Technical Standards for the Authorization and Operation of Agencies, National Offices, and Representation Offices for Pension Fund Administrators

NSP-75
AGENCIES, NATIONAL OFFICES AND REPRESENTATION OFFICES FOR PENSION FUND ADMINISTRATORS Approval: 26/01/2023 Validity: 26/01/2023

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

CONSIDERING:

I. That by Legislative Decree No. 614, of December 20, 2022, published in the Official Journal No. 241, Volume No. 437 of the 21st of the same month and year, the Comprehensive Law of the Pension System was issued.
II. That Article 27 of the Comprehensive Law of the Pension System establishes that Pension Fund Administrators shall be obliged to maintain, at least, one agency or office at the national level dedicated to public service.
III. That Article 69 of the Comprehensive Law of the Pension System establishes that Administrators may open agencies and representation offices abroad, with prior authorization from the Superintendency, based on the corresponding Technical Norms issued for this purpose by the Committee of Norms of the Central Reserve Bank. If authorized, the agencies and representation offices abroad shall be subject to the supervision of the Superintendency and the examination of the external auditors of the respective Administrators, without prejudice to what corresponds to foreign authorities.
IV. That Article 159 of the Comprehensive Law of the Pension System establishes that the Central Reserve Bank of El Salvador shall issue the Technical Norms necessary to allow the development of what is established in the aforementioned Law.
V. That Article 99, letter a), of the Law on Supervision and Regulation of the Financial System, establishes that it corresponds to the Central Reserve Bank of El Salvador in its capacity as regulator, to approve the technical norms that the laws regulating the supervised entities establish must be issued to facilitate their application, especially regarding good corporate governance practices.

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 THE AUTHORIZATION AND OPERATION OF AGENCIES, NATIONAL OFFICES AND REPRESENTATION OFFICES FOR THE PENSION FUND ADMINISTRATORS

NSP-75
AGENCIES, NATIONAL OFFICES AND REPRESENTATION OFFICES FOR PENSION FUND ADMINISTRATORS Approval: 26/01/2023 Validity: 26/01/2023
CHAPTER I
OBJECT, SUBJECTS AND TERMS
Object
Art. 1.- These Standards aim to establish the necessary guidelines for the correct performance of legal functions in the various agencies, national offices and representation offices of Pension Fund Administrators, as well as to define the operational procedures for their opening, closure and relocation. Subjects Art. 2.- The subjects obliged to comply with the provisions established in these Standards are the Pension Fund Administrators. Terms Art. 3.- For the purposes of these Standards, the terms indicated below have the following meaning:
a) AEG: Special Guarantee Contribution. b) AFP: Pension Fund Administrator; c) Agency: Those public service locations that can carry out the processes of the Pension System, according to the Comprehensive Law of the Pension System and its Regulations; d) CT: Transfer Certificate; e) Days: Calendar days, unless it is specified that they are business days; f) Fund: Pension Fund; g) SP Law: Comprehensive Law of the Pension System; h) Administrative offices: Those premises in which the activities specific to the AFP related to the areas of Administration, Accounting, Operations, Marketing are carried out; and all those in which there is no relationship whatsoever with affiliates and the general public; i) Representation office: Those AFP offices that, without being agencies, established abroad, can carry out affiliation activities and provide information to the public related to the Pension System; j) National offices: Those AFP offices that, without being agencies, established in the national territory, can carry out affiliation activities and provide information to the public, according to the Comprehensive Law of the Pension System and its Regulations; k) SEPP: Pension Payroll Preparation System; l) SP: Pension System; and m) Superintendency: Superintendency of the Financial System.
CHAPTER II
GENERAL FUNCTIONS OF AGENCIES, NATIONAL OFFICES AND REPRESENTATION OFFICES

