Committee did indeed have the appraisal at the moment of deliberating on the inv

PERÚ Ministry of Economy and Finance

SMV
Superintendency of the Securities Market
"Decade of Equal Opportunities for Women and Men" "Year of recovery and consolidation of the Peruvian economy" Electronically signed document in the framework of Law No. 27269, Law of 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 occur the facts, for not having carried out the impairment assessment of the investments of a fund it administers; three (3) serious offenses classified in Annex VI, item 2, subsection 2.18 of the SANCTIONS REGULATION, for not having complied with provisions regarding the guarantee execution process; the limitation that should have been observed in the composition of the audit team for the financial statements; and the compliance with the requirement for the appraisal of real estate given as collateral for the approval of investments; one (1) serious offense classified in Annex VI, item 2, subsection 2.17 of the SANCTIONS REGULATION, for having made charges to a fund instead of charging the administrator for third-party service contracting; one (1) serious offense classified in Annex I, item 2, subsection 2.12 of the SANCTIONS REGULATION, for having prepared its audited financial statements as of December 31, 2017 without observing the regulations established for that purpose;

3. By writing presented on December 30, 2021, POPULAR SAFI filed a reconsideration appeal against the RESOLUTION;

4. By writing presented on January 20, 2022, POPULAR SAFI informed the SMV about the execution of the corrective measure established by the RESOLUTION;

5. On July 16, 2024, POPULAR SAFI presented its oral report before this Adjunct Superintendency;

II. FORMAL REQUIREMENTS

6. In accordance with Article 218 of the Single Text of the General Administrative Procedure Law No. 27444, approved by Supreme Decree No. 004-2019-JUS (hereinafter, TUO LPAG), establishes that the term for filing administrative appeals is fifteen (15) peremptory days. In concordance with what is stated in Article 16 of the TUO LPAG, the aforementioned period shall begin to run from the day following the legal notification of the challenged administrative act;

7. Regarding this, it has been verified that the reconsideration appeal was filed within the fifteen (15) days established by Article 218 of the TUO LPAG;

III. ARGUMENTS EXPRESSED BY POPULAR SAFI

8. POPULAR SAFI requests that the RESOLUTION be revoked and declared void, and that it be declared that POPULAR SAFI has not committed the infractions attributed to it regarding its obligations derived from the "Capital Emprendedor Investment Fund" (hereinafter, FUND), leaving the imposed sanction and corrective measure without effect, by virtue of the facts and legal arguments developed in its reconsideration;

3.1 First Infraction: NON-COMPLIANCE WITH THE FUND PARTICIPATION REGULATION

3.1.1 On the non-execution of the guarantee associated with the TCHN

9. POPULAR SAFI states that the attribution revolves around whether it complied with executing the corresponding guarantee regarding some Negotiable Mortgage Credit Titles ("TCHN") with respect to the Fund that were in a situation of payment default. This, by virtue of subsection d) of section II of Article 19 of the Participation Regulation of the FUND (hereinafter, PARTICIPATION REGULATION) in force at that time, which stated that "The FUND will necessarily initiate a guarantee execution process associated with the TCHN when the ENTREPRENEUR, obligated constituent has not paid six (06) consecutive or alternating installments of its payment schedule (...)";

10. In summary, POPULAR SAFI indicates that the position of the RESOLUTION is that not having strictly complied with the execution of the guarantee associated with the TCHN constitutes a breach of the PARTICIPATION REGULATION. Likewise, it is observed that it has not been proven that the fund participants knew about the operational procedures regarding the execution of the guarantee associated with the TCHN or the existence of debtors with more than six unpaid installments against whom a guarantee execution process has not been initiated;

11. POPULAR SAFI exposes that the RESOLUTION highlights that the PARTICIPATION REGULATION contains relevant information about the operation of the FUND, thus constituting fundamental information on the basis of which an investor decides whether to invest or not in a particular fund, and by doing so, assumes that the conditions indicated therein - which in turn define the degree of risk exposure assumed - will be diligently complied with by the fund administrator;

12. Indeed, POPULAR SAFI highlights that it agrees that the PARTICIPATION REGULATION sets the terms that frame the activities and functions of the administering entity, and provides predictability to the participants. However, the administration and management functions of the FUND entrusted to POPULAR SAFI are not reduced exclusively to rigid parameters foreseen in the PARTICIPATION REGULATION; likewise, the relationship between POPULAR SAFI and the participants is not limited to said text;

