Technical Standards for the Authorization of Constitution, Commencement of Operations, Registration and Management of Operations of Investment Fund Managers — SSF — SV

THE COMMITTEE OF STANDARDS OF THE CENTRAL RESERVE BANK OF EL SALVADOR, CONSIDERING:

I. That articles 2 and 7 of the Investment Funds Law establish that, in order to administer an Investment Fund, Managers shall be constituted as fixed-capital anonymous societies, of indefinite term, domiciled in El Salvador.
II. That article 5 of the Investment Funds Law stipulates that the Superintendency of the Financial System, within the scope of its competence, is responsible for the supervision of Investment Fund Managers, their operations, and other participants regulated by the same.
III. That article 6 of the Investment Funds Law assigns to the Central Reserve Bank of El Salvador the issuance of the Technical Standards necessary for the application of said Law.

IV. That articles 8, 9, and 11 of the Investment Funds Law establish that it is the competence of the Superintendency of the Financial System to authorize the constitution, functioning, and commencement of operations of a Manager.
V. That articles 7 and 35 of the Supervision and Regulation of the Financial System Law establish that members of the financial system must adopt policies and mechanisms in matters of risk management and code of conduct that are in accordance with international best practices.
VI. That article 15, first paragraph, of the Special Law for the Prevention, Control and Sanction of Money Laundering, Terrorism Financing and Financing of the Proliferation of Weapons of Mass Destruction establishes that obligated subjects, in order to identify their clients and users, including the controller, recipient or ultimate beneficiary, who manage the risks associated with them and obtain appropriate information about the commercial relationships entered into or their continuity, must take reasonable measures to carry out due diligence procedures. (4)

THEREFORE,

by virtue of the regulatory powers conferred by article 99 of the Supervision and Regulation of the Financial System Law, AGREES to issue the following:

TECHNICAL STANDARDS FOR THE AUTHORIZATION OF CONSTITUTION, COMMENCEMENT OF OPERATIONS, REGISTRATION AND MANAGEMENT OF OPERATIONS OF INVESTMENT FUND MANAGERS

CHAPTER I
OBJECT, SUBJECTS AND TERMS

Object
Art. 1.- These Standards aim to regulate the requirements and the process for the authorization of constitution of Investment Fund Management Societies, in accordance with the Investment Funds Law, commencement of operations and their registration with the Superintendency; as well as applicable provisions for the operations they carry out. Subjects Art. 2.- The subjects obliged to comply with the provisions established in these Standards are persons interested in constituting an Investment Fund Management Society in accordance with the Investment Funds Law, Managers authorized by the Superintendency of the Financial System, their representatives, directors, related persons or employees. (3) Terms Art. 3.- For the purposes of these Standards, the terms indicated below have the following meaning:
a) Commercial Agent: Natural person authorized by the Superintendency of the Financial System to market participation quotas of Investment Funds and who works for a Manager or marketing entity; b) Central Bank: Central Reserve Bank of El Salvador; c) Financial Conglomerate: In accordance with article 113 of the Banks Law, it is a set of societies characterized by the fact that more than fifty percent of their respective share capital is owned by a controlling society, which is also a member of the conglomerate. The controlling society of the conglomerate may be a society of exclusive purpose or a bank constituted in the country; d) External Director: One who is not an employee nor holds an executive position in the entity; e) Marketing Entity: Brokerage House, as well as any other legal person authorized by the Superintendency of the Financial System, which has signed a mandate contract with a Manager for the marketing of participation quotas of Investment Funds; f) Fund: Investment Fund;

CHAPTER II
NATURE AND CONSTITUTION OF MANAGERS

Nature and constitution
Art. 4.- Managers shall be constituted in accordance with what is established in Article 7 of the Funds Law. They shall be governed by the Funds Law, the Technical Standards issued by the Central Bank, by the Internal Regulations authorized by the Superintendency for each Fund, and other applicable laws. Likewise, the legal and regulatory provisions relating to fixed-capital anonymous societies, contained in the Commercial Code, shall apply to these societies, in everything that does not oppose the special provisions that govern them. In the case of Managers that belong to financial conglomerates, they shall also observe what is provided in the Supervision Law and Banks Law insofar as it does not contradict the Funds Law. Purpose Art. 5.- Managers have as their purpose to administer the Funds, on behalf and at the risk of the participants and to act on behalf of the Funds.

Board of Directors
Art. 6.- The Manager shall be administered by a Board of Directors. For the formation of said Board, what is regulated in article 39 of the Supervision Law shall be taken into consideration.
Inabilities
Art. 7.- Those who fall within the circumstances detailed in article 14 of the Funds Law, presenting a sworn declaration in accordance with Annex No. 1 of these Standards, shall not be able to be directors or administrators of the Managers due to ineligibility.

