Technical Standards for Qualifying Sophisticated Investors in Investment Banks

Alameda Juan Pablo II, between 15 and 17 Av. Norte, San Salvador, El Salvador.
Tel. (503) 2281-8000 www.bcr.gob.sv
CNBCR-09/2025
NRP-94
TECHNICAL STANDARDS FOR QUALIFYING SOPHISTICATED INVESTORS IN INVESTMENT BANKS Approval: 10/11/2025 Effective Date: 25/11/2025

THE NORMS COMMITTEE OF THE CENTRAL RESERVE BANK OF EL SALVADOR,

CONSIDERING:

I. That Article 2, first paragraph, of the Investment Banks Law establishes that Investment Banks shall have as their purpose to offer services exclusively to those subjects who have been previously qualified as Sophisticated Investors, as provided in said law and as established in the technical regulations issued by the Central Bank through its Norms Committee for such purposes.

II. That Article 3, third paragraph, of the Investment Banks Law establishes that, in accordance with the Law on Supervision and Regulation of the Financial System, Investment Banks constituted in accordance with the first law shall have the status of members of the Financial System.

III. That Article 4, first and second paragraphs, of the Investment Banks Law establishes the criteria that natural or legal persons must meet to be considered Sophisticated Investors.

IV. That Article 4, fifth paragraph, of the Investment Banks Law establishes that Investment Banks shall validate that their clients possess the status of Sophisticated Investors, for which they must establish a process that accredits such category.

V. That Article 16, first paragraph, of the Investment Banks Law establishes that the directors, executive directors, or general managers of Investment Banks must at all times ensure that the deposits of Sophisticated Investors are managed under criteria of honesty, prudence, and efficiency, as good merchants in their own business. They shall also be responsible for ensuring that the information provided to the Superintendence and to Sophisticated Investors is truthful and reflects with transparency the true financial situation of the Investment Bank.

VI. That Article 2 of the Law on Supervision and Regulation of the Financial System establishes that the Financial Supervision and Regulation System aims to ensure the efficiency and transparency of the financial system, as well as the adoption of the highest standards of conduct in the development of their businesses.

VII. That Article 35, letter b), 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 businesses, 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; they are obligated to comply with and ensure that the legal, regulatory, and normative provisions regulating the activity of the members of the financial system, as well as the instructions issued by the Superintendence in accordance with their legal powers, are fulfilled in the institution they direct or work for.

THEREFORE,

by virtue of the regulatory powers conferred upon it by Article 99 of the Law on Supervision and Regulation of the Financial System,

AGREES to issue the following:

TECHNICAL STANDARDS FOR QUALIFYING SOPHISTICATED INVESTORS IN INVESTMENT BANKS

CHAPTER I
OBJECT, SUBJECTS, AND TERMS

Object
Art. 1.- These Standards aim to establish the procedure and criteria that Investment Banks must observe to determine whether a natural or legal person, national or foreign, qualifies as a Sophisticated Investor prior to providing services to them, as established in the Investment Banks Law.

Subjects
Art. 2.- The subjects obligated to comply with the provisions established in these Standards are Investment Banks constituted in El Salvador and their subsidiaries, as established in the Investment Banks Law.

Terms
Art. 3.- For the purposes of these Standards, the terms indicated below have the following meaning:

a) Easily liquid assets: In accordance with Article 4, fourth paragraph, of the Investment Banks Law, these are those goods or resources owned by a natural or legal person that can be used immediately without legal or contractual restrictions, understanding that these assets are free of liens and any restriction that limits their use or alienation, such as: Bitcoin, stablecoins, Treasury Bonds, tokenized Treasury Bonds, gold, tokenized gold, among others;

b) Central Bank: Central Reserve Bank of El Salvador;

c) Investment Banks: In accordance with Article 3, first paragraph, of the Investment Banks Law, these are those institutions that act habitually in the financial market, being able to carry out operations and provide services exclusively with Sophisticated Investors, in accordance with the active, passive, and investment operations established in the Investment Banks Law or those duly authorized by the Central Bank within its competence;

d) Sophisticated Investors: In accordance with Article 4 of the Investment Banks Law, these are natural or legal persons, national or foreign, to whom Investment Banks are authorized to offer their services;

e) Law: Investment Banks Law; and

f) Superintendence: Superintendence of the Financial System.

