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Superintendent Resolution No. 020-2024-SMV/02

Lima, 1 March 2024

The Superintendent of the Securities Market

SEEN:

File No. 2022004588 and Report No. 202-2024-SMV/06 of the Legal Advisory Office, by which it issues an opinion on the appeal filed by El Clan EAFC S.A. and the written arguments submitted by the administered entity;

CONSIDERING:

That, by Deputy Superintendent Resolution SMV No. 017-2022-SMV/10 (hereinafter, the RESOLUTION), El Clan EAFC S.A. (hereinafter, EL CLAN) was sanctioned with a fine of one (1) UIT, for having incurred two (2) infractions of a minor nature, classified in Annex XIV, numeral 3, subparagraph 3.10 of the Sanctions Regulation, approved by CONASEV Resolution No. 055-2001-EF/94.10 (hereinafter, SANCTIONS REGULATION) and in Annex I, numeral 3, subparagraph 3.6 of the Sanctions Regulation, approved by SMV Resolution No. 035-2018-SMV/01 (hereinafter NEW SANCTIONS REGULATION), for not having timely submitted the Compliance Report, as well as the Letter of Recommendations on accounting internal control aspects, corresponding to fiscal years 2017 and 2018, respectively;

That, by document submitted on 21 September 2022, EL CLAN filed an appeal (hereinafter, the APPEAL) against the RESOLUTION;

That, through Report No. 202-2024-SMV/06 of 14 February 2024 (hereinafter, the REPORT), the Legal Advisory Office issued an opinion;

That, by document of 26 February 2024 EL CLAN submitted its written arguments;

That, below the arguments contained in the APPEAL filed by EL CLAN and in its written arguments are succinctly set forth;

I. ARGUMENTS OF THE APPEAL AND WRITTEN ARGUMENTS

That, EL CLAN maintains that the exemption from liability for infractions established in literal f) of subsection 1 of article 257°1 is applicable to it

[1] “f) The voluntary correction by the possible sanctioned party of the act or omission imputed as constituting an administrative infraction, prior to the notification of the imputation of charges referred to in subsection 3) of article 255”

of the Single Ordered Text of Law No. 27444 – General Administrative Procedure Law (hereinafter, TUO LPAG), on voluntary correction;

That, it states that the provisions of literal c)2 of article 28° of the NEW SANCTIONS REGULATION violate the provisions of Law No. 27444 – General Administrative Procedure Law (hereinafter LPAG), because the SMV's power to issue legal norms regulating matters of the securities market does not allow it to go beyond what is regulated in the LPAG, and it must adhere to the principles given for all sanctioning procedures; it not being possible for a sanctions regulation to limit the provisions of a Law, such as the LPAG, since this, in its opinion, would fail to comply with the provisions of article II3 of the TUO LPAG and subsection 247.24 of article 247° of the same norm, which specifies that conditions less favorable to the administered parties than those established in this cannot be imposed;

That, EL CLAN adds that the Deputy Superintendency of Prudential Supervision, SASP, does not rule, nor justify on what legal basis it would be permitted for a regulation to contravene the LPAG, imposing conditions less favorable5 than the referred norm, when it makes no distinction, and specifies that THE RESOLUTION would only be limited to indicating the articles that empower it to issue legal norms regulating matters of the securities market;

That, on the other hand, EL CLAN points out that it complied with submitting the Compliance Report and the Letter of Recommendations on accounting internal control aspects for fiscal year 2017 and 2018, and that although there was a delay in the submission of said information, this should be considered as minimal impact on the principle of transparency;

That, the administered company adds that it did not intend to breach, omit the request made or fail to submit the requested information, given that if that had been the case the information would not have been brought to the SMV's knowledge;

That, as indicated above, on 26 February of this year EL CLAN submits complementary arguments basically repeating the arguments of its appeal and additionally stating that: “…, it must be taken into account that it incurs another violation of the duty to provide reasons, by stating that the

[1] Article 236-A in Law No. 27444 – General Administrative Procedure Law, modified by Legislative Decree No. 1272, published on 21 December 2016 (with the same wording as the TUO LPAG).

[2] Article 28.- CASES IN WHICH CORRECTION DOES NOT APPLY AS AN EXEMPTION FROM LIABILITY They are not eligible for correction for the purposes of the provisions of literal f) of article 27: c) The late or incomplete submission, or the non-submission of material facts, financial information and annual reports.