Prohibitions for controlling or relevant shareholders Art. 8.- Those who fall within the prohibitions referred to in article 17 of the Funds Law, presenting a sworn declaration in accordance with Annex No. 2 of these Standards, shall not be able to be controlling or relevant shareholders of the Manager. In the event that the Manager has knowledge that a shareholder is in any of the prohibitions indicated by the Funds Law, it must notify the Superintendency within three business days following the date on which it had knowledge of such circumstance. Application for authorization of constitution Art. 9.- Persons who intend to constitute a Manager must request authorization for its constitution from the Superintendency. The application must contain the following information: (3) a) Of the applicants: full name, age, profession or occupation, expression of the type and number of identity document, NIT, domicile and nationality; b) Of the future shareholders, if a natural person: full name, age, profession or occupation, expression of the type of identity document and its number, NIT, domicile and nationality as well as the amount of their respective subscriptions. If a legal person: name of the society, NIT, domicile and Taxpayer Registration Number; c) In the event that the application is signed by the legal representative or attorney-in-fact of the future shareholders, their full name, age, profession or occupation, expression of the type and number of identity document, NIT, domicile and nationality must be expressed; d) Indication, if applicable, of the business group or conglomerate to which the future shareholders belong

Alameda Juan Pablo II, between 15 and 17 Av. Norte, San Salvador, El Salvador.
Tel. (503) 2281-8000 www.bcr.gob.sv
CNBCR-07/2015 NDMC-02
TECHNICAL STANDARDS FOR THE AUTHORIZATION OF CONSTITUTION, COMMENCEMENT OF OPERATIONS, REGISTRATION AND MANAGEMENT OF OPERATIONS OF INVESTMENT FUND MANAGERS Approval: 19/03/2015 Validity: 08/04/2015 e) Indication of the amount of capital to be subscribed and paid, which cannot be lower than that required in article 19 of the Funds Law; f) Indication of the amount of the guarantee to be constituted as required in article 8, letter c) of the Funds Law, which cannot be lower than that established in article 22, letter a) of the same Law; g) Full name, age, profession or occupation, domicile, nationality, experience, banking or credit references, expression of the type and number of personal identity document, of each of the potential directors and administrators and that of their respective spouses, if they have agreed in the act of marriage to submit to the regimes of participation in profits or deferred community; (3) h) The denomination of the Manager; and i) The place to receive any kind of notifications and the designation of the persons commissioned for such effect. Documents that must be attached to the application Art. 10.- The application for authorization of constitution must be accompanied by the following documentation:
a) Draft deed of constitution in which the purpose must be in accordance with the acts or services established in article 7 of the Funds Law; b) Draft statutes of the society, if these are not included in the draft deed; c) Legible copies of the personal identity document, the NIT or its Graphic Representation, of each of the future shareholders and that of their legal representatives, attorneys and their attorneys-in-fact if applicable; (3) d) Sworn declaration by each of the future controlling or relevant shareholders, defined as such in the Funds Law, in which they express that they are not in any of the prohibitions established in article 17 of the Funds Law, likewise they must send such sworn declaration the shareholders who possess 25% or more of participation in those societies that possess the quality of relevant or controlling shareholders. Shareholders who do not have the quality of controllers or relevant ones must present a sworn declaration in which it is stated that they do not incur in the prohibitions established in article 17, letters c) and f) of the Funds Law. In the sworn declarations signed by the shareholders, they must indicate the place in which they can receive any kind of notifications and the list of persons designated for such effect. The signature that matches each of these declarations must be authenticated by a notary and the declarations must be prepared in accordance with Annex No. 2 of these Standards; e) Documentation that proves the origin of the funds for the acquisition of shares by future shareholders who possess more than 1% of them; f) In the event that one or more shareholders are a legal person, the following documents must also be attached, insofar as applicable to them:
i. Copy of their current partnership agreement and the latest credential of the election of their administration body;
ii. Certification of the list of shareholders who possess twenty-five percent or more of their social capital. Such certification must be signed by whoever has the legal representation of the applicant and must be authenticated by a notary;
iii. Copy of the certification of the point of the act in which the agreement of authorization to the legal representative is stated, if the current partnership agreement establishes that for the constitution of any type of society, the legal representative of the applicant needs authorization from any superior organism;
iv. Last financial information at the close of the previous exercise. When the closing information corresponds to a date greater than six months prior to its presentation, unaudited financial information corresponding to at least three months prior must be presented;
v. Copy of the Taxpayer Registration Number; and
vi. When the future shareholder is an entity that by virtue of law is supervised by the Superintendency and has presented the information requested in this letter, it will not be necessary to present it again unless such information is not updated, that is, its date of presentation to the Superintendency is greater than six months.
g) Sworn declaration by each of the potential directors and administrators, in which they express that they are not in any of the inabilities established in article 14 of the Funds Law. In the sworn declarations signed by the directors and administrators, they must indicate the place in which they can receive any kind of notifications and the list of persons designated for such effect. The signature that matches each of these declarations must be authenticated by a notary and must be prepared in accordance with Annex No.1 of these Standards; h) Legible copies of the personal identity document, the NIT or its Graphic Representation, of each of the potential directors and administrators; (3) i) The Curriculum Vitae of each of the initial directors and administrators or any other type of documentation that accredits their experience in the area related to the position they will perform; j) Banking or credit references, two at minimum, of each of the potential directors and administrators proposed, issued by institutions authorized to operate in the country by the Superintendency or by the office that exercises State surveillance, when references are extended abroad. The aforementioned references must be issued with six months of prior notice to the date of presentation, at most. When any of these certificates have been issued abroad, the Superintendency may require applicants to present the documents by virtue of which it is

