Superintendent Resolution No. 152-2024-SMV/02

PERU Ministry of Economy and Finance

SMV
Securities Market Superintendence
Electronically signed document within the framework of Law No. 27269, Law of Digital Signatures and Certificates, its regulations and amendments. The integrity of the document and authorship Superintendent Resolution No. 152-2024-SMV/02 Lima, December 27, 2024 The Superintendent of the Securities Market

SEEN:

File No. 2022023479 which contains, among others, the appeal filed by FIT Capital S.A.C. against the Adjunct Superintendent Resolution SMV No. 032-2023-SMV/10, Report No. 1238-2024-SMV/06 issued by the Legal Advisory Office, as well as the arguments presented in the hearing for the use of the word by the representative of the aforementioned company;

CONSIDERING:

1. That, on February 27, 2020 1, the then FIT Capital Brokerage Society S.A.C. —now FIT Capital S.A.C.— (hereinafter, FIT CAPITAL) sent, as its Audit Report on the Evaluation of the Control System for the corresponding year 2019 (hereinafter, 2019 CONTROL SYSTEM REPORT), a document titled "Letter of Recommendations on Internal Control, Accounting and Other Matters" (hereinafter, LETTER OF RECOMMENDATIONS);

2. That, through Letter No. 3553-2020-SMV/10.2 of October 8, 2020, FIT CAPITAL was informed that the so-called LETTER OF RECOMMENDATIONS did not meet the purpose and scope required by Article 139 of the Regulation of Intermediation Agents, approved by SMV Resolution No. 034-2015-SMV/01 and its amendments (hereinafter, RAI), and was required to send the 2019 CONTROL SYSTEM REPORT within ten (10) business days;

3. That, on October 21, 2020, FIT CAPITAL requested an extension to address Letter No. 3553-2020-SMV/10.2, which was granted through Letter No. 3802-2020-SMV/10.2;

4. That, on October 29, 2020, FIT CAPITAL presented a letter in response to Letter No. 3553-2020-SMV/10.2 in which it indicated, among other things, that its external auditors Caipo and Associates S. Civil de R.L. (hereinafter, KPMG) had affirmed having included in their evaluation all the points established in Article 139 of the RAI. Likewise, they attached the response letter from KPMG C0815-20 dated October 29, 2020 and the new version of the Letter of

1 File No. 2020008017.

PERU Ministry of Economy and Finance

SMV
Securities Market Superintendence
Electronically signed document within the framework of Law No. 27269, Law of Digital Signatures and Certificates, its regulations and amendments. The integrity of the document and authorship Recommendations, under the name "Memorandum of Recommendations on Internal Control, Accounting and Other Matters December 31, 2019" (hereinafter, MEMORANDUM OF RECOMMENDATIONS);

5. That, through Letter No. 2877-2022-SMV/10.3 of June 1, 2022, a charge was imputed to FIT CAPITAL for having failed to submit the 2019 CONTROL SYSTEM REPORT within the deadline established in Article 128, letter c), of the RAI;

6. That, subsequently, through Adjunct Superintendent Resolution SMV No. 032-2023-SMV/10 (hereinafter, SANCTION RESOLUTION), the Prudential Supervision Adjunct Superintendence (SASP) resolved to sanction FIT CAPITAL with a fine of four (04) Tax Units (UIT), for having committed one (01) serious infringement typified in Annex X, section 2, numeral 2.16 of the Sanctions Regulation, approved by SMV Resolution No. 035-2018-SMV/01 (hereinafter, SANCTIONS REGULATION), for failing to comply with presenting the 2019 CONTROL SYSTEM REPORT within the deadline established in Article 128, letter c), of the RAI;

7. That, on June 22, 2023, FIT CAPITAL filed an appeal against the SANCTION RESOLUTION, in order for it to be revoked;

8. That, through Superintendent Resolution No. 098-2023-SMV/02 of November 22, 2023, the authorization to operate as a brokerage company for FIT CAPITAL was resolved to be cancelled, and consequently, to exclude it from the Brokerage Agents section of the Public Registry of the Securities Market – RPMV;

9. That, through Report No. 1238-2024-SMV/06 of September 20, 2024 (hereinafter, REPORT), the Legal Advisory Office issued an opinion on the appeal filed by FIT CAPITAL;

10. That, through Letter No. 4227-2024-SMV/14 of September 20, 2024, FIT CAPITAL was notified of the REPORT for the purpose of presenting its arguments, within a period of five (05) business days, as provided for in Article 18 of the SANCTIONS REGULATION;

11. That, on October 4, 2024, the presentation of arguments took place, by FIT CAPITAL, regarding the REPORT;

I. DEFENSE ARGUMENTS OF FIT CAPITAL

12. That, below are exposed succinctly the arguments of the appeal filed by FIT CAPITAL and its oral report:

(i) The SASP deliberately ignores what was stated by KPMG, in its communication dated October 29, 2020, through which it states that the LETTER OF RECOMMENDATIONS does qualify as the 2019 CONTROL SYSTEM REPORT. Likewise, it errs in its reasoning and interpretation by considering that it is a proven fact that the MEMORANDUM OF RECOMMENDATIONS constitutes a new version of the LETTER OF RECOMMENDATIONS, without having proven in the first instance whether the latter complies or not with the scope of Article 139 of the RAI, through the investigation of the procedures practiced by KPMG, the samples taken and the working papers.