Art. 4.- The general functions of agencies, national offices and representation offices are the following:
a) Provide information to affiliates, employers and the general public regarding affiliation activities; b) Provide information to the general public regarding the activities and operations carried out by the AFP; c) Maintain in all its agencies and visible to the public, an extract of the following information:
i. Background of the AFP: Name, domicile, registration in the Commercial Registry and resolution that authorized the start of its operations, Board of Directors and Senior Management; agencies, national offices and representation offices;
ii. Balance Sheet and income statements of the last fiscal year, both of the AFP and of the Fund. In any case, they must keep available to the public the information of the last two years;
iii. Amount of Capital, Fund Equity, and AEG.
iv. Value of Fund Shares;
v. Amount and percentage of commissions charged;
vi. Investment Policy and composition of the Fund's investment portfolio; and
vii. Profitability of the last twelve months of the administered Fund.
These backgrounds must be updated monthly within the first ten days of each month. Likewise, the information referred to in items iii, iv, v, vi and vii above and the composition of the Fund's investment portfolio, must be published quarterly in a newspaper of national circulation or by the means established in the Special Law regulating the obligation of natural and legal persons of private law to comply with the principle of publicity. The investment policy will be published annually. All the information detailed above must be visible to the public and drafted in Spanish. The value of the AEG, referred to in item iii, must specify both the contracted value through Bonds or other financial instruments and its validity, as well as the required value through calculation, which must be updated whenever its change occurs. d) Process the CT for the affiliate when appropriate and provide any type of guidance that they may require regarding this; e) Attend to claims and complaints filed by affiliates and provide the necessary guidance when they require it; f) Process the AFP transfer for the affiliate who requests it and provide them with all the necessary information and assistance regarding the requirements and mechanisms to carry out said procedure, according to the Procedures for Transfers between Pension Fund Administrators (NSP-66); g) Facilitate affiliates with all relevant information regarding benefits and pension modalities in the SP, and provide, when appropriate, the necessary services to carry out the corresponding procedure;

NSP-75
AGENCIES, NATIONAL OFFICES AND REPRESENTATION OFFICES FOR PENSION FUND ADMINISTRATORS Approval: 26/01/2023 Validity: 26/01/2023 h) Provide the necessary support tools so that employers have access to the SEPP, for the preparation of the Pension Payroll, when they require it; i) Provide the affiliate with the account statement according to what is established in Article 72 of the SP Law; j) The AFPs must provide the affiliate with the account statement with the information that took place while they were affiliated with the AFP, at the moment when their intention to transfer to another AFP is verified; and k) Other functions necessary for the proper functioning of the agencies, national offices and representation offices that the AFP possesses. Art. 5.- The premises where the agencies, national offices and representation offices of an AFP operate must be independent and exclusively used by it. Consequently, under no circumstances can they be located in buildings where companies or entities operate that, by reason of the nature of their activities, could induce the public to identify the AFP with said companies. By virtue of the above, the AFP cannot use premises for the operation of agencies, national offices and representation offices, when in the same building activities are carried out by the following persons:
a) Entities that are part of the Financial System; b) Legal persons that are shareholders and own one percent or more of the social capital of the AFP; and c) Legal person linked to the legal persons that are shareholders of the AFP and whose trade name implies association with them, excluding premises located in shopping centers and centers of mass attendance, provided that the total independence of these is verified in the judgment of the Superintendency. Art. 6.- AFPs cannot use premises for the operation of agencies, national offices and representation offices, when the building by effect of the signs installed in it, can be commercially associated with any of the legal person shareholders or any institution belonging to the National Financial System, even in the case that these do not carry out any activity in them.
CHAPTER III
GENERAL REQUIREMENTS FOR THE OPERATION OF AGENCIES, NATIONAL OFFICES, REPRESENTATION OFFICES ABROAD AND ADMINISTRATIVE OFFICES

Agencies, National Offices and Representation Offices Art. 7.- For the purposes of guaranteeing the proper functioning of agencies, national offices and representation offices and their public service, the premises must verify compliance with the following requirements:
a) Have sufficient areas for the attention of the general public;

