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2016-06-22 | NDMC-07

Added 2026-08-19 · Updated 2026-08-20

Technical Standards for Investment Fund Investments

The Technical Standards establish minimum requirements for the investment of Open and Closed Funds in securities, defining permitted assets such as government bonds, bank deposits, and foreign equities, while prohibiting investments in real estate or specific closed funds not covered by separate regulations. The rules mandate that Open Funds maintain at least 20% of their resources in high-liquidity, low-risk assets, require strict custody and segregation of assets, and impose liquidity and diversification limits on management companies. These standards apply to authorized Fund Managers, Investment Administrators, and Investment Committees, enforcing operational controls and documentation to ensure investor protection and adequate returns.

El Salvador

Superintendencia del Sistema Financiero

THE COMMITTEE OF STANDARDS OF THE CENTRAL RESERVE BANK OF EL SALVADOR, CONSIDERING: I. That Article 5 of the Investment Funds Law establishes that the Superintendence of the Financial System, within its scope of competence, is the administrative authority responsible for supervising Managers, their operations, and other participants regulated by the same; this includes, supervising the investments made by Managers with resources from Investment Funds. II. That Article 6 of the Investment Funds Law establishes that the Central Reserve Bank of El Salvador, within its scope of competence, is responsible for issuing the necessary technical standards that allow for the application of the Investment Funds Law. III. That Chapter II, Title III of the Investment Funds Law, referred to as the Investment Regime, establishes the authority of the Central Reserve Bank of El Salvador to issue the necessary technical standards for the application of said Chapter, which allow for the adequate realization of investments made with resources from Investment Funds. IV. That Article 96 of the Investment Funds Law establishes that investments made with resources from Investment Funds shall have the sole objective of obtaining adequate profitability, based on the level of risk and liquidity requirements defined in the investment policy. V. That Article 35 of the Law on Supervision and Regulation of the Financial System establishes that directors, managers, and other officials holding positions of direction or administration in the members of the financial system must conduct their business, acts, and operations complying with the highest ethical standards of conduct and acting with the due diligence of a good merchant in their own business. VI. That for the development of investments with resources from Investment Funds, it is necessary to have minimum provisions that must be followed by the Managers of Investment Funds, in order to achieve adequate profitability, security, and diversification for the benefit of investors. THEREFORE, by virtue of the regulatory powers conferred by Article 99 of the Law on Supervision and Regulation of the Financial System,

AGREES to issue the following: TECHNICAL STANDARDS FOR INVESTMENT FUND INVESTMENTS CHAPTER I OBJECT, SUBJECTS, AND TERMS Object Art. 1.- These Standards aim to establish guidelines regarding investments made with resources from Investment Funds, with the objective of obtaining adequate profitability, based on the Fund's risk level, liquidity requirements, diversification, and limits defined in the investment policy according to the nature of the Fund, in accordance with the Internal Regulations and in concordance with what is provided in the Investment Funds Law. These Standards develop minimum provisions to be considered for the investments of Open Funds and Closed Funds that invest in securities. In the case of Closed Real Estate Investment Funds, as well as Closed Funds that invest in securities issued by companies whose shares are not traded on the stock exchange and whose purpose is investment in specific business projects to be developed in the medium and long term, the specific provisions contained in the technical standards issued for such effect by the Central Reserve Bank of El Salvador through its Committee of Standards shall apply. Subjects Art. 2.- The subjects obliged to comply with these Standards shall be the following: a) Investment Fund Managers authorized by the Superintendence of the Financial System, in accordance with what is established in the Investment Funds Law; b) Investment Administrators of Investment Funds authorized by the Superintendence of the Financial System, who work for an Investment Fund Manager; and c) Members of the Investment Committee, in case the Manager has constituted it. Terms Art. 3.- For the purposes of application of these Standards, the terms indicated below have the following meaning: a) Central Bank: Central Reserve Bank of El Salvador; b) Stock Exchange: Stock Exchange constituted in El Salvador and registered in the Superintendence of the Financial System; c) House: Brokerage House; authorized and registered in the Superintendence of the Financial System; d) Forward Contracts: Non-standardized contracts through which the buyer or seller acquires the obligation to buy or sell, respectively, in a future pre-established period, a determined number of units of a previously defined and characterized underlying asset, at a pre-defined price at the time of contract celebration;