In this sense, under its criterion, the principle of presumption of lawfulness has not been met, as no single element of conviction has been provided that accredits that the LETTER OF RECOMMENDATIONS does not comply with the scope and purpose of Article 139 of the RAI, nor has it been sufficiently motivated. Furthermore, the report that gave rise to the SANCTION RESOLUTION contains no indication of infringement, so an origin nullity would have been incurred.

(ii) In the "Commitment Letter" corresponding to the 2019 exercise, signed between FIT CAPITAL and KPMG, it was established that the aforementioned audit society had the obligation to issue the 2019 CONTROL SYSTEM REPORT, as provided by the regulations. Thus, on February 27, 2020, KPMG issued the LETTER OF RECOMMENDATIONS and, on that same date, FIT CAPITAL sent said document to the Securities Market Superintendence – SMV, with the purpose of complying with the obligation established in Article 128, letter c), of the RAI. In this sense, the responsibility for the LETTER OF RECOMMENDATIONS having been prepared according to what the regulations provide corresponds to KPMG, since said audit society was hired to prepare the mentioned document. Furthermore, FIT CAPITAL cannot intervene in the content of the document; since it could affect independence.

(iii) In considering 124 of the SANCTION RESOLUTION it is stated that FIT CAPITAL acted with fault, without specifying the source of such fault. Nevertheless, it alleges that, as long as the duty to present the 2019 CONTROL SYSTEM REPORT was fulfilled in a timely manner, there is no fault on the part of FIT CAPITAL.

(iv) In considering 135 of the SANCTION RESOLUTION it is stated that the Securities Market Superintendence – SMV did not issue an administrative act or declaration regarding the internal control letters that were presented as a control system report in previous years. In this sense, said behavior generated a legitimate trust in the administered, which led to the belief that the mentioned documents complied with the scope of the RAI. As a consequence, the SANCTION RESOLUTION would be violating the principle of legitimate trust and incurring a nullity.

In addition to the above, FIT CAPITAL states that the SASP, in considerations 136 and 137 of the SANCTION RESOLUTION, limits itself to declaring, without motivation, that the behavior indicated in the preceding paragraph does not constitute legally relevant behavior. Likewise, in its consideration 146 it exposes that the internal control letters corresponding to the years 2017, 2018 and 2019 are not identical. However, FIT CAPITAL considers that said Adjunct Superintendence ignores that the phrase about having issued the report to express an opinion on its financial statements, is repeated identically in the mentioned periods. In such a way, there is indeed a legally relevant behavior that generated legitimate trust in FIT CAPITAL that has been defrauded, which has generated the nullity of the sanction.

(v) In accordance with Article 115 of the RAI, the only bodies of the control system are: i) the compliance unit, ii) the risk management unit, and iii) the internal audit unit. In this sense, as the external authoring society is not considered a control body, the Control System Report that it issues would also not be relative to the internal control system. Therefore, it does not fall under the infringing type provided for in Annex X, section 2, numeral 2.16 of the SANCTIONS REGULATION. Furthermore, it contravenes the proscription on typification by analogy since, arbitrarily, it equates the documentation related to the internal control system with the report that must be evacuated by a body that is not part of the internal control system, so the type is inaccurate, imprecise and broad and, consequently, becomes null.

(vi) The infringing type that should have been imputed is that of presenting incomplete information since, on February 27, 2020, FIT CAPITAL fulfilled sending the LETTER OF RECOMMENDATIONS as the 2019 CONTROL SYSTEM REPORT and, on October 29, 2020, corrected said document. It alleges that the fact that it corrected it does not mean that it is unknown that the 2019 CONTROL SYSTEM REPORT was presented on time.

(vii) The right of defense has been violated by not allowing to produce evidence that accredits whether the LETTER OF RECOMMENDATIONS complies or not with the scope of the RAI, limiting itself to declaring, in an unmotivated way, that the offered evidentiary means are not relevant (audit working papers). Which constitutes a grave and flagrant violation of its right of defense that vitiates the SANCTION RESOLUTION with nullity.

II. EVALUATION OF THE APPEAL

2.1. Formal requirements of the appeal

13. That, in accordance with what is provided for in section 109.1 of Article 109 of Law No. 27444, General Administrative Procedure Law (hereinafter, LPAG), against an "act that implies that it violates, affects, disregards or harms a right or a legitimate interest, its contradiction in the administrative route is proceeded in the form provided for in this Law, so that it is revoked, modified, annulled or its effects are suspended";

14. That, regarding this, Article 207 of the LPAG provides that administrative resources are reconsideration and appeal; and that their filing must be raised within a period of fifteen (15) peremptory days. Complementarily, section 134.1 of Article 134 of the LPAG 2 provides that when the deadline is indicated by days, it will be understood as consecutive business days, excluding from

2 "Article 134.- Passage of the deadline
134.1 When the deadline is indicated by days, it will be understood as consecutive business days, excluding from
the computation those non-working days of the service, and the non-working holidays of national or regional order.
(…)"