CHAPTER II
ON THE QUALIFICATION OF THE SOPHISTICATED INVESTOR

Art. 4.- Investment Banks shall have as their purpose to offer their operations and services only to Sophisticated Investors who qualify as such, as established in the Law and these Standards.

Investment Banks must have the following legend displayed in all their offices or branches, as well as exhibited on their website, digital platforms, or technological applications used to provide their services: "THIS INVESTMENT BANK HAS AUTHORIZATION FROM THE SUPERINTENDENCE OF THE FINANCIAL SYSTEM TO OPERATE AS AN INVESTMENT BANK AND AS SUCH MAY CARRY OUT ACTIVE AND PASSIVE OPERATIONS ONLY WITH SOPHISTICATED INVESTORS, QUALIFIED AS SUCH IN ACCORDANCE WITH THE INVESTMENT BANKS LAW". This legend must be visible and written in a font size that allows it to be clearly distinguished, placed in a prominent location so that it is visible to the public.

Authorization to offer services
Art. 5.- Investment Banks may offer their services only to Sophisticated Investors once authorization has been granted by the Superintendence for the start of their operations and the publications of said authorization referred to in Article 12 of the Law have been materially verified.

On the qualification of Sophisticated Investors Art. 6.- Investment Banks must have a process that accredits the status of Sophisticated Investors of their clients, for which they must apply the criteria established in the Law, as well as the following aspects:

a) Financial situation and capacity: That the investor has free disposal of cash in legal tender or easily liquid assets, in accordance with what is established in the Law; and

b) That the investor has knowledge in terms and operations related to digital assets using distributed ledger technologies or similar, such as cryptocurrencies, tokens, among others, as well as the acceptance of the risks associated with the operations to be carried out.

The determination of Sophisticated Investor status for each of their clients must be reviewed by the Investment Bank at least annually.

The submission of the information and/or documentation required to qualify the client and grant them the status of Sophisticated Investor does not exempt the Investment Bank from requesting the submission of the documentation required to carry out the credit operations referred to in the "Technical Standards for Classifying Credit Risk Assets and Establishing Sanitation Reserves for Investment Banks" (NCF-13) approved by the Central Bank through its Norms Committee.

Due diligence
Art. 7.- The Investment Bank must have policies and procedures to perform due diligence for the identification and knowledge of its sophisticated investors, as well as the origin of funds and their economic activity, in accordance with what is established in the laws, instructions, and current regulations related to the prevention, detection, and control of money laundering and asset trafficking, terrorism financing, and the financing of the proliferation of weapons of mass destruction.

Information to Sophisticated Investors
Art. 8.- The information on operations and services, as well as their financial situation, that Investment Banks provide to natural or legal persons interested in obtaining the status of Sophisticated Investor, including those already qualified as such, must be clear, transparent, truthful, and complete, so that they can make duly informed decisions to carry out their operations with them.

Sophisticated Investor Files
Art. 9.- The Investment Bank must create files, either in physical or electronic media, in which the entire process and supporting documents for the qualification of Sophisticated Investors are recorded, in accordance with what is established in the Law and these Standards.

CHAPTER III
OTHER PROVISIONS AND EFFECTIVE DATE

Information retention period
Art. 10.- Information regarding Sophisticated Investors, as well as the operations they carry out with the Investment Bank, must be preserved in accordance with the period established in the Special Law for the Prevention, Control, and Sanction of Money Laundering, Terrorism Financing, and Financing of the Proliferation of Weapons of Mass Destruction.

Sanctions
Art. 11.- 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. 12.- Aspects not provided for in the regulatory matter of these Standards will be resolved by the Central Bank through its Norms Committee.

Effective Date
Art. 13.- These Standards will enter into effect starting from the twenty-fifth of November of two thousand twenty-five.