CNBCR-05/2016 NDMC-07 TECHNICAL STANDARDS FOR INVESTMENT FUND INVESTMENTS Approval: 22/06/2016 Validity: 11/07/2016 Alameda Juan Pablo II, between 15 and 17 Av. Norte, San Salvador, El Salvador. Tel. (503) 2281-8000 www.bcr.gob.sv Page 5 of 23 Art. 5.- The Manager is authorized to carry out repo operations on behalf of the Funds, which may be carried out with public offer securities defined in the Internal Regulations of the Fund and in which the Funds will participate as repos lenders or sellers of Funds. The Manager may carry out passive repo operations, solely to meet liquidity needs arising from the withdrawal of its participants or Fund expenses or other cases indicated in the Internal Regulations of the Fund and based on what is established in the Funds Law, which may not exceed twenty percent of the total asset of the Fund. The conditions of the operation, as well as the respective guarantees, must be established in accordance with what is regulated in the Securities Market Law, other laws, and applicable regulation to repo operations. Shares issued by foreign companies Art. 6.- Shares issued by foreign companies in which the resources of the Funds are invested must have the characteristics defined in the Fund's investment policy, be recorded in the Registry and registered in a Salvadoran stock exchange. Participation shares issued by foreign investment funds Art. 7.- Funds may invest in participation shares of Foreign Investment Funds that are recorded in the Registry and comply with what is established in the technical standards issued by the Committee of Standards of the Central Bank relative to the commercialization of Foreign Investment Funds. Additionally, Funds may invest in participation shares of Foreign Closed Investment Funds, referred to in Article 135 of the Funds Law. Securities trading mechanisms Art. 8.- Investments in public offer securities in which it is permitted to invest the resources of the Funds must be carried out only if the investment administrator has a documented analysis of their characteristics and risks and has the necessary information and experience for investment decision-making. To carry out the Fund's investments, the investment administrator must know the functioning of the instruments and have the necessary means for their recognition, valuation, measurement, and capacity to ensure compliance with the criterion taken to value the instruments to be acquired; if the foregoing is not met, the Manager must not enter into negotiations of such instruments. Securities issued abroad in which the resources of the Funds are invested must be recorded in the Registry and subsequently registered in a stock exchange, in concordance with what is established in the Securities Market Law and comply with the requirements established in the

CNBCR-05/2016 NDMC-07 TECHNICAL STANDARDS FOR INVESTMENT FUND INVESTMENTS Approval: 22/06/2016 Validity: 11/07/2016 Alameda Juan Pablo II, between 15 and 17 Av. Norte, San Salvador, El Salvador. Tel. (503) 2281-8000 www.bcr.gob.sv Page 6 of 23 Standards regulating the Trading of Foreign Securities. Liquidity requirements of investments Art. 9.- Open Funds must maintain at least twenty percent of their resources in cash, bank deposits, and high-liquidity, low-risk securities. For these purposes, high-liquidity and low-risk securities are understood to be those that meet the following requirements: a) That the securities have a maturity term of less than 365 days; b) That they can be received as collateral in passive operations; c) That their market price can be obtained through one or more price provider sources, an international stock or financial information system recognized by the Superintendence, or in their defect, can be obtained from a previously established methodology or another reliable source of prices; and, d) That foreign securities must be investment grade and that local debt instruments have a long-term risk classification not lower than category BBB and N-2 for short-term instruments. Investments in Treasury Bills of El Salvador, issued by the State of El Salvador, and Negotiable Liquidity Certificates issued by the Central Reserve Bank of El Salvador are also considered liquid. In the event that any of the securities considered high-liquidity and low-risk cease to meet the requirements established in this article, the Manager, in order to maintain the minimum limit established in the Funds Law, must substitute the referred securities no later than the next business day of the detected non-compliance. On the contrary, low-liquidity assets are those that are not traded frequently and in significant volumes in formal secondary markets, and therefore would have difficulties selling immediately at market price. For these purposes, low-liquidity assets are considered those that do not comply with what is established in letters a, b, c, and d, and third paragraph of this article. Investments during the subscription and placement period of shares Art. 10.- During the period in which the Fund reaches the minimum equity and number of participants established in the Funds Law, the Manager, in order to preserve the Equity, must keep monetary contributions in deposits at banks domiciled in El Salvador or invest them in high-liquidity, low-risk securities, which meet the requirements established in the previous article. The Manager, for diversification purposes, must define in the investment policy the maximum limit of deposits that can be kept in the same banking entity, in order to manage possible concentration risk. Basic conditions of operability Art. 11.- The securities in which the resources of the Fund are invested, when appropriate according to their nature, must be under the custody of an entity authorized to provide that service in accordance with the Securities Market Law, which must keep them in separate accounts per Fund and be duly identified to the corresponding Fund, in accordance with what is established in the seventh paragraph of Article 97 of the Funds Law. For cases of investments that cannot be denominated with the clause "For the Investment Fund", the Manager must formally evidence the ownership of the assets, through the respective receipt, in which the amount and type of instrument are stated. The Manager must constitute separate bank accounts for each Fund, in which the entirety of contributions, the proceeds from their investments, and all other income received must be deposited directly in the name of the Fund. From these accounts, withdrawals can only be made destined to the acquisition of instruments or financial operations carried out in the name of the Fund, to the payment of redemptions, to distribute benefits, to the payment of the Manager's remuneration, and to the other expenses established in the Internal Regulations of the Fund and in Article 24 letter e) of the Funds Law. Each Manager with reference to the Funds they administer is obliged to comply with the following requirements: a) Comply with the responsibilities derived from the compensation and settlement processes of the transactions carried out; b) The approval by the Senior Administration of employees delegated to make electronic banking transactions and withdrawals from bank accounts, including limits and the use of joint signatures; and c) Design an information and monitoring system with daily and detailed updates of assets, transactions, documentation of failures and errors with the application of necessary corrections for each Fund. Investment control Art. 12.- The Manager, for the control of investments carried out on behalf of each Fund, must maintain the documentation, record, or receipt of the transaction containing the detailed information of the operations carried out, for which it must maintain an updated investment register in chronological order, in accordance with what is required in the "Technical Standards for the Authorization of Constitution, Start of Operations, Registration, and Management of Operations of Investment Fund Managers" (NDMC-02), approved by the Committee of Standards of the Central