13. Evidently, POPULAR SAFI maintains that there are acts or decisions that it cannot perform or agree upon because they constitute a clear violation or contravention of the terms of the PARTICIPATION REGULATION. For example, investing in instruments or activities not permitted by the PARTICIPATION REGULATION;

14. However, there would also be acts or decisions that POPULAR SAFI can perform or agree upon because they are linked to the very essence of its work as administrator and manager of the FUND. Such would be the case of the execution of guarantees associated with the TCHN. As expressed in its defense writing - without prejudice to the strict provisions of the PARTICIPATION REGULATION - the execution of guarantees is not a formal and automatic issue; it responds to an analysis of the debtor's situation and the debt owed;

15. POPULAR SAFI clarifies that the main objective of its work as administrator of the FUND must not be lost sight of: to generate value for the participants in compliance with the PARTICIPATION REGULATION and current laws. This objective is present in POPULAR SAFI's decisions and determines its acts;

16. POPULAR SAFI emphasizes that there is always the possibility that the fund participants question its conduct as an administering entity, for example, for not immediately executing the guarantees associated with the TCHN. Regarding this, it manifests under sworn declaration that POPULAR SAFI has not been notified by any fund participant regarding any complaint or questioning about how POPULAR SAFI has proceeded against debtors with more than six installments in arrears. Despite the participants being informed about the fund's delinquency structure, through the presentations made in all the Assemblies it attaches as Annex 1 (Assemblies of the years 2016 and 2017) and Investment Statements mentioned in its previous Defense Writing;

17. The foregoing is also related to the fact that POPULAR SAFI's commercial decisions regarding the execution of guarantees associated with the TCHN have indeed generated value for the fund participants. Proof of this are the payment records by the debtors mentioned in Table No. 1 of Letter No. 951-2021-SMV/10.3 (hereinafter, CHARGES LETTER), of the full amounts owed, generating profit for the Fund, which it details below and attaches as Annex 2:

TCHN Code IRR Operation Cancellation Date Amount paid for final cancellation TCHN06424 36% 31/10/2018 S/23,000.00 TCHN07051 35% 03/10/2018 S/79,563.43 TCHN08222 35% 16/01/2018 S/80,796.79

18. POPULAR SAFI specifies that RESOLUTION in item 37 states that the cancellation of the debt does not constitute "having complied with the norm subject of attribution, since the observation raised refers to the closing of the 2017 exercise, and not January or October 2018." On this matter, the support for the payments seeks to accredit the theory of administration or commercial strategy applied by POPULAR SAFI regarding the non-immediate execution of guarantees, and that no harm was generated to the participants or the market;

19. POPULAR SAFI emphasizes that the fact that the Fund Participants' Assembly, dated July 3, 2020, agreed to modify the Fund Regulation, with respect to the elimination of the obligation to initiate judicial actions for non-payment of six or more installments, is the formalization of the practice known and accepted by the fund participants;

20. The current FUND REGULATION grants POPULAR SAFI - formally - a wide field of action regarding the execution of the guarantee associated with the TCHN; that is, the possibility of initiating legal actions exists, but it is expressly subordinated to the administrator's criterion regarding the debtor's attitude and willingness to pay, as well as market conditions that may exist at the time of possible execution;

21. Additionally, POPULAR SAFI indicates that items 39 and 40 of the Resolution state that an exemption for voluntary remediation would not correspond, as it is required that no communication demanding compliance with the obligation issued has been sent. In the present case, they state that through Letter No. 4439-2018-SMV/10.2 of November 29, 2018 (hereinafter, OBSERVATIONS LETTER), the non-compliance with the PARTICIPATION REGULATION is warned, referring to the non-performance of actions for the execution of fund guarantees for unpaid debts; however, it must be clarified that in the OBSERVATIONS LETTER in point 1, what is observed and literally says is the following:

1. Of the investment conditions in the Participation Regulation
"..."

The ADMINISTRATOR has not proven having carried out actions for the extrajudicial execution of the respective guarantee, as established in Article 5 of the Fund's internal regulation (underlining added) "..."