PERU Ministry of Economy and Finance

SMV
Securities Market Superintendence
Electronically signed document within the framework of Law No. 27269, Law of Digital Signatures and Certificates, its regulations and amendments. The integrity of the document and authorship the computation those non-working days of the service, and the non-working holidays of national or regional order;

15. That, in addition to the above, Articles 113 3, 209 4 and 211 5 of the LPAG establish the requirements that the appeal must meet;

16. That, now well, from the evaluation carried out based on said legal framework, it has been verified that the appeal filed by FIT CAPITAL meets the requirements established in Articles 113, 207, 209 and 211 of the LPAG, since it was filed within the period of fifteen (15) business days from notification of the administrative act, it is founded on issues of pure law and meets the other requirements established by the regulations, so it corresponds to issue an opinion on the grounds thereof;

2.2. Evaluation of the arguments of the appeal

17. That, FIT CAPITAL states that what was stated by KPMG, in its communication dated October 29, 2020, through which it states that the LETTER OF RECOMMENDATIONS does qualify as the 2019 CONTROL SYSTEM REPORT, has been ignored. Likewise, it states that the SASP errs in the reasoning and interpretation by considering that it is a proven fact that the MEMORANDUM OF RECOMMENDATIONS constitutes a new version of the LETTER OF RECOMMENDATIONS, without having proven in the first instance whether the latter complied or not with the scope of Article 139 of the RAI, through the investigation of the procedures practiced by KPMG, the samples taken and the working papers.

3 "Article 113.- Requirements of the writings
Every writing that is presented before any entity must contain the following:

1. Full names, address and number of National Identity Document or foreigner's ID card of the administered, and if applicable, the quality of representative and of the person whom he represents.
2. The concrete expression of what is requested, the grounds of fact that support it and, when possible, the grounds of law.
3. Place, date, signature or fingerprint, in case of not knowing how to sign or being impeded.
4. The indication of the body, the entity or the authority to which it is directed, understanding by such, as far as possible, the authority of the grade closest to the user, according to the hierarchy, with competence to know and resolve it.
5. The address of the place where notifications of the procedure are desired to be received, when it is different from the real address exposed by virtue of numeral 1. This indication of address produces its effects from its indication and is presumed subsistent, unless its change is expressly communicated. Likewise, the electronic mail or, if applicable, the electronic box, in accordance with Article 20 of this law.
6. The relationship of the documents and attachments that accompany, indicated in the TUPA.
7. The identification of the file of the matter, in the case of already initiated procedures."

4 "Article 209.- Appeal Resource
The appeal resource will be filed when the challenge is based on a different interpretation of the produced evidence or when it is a matter of pure law, being directed to the same authority that issued the act that is challenged so that it elevates the acted to the hierarchical superior."

5 "Article 211.- Requirements of the resource
Once the deadlines to file the administrative resources have expired, the right to articulate them will be lost, leaving the act firm."

PERU Ministry of Economy and Finance

SMV
Securities Market Superintendence
Electronically signed document within the framework of Law No. 27269, Law of Digital Signatures and Certificates, its regulations and amendments. The integrity of the document and authorship Furthermore, it alleges that the report that gave rise to the SANCTION RESOLUTION contains no indication of infringement. In such a way, it holds, the principle of presumption of lawfulness has not been met and a nullity has been incurred;

18. That, regarding this, the text in force at the date of the commission of the sanction, letter c) of Article 128 of the RAI provided as follows:

"Article 128.- Information to the SMV
Audit societies must deliver to the SMV, when it requires them, a copy of all documentation or working papers that supports the reports and opinions they issue, as appropriate.
The Agent must present to the SMV:
(...) c) Report containing the opinion formulated regarding whether the Agent's control meets its objectives and offers reasonable assurance in all relevant aspects of preventing or detecting errors or irregularities in the normal course of the Agents' activities.
This opinion and reports must be sent to the SMV before February 28 of the following year." (Underlined and emphasis added)

19. That, complementarily, Article 139 of said regulation contemplates the following:

"Article 139.- Of the audit report on the evaluation of the control system The Control System Evaluation Report must contain the audit society's evaluation, regarding the Agent's Control System, observing if it meets its objectives and offers reasonable assurance in all relevant aspects of preventing or detecting errors or irregularities in the normal course of the Agents' activities. The scope of this evaluation must comprise at least cash operations, reporting operations, operations with Financial Instruments not registered in centralized mechanisms, operations with Financial Instruments traded abroad, operations with derivative instruments, control of prudential indicators, portfolio management, information processing computer systems, as well as on the main operations and areas that the audit society considers most important for the Agent". (Underlined and emphasis added)

20. That, as can be seen from the aforementioned articles, the control system report has the objective that the audit society issues an opinion regarding whether the intermediary agent's internal control meets its objectives and offers reasonable assurance in all relevant aspects of preventing or detecting errors or irregularities in the normal course of activities of said agent. Likewise, Article 139 of the RAI specifies what the scope of said evaluation must comprise;

21. That, now well, from the documents in the file, it has been observed that the LETTER OF RECOMMENDATIONS contains the following information:

(i) Letter CCI-013-20 of February 27, 2020
This letter was issued by KPMG to the Board of Directors and General Management of FIT CAPITAL.
It should be specified that, in its first and last paragraph it was indicated that: (a) the LETTER OF RECOMMENDATIONS was issued as part of the audit of the financial statements of FIT CAPITAL corresponding to the year 2019; (b) the evaluation of FIT CAPITAL's internal control system had the objective that KPMG be in conditions to express an opinion on the mentioned financial statements; and, (c) said evaluation did not have as its object to express an opinion on the internal control system as a whole, as cited below:

"As part of the audit of the financial statements of FIT Capital Brokerage Society S.A.C. (hereinafter "the Society") for the year ended December 31, 2019, we have evaluated the Society's internal control system, to the extent we considered necessary to determine the nature, timing and extent of the audit procedures, and thus be in conditions to express an opinion on its financial statements in accordance with International Auditing Standards approved for application in Peru by the Board of Deans of Public Accountants Colleges of Peru. (...) As a result of the review we carried out, we have obtained certain recommendations that we present in the following pages to help the Society in the continuous process of perfectioning its procedures and controls. Such recommendations do not necessarily cover all the weaknesses that the existing internal control system might have given that, as explained in the previous paragraphs, our study and evaluation does not have as its object to express an opinion on said system taken as a whole. (...)" (Underline added)

(ii) Section "Operational, accounting and internal control matters" In this section, KPMG issued recommendations to FIT CAPITAL regarding the registration of placement and structuring commissions in soles registered in dollar accounts. Additionally, the comment issued by FIT CAPITAL's Management regarding said recommendation was recorded.

(iii) Section "Follow-up on recommendations from previous years" In this section, KPMG exposed the situation of recommendations from previous years pending implementation by FIT CAPITAL regarding personnel indemnification. Likewise, the comment issued by FIT CAPITAL's Management regarding said recommendation was recorded.

PERU Ministry of Economy and Finance

SMV
Superintendencia del Mercado de Valores
Documento electrónico firmado digitalmente en el marco de la Ley N° 27269, Ley de Firmas y Certificados Digitales, su Reglamento y modificatorias. La integridad del documento y la autoría
22. That, it should be clarified that, in no section of the LETTER OF RECOMMENDATIONS is it observed that KPMG has issued an opinion regarding whether the internal control of FIT CAPITAL meets its objectives and offers reasonable assurance in all relevant aspects of preventing or detecting errors or irregularities in the normal course of the activities of said agent, as required by articles 128, literal c, and 139 of the RAI;
23. That, on the other hand, with respect to the MEMORANDUM OF RECOMMENDATIONS, sent on October 29, 2020 by FIT CAPITAL, in response to Office No. 3553-2020-SMV/10.2, it is observed that it contains the following information:
(i) Letter CCI-013-2020 of February 27, 2020
This letter is a new version of the one presented in the LETTER OF RECOMMENDATIONS; since it replaced its last paragraph with the following text:
«(...)
This report has been reviewed as of October 29, 2020, in accordance with specific requirements made by the Securities Market Superintendence and has been clarified in order to explicitly visualize the components provided for by the Intermediary Agents Regulation (SMV Resolution No. 034-2015-SMV/01 and amendments):
(i) activities carried out and audit procedures applied, (ii) criteria for the selection of the evaluated sample, and (iii) the recommendations that resulted, if applicable, in compliance with what is established in article 139 of the Intermediary Agents Regulation, carried out according to the procedures described in Section I.
Based on the audit procedures we performed and which are described in detail in Section I of this report, we have not identified internal control deficiencies and significant non-compliance related to the requirements of the Intermediary Agents Regulation. Section II includes recommendations for the continuous improvement of the Company's processes.
(...)» (Underline added)
As it is noted, in this last paragraph it was recorded that: (a) the MEMORANDUM OF RECOMMENDATIONS is a revised version as of October 29, 2020 of the LETTER OF RECOMMENDATIONS, in order to facilitate the components of the RAI; and, (b) in KPMG's opinion, no internal control deficiencies and significant non-compliance related to the RAI requirements were identified.
(ii) Section "Aspects related to compliance with what is established in article No. 139 of the Intermediary Agents Regulation" This section was added, detailing the procedures applied, the criteria for the selection of the sample and the results obtained regarding: (a) the evaluation of intermediary operations; (b) the evaluation of special aspects; and, (c) the evaluation of other aspects.