CNBCR-05/2016 NDMC-07 TECHNICAL STANDARDS FOR INVESTMENT FUND INVESTMENTS Approval: 06/22/2016 Validity: 07/11/2016 Alameda Juan Pablo II, between 15 and 17 Av. Norte, San Salvador, El Salvador. Tel. (503) 2281-8000 www.bcr.gob.sv Page 8 of 23

Central and that includes at least the detailed information in Annex No. 1 of these Standards.

The information regarding the investments made by the Manager on behalf of each Fund must be available to the Superintendency upon its request. Likewise, the Manager must document the aspects taken into consideration in the investment process.

The Manager, for the control of investments made on behalf of each Fund, must ensure that the orders issued have been executed by the House in accordance with the request.

CHAPTER III RISK HEDGING OPERATIONS FOR INVESTMENTS Derivatives for risk hedging Art. 13.- Open Funds and Closed Funds may carry out operations with derivatives of the forwards, futures, swaps, and options type that have as their exclusive object the hedging of risks of the Fund's investments. Investment in such derivative instruments may be carried out in organized markets in El Salvador or abroad, such as stock exchanges, electronic markets, over-the-counter markets, or their equivalent, that have similar or superior supervision and regulation requirements with respect to those of El Salvador.

To carry out operations in derivative instruments, the investment manager must know how they work and have the necessary means for their valuation, risk identification, measurement, and capacity to ensure compliance with the criterion taken to value the instruments; if the foregoing is not met, the Manager must not carry out operations with such instruments. In case that hedging operations are carried out in international markets, they must comply with the required documentation and be subject to the regulations of the jurisdiction in which they are carried out.

The analyses carried out to carry out operations with derivative instruments must be duly documented.

Art. 14.- Risk hedging operations of the Fund's investments may be carried out through master agreements, preferably following international market standards, and must be subject to the following conditions: a) Contracts entered into within a centralized mechanism must have as counterparty an entity authorized and supervised by the Superintendency, or in the case of operations abroad, an entity of superior or similar competence to the Superintendency. Contracts entered into outside a centralized mechanism must have as counterparty an entity authorized by the Superintendency, or in the case of operations abroad, an entity constituted in member countries of the Financial Action Task Force or some equivalent regional intergovernmental organization, destined to combat money laundering and asset financing, and terrorist financing, and that are not considered by these organisms as jurisdictions presenting strategic deficiencies in the prevention of money laundering and asset financing, and terrorist financing, referred to as high-risk or non-cooperative jurisdictions; b) Be associated with an instrument or group of instruments that are considered in the Investment Policy; c) A hedge of the same underlying asset may be structured in at most two currencies; d) That in the case of contracts entered into in stock markets, their settlement be through a Clearing House, which is duly authorized and supervised by the Superintendency or an entity of similar competence to the Superintendency within the country where they have been constituted; and e) That in the case of contracts entered into outside a centralized mechanism, the settlement process must be a financial settlement.