22. Then, POPULAR SAFI reiterates that the OBSERVATIONS LETTER never pointed to Article 19°, which is the article that referred to before necessarily initiating a guarantee execution process in case the six (06) consecutive or alternating installments of its payment schedule have not been paid. In this sense, the administrator argues that the OBSERVATIONS LETTER only refers to the fact that it was carrying out judicial processes when it should have carried out extrajudicial processes, indicating even that this faculty stands out in the PARTICIPATION REGULATION (despite that this does not depend on the SAFI but on another entity accepting it), it even points out a table with various codes that were at the time of the inspection in judicial process and protested (not clients with unpaid debts of more than 6 installments);

23. Now, POPULAR SAFI highlights that in no case does the OBSERVATIONS LETTER indicate anything about the non-execution of TCHN with more than 6 unpaid installments as the CHARGES LETTER No. 951-2021-SMV/10.3 of March 8, 2021 does in considering 1 subsection 1 which literally says:

1. Of the non-compliance with the Participation Regulation of the Capital Emprendedor Investment Fund
1.1 Of the non-execution of the guarantee associated with the TCHN
"..."

Below, the cases that at the time of the Inspection were in payment default (including capital and interests), with delays equal to or greater than six (6) installments, and regarding which Popular SAFI had not carried out the process of execution of the guarantee associated with the TCHN are shown.
"..";

24. In that sense, and by virtue of Article 27° of the Sanctions Regulation, approved by SMV Resolution No. 035-2018-SMV/01 and its amendments (hereinafter, CURRENT SANCTIONS REGULATION), indicates that there was indeed a voluntary remediation by not having issued communication demanding compliance with said obligation. On the other hand, the administrator states that as it already indicated in its previous writing, the assembly of the 2019 exercise, dated July 3, 2020, before the notification of the CHARGES LETTER, modified the possibility of initiating legal actions when the default is greater than two installments, completely eliminating the obligation to initiate judicial actions for non-payment of six or more installments, this last only observed in the CHARGES LETTER of March 8, 2021 (3 years after said Inspection and almost 1 year after the modification to the PARTICIPATION REGULATION);

25. As new proof, POPULAR SAFI attaches the table that was sent in the OBSERVATIONS LETTER and all the charges of income from lawsuits that were at the time of the inspection which would demonstrate its affirmation according to Annex 3 of its reconsideration appeal.

TCHN Holder Amount S/ Disbursement Date Judicial Process Start Observations 4538 HOLDER1 129,286.33 13/03/2013 08/09/2014 Pending to date 4845 HOLDER2 88,309.73 10/07/2013 28/02/2017 Pending to date 7763 HOLDER3 73,155.98 26/03/2015 09/05/2017 Pending to date 10249 HOLDER4 84,044.28 06/06/2017 Protested on 20/12/2017 Pending to date

3.1.2 On the audit of the Financial Statements of the Fund as of December 31, 2017

26. Regarding this attribution, POPULAR SAFI states that it has not been adequately assessed the fact that the participants and the Surveillance Committee had full knowledge of the audit team's work;

27. POPULAR SAFI points out that as it was proven in its defense writing, on August 1, 2017, it was communicated that, through a Surveillance Committee held on the same date, Pazos, López de Romaña, Rodriguez Sociedad Civil de Responsabilidad Limitada (BDO) was unanimously elected as the external independent audit firm to perform the external independent audit of the financial statements of the 2017 exercise of the FUND. This, by virtue of the powers delegated by the participants through the General Assembly dated April 5, 2017;

28. POPULAR SAFI adds that through the General Assembly of Fund Participants of the 2017 exercise, dated March 6, 2018 (which it attached to its defenses), the participants of the FUND unanimously approved the external independent audit report on the financial information of the 2017 exercise. Therefore, it is demonstrated that the participants of the FUND had full knowledge and unanimously approved, in the respective General Assembly of Fund Participants of the FUND, the audit report for the financial statements of the 2017 exercise. In other words, the participants of the FUND were aware of the team in charge of the audit;

29. In addition to the foregoing, to date, POPULAR SAFI manifests under sworn declaration that it has not received any complaint or challenge from fund participants regarding the participation of the audit team formed by LADY1 in the periods mentioned in the CHARGES LETTER;

30. POPULAR SAFI maintains that the lack of opposition by the participants demonstrates that the choice of the audit firm has not generated any harm to the FUND and its interests - nor has it benefited POPULAR SAFI in any way - limiting itself only to not having complied with a provision of the PARTICIPATION REGULATION of internal corporate order;

31. POPULAR SAFI considers that there is no affectation by the work performed by the audit team considering that the participants and the Surveillance Committee were aware of it, and Resolution SMV No. 029-2014-SMV/01 always recognized as the maximum period, during which the fund could be audited by the same audit team, five consecutive years?