NSP-75
AGENCIES, NATIONAL OFFICES AND REPRESENTATION OFFICES FOR PENSION FUND ADMINISTRATORS Approval: 26/01/2023 Validity: 26/01/2023 b) Have doors, windows or forms of interior communication with other adjacent premises; c) Have at least one telephone line; d) Adequate alarm systems and have at least one emergency exit; e) Maintain fire extinguishers that are adequate to the environment, subject to periodic review and located in accordance with current labor legislation; f) Have a parking area for visiting public; g) Have alternative procedures to electronic ones to provide service to the public; h) Have adequate service conditions for people with disabilities; i) Visibly exhibit to the public, the respective authorization for the opening of the Agency, National Office or Representation Office, as well as all those documents that establish the legal norms applicable to it; and j) Others that are previously required for the proper functioning of the Agencies, National Offices and Representation Offices. Administrative offices Art. 8.- The provisions established in articles 5 and 6 will not be applicable to the premises destined for the use of administrative offices of the AFP where there is no public service and they cannot install external signs or any other similar element that identifies the AFP. Art. 9.- Administrative offices must reserve within their facilities, a space destined for supervision activities by the personnel designated by the Superintendency, which must meet at minimum the following conditions:
a) Access to the AFP's network and computer system; b) Telephone line; and c) All equipment and furniture necessary for the performance of supervision activities.

CHAPTER IV
OPENING OF AGENCIES OR NATIONAL OFFICES

Opening
Art. 10.- AFPs must open and maintain at least one Agency dedicated to public service. However, depending on the volume of operations carried out or the target market covered, they may open other Agencies and offices at the national level in any place on the territory of the Republic, with prior authorization from the Superintendency. Art. 11.- The AFP interested in the opening of an agency or national office must send an authorization request to the Superintendency, which will proceed to verify that the presented documentation is complete and in due form, having a maximum period of thirty business days for the authorization or denial of registration in the corresponding Registry. The request presented by the AFP must be accompanied by the following information:

NSP-75
AGENCIES, NATIONAL OFFICES AND REPRESENTATION OFFICES FOR PENSION FUND ADMINISTRATORS Approval: 26/01/2023 Validity: 26/01/2023 a) Copy of the certification of the minutes point in which the agreement adopted by the Board of Directors regarding said opening is recorded; b) A statement of reasons in which the following are detailed: the background specific to the operation of the AFP, the characteristics of the zone on which it will carry out its operations specifying its domicile and geographic location and the grounds that justify the opening of the new premises; c) Feasibility profile containing: the geographic area of influence, the main characteristics of the target market on which it will carry out its operations, estimates of the economically active population, structure and levels of ages and average remunerations of potential affiliates in the zone where it will start operations, the organizational chart specifying the description of the tasks to be developed by each functional area, the personnel requirements, also indicating the estimated number of agents necessary for the development of its activities, the investment and the marginal contribution regarding the number of affiliates and the growth of the Fund as a result of the operation of the new agency, as well as the impact on the income and expenses of the AFP; and d) With the exception of the organizational chart, the requirements listed in the previous letter do not constitute a requirement at the time of requesting the opening of Agencies before the start of operations of the AFP. Authorization procedure for the opening of Agencies or National Offices Art. 12.- If the request is not accompanied by the complete and due information detailed in Article 11 of these Standards, the Superintendency, in the absence of necessary requirements, may require the AFP to present the missing documents within a period of ten business days counted from the day following the notification, a period that may be extended at the request of the AFP when there are reasons justifying it. The Superintendency in the same warning will indicate to AFPs interested in establishing agencies or national offices that if they do not complete the information within the aforementioned period, it will proceed without further procedure to archive the request, leaving them free to present a new one. If after the analysis of the presented documentation according to Article 11 of these Standards, the Superintendency has observations or when the documentation or information presented is not sufficient to establish the facts or information intended to be accredited, the Superintendency will warn the AFP to remedy the deficiencies communicated to them or present additional documentation or information required of them. AFPs interested in establishing agencies or national offices will have a maximum period of ten business days counted from the day following the notification, to resolve the observations or present the
additional information required by the Superintendency.