Derivatives control Art. 15.- The Manager, for the control of operations with derivatives that have as their exclusive object the hedging of risks of the Fund's investments, must maintain the documentation and register containing the detailed information of the operations carried out, clearly indicating their characteristics and the minimum requirements established in Annex No. 2 of these Standards.

The information regarding the operations carried out by the Manager with derivatives that have as their exclusive object the hedging of risks of the Fund's investments must be available to the Superintendency upon its request.

CHAPTER IV INVESTMENT LIMITS Investment limits Art. 16.- The investment limits in Open Funds will be fixed within the Fund's Internal Regulations as part of its object and its investment policy, and must be subject to the following percentages: a) The sum of the investments of an Open Fund, different from those established in letter g) of this article, may reach a maximum of eighty percent of the Fund's assets; b) Limits with respect to the assets of the Investment Fund: i. The Fund cannot be the holder of debt-representative securities that represent more than eighty percent of the Fund's asset; and ii. The Fund cannot be the holder of shares that represent more than fifty percent of the Fund's asset.

c) Limits with respect to the issuer's assets and same issuer: i. The Fund cannot be the holder of debt-representative securities that represent more than thirty percent of the issuer's asset based on the last Financial Statements published by the issuer. This percentage is also applicable to the investment that a Fund can make in the same issuance of securities. These limits include repo operations; and ii. The Fund must not hold directly or indirectly shares of the same company above twenty percent of the issuer's asset. d) Limits with respect to the business group or conglomerate: i. The Fund must not hold more than twenty-five percent of its total assets, in securities issued or guaranteed by companies belonging to the same financial conglomerate or business group different from that to which the Manager belongs; this limit includes securities issued against independent estates administered by these companies, as well as money deposits, in the bank of the referred conglomerate. Also included are the securities that guarantee repo operations. Current or savings accounts used for the Fund's operations are excepted from this limit; and ii. The Fund may hold up to ten percent of its total assets in fixed-income securities issued by an entity linked to the Manager, provided that these instruments are investment grade in the case of foreign securities and local debt instruments have a long-term risk classification not lower than category BBB and N-2 for short-term instruments.(1) e) The Fund must not hold above fifty percent of the total participation quotas placed by another Investment Fund. Additionally, the sum of the participation quotas acquired by funds managed by a Manager cannot exceed fifty percent of the participation quotas placed by the same Investment Fund. In case that the investments in participation quotas are of Funds managed by the same Manager, this must be communicated to the participants; f) The Fund may hold securities of the same Securitization Fund up to fifty percent of the assets of the Securitization Fund. The sum of the securitization values acquired by funds managed by a Manager cannot exceed fifty percent of the values issued by the same Securitization Fund. This type of value will not be included within the debt-representative securities indicated in letters b) and c) of this article; and g) At least twenty percent of its resources must be kept in cash, in bank deposits, and in liquid securities that comply with what is established in article 9 of these Standards.

In the case of Closed Funds that invest in securities, the limits established in this article will be applicable to them, with the exception of letters a) and g) which are exclusively for Open Funds.

The Manager will be responsible for ensuring that investments in securities made with Fund resources comply with the limits established in this article.

Art. 17.- Open or Closed Funds may invest their resources in the same type of instrument, respecting the limits established in these Standards. The investments that Open or Closed Funds make in the securities established in letter g) article 4 of these Standards cannot exceed eighty percent of the Fund's assets. Additionally, investments by type of instrument must be subject to the limits established in article 16 of these Standards. The Manager is responsible for carrying out the control of investment limits on a daily basis.

Debt limits Art. 18.- The Fund cannot have debts, which added together exceed in the case of Open Funds, twenty-five percent of its equity and for Closed Funds, fifty percent of its equity. These limits include repo operations. The Fund's assets can only be encumbered to guarantee the payment of its own obligations, according to what is established in the Internal Regulations and additionally in the case of Open Funds, those related to attending quota redemptions.

Debts acquired by a Fund can only be collected against its assets.

Investment prohibition Art. 19.- The Fund's resources cannot be invested in the securities established in article 100 of the Fund Law.

Deadline for compliance with limits Art. 20.- The investment limits for Open and Closed Funds that invest in securities established in these Standards must be complied with by the Manager, within the timeframe contemplated in the investment policy, which cannot exceed thirty business days from the moment the minimum equity and number of participants are reached. The Manager must comply with debt limits immediately from the start of the Fund's operations.

For the purposes of applying the limits indicated in this Chapter, the registered issuance of the securities in question will be considered.