PERÚ Ministry of Economy and Finance

SMV
Superintendencia del Mercado de Valores
Documento electrónico firmado digitalmente en el marco de la Ley N° 27269, Ley de Firmas y Certificados Digitales, su Reglamento y modificatorias. La integridad del documento y la autoría Likewise, the following was specified among others:
«Based on the sample of operations determined according to the criteria indicated below, we have executed procedures to review the compliance by the Company of the operational and control procedures established in their respective manuals, in accordance with the Intermediary Agents Regulation approved by SMV Resolution No. 034-2015-SMV/01, and its amendments (hereinafter the "Regulation") and other applicable provisions. (...)». (Underline added) (iii) Section "Recommendations on operational, accounting and internal control aspects" The recommendations recorded in the sections "Recommendations on operational, accounting and internal control aspects" and "Follow-up on recommendations from previous years" of the LETTER OF RECOMMENDATIONS were maintained, as well as the comments of FIT CAPITAL's Management.
24. That, from the aforementioned, it is observed that the LETTER OF RECOMMENDATIONS and the MEMORANDUM OF RECOMMENDATIONS are different documents. Furthermore, it is in the latter that KPMG issues its opinion on FIT CAPITAL's control system, as well as on the results of the procedures applied. Consequently, it is not possible to sustain that the LETTER OF RECOMMENDATIONS qualifies as the 2019 INTERNAL CONTROL SYSTEM REPORT, since it does not meet the purpose and scope required by articles 128, literal c, and 139 of the RAI;
25. That, now, with respect to what is alleged by FIT CAPITAL, regarding the lack of means of proof by the first instance in not having carried out investigations of the procedures practiced by KPMG, for which the principle of presumption of legality would not have been fulfilled; it corresponds to state that said principle emanates from the constitutional principle of presumption of innocence, recognized in article 2, paragraph 24, literal e, of the Political Constitution of Peru, which provides that "every person is considered innocent until their responsibility has been declared judicially";
26. That, the scope of this guarantee has been extended to administrative law under the principle of presumption of legality, contemplated in article 230, numeral 9, of the LPAG, which provides the following:
"Article 230.- Principles of the administrative sanctioning power The sanctioning power of all entities is additionally governed by the following special principles:
(...)
9. Presumption of legality.- Entities must presume that those under their administration have acted in accordance with their duties while they do not have evidence to the contrary".

PERÚ Ministry of Economy and Finance

SMV
Superintendencia del Mercado de Valores
Documento electrónico firmado digitalmente en el marco de la Ley N° 27269, Ley de Firmas y Certificados Digitales, su Reglamento y modificatorias. La integridad del documento y la autoría
27. That, from the aforementioned article, it is evident that a presumption iuris tantum falls on the administered party regarding the legal compliance of their duties, corresponding to the administrative authority the obligation to gather the means of proof that allows it to rebut said presumption.
28. That, with respect to this principle, the author Morón Urbina 6 has stated the following:
"(...) This presumption covers the accused during the sanctioning procedure (...). The presumption will only yield if the entity can gather sufficient evidence on the facts and their authorship, have certainty that all the elements constituting the type provided for have occurred, and a sufficient logical reasoning that articulates all these elements forming conviction." (Underline added)
29. That, for its part, the Constitutional Tribunal 7 has exposed that:
"(...) any sanction, whether criminal or administrative, must be based on a minimum probative activity of charge, that is, the burden of proof corresponds to the accuser; this must prove the fact for which he accuses a certain person, proscribing sanctions that are based on presumptions of guilt. Thus the presumption of innocence (...) constitutes a limit to the exercise of the sanctioning power of the State, in its various manifestations" (Underline added)
30. That, from what has been stated above, the administrative authority must carry out a minimum probative activity in order to collect sufficient proof element(s) to demonstrate that the administered party has committed the alleged infringement imputed to them, with the purpose of applying the corresponding sanction. In the absence of probative activity, it must be presumed that the conduct of the administered party has been in accordance with the law, based on the principle of presumption of legality;
31. That, in that framework, it has been observed that, in the case under analysis, FIT CAPITAL was imputed with not having fulfilled the obligation to present the 2019 INTERNAL CONTROL SYSTEM REPORT, in accordance with the deadline established in article 128, literal c), of the RAI;
32. That, on this particular matter, it is important to highlight that infringements related to the presentation of information outside the deadline established by the regulations are usually determined through the deadline for its delivery. However, this should not mean that the administered party is exempt from responsibility simply for having sent, within the deadline, any document or report that differs in nature, purpose and/or scope from what is required by the corresponding regulation. Adopting such an approach could undermine the importance of

6 MORÓN URBINA, Juan Carlos (2020). Comments on the General Administrative Procedure Law.
15th ed. Lima: Gaceta Jurídica. Pg. 440 – 441.
7 File 02971-2016-PA/TC.