[3] “Article II.- Content 1. This Law contains common norms for the actions of the administrative function of the State and regulates all administrative procedures developed in the entities, including special procedures. 2. Laws that create and regulate special procedures may not impose conditions less favorable to the administered parties than those provided in this Law. (…)”

[4] “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 necessarily observe the principles of the administrative sanctioning power referred to in article 248, as well as the structure and guarantees provided for the administrative sanctioning procedure. Special procedures may not impose conditions less favorable to the administered than those provided for in this Chapter.”

[5] EL CLAN refers to article 28 of the New Sanctions Regulation.

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application of the exemption from liability established in article 257°, numeral 1, literal f) of the TUO OF THE LPAG is subject to the constitutive act of the infringement being remedied and not the consequences of the administrative infractions”;

That, likewise, in said arguments, EL CLAN cites the “Practical Guide on the administrative sanctioning procedure”6 (hereinafter, the GUIDE) prepared by the Ministry of Justice and Human Rights (MINJUS), which refers to the following:

That, in this regard EL CLAN states the following: “In that sense, although the General Superintendence of Prudential Compliance states that in application of the principles contained in article 248°, numeral 3 of the TUO of the LPAG, account must be taken of what the spirit of the TUO of the LPAG is, since the Ministry of Justice has expressly ruled on this, stating that spontaneous reparative action is preferred over carrying out preliminary proceedings and initiating the sanctioning procedure, with all the expenses it involves, and furthermore in our case, remediation has been carried out in cases of existence of delay, without the existence of consequences or damages having been accredited”;

That, on the other hand, EL CLAN mentions the following: “Likewise, in report7 it is stated that «the infraction analyzed in this part of the resolution does not meet the requirement of minimum affectation to the principle of transparency, so it is not appropriate to apply a warning sanction», however, for said statement there is no development that supports it. This is all the more so, if in the SANCTION CRITERIA there is no objective definition of what is understood as minimum”;

II. EVALUATION OF THE ARGUMENTS SET FORTH BY EL CLAN

That, EL CLAN maintains that the exemption from liability for infractions established in literal f) of subsection 1 of article 257°8 of the TUO LPAG, on voluntary remediation, is applicable to it, however, said provision requires

[6] Approved by Directoral Resolution No. 002-2017-JUS/DGDOJ

[7] EL CLAN does not specify which report it refers to.

[8] “f) The voluntary remediation by the possible sanctioned party of the act or omission imputed as constitutive of administrative infraction, prior to the notification of the imputation of charges referred to in subsection 3) of article 255”

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of two elements: i) voluntariness; and, ii) that it be prior to the notification of imputation of charges;

That, in the present case, it is observed that by means of Official Letter No. 3629-2020-SMV/10.29 of 13 October 2020, EL CLAN is required to immediately submit the compliance reports and recommendation letters on aspects of internal accounting control for the periods 2017 and 201810, among others. Said documentation, in response to such requirement, is presented by EL CLAN on 19 October 2020;

That, in that sense, the requirement of voluntariness referred to in article 257 of the TUO LPAG for remediation to operate as an exemption has disappeared, since there is a requirement addressed to EL CLAN to comply with the aforementioned obligations, therefore, remediation would not be applicable as an exemption from liability;

That, in this way THE RESOLUTION also specifies it when it refers to the following:

“On the other hand, it must be indicated that the application of the exemption from liability established in article 257°, numeral 1, literal f) of the TUO OF THE LPAG is not applicable to the present case, given that, although the submission of the Compliance Report, as well as the Recommendation Letter on aspects of internal accounting control, corresponding to fiscal year 2017 and 2018 was carried out prior to the notification of the OFFICIAL LETTER OF CHARGES, they were submitted as a result of the request made by means of Official Letter No. 3629-2020-SMV/10.2 of 13 October 2020; therefore, in accordance with the provisions of article 257, numeral 1), literal f) of the TUO OF THE LPAG and article 27°, literal f) of the NEW SANCTIONS REGULATION, voluntary remediation must be carried out prior to the notification of the official letter of charges and provided that no communication demanding compliance with the obligation has been sent, which did not happen in the present case”

That, on the other hand, it is appreciated that in the present case, as provided by c) article 26 of the NEW SANCTIONS REGULATION, which states “The following constitute mitigating conditions of liability for infractions: c) The remediation carried out after its requirement or the initiation of the administrative sanctioning procedure.”, it is appropriate that the remediation carried out by EL CLAN in response to the requirement of the official letter dated 13 October 2020 be applied as a mitigating factor;

That, in this regard, it is observed from THE RESOLUTION that the SASP has considered the correction as a mitigating factor in its assessment of the sanction criteria, as follows:

[9] File 2020035645

[10] "(...) In view of the foregoing, and without prejudice to the administrative actions that may be generated, considering that as of the date of this letter the compliance report corresponding to the periods of 2017, 2018 and 2019 and the letter of recommendations on internal control aspects corresponding to the periods of 2017 and 2018 have not been sent to the SMV, you are urged to immediately send the aforementioned documents to this Superintendency"

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That, in that sense, according to what has been analyzed in the preceding paragraphs, this office considers that the exemption from liability did not occur, given the prior request before the submission of documents (which makes its compliance not voluntary); however, it is appropriate to assess said correction as a mitigating factor, as the SASP effectively did;

That, on the other hand, EL CLAN considers that the provisions of literal c)11 of article 28° of the NEW SANCTIONS REGULATIONS violate the provisions of the TUO LPAG, because the power of the SMV to issue legal norms regulating matters of the securities market does not allow going beyond what is regulated in said norm, and must adhere to the principles given for all sanctioning procedures, and it is not possible for a sanctions regulation to limit the provisions of a Law, such as the LG, since this would breach the provisions of article II12 of the TUO LPAG and subsection 247.213 of article 247 of the same normative body, which specifies that conditions less favorable to the administered than those established in this cannot be imposed;

That, in this regard, as can be seen from the RESOLUTION, and as has been stated in the previous recitals, the correction made by EL CLAN was not considered as an exemption from liability, because there was a prior request for correction by the SMV to EL CLAN to regularize the submission of the pending information, and for that same reason, the SASP considered that the correction is applicable as a mitigating factor, and not by application of Article 28 of the NEW SANCTIONS REGULATIONS, as suggested by the preceding argument;

That, likewise, the RESOLUTION shows a general analysis of legality (recitals 34 to 38), and in particular of the scope of article 28 of the NEW SANCTIONS REGULATIONS, in accordance with the precepts of the TUO LPAG, so this office does not agree that the Sanctions Regulations would oppose said Law;

[11] Article 28.- Cases in which the correction as an exemption from liability does not apply. The following are not eligible for correction for the purposes of the provisions of literal f) of article 27: c) The late or incomplete submission, or the non-submission of material facts, financial information and annual reports.

[12] "Article II.- Content 1. This Law contains common norms for the actions of the administrative function of the State and regulates all administrative procedures developed in the entities, including special procedures. 2. The laws that create and regulate special procedures may not impose conditions less favorable to the administered than those provided in this Law.(...)"

[13] "247.2 The provisions contained in this Chapter apply on a supplementary basis to all procedures established in special laws, including tax ones, which must necessarily observe the principles of the 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 conditions less favorable to the administered than those provided in this Chapter."

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That, EL CLAN states that the SASP does not rule, nor justify based on what legal support it would be permitted for a regulation to contravene the LPAG, imposing conditions less favorable14 than the referred norm, when it makes no distinction; and specifies that THE RESOLUTION would only limit itself to pointing out the articles that empower it to issue legal norms regulating matters of the securities market;

That, on this matter, it can be seen that the RESOLUTION develops arguments related to these statements, as follows:

That, notwithstanding this, as already mentioned, the SASP does not seek the application of the referred article to support that the correction made by EL CLAN does not constitute an exemption from liability, but rather is based on the LPAG itself, which considers the correction as an exemption provided it is made voluntarily, an element that disappears when there is a prior request from the authority, as occurs in the present case

[14] EL CLAN refers to article 28 of the New Sanctions Regulations.

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That, EL CLAN indicates that it complied with submitting the Compliance Report and the Letter of Recommendations on aspects of accounting internal control for the 2017 and 2018 fiscal years, and that although there was a delay in the submission of said information, this should be considered as a minimal impact on the principle of transparency; however, it should be noted that such documents should have been submitted on 30 April 2018 and 2019, respectively, and despite this, they were submitted on 19 October 2020, that is, in the first case almost three years later, and in the second, almost two years late. It should also be considered that this occurred only after the information was requested by official letter of 13 October 2020, which indirectly affects the associates and participants of the collective funds system, by limiting the work of the SMV, without prejudice to the fact that this type of company must know the rules applicable to it and consequently, its obligations, including the submission of periodic information to the SMV;

That, EL CLAN adds that it was not intended to breach, omit the request made or fail to present the requested information, since if that had been the case the information would not have been brought to the attention of the SMV, which, as can be seen from the RESOLUTION, was taken into account, when the SASP analyzes the intentionality in the commission of the infraction as part of the evaluation of the sanction, concluding that there was no intentionality;