Requirements for the acquisition, alienation, lease, or usufruct of goods Art. 21.- The acquisition, alienation, lease, or usufruct of goods of or for the Fund to persons related to the Manager, to other Funds managed by it, to Funds managed by Managers related to it, to companies of the same financial conglomerate or business group of the Manager, or to Funds managed by Managers of the same financial conglomerate or business group of the Manager, must comply with the following requirements and conditions: a) That the goods to be traded be demonstrably necessary and of the necessary quality for the adequate performance of the Fund; b) That all operations be carried out based on current market prices at the time of the same. For this purpose, the Internal Regulations must identify the mechanisms that the Manager will use to seek independence in the determination of prices and for the operations to be carried out in conditions that are not disadvantageous for the Fund in relation to other options available in the market if there are any; and c) The transactions must be authorized by the Board of Directors of the Manager in the case of Open Funds and by the assembly of participants in the case of Closed Funds when so defined in the Fund's Internal Regulations. The foregoing is excepted for transactions with public offer instruments, provided they comply with what is established in the investment policy.

In the case of transactions with securities, these must be contemplated in the Fund's investment policy and traded in organized markets, such as stock exchanges, electronic markets, over-the-counter markets, or their equivalent, which have similar or superior regulation and supervision requirements with respect to those of El Salvador.

Investment policy Art. 22.- The investment policy, defined in the Internal Regulations of each Fund, must indicate the minimum and maximum investment limits in each of the types of assets permitted according to the investment objective, the Fund Law, and these Standards, considering for these purposes, among others, the aspects contemplated in article 99 of the Fund Law. The Manager will be responsible for revealing to the investor the Fund's investment policy, the investor profile to which the Fund is directed, avoiding making statements that could lead to false, misleading, or inaccurate appraisals of the Fund's characteristics, indicating that the originally contributed amount may increase or decrease depending on the Fund's financial result. Additionally, they must inform the investor about the functioning, risks, and characteristics of the Funds, in accordance with what is established in the "Technical Standards for the Authorization, Registration, and Operation of Investment Funds" (NDMC-06), approved by the Standards Committee of the Central Bank.

CHAPTER V INVESTMENT EXCESSES Identification and communication of investment excesses Art. 23.- If excesses to the investment or debt limits indicated in the Fund Law, in these Standards, or in the respective internal regulations of the Funds occur, due to market fluctuations or for another justified cause, the Manager must notify and inform its plan to reduce the excess to the Superintendency within three business days following the occurrence of the excess, indicating in the same the cause of the excess, the effect on the participants, and the activities that will be carried out to reduce the excess. The Manager will have a period of up to ninety days, counted from the date the excess occurred, to regularize it to the established percentages. The period may be extended for justified cause and when so authorized by the Superintendency. The Manager cannot make new acquisitions of instruments of the entities or instruments involved in the excess, until its situation is regularized.

In cases where the excesses do not obey the reasons mentioned in the previous paragraph and are caused by errors of the investment manager, the Manager, without prejudice to the sanctions that may apply, must regularize the Fund's situation within a period of up to ninety days, counted from the date the excess occurred, to regularize it to the established percentages. The period may be extended for justified cause and when so authorized by the Superintendency.

The Manager, for the purposes of regularizing the Fund's investments to the established percentages, may acquire for itself the instruments in excess or the investments not provided for in the Fund's investment policy. In case that the investment excesses are caused by errors of the investment manager, the acquisition of said instruments must be carried out at the highest value recorded in its valuation during the stage of the excess or of the investment not provided for in the Fund's investment policy.

If for justified cause, the Fund receives in payment securities, assets, or rights whose investment does not comply with what is established in the Law, in these Standards, or in the respective internal regulations, the Manager will communicate this situation to the Superintendency, within the third business day counted from the date on which it was received in payment, and must proceed to its valuation and sale within a maximum period of ninety days counted from the date of said communication. For the case of real estate assets, the maximum period to proceed to their valuation and sale will be one year counted from the date of the communication.

The Superintendency, for justified causes, may extend the aforementioned periods at the request of the Manager. In this case, the Manager must present to the Superintendency the extension request at least twenty days in advance of the expiration of the period, who will rule within a maximum period of ten days of receiving the request, authorizing or denying the request.

In the case that an investment excess occurs and while it lasts, the Manager must inform the participants of this situation, as well as the effect of the regularization through the account statement, its Web page, or other means determined by the participant.