PERÚ Ministry of Economy and Finance

SMV
Superintendencia del Mercado de Valores
Documento electrónico firmado digitalmente en el marco de la Ley N° 27269, Ley de Firmas y Certificados Digitales, su Reglamento y modificatorias. La integridad del documento y la autoría such an obligation, compromising the protection of the legal interest that is intended to be guaranteed;
33. That, in that context, it has been observed that in the SANCTION RESOLUTION the LETTER OF RECOMMENDATIONS has been considered as means of proof; since, based on its content, it could be determined whether or not it qualified as the 2019 INTERNAL CONTROL SYSTEM REPORT. In this line, the first instance pointed out that in the LETTER OF RECOMMENDATIONS it was recorded that it was issued as part of the audit of FIT CAPITAL's annual financial statements corresponding to 2019, in order for the audit firm to be in a position to express an opinion on said financial information. Furthermore, as has been previously exposed, in said document it is not observed that KPMG has issued its opinion regarding FIT CAPITAL's control system. Consequently, from the scope of the LETTER OF RECOMMENDATIONS, the first instance was in a position to conclude that the mentioned document did not qualify as the 2019 INTERNAL CONTROL SYSTEM REPORT, without the need to resort to other complementary means of proof, such as a justification of working papers;
34. That, for the aforementioned, it is not considered that the principle of presumption of legality has been violated and, therefore, no cause of nullity has been incurred;
35. That, likewise, FIT CAPITAL states that in the "Commitment Letter" corresponding to the 2019 exercise, which it signed with KPMG, it was established that the mentioned audit firm had the obligation to issue the 2019 Internal Control System Report, as provided by the regulation. Consequently, it maintains that the responsibility for the content of the LETTER OF RECOMMENDATIONS corresponds to KPMG, even more so when FIT CAPITAL cannot intervene in its elaboration since it could affect independence;
36. That, on this particular matter, it must be taken into account that the development in the securities market is based on the confidence that investors, potential investors and the market in general can have in the diligent work that the different entities participating in it can have, among which are the stockbroker companies. In this sense, it is necessary for the participants in the securities market to proceed in a responsible and careful manner in the presentation of eventual and periodic information - such as the Internal Control System Report - and must deploy the necessary measures that allow them to corroborate that said information is the one required by the regulation;
37. That, in that context, it corresponds to reiterate that, it would not be justifiable to sustain that FIT CAPITAL, in its then condition as a stockbroker company, fulfilled its obligation simply by sending a document or report under the name of 2019 INTERNAL CONTROL SYSTEM REPORT, even if it differed in nature, purpose and/or scope from what is required by the pertinent regulation. Such reasoning would undermine the importance of the mentioned obligation;
38. That, it should be clarified, that what is stated in the preceding numeral should not be understood as that, at that time, FIT CAPITAL had the

PERÚ Ministry of Economy and Finance

SMV
Superintendencia del Mercado de Valores
Documento electrónico firmado digitalmente en el marco de la Ley N° 27269, Ley de Firmas y Certificados Digitales, su Reglamento y modificatorias. La integridad del documento y la autoría obligation to validate the content of the 2019 INTERNAL CONTROL SYSTEM REPORT or the faculty to interfere in said content. What is being demanded of FIT CAPITAL is that it has verified whether the mentioned document complies or not with the purpose and scope required by articles 128, literal c, and 139 of the RAI. In such a way, said action should not generate an impact on the independence and autonomy of the audit firm;
39. That, therefore, the fact that FIT CAPITAL alleges that in the "Commitment Letter" signed with KPMG it is stipulated that said audit firm must issue the 2019 INTERNAL CONTROL SYSTEM REPORT, does not mean that FIT CAPITAL does not verify if the document it is sending complies or not with the nature, purpose and/or scope required by the pertinent regulation. Consequently, it corresponds to dismiss the arguments made by FIT CAPITAL on this point;
40. That, on the other hand, FIT CAPITAL alleges that in consideration 124 of the SANCTION RESOLUTION it is stated that it acted with negligence, without specifying the source of such negligence; nevertheless, under its judgment, it considers that since it fulfilled its duty to present the 2019 INTERNAL CONTROL SYSTEM REPORT on time, there is no negligence on its part;
41. That, with respect to the principle of culpability, article 230, numeral 10, of the LPAG provides the following:
"Article 230.- Principles of the administrative sanctioning power The sanctioning power of all entities is additionally governed by the following special principles:
(...)
10. Culpability.- Administrative responsibility is subjective, except in cases where the law or legislative decree provides for objective administrative responsibility".
42. That, national and international doctrine has widely developed this principle. Thus Morón Urbina 8 has exposed the following:
"(...) it is proven in the sanctioning procedure that the subject has acted in a fraudulent or negligent manner in the commission of the infringing act and not only because the conduct or the harmful effect has been produced. In this sense, by virtue of this principle, which encompasses other categories within it, it is not enough with the material result produced by the action, but it requires taking into account the subjective circumstances of the author".
43. That, likewise, the author Ángeles De Palma 9 has exposed that:

8 MORÓN URBINA, Juan Carlos (2011). Comments on the General Administrative Procedure Law. 9th ed. Lima: Gaceta Jurídica.
9 DE PALMA DEL TESO, Ángeles (2001). Culpability. Administrative Justice: Journal of Administrative Law. Pp. 29 – 51.