32. POPULAR SAFI alludes that the participants' conformity with the conduct regarding the audit team's work was also materialized through the Ordinary General Assembly of the 2018 exercise, dated March 29, 2019, where it was agreed to modify the scope of Article 14 of the PARTICIPATION REGULATION. This article now provides that the maximum period during which the FUND can be audited by the same audit team is five consecutive years;

3.1.3 On the compliance with the requirements for the approval of investments

33. POPULAR SAFI points out that the attribution is reduced to a formal observation regarding the verification that all the necessary elements were available to decide on an investment. Specifically, the RESOLUTION warns that POPULAR SAFI has not proven that, regarding the four observed cases, at the date of approval of the respective agreements, the FUND's Investment Committee had the value of the property delivered by an appraiser;

34. POPULAR SAFI maintains that the RESOLUTION states that the PARTICIPATION REGULATION is clear in requiring as part of the necessary elements for the FUND's Investment Committee to adopt a financing decision, having the value of the property delivered by an appraiser;

35. POPULAR SAFI emphasizes that new proof that supports the fact that the investments were made subsequent to the receipt and evaluation of the appraisal, without prejudice to the error in the drafting and dating of the Investment Committee minutes in which they were deliberated, is that no disbursement was made prior to the appraisal reports, as presented below:

TCHN Code Date of appraisal report Date of disbursement TCHN10842 20/11/2017 07/12/2017 TCHN10557 04/08/2017 31/08/2017 TCHN10549 04/07/2017 21/08/2017 TCHN10678 15/09/2017 29/09/2017

36. For the purpose of verifying this information, POPULAR SAFI attaches as Annex 4 to its reconsideration appeal the aforementioned appraisal reports, as well as the disbursement records where it is verified that these were made subsequently;

37. POPULAR SAFI points out as another new proof that supports the fact that the Investment Committee did indeed have the appraisal at the moment of deliberating on the inv

PERÚ Ministry of Economy and Finance

SMV
Superintendency of the Securities Market
"Decade of Equal Opportunities for Women and Men" "Year of recovery and consolidation of the Peruvian economy" Electronically signed document in the framework of Law No. 27269, Law of 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 occur the facts, for not having carried out the impairment assessment of the investments of a fund it administers; three (3) serious offenses classified in Annex VI, item 2, subsection 2.18 of the SANCTIONS REGULATION, for not having complied with provisions regarding the guarantee execution process; the limitation that should have been observed in the composition of the audit team for the financial statements; and the compliance with the requirement for the appraisal of real estate given as collateral for the approval of investments; one (1) serious offense classified in Annex VI, item 2, subsection 2.17 of the SANCTIONS REGULATION, for having made charges to a fund instead of charging the administrator for third-party service contracting; one (1) serious offense classified in Annex I, item 2, subsection 2.12 of the SANCTIONS REGULATION, for having prepared its audited financial statements as of December 31, 2017 without observing the regulations established for that purpose;

3. By writing presented on December 30, 2021, POPULAR SAFI filed a reconsideration appeal against the RESOLUTION;

4. By writing presented on January 20, 2022, POPULAR SAFI informed the SMV about the execution of the corrective measure established by the RESOLUTION;

5. On July 16, 2024, POPULAR SAFI presented its oral report before this Adjunct Superintendency;

II. FORMAL REQUIREMENTS

6. In accordance with Article 218 of the Single Text of the General Administrative Procedure Law No. 27444, approved by Supreme Decree No. 004-2019-JUS (hereinafter, TUO LPAG), establishes that the term for filing administrative appeals is fifteen (15) peremptory days. In concordance with what is stated in Article 16 of the TUO LPAG, the aforementioned period shall begin to run from the day following the legal notification of the challenged administrative act;

7. Regarding this, it has been verified that the reconsideration appeal was filed within the fifteen (15) days established by Article 218 of the TUO LPAG;