NSP-75
AGENCIES, NATIONAL OFFICES AND REPRESENTATION OFFICES FOR PENSION FUND ADMINISTRATORS Approval: 26/01/2023 Validity: 26/01/2023 The Superintendency may, through a reasoned resolution, extend by up to another ten business days, the period indicated in the previous paragraph, when the nature of the observations or deficiencies warned requires it. Extension Period Art. 13.- AFPs interested in establishing agencies or national offices may submit to the Superintendency a request for extension of the period indicated in the fifth paragraph of Article 12 of these Standards, before the expiration of said period, must express the grounds on which it is based and propose, if appropriate, the relevant proof. The extension period cannot exceed ten business days and will start from the next business day after the expiration date of the original period. Art. 14.- The period of ten business days indicated in the first paragraph of Article 12 of these Standards, will be suspended for the days that elapse between the notification of the request for information or documentation referred to in the second and fifth paragraphs of said article, until the observations required by the Superintendency are remedied. Art. 15.- Once the complete and due documentation is received and the observations, if any, are remedied, the Superintendency will proceed to notify the resolution of the authorization request to the AFP interested in establishing agencies or national offices within a maximum period of three business days from the date the resolution is issued. The authorization must be published in accordance with what is established in the Special Law Regulating the Obligation of Natural and Legal Persons of Private Law to Comply with the Principle of Publicity.

CHAPTER V
OPENING OF AGENCIES OR REPRESENTATION OFFICES

Opening
Art. 16.- Regarding the opening of agencies or representation offices abroad and according to what is provided in Article 69 of the SP Law; the AFP interested in the opening of an agency or representation office abroad must send an authorization request to the Superintendency, which will proceed to verify that the presented documentation is complete and in due form, having a maximum period of thirty business days for the authorization or denial of registration in the corresponding Registry. The request presented by the AFP must be accompanied by the following information:
a) The legal justification, pertinent, by a Salvadoran professional of recognized prestige, in which it is determined unequivocally that the laws of the country in which the agency or representation offices are intended to be installed allow it; and b) Sworn declaration authenticated by a Notary, by which they submit to the

NSP-75
AGENCIES, NATIONAL OFFICES AND REPRESENTATION OFFICES FOR PENSION FUND ADMINISTRATORS Approval: 26/01/2023 Validity: 26/01/2023 supervision of the Superintendency and to the examination of the external auditors of the respective AFP, without prejudice to those that correspond to foreign authorities. Authorization procedure for the opening of Agencies or Representation Offices Art. 17.- If the request is not accompanied by the complete and due information detailed in Article 16 of these Standards, the Superintendency, in the absence of necessary requirements, may require the AFP to present the missing documents within a period of ten business days counted from the day following the notification, a period that may be extended at the request of the AFP when there are reasons justifying it. The Superintendency in the same warning will indicate to AFPs interested in establishing agencies or representation offices abroad, that if they do not complete the information within the aforementioned period, it will proceed without further procedure to archive the request, leaving them free to present a new one. If after the analysis of the presented documentation according to Article 16 of these Standards, the Superintendency has observations or when the documentation or information presented is not sufficient to establish the facts or information intended to be accredited, the Superintendency will warn the AFP to remedy the deficiencies communicated to them or present additional documentation or information required of them. AFPs interested in establishing agencies or representation offices abroad will have a maximum period of ten business days counted from the day following the notification, to resolve the observations or present the additional information required by the Superintendency. The Superintendency may, through a reasoned resolution, extend by up to another ten business days, the period indicated in the previous paragraph, when the nature of the observations or deficiencies warned requires it. Extension Period Art. 18.- AFPs interested in establishing agencies or representation offices abroad may submit to the Superintendency a request for extension of the period indicated in the fifth paragraph of Article 17 of these Standards, before the expiration of said period,