PERÚ Ministry of Economy and Finance

SMV
Superintendencia del Mercado de Valores
Documento electrónico firmado digitalmente en el marco de la Ley N° 27269, Ley de Firmas y Certificados Digitales, su Reglamento y modificatorias. La integridad del documento y la autoría "The principle of fraud or negligence, referred to the subjective elements of the infringement, is the essential core of the principle of culpability. (...) Thus, it can be said that a person acts culpably or imprudently when, by disregarding a legal duty of care, they do not behave with the diligence that is expected of them and carry out (in a non-fraudulent or intentional manner) the conduct typified as an infringement, being such fact foreseeable and avoidable. Therefore, negligence or imprudence implies the non-observance of the expected diligence. (...)" "(...) On the other hand, the principle of culpability contributes to the correct application of the principle of proportionality of sanctions, by allowing a greater adequacy between the gravity of the sanction and that of the infringing act. (...). Therefore, when concretizing the sanction within the legally provided framework it is necessary to consider the degree of culpability, whether the offense has been committed with intent or negligence."
44. That, from the aforementioned, it can be concluded that administrative responsibility must be evaluated subjectively, except in cases where the specific law provides otherwise. This means that, for the correct application of the principle of culpability in the administrative sanctioning procedure, it is required to consider not only the result of the infringing act, but also the intention (fraud) or negligence (negligence) of the author. This approach allows for a greater adequacy and proportionality of sanctions, taking into consideration the various degrees of culpability. In this way, it is ensured that the imposed sanction reflects, among others, the subjective circumstances of the infringer;
45. That, now, in consideration 124 of the SANCTION RESOLUTION it was exposed that "(...) although it cannot be determined if FIT CAPITAL SAB acted with the will to break the obligations provided for in the RAI, according to the charge imputed, it is evident that its action involves the commission of an infringement by negligence; that is, by the production of an unlawful result, duly typified, completely foreseeable and avoidable, by not having fulfilled the obligation to present the INTERNAL CONTROL SYSTEM REPORT corresponding to the year 2019 within the established deadline, according to what is required in the RAI". Likewise, in consideration 206 it was stated that it has not been evidenced that FIT CAPITAL has acted with intent in the commission of the infringement;
46. That, on this particular matter, it can be noticed that in the SANCTION RESOLUTION the culpability of FIT CAPITAL has indeed been evaluated. This position is shared by this office since, although on February 27, 2020, FIT CAPITAL sent the LETTER OF RECOMMENDATIONS, it did not qualify as the 2019 INTERNAL CONTROL SYSTEM REPORT, a situation that should have been previously alerted by said entity, in attention to the diligence expected in the compliance with regulatory provisions (principle of culpability). Therefore, it is not legally possible to sustain that the 2019 INTERNAL CONTROL SYSTEM REPORT was presented on that date, nor that the action of FIT CAPITAL was diligent;

PERÚ Ministry of Economy and Finance

SMV
Superintendencia del Mercado de Valores
Documento electrónico firmado digitalmente en el marco de la Ley N° 27269, Ley de Firmas y Certificados Digitales, su Reglamento y modificatorias. La integridad del documento y la autoría
47. That, therefore, it corresponds to dismiss FIT CAPITAL's arguments regarding the violation of the principle of culpability.
48. That, on the other hand, FIT CAPITAL alleges that the principle of legitimate trust has been violated due to the lack of an administrative act or declaration, by the Securities Market Superintendence – SMV, regarding the internal control letters that were presented as internal control system reports in previous years, which have the same wording as the LETTER OF RECOMMENDATIONS. Additionally, it points out that, in the SANCTION RESOLUTION, it has not been motivated why this non-observance does not qualify as a legally relevant behavior;
49. That, regarding this, it corresponds to state that the principle of legitimate trust is contemplated as a general principle of Administrative Law in Article IV, paragraph 1.15, of the Preliminary Title of the LPAG:
"Article IV. Principles of the administrative procedure
1. The administrative procedure is fundamentally based on the following principles, without prejudice to the validity of other general principles of Administrative Law:
(...)
1.15. Principle of predictability or legitimate trust.- The administrative authority provides the administered parties or their representatives with true, complete and reliable information on each procedure under its charge, so that, at all times, the administered party can have a certain understanding of the requirements, procedures, estimated duration and possible results that could be obtained.
The actions of the administrative authority are consistent with the legitimate expectations of the administered parties reasonably generated by practice and administrative precedents, unless for the reasons that are explicitly stated, in writing, it decides to depart from them.
The administrative authority is subject to the current legal framework and cannot act arbitrarily. In this sense, the administrative authority cannot vary the interpretation of the applicable norms unreasonably and without motivation." (Underline added)
50. That, with respect to this principle, it is fundamental to highlight that both national doctrine 10 and international doctrine 11 agree that one of the essential elements for the application of the mentioned principle is the existence of a concrete action or behavior on the part of the administrative authority, capable of generating legal effects, that is, it must be capable of creating, modifying or extinguishing a concrete legal situation. In this sense, it is not enough to invoke acts or conduct

10 MORÓN URBINA, Juan Carlos (2020). Comments on the General Administrative Procedure Law.
15th ed. Lima: Gaceta Jurídica. Pg. 131.
11 SÁNCHEZ MORÓN, Miguel (2005). Venire contra factum proprium non valet. Journal of Administrative Documentation.