III. ARGUMENTS EXPRESSED BY POPULAR SAFI

8. POPULAR SAFI requests that the RESOLUTION be revoked and declared void, and that it be declared that POPULAR SAFI has not committed the infractions attributed to it regarding its obligations derived from the "Capital Emprendedor Investment Fund" (hereinafter, FUND), leaving the imposed sanction and corrective measure without effect, by virtue of the facts and legal arguments developed in its reconsideration;

3.1 First Infraction: NON-COMPLIANCE WITH THE FUND PARTICIPATION REGULATION

3.1.1 On the non-execution of the guarantee associated with the TCHN

9. POPULAR SAFI states that the attribution revolves around whether it complied with executing the corresponding guarantee regarding some Negotiable Mortgage Credit Titles ("TCHN") with respect to the Fund that were in a situation of payment default. This, by virtue of subsection d) of section II of Article 19 of the Participation Regulation of the FUND (hereinafter, PARTICIPATION REGULATION) in force at that time, which stated that "The FUND will necessarily initiate a guarantee execution process associated with the TCHN when the ENTREPRENEUR, obligated constituent has not paid six (06) consecutive or alternating installments of its payment schedule (...)";

10. In summary, POPULAR SAFI indicates that the position of the RESOLUTION is that not having strictly complied with the execution of the guarantee associated with the TCHN constitutes a breach of the PARTICIPATION REGULATION. Likewise, it is observed that it has not been proven that the fund participants knew about the operational procedures regarding the execution of the guarantee associated with the TCHN or the existence of debtors with more than six unpaid installments against whom a guarantee execution process has not been initiated;

11. POPULAR SAFI exposes that the RESOLUTION highlights that the PARTICIPATION REGULATION contains relevant information about the operation of the FUND, thus constituting fundamental information on the basis of which an investor decides whether to invest or not in a particular fund, and by doing so, assumes that the conditions indicated therein - which in turn define the degree of risk exposure assumed - will be diligently complied with by the fund administrator;

12. Indeed, POPULAR SAFI highlights that it agrees that the PARTICIPATION REGULATION sets the terms that frame the activities and functions of the administering entity, and provides predictability to the participants. However, the administration and management functions of the FUND entrusted to POPULAR SAFI are not reduced exclusively to rigid parameters foreseen in the PARTICIPATION REGULATION; likewise, the relationship between POPULAR SAFI and the participants is not limited to said text;

13. Evidently, POPULAR SAFI maintains that there are acts or decisions that it cannot perform or agree upon because they constitute a clear violation or contravention of the terms of the PARTICIPATION REGULATION. For example, investing in instruments or activities not permitted by the PARTICIPATION REGULATION;

14. However, there would also be acts or decisions that POPULAR SAFI can perform or agree upon because they are linked to the very essence of its work as administrator and manager of the FUND. Such would be the case of the execution of guarantees associated with the TCHN. As expressed in its defense writing - without prejudice to the strict provisions of the PARTICIPATION REGULATION - the execution of guarantees is not a formal and automatic issue; it responds to an analysis of the debtor's situation and the debt owed;

15. POPULAR SAFI clarifies that the main objective of its work as administrator of the FUND must not be lost sight of: to generate value for the participants in compliance with the PARTICIPATION REGULATION and current laws. This objective is present in POPULAR SAFI's decisions and determines its acts;

16. POPULAR SAFI emphasizes that there is always the possibility that the fund participants question its conduct as an administering entity, for example, for not immediately executing the guarantees associated with the TCHN. Regarding this, it manifests under sworn declaration that POPULAR SAFI has not been notified by any fund participant regarding any complaint or questioning about how POPULAR SAFI has proceeded against debtors with more than six installments in arrears. Despite the participants being informed about the fund's delinquency structure, through the presentations made in all the Assemblies it attaches as Annex 1 (Assemblies of the years 2016 and 2017) and Investment Statements mentioned in its previous Defense Writing;

17. The foregoing is also related to the fact that POPULAR SAFI's commercial decisions regarding the execution of guarantees associated with the TCHN have indeed generated value for the fund participants. Proof of this are the payment records by the debtors mentioned in Table No. 1 of Letter No. 951-2021-SMV/10.3 (hereinafter, CHARGES LETTER), of the full amounts owed, generating profit for the Fund, which it details below and attaches as Annex 2:

TCHN Code IRR Operation Cancellation Date Amount paid for final cancellation TCHN06424 36% 31/10/2018 S/23,000.00 TCHN07051 35% 03/10/2018 S/79,563.43 TCHN08222 35% 16/01/2018 S/80,796.79