Justified investment excesses or not attributable to the Manager Art. 24.- Excesses in the investment limits defined in the Funds' investment policy occur for causes not attributable to the Manager, in the following cases: a) When, having acquired instruments within the established limits, variations in prices occur, causing excesses; b) When, having acquired instruments within the established limits, variations in the exchange rates of the foreign currencies in which those instruments or values in which the Funds' resources are invested are expressed occur, causing excesses; c) When quota redemptions of the Open Fund occur that represent significant amounts of the total equity that produce a decrease in its total asset; d) As a consequence of changes in the corporate structure of the issuer in which the Fund has invested; e) In the case that any of the investments indicated in article 4 of these Standards ceases to comply with any of the conditions to be considered as permitted; f) In the case that for justified cause, the Fund receives in payment securities, assets, or rights whose investment does not comply with what is established in the Fund Law, in these Standards, or in the respective internal regulations; and g) Other cases in which the Superintendency, according to the justification made by the Manager, determines that they were caused by causes unrelated to its management.

CHAPTER VI INVESTMENT COMMITTEE AND INVESTMENT MANAGERS Investment Committee Art. 25.- The Board of Directors of the Manager will be responsible for ensuring compliance with the investment policy and the adequate exercise of the investment administration functions of the Fund. For these purposes, it may constitute an Investment Committee that will be responsible for evaluating, recommending, and approving guidelines for investment decision-making, which will be executed by the Fund's investment managers.

The Manager will have the faculty to appoint the Investment Committee which will be composed of a minimum of three members and their respective alternates, who must have capacity and knowledge related to the type of assets in which the Fund invests and be ratified annually by the Board of Directors.

CNBCR-05/2016 NDMC-07 TECHNICAL STANDARDS FOR INVESTMENT FUND INVESTMENTS Approval: 22/06/2016 Effective: 11/07/2016 Alameda Juan Pablo II, between 15 and 17 Av. Norte, San Salvador, El Salvador. Tel. (503) 2281-8000 www.bcr.gob.sv Page 15 of 23

The Manager, through its Board of Directors, must approve the Charter for the Investment Committee, which must contain as a minimum the duties, obligations, meeting frequency, policies for the selection of Committee members, number of members, voting scheme, analysis mechanisms or indicators, and the frequency and minimum content of the reports that the investment administrator must present; all the aforementioned information must be kept in minutes and their respective backups.

The Manager must document in the entity's organization and procedures manual the formation of the Investment Committee, defining its responsibilities and attributes.

Requirements for Investment Committee Members Art. 26.- The Manager must ensure that the members of the Investment Committee act with diligence, skill, and reasonable care in the exercise of their functions and meet at a minimum the following requirements: a) Be of recognized honorability; b) Hold a university degree registered or incorporated in the Ministry of Education for degrees obtained in the country. In case the degree was obtained abroad, it must comply with what is established in Article 334 of the Civil and Commercial Procedural Code or the apostille procedure, in the case of countries signatories to the "Hague Convention Abolishing the Requirement of Legalization for Foreign Public Documents," ratified by Legislative Decree No. 811, dated September 12, 1996, published in the Official Journal No. 194, Volume No. 333, of October 16 of that same year; c) Have at least three years of experience and knowledge in topics related to the financial sector, securities market, investment management, and in the field of specialization of the nature of the Fund they administer; d) Not have been judicially qualified as responsible for negligent or fraudulent bankruptcy; e) Not have been convicted by a final judgment in the country or abroad for having committed or participated fraudulently in the commission of any crime; f) Not have been judicially convicted for their participation in violations of laws and norms of a financial nature; g) That their participation in activities related to drug trafficking and related crimes, and money laundering and other assets, in the country or abroad, has not been judicially proven; and h) Investment Committee members may participate as members of other investment committees of other funds provided that they are administered by the same Manager. The quantity and quality of the members of the Investment Committee will be governed by what is established in Articles 25 and 26 of these Standards.

Functions Art. 27.- The Manager will establish the main functions that as a minimum must be fulfilled by the members of the Investment Committee or their substitutes, considering as a minimum the following:

a) Define the general investment guidelines of the Fund, supervise the work of the investment administrator, and ensure the adequate performance of the portfolio; b) Propose to the Board of Directors the valuation methodology for the Fund's investments, in accordance with the technical standards issued by the Central Bank for such purposes, in cases where information regarding the price or quotation of any instrument or operation by an agent specialized in securities valuation or the corresponding information systems is not available; c) Approve the Fund's investment strategy, based on the investment policy established in the Internal Regulations; d) Establish processes to evaluate possible Fund investments; e) Provide adequate follow-up to the assets that make up the Fund's investments; f) Evaluate whether the recommendations of the risk unit are taken into account; if not, evaluate the respective justifications; g) Supervise treasury management; h) Supervise compliance with the Fund's investment policy, as well as the fulfillment of the stated objectives; i) Propose the carrying out of audits on the Fund's investments; j) Evaluate the necessary strategies for regularization in case of non-compliance with investment policies; and k) Present reports to the Board of Directors on investments made, at the frequency determined by the Manager.