That, according to what has been analyzed in the preceding paragraphs, it is observed that the arguments of EL CLAN have not disproved what was resolved by the SASP;

That, as mentioned, EL CLAN reiterates in its written arguments the arguments analyzed in the preceding paragraphs, so no additional reference and analysis is warranted;

That, notwithstanding the foregoing, in the aforementioned written arguments, EL CLAN adds: “…, it must be taken into account that it incurs15 in another violation of the duty to provide reasons, by stating that the application of the exemption from liability established in article 257, numeral 1, literal f) of the TUO OF THE LPAG is subject to the correction of the act constituting the infraction and not the consequences of the administrative infractions”;

That, in this regard, in the RESOLUTION it is not observed that the SASP had adopted the position raised by EL CLAN, nor that this motivates its decision not to apply the exemption for voluntary correction to the present case, and as mentioned above, the exemption cannot be recognized because in this case the element of voluntariness does not exist, since as already indicated EL CLAN WAS requested by the SMV to submit the pending documentation;

That, furthermore, in recitals 33 and 38 of the RESOLUTION, which are transcribed below, the SASP – referring to the GUIDE cited by EL CLAN – states that in order to apply the exemption for voluntary correction, in some cases, not only must the infringing conduct cease, but the consequences must also be repaired, which is not consistent with what was stated by EL CLAN;

[15] Refers to the SASP, according to the additional context of the paragraph

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That, notwithstanding this, it is observed that such references made in the RESOLUTION are general, not applied to the case and developed by the SASP in response to the approach made by EL CLAN;

That, additionally, EL CLAN again cites the Guide which refers to the following (the underlining and emphasis are from the written arguments):

That, in this regard EL CLAN specifies the following: “In this sense, although the General Superintendence of Prudential Compliance states that in application of the principles contained in article 248, numeral 3 of the TUO of the LPAG, it must be taken into account what is the spirit of the TUO of the LPAG, and the Ministry of Justice has expressly ruled on this, stating that spontaneous reparative action is preferred over carrying out preliminary proceedings and initiating the sanctioning procedure, with all the expenses involved, and furthermore in our case, correction has been carried out in cases of delay, without having proven the existence of consequences or damages”;

That, on this matter, indeed spontaneous reparative action should be preferred; however, as has been seen, in the present case, the spontaneity in the correction has been lost when the SMV requests EL CLAN by Official Letter No. 3629-2020-SMV/10.2 to immediately submit the documents not presented;

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That, on the other hand, EL CLAN states the following: “Likewise, in the report16 it is stated that «the infraction analyzed in this part of the resolution does not meet the requirement of minimal impact on the principle of transparency, so it is not appropriate to apply a sanction of admonition», however, for said statement there is no development that supports it. This is even more so, if in the SANCTION CRITERIA there is no objective definition of what is understood as minimal”;

That, in this regard, the reference to “minimal impact on the principle of transparency” is an expression introduced and used by the same administered entity within its arguments of the appeal, as follows:

That, additionally, it is observed that the citation made by EL CLAN is not found either in the RESOLUTION or in the REPORT, without prejudice to the fact that in none of said documents has it been established – as EL CLAN maintains – that the “minimal impact on the principle of transparency” determines the application of a reprimand as a sanction; and,

In accordance with the provisions of numeral 26 of article 12° of the Regulations on Organization and Functions of the SMV, approved by Supreme Decree No. 216-2011-EF;

RESOLVES:

Article 1°.- Declare unfounded the appeal filed by El Clan EAFC S.A. against Resolution of the Deputy Superintendent SMV No. 017-2022-SMV/10.

Article 2°.- Consider the administrative route exhausted.

Article 3°.- Transcribe this resolution to El Clan EAFC S.A.

Article 4°.- Order the dissemination of this resolution on the Institutional Page of the Superintendency of the Securities Market on the Single Digital Platform of the Peruvian State (www.gob.pe/smv).

Register, communicate and publish.

[16] EL CLAN does not specify which report it refers to. It is assumed that it refers to the OAJ REPORT.

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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"

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Lorena Masías Quiroga
Superintendent of the Securities Market

Reason:

Signed by: VARGAS PIÑA Julio Cesar FAU 20131016396

Reason:

Signed by: GIL VASQUEZ Liliana FAU 20131016396 soft

Reason: 2024-05-14 16:09:39

Signed by: MASIAS QUIROGA Lorena FAU 20131016396 soft