18. POPULAR SAFI specifies that RESOLUTION in item 37 states that the cancellation of the debt does not constitute "having complied with the norm subject of attribution, since the observation raised refers to the closing of the 2017 exercise, and not January or October 2018." On this matter, the support for the payments seeks to accredit the theory of administration or commercial strategy applied by POPULAR SAFI regarding the non-immediate execution of guarantees, and that no harm was generated to the participants or the market;

19. POPULAR SAFI emphasizes that the fact that the Fund Participants' Assembly, dated July 3, 2020, agreed to modify the Fund Regulation, with respect to the elimination of the obligation to initiate judicial actions for non-payment of six or more installments, is the formalization of the practice known and accepted by the fund participants;

20. The current FUND REGULATION grants POPULAR SAFI - formally - a wide field of action regarding the execution of the guarantee associated with the TCHN; that is, the possibility of initiating legal actions exists, but it is expressly subordinated to the administrator's criterion regarding the debtor's attitude and willingness to pay, as well as market conditions that may exist at the time of possible execution;

21. Additionally, POPULAR SAFI indicates that items 39 and 40 of the Resolution state that an exemption for voluntary remediation would not correspond, as it is required that no communication demanding compliance with the obligation issued has been sent. In the present case, they state that through Letter No. 4439-2018-SMV/10.2 of November 29, 2018 (hereinafter, OBSERVATIONS LETTER), the non-compliance with the PARTICIPATION REGULATION is warned, referring to the non-performance of actions for the execution of fund guarantees for unpaid debts; however, it must be clarified that in the OBSERVATIONS LETTER in point 1, what is observed and literally says is the following:

1. Of the investment conditions in the Participation Regulation
"..."

The ADMINISTRATOR has not proven having carried out actions for the extrajudicial execution of the respective guarantee, as established in Article 5 of the Fund's internal regulation (underlining added) "..."

22. Then, POPULAR SAFI reiterates that the OBSERVATIONS LETTER never pointed to Article 19°, which is the article that referred to before necessarily initiating a guarantee execution process in case the six (06) consecutive or alternating installments of its payment schedule have not been paid. In this sense, the administrator argues that the OBSERVATIONS LETTER only refers to the fact that it was carrying out judicial processes when it should have carried out extrajudicial processes, indicating even that this faculty stands out in the PARTICIPATION REGULATION (despite that this does not depend on the SAFI but on another entity accepting it), it even points out a table with various codes that were at the time of the inspection in judicial process and protested (not clients with unpaid debts of more than 6 installments);

23. Now, POPULAR SAFI highlights that in no case does the OBSERVATIONS LETTER indicate anything about the non-execution of TCHN with more than 6 unpaid installments as the CHARGES LETTER No. 951-2021-SMV/10.3 of March 8, 2021 does in considering 1 subsection 1 which literally says:

1. Of the non-compliance with the Participation Regulation of the Capital Emprendedor Investment Fund
1.1 Of the non-execution of the guarantee associated with the TCHN
"..."

Below, the cases that at the time of the Inspection were in payment default (including capital and interests), with delays equal to or greater than six (6) installments, and regarding which Popular SAFI had not carried out the process of execution of the guarantee associated with the TCHN are shown.
"..";

24. In that sense, and by virtue of Article 27° of the Sanctions Regulation, approved by SMV Resolution No. 035-2018-SMV/01 and its amendments (hereinafter, CURRENT SANCTIONS REGULATION), indicates that there was indeed a voluntary remediation by not having issued communication demanding compliance with said obligation. On the other hand, the administrator states that as it already indicated in its previous writing, the assembly of the 2019 exercise, dated July 3, 2020, before the notification of the CHARGES LETTER, modified the possibility of initiating legal actions when the default is greater than two installments, completely eliminating the obligation to initiate judicial actions for non-payment of six or more installments, this last only observed in the CHARGES LETTER of March 8, 2021 (3 years after said Inspection and almost 1 year after the modification to the PARTICIPATION REGULATION);

25. As new proof, POPULAR SAFI attaches the table that was sent in the OBSERVATIONS LETTER and all the charges of income from lawsuits that were at the time of the inspection which would demonstrate its affirmation according to Annex 3 of its reconsideration appeal.