Art. 28.- The Manager will establish the main functions that as a minimum must be fulfilled by the Fund's investment administrators, considering as a minimum the following: a) Analyze and identify investment opportunities in accordance with the Investment Committee's guidelines and the Fund's investment policy; b) Make investment decisions in accordance with what is established in the Fund's investment policy; c) Propose to the Investment Committee modifications to the investment policy if necessary; d) Supervise and ensure that recommendations issued by the risk unit are implemented, informing the Investment Committee of the corresponding justifications if they decide not to adopt them; e) Supervise that control and monitoring of the Fund's owned assets are carried out and report to the Investment Committee; f) Supervise that the valuation of the Fund's investments is made in accordance with the applicable valuation methodology, according to the segregation of functions; g) Prepare a report for the Investment Committee describing the management performed according to their functions, which must respect the frequency and minimum content established in the organization and procedures manuals according to the segregation of functions; and

h) Propose the necessary strategies for regularization in case of non-compliance with investment policies. The functions of the members of the Investment Committee or their substitutes and of the investment administrators are non-delegable, and in case of non-compliance, they may be removed by the Manager's Board of Directors.

Applicable Principles Art. 29.- The members of the Fund's Investment Committee or their substitutes, in the exercise of their functions, must observe the following principles: a) Confidentiality: The Manager must provide conditions of confidentiality and secrecy during the exercise of these functions. The same principle must be applied in the communications required to execute the Fund's investment decisions; b) Independence: This means that in order to avoid conflicts of interest, members of the Investment Committee cannot provide their services to persons linked to the Manager, unless expressly authorized by the General Assembly of participants for Closed Funds or by the Board of Directors for Open Funds, in which case, it must be previously disclosed and when these persons are participants in the Fund, they cannot exercise the right to vote; and c) Autonomy: This implies that the investment decision-making by the investment administrator and the members of the Investment Committee must be without subordination to third-party interests. For these purposes, investment decision-making is understood as the adoption of the agreement to acquire, hold, or dispose of assets for the Fund's managed portfolio in accordance with the investment policy.

Meetings Art. 30.- The Investment Committee or their substitutes must meet at least once a month and draw up minutes for each session, which must guarantee their authenticity and truthfulness; likewise, they must be kept in places that ensure their adequate preservation.

The minutes documenting the Investment Committee's agreements must include details to understand the foundations of the agreements taken, must implement a sequential numbering system for meeting minutes, and must include as a minimum the following aspects: a) Place, date, and time of the session; b) Session agenda; c) Information supporting the sessions; d) Matters discussed; e) Voting results; f) Agreements taken, as well as observations or incidents occurred; and, g) Name and signature of attendees.

The Manager is responsible for having the minutes, reports, and supporting documentation of the topics reviewed.

CHAPTER VII OTHER PROVISIONS AND EFFECTIVE DATE

Compliance with the investment policy Art. 31.- The Manager, in order to ensure compliance with the investment policy, must ensure the following: a) Maintain control of the Fund's assets, detailing their characteristics, ownership, price, compensation and settlement process, as well as information regarding their custody; b) That the securities in the Fund's investment portfolio are duly custodied by an authorized entity in accordance with the Securities Market Law, when applicable; c) Keep in strict confidence information about the Fund and its participants that they come to know by reason of their functions; d) Have an internal auditor's report, in which the compliance with the investment policy is specified, or, in its absence, follow up on the recommendations and observations made therein; and e) Communicate to the Superintendence any irregularity detected regarding investment administration, no later than the next business day after becoming aware of the fact; as well as provide any information that the Superintendence requests related to said functions.

Obligations Art. 32.- Managers are obliged to provide timely and truthful information about their situation and that of the Funds they administer, in accordance with what is established in the technical standards issued by the Central Bank's Standards Committee related to publication and dissemination.

In accordance with what is established in Article 89 of the Funds Law, under no circumstances may the Manager directly dispose of assets belonging to the Fund, and they cannot be seized or subject to any type of precautionary or preventive measure by the creditors of the Manager or the participants.

Information Submission Art. 33.- The Manager must submit monthly to the Superintendence information on investments and operations with derivatives that have as their exclusive object the hedging of risks of the Fund's investments, no later than the first five business days of the month, detailing the information required in Annexes No. 1, 2, and 3 of these Standards.

The Superintendence will transmit the technical details related to the sending of the information requested in this article, which will be communicated within a maximum period of thirty days following the entry into force of these Standards. The information requirements will be limited to the collection of information as regulated in these Standards.