PERÚ Ministry of Economy and Finance

SMV
Superintendencia del Mercado de Valores
Documento electrónico firmado digitalmente en el marco de la Ley N° 27269, Ley de Firmas y Certificados Digitales, su Reglamento y modificatorias. La integridad del documento y la autoría

ambiguous, confusing, or indefinite interpretations that could give rise to different interpretations; but rather, such act or conduct must be unequivocal, conclusive, and clear;

51. That, in that framework, it is not possible to sustain that the omission of a pronouncement by the Superintendencia del Mercado de Valores – SMV regarding the internal control letters that were presented as internal control system reports in previous years equates to an effective conduct that has generated any type of expectation on FIT CAPITAL; since, according to the principle of legitimate trust, the administrative authority, within the framework of its competencies and powers, must have issued some act destined to manifest, in an unequivocal, conclusive, and clear manner, its position regarding said matter. This situation has not been demonstrated in the present case;

52. That, in that sense, the position of the SANCTION RESOLUTION is shared, regarding that no legally relevant and effective behavior is appreciated that could have configured in FIT CAPITAL the trust of having fulfilled its duty to present the INTERNAL CONTROL SYSTEM REPORT 2019 with the submission of the RECOMMENDATION LETTER. Therefore, it corresponds to dismiss the arguments of FIT CAPITAL, having evidenced that the principle of legitimate trust has not been violated;

53. That, additionally, FIT CAPITAL alleges that article 115 of the RAI does not contemplate the external audit firm as a body of the internal control system; and that, therefore, the report issued by it would not be relative to the internal control system either. In that sense, it considers that it would not be subsumed under the infringing type provided for in Annex X, section 2, numeral 2.16 of the SANCTIONS REGULATION, so that, the type is inaccurate, imprecise, and broad and, consequently, becomes null;

54. That, as has been previously exposed, articles 128, letter c, and 139 of the RAI expressly establish that the system report must contain the evaluation of the audit firm, regarding the Control System of the Agent observing whether it fulfills its objectives and offers reasonable security in all relevant aspects of preventing or detecting errors or irregularities in the normal course of the agents' activities;

55. That, the fact that the external audit firm is not included in article 115 of the RAI, does not mean that the Report issued by virtue of articles 128, letter c, and 139 of the RAI is not part of the internal system;

56. That, on the other hand, Annex X, section 2, numeral 2.16 of the SANCTIONS REGULATION contemplates as an infringement "Not to present, or not to do so timely, the reports, the annual work plan, or the documentation related to the internal control system, according to what the regulations establish" (Underline added);

57. That, from said text, it is not observed that the infringement type is inaccurate, imprecise, and broad. On the contrary, it presents a degree of determination that is reasonable and sufficient, which allows FIT CAPITAL to predict, in a sufficient and adequate manner, the consequences of its acts, so there is no violation

PERÚ Ministry of Economy and Finance

SMV
Superintendencia del Mercado de Valores
Documento electrónico firmado digitalmente en el marco de la Ley N° 27269, Ley de Firmas y Certificados Digitales, su Reglamento y modificatorias. La integridad del documento y la autoría the principle of legality. Therefore, it corresponds to dismiss the arguments of FIT CAPITAL in this aspect of its writing;

58. That, FIT CAPITAL argues that the infringing type that should have been imputed to it is that of presenting incomplete information, since on February 27, 2020, it fulfilled the obligation to submit the RECOMMENDATION LETTER as the INTERNAL CONTROL SYSTEM REPORT 2019 and, on October 29, 2020, corrected said document. It alleges that, the fact that it corrected it does not mean that it is denied that the INTERNAL CONTROL SYSTEM REPORT 2019 was presented timely;

59. That, regarding this, as has been evidenced in the preceding paragraphs, the RECOMMENDATION LETTER and the RECOMMENDATIONS MEMORANDUM are different documents. Therefore, it is not possible to sustain that the RECOMMENDATION LETTER qualifies as the INTERNAL CONTROL SYSTEM REPORT 2019 and that it was subsequently remedied, since the primary document does not fulfill the purpose and scope required by articles 128, letter c, and 139 of the RAI;

60. That, finally, FIT CAPITAL reiterates that the right to defense has been violated by not allowing the production of evidence to prove that the RECOMMENDATION LETTER fulfills the scope of the RAI, limiting itself to declaring, in an unmotivated manner, that the offered means of proof are not relevant; which, in its judgment, constitutes a grave and flagrant violation of its right to defense that vitiates the SANCTION RESOLUTION with nullity;

61. That, regarding this particular matter, it corresponds to point out that, in the preceding paragraphs referred to the means of proof, this argument has been disproven;

62. That, according to what has been developed and analyzed above, it corresponds to confirm the SANCTION RESOLUTION; and, consequently, to dismiss the appeal filed by FIT CAPITAL; and,

Being in accordance with what is provided for in numeral 26 of article 12° of the Regulation of Organization and Functions of the Superintendencia del Mercado de Valores, approved by Supreme Decree N° 216-2011-EF and its modifications;

RESOLVES:

Article 1°.- Declare unfounded the appeal filed by FIT Capital S.A.C. against the Superintendent Adjunct Resolution SMV N° 032-2023-SMV/10.

Article 2°.- Declare the administrative route exhausted.

Article 3°.- Transcribe this resolution to FIT Capital S.A.C.

PERÚ Ministry of Economy and Finance

SMV
Superintendencia del Mercado de Valores
Documento electrónico firmado digitalmente en el marco de la Ley N° 27269, Ley de Firmas y Certificados Digitales, su Reglamento y modificatorias. La integridad del documento y la autoría

Article 4°.- Order the dissemination of this resolution on the Institutional Page of the Superintendencia del Mercado de Valores – SMV on the Single Digital Platform of the Peruvian State (www.gob.pe/smv).

Register, communicate, and publish.

Zósimo Juan Pichihua Serna
Superintendent of the Securities Market