TCHN Holder Amount S/ Disbursement Date Judicial Process Start Observations 4538 HOLDER1 129,286.33 13/03/2013 08/09/2014 Pending to date 4845 HOLDER2 88,309.73 10/07/2013 28/02/2017 Pending to date 7763 HOLDER3 73,155.98 26/03/2015 09/05/2017 Pending to date 10249 HOLDER4 84,044.28 06/06/2017 Protested on 20/12/2017 Pending to date

3.1.2 On the audit of the Financial Statements of the Fund as of December 31, 2017

26. Regarding this attribution, POPULAR SAFI states that it has not been adequately assessed the fact that the participants and the Surveillance Committee had full knowledge of the audit team's work;

27. POPULAR SAFI points out that as it was proven in its defense writing, on August 1, 2017, it was communicated that, through a Surveillance Committee held on the same date, Pazos, López de Romaña, Rodriguez Sociedad Civil de Responsabilidad Limitada (BDO) was unanimously elected as the external independent audit firm to perform the external independent audit of the financial statements of the 2017 exercise of the FUND. This, by virtue of the powers delegated by the participants through the General Assembly dated April 5, 2017;

28. POPULAR SAFI adds that through the General Assembly of Fund Participants of the 2017 exercise, dated March 6, 2018 (which it attached to its defenses), the participants of the FUND unanimously approved the external independent audit report on the financial information of the 2017 exercise. Therefore, it is demonstrated that the participants of the FUND had full knowledge and unanimously approved, in the respective General Assembly of Fund Participants of the FUND, the audit report for the financial statements of the 2017 exercise. In other words, the participants of the FUND were aware of the team in charge of the audit;

29. In addition to the foregoing, to date, POPULAR SAFI manifests under sworn declaration that it has not received any complaint or challenge from fund participants regarding the participation of the audit team formed by LADY1 in the periods mentioned in the CHARGES LETTER;

30. POPULAR SAFI maintains that the lack of opposition by the participants demonstrates that the choice of the audit firm has not generated any harm to the FUND and its interests - nor has it benefited POPULAR SAFI in any way - limiting itself only to not having complied with a provision of the PARTICIPATION REGULATION of internal corporate order;

31. POPULAR SAFI considers that there is no affectation by the work performed by the audit team considering that the participants and the Surveillance Committee were aware of it, and Resolution SMV No. 029-2014-SMV/01 always recognized as the maximum period, during which the fund could be audited by the same audit team, five consecutive years?

32. POPULAR SAFI alludes that the participants' conformity with the conduct regarding the audit team's work was also materialized through the Ordinary General Assembly of the 2018 exercise, dated March 29, 2019, where it was agreed to modify the scope of Article 14 of the PARTICIPATION REGULATION. This article now provides that the maximum period during which the FUND can be audited by the same audit team is five consecutive years;

3.1.3 On the compliance with the requirements for the approval of investments

33. POPULAR SAFI points out that the attribution is reduced to a formal observation regarding the verification that all the necessary elements were available to decide on an investment. Specifically, the RESOLUTION warns that POPULAR SAFI has not proven that, regarding the four observed cases, at the date of approval of the respective agreements, the FUND's Investment Committee had the value of the property delivered by an appraiser;

34. POPULAR SAFI maintains that the RESOLUTION states that the PARTICIPATION REGULATION is clear in requiring as part of the necessary elements for the FUND's Investment Committee to adopt a financing decision, having the value of the property delivered by an appraiser;

35. POPULAR SAFI emphasizes that new proof that supports the fact that the investments were made subsequent to the receipt and evaluation of the appraisal, without prejudice to the error in the drafting and dating of the Investment Committee minutes in which they were deliberated, is that no disbursement was made prior to the appraisal reports, as presented below:

TCHN Code Date of appraisal report Date of disbursement TCHN10842 20/11/2017 07/12/2017 TCHN10557 04/08/2017 31/08/2017 TCHN10549 04/07/2017 21/08/2017 TCHN10678 15/09/2017 29/09/2017

36. For the purpose of verifying this information, POPULAR SAFI attaches as Annex 4 to its reconsideration appeal the aforementioned appraisal reports, as well as the disbursement records where it is verified that these were made subsequently;

37. POPULAR SAFI points out as another new proof that supports the fact that the Investment Committee did indeed have the appraisal at the moment of deliberating on the inv

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