Sanctions Art. 34.- Non-compliance with the provisions contained in these Standards will be sanctioned in accordance with what is established in the Law on Supervision and Regulation of the Financial System.

Unforeseen Aspects Art. 35.- Aspects not provided for in terms of regulation in these Standards will be resolved by the Central Bank's Standards Committee.

Effective Date Art. 36.- These Standards will enter into force on July 11, 2016.

MODIFICATIONS: (1) Modification approved by the Standards Committee of the Central Reserve Bank of El Salvador, in Session No. CN-09/2016 dated September 14, 2016, with effect from September 14, 2016.

Annex No. 1 MINIMUM CONTENT OF THE FUND INVESTMENT REGISTER Fund Name: _______ Manager Name: _____ Reference Month: _______ 1 GENERAL INFORMATION 1.1 Account number at the Specialized Society in the Deposit and Custody of Securities 1.2 Identification of the intermediary that intervened in the operation 1.3 Identification of the stockbroker agent that executed the operation 1.4 Classification of the Investment Fund (Open or Closed)(1) 2 OPERATION INFORMATION 2.1 Trading date 2.2 Settlement date 2.3 Date and time the order was issued to the House 2.4 Type of market in which the operation is carried out 2.5 Purpose of the operation (trading or maturity) 2.6 Type of operation (purchase, sale, or repo) 2.7 Quantity of securities traded, when applicable 2.8 Transacted price 2.9 Total transacted amount 2.10 Stock Exchange Commission 2.11 Intermediary Commission 2.12 Taxes paid 2.13 Other expenses 3 INSTRUMENT INFORMATION 3.1 Type of instrument 3.2 Instrument identification 3.3 Currency in which the instrument was issued 3.4 Issuer identification 3.5 Issuer's country of origin 3.6 Issuer's country of registration 3.7 Nominal value 3.8 Market value 3.9 Source of market value 3.10 Term 3.11 Maturity Date 3.12 Days to instrument maturity 3.13 Interest rate 3.14 Payment frequency

Annex No. 1 MINIMUM CONTENT OF THE FUND INVESTMENT REGISTER Fund Name: _______ Manager Name: _____ Reference Month: _______ 3.15 Risk classification 3.16 Rating agency 3.17 The instrument is part of high liquidity and low risk assets Name of the person preparing the Report: _______________________________ Phone: __________________________ Email: _______________________

Annex No. 2 OPERATIONS WITH DERIVATIVE INSTRUMENTS THAT HAVE AS THEIR EXCLUSIVE OBJECT THE HEDGING OF RISKS OF INVESTMENTS Fund Name: ____ Manager Name: _______ Reference Month: _________ 1 OPERATION INFORMATION 1.1 Type of operation, indicating if it is a forwards, futures, swaps, and/or options contract 1.2 Entity with which the operation was carried out 1.3 Identification of the instrument or group of instruments that were hedged with the operation (Underlying) 1.4 Identification of where the operation was carried out, indicating if it was celebrated outside or within a centralized mechanism 1.5 Date of the operation 1.6 Settlement date 1.7 Term of the operation/contract 1.8 Price of the operation 1.9 Amount of the operation (Notional) 1.10 Contract conditions: agreed rate, exchange rate when applicable Name of the person preparing the Report: _______________________________ Phone: __________________________ Email: _______________________

Annex No. 3 REPORT OF TOTAL AMOUNTS OF INVESTMENT OF THE INVESTMENT FUND PORTFOLIO Fund Name: ____ Manager Name: _____ Reference Month: __________ 1 Manager Identification 2 Fund Identification 3 Fund Investment Administrator Identification 4 Classification of the Investment Fund (Open or Closed)(1) 5 Reference date of the information 6 Type of investment (time deposit, bank deposits, current accounts, financial instrument, etc.) 7 Issuer Identification 8 Economic sector of the investment (Banking, Industry, Commerce, Agriculture, Construction, Insurance Companies, Foreign, Service Companies and Public Institutions, etc.) 9 Instrument Identification 10 Quantity of securities, when applicable 11 Status (available or reported) 12 Identification of the Specialized Society in the Deposit and Custody of Securities or Banking Entity in which the investment is safeguarded 13 Market value as of the report date 14 Nominal value 15 Total amount invested 16 Interest rate 17 Accrued interest 18 Days to maturity 19 Total amount of capital gain or loss 20 Purpose of the instrument (trading or maturity) Name of the person preparing the Report: _______________________________ Phone: __________________________ Email: _______________________