Alameda Juan Pablo II, between 15 and 17 Av. Norte, San Salvador, El Salvador.
Tel. (503) 2281-8000 www.bcr.gob.sv
CNBCR-07/2015 NDMC-02
COMMENCEMENT OF OPERATIONS, REGISTRATION AND MANAGEMENT OF OPERATIONS OF INVESTMENT FUND MANAGERS Approval: 19/03/2015 Validity: 08/04/2015 The Superintendence may, through a reasoned resolution, extend the deadline indicated in the preceding clause by up to ten additional business days, when the nature of the observations or deficiencies foreseen so requires. (3) Extension Period (3) Art. 10-B.- Applicants may submit to the Superintendence a request for an extension of the deadline indicated in the fifth clause of Article 10-A of these Norms, before the expiration of said deadline, stating the grounds for the request and proposing, if applicable, the relevant proof. (3) The extension period may not exceed ten business days and will begin on the business day following the expiration date of the original deadline. (3) Suspension of Deadline (3) Art. 10-C.- The fifteen-business-day deadline indicated in the first clause of Article 10-A of these Norms will be suspended for the days that elapse between the notification of the request to complete information or documentation referred to in the second and fifth clauses of said Article, until the interested parties remedy the observations required by the Superintendence. (3) Publication of Manager's Application for Objections (3) Art. 11.- Once the complete documentation referred to in Articles 9 and 10 of these Norms has been presented in due form, the Superintendence, within a deadline not exceeding fifteen business days, will publish in national circulation print media or another digital publication platform with equal or greater coverage, or on its website, in accordance with the provisions of the current legal framework, a notice that includes the name of the Manager to be constituted; the list of controlling or relevant shareholders, if applicable, as well as their participation in the company to be constituted and mention of belonging to a business group or conglomerate; and the list of initial directors and administrators. When shareholders are legal entities, the notice must additionally include the list of their shareholders who own at least ten percent of their share capital or of partners who have that percentage of social participation, as established in Article 9 of the Funds Law. (3) The publication aims to allow any person who knows that any of the disqualifications and prohibitions contained in Articles 14 and 17 of the Funds Law apply to the directors, administrators, or shareholders who will be part of the Manager, to object to them. Objections must be submitted in writing to the Superintendence within a period of fifteen days counted from the day following the publication, attaching relevant proof. The information will be confidential. The Superintendence will notify the objected person of this circumstance, who must appear within a deadline of eight business days counted from the day following the respective notification, and must pronounce on the opposition raised, being able to
attach any kind of proof tending to support their arguments. Once the previous deadline has expired, the Superintendence will resolve on the alleged disqualifications or prohibitions within two business days, notifying this circumstance in the manner previously provided.

Alameda Juan Pablo II, between 15 and 17 Av. Norte, San Salvador, El Salvador.
Tel. (503) 2281-8000 www.bcr.gob.sv
CNBCR-07/2015 NDMC-02
COMMENCEMENT OF OPERATIONS, REGISTRATION AND MANAGEMENT OF OPERATIONS OF INVESTMENT FUND MANAGERS Approval: 19/03/2015 Validity: 08/04/2015 Modifications Art. 13.- If during the deadline referred to in Article 12 of these Norms, any change occurs in the information or documentation presented to the Superintendence in accordance with Articles 9 and 10 of these Norms, the Manager must send to the Superintendence the updated information or documentation, within five days of the change occurring. Additionally, when a change occurs in the information published in the notice referred to in Article 11 of these Norms, this fact must be published in the terms and deadlines established in said Article. Once the Superintendence has verified the modifications to the information or documentation presented or published, it will issue a new resolution authorizing or denying the application for the constitution of a Manager, within a deadline not greater than thirty days. From the notification of this resolution, the thirty-day deadline referred to in Article 12 of these Norms will begin to run. Review of Testimony Art. 14.- Prior to the presentation of the testimony of the constitutive deed in the Commercial Registry, the applicants must send it to the Superintendence within a deadline of fifteen business days from its execution, so that it verifies that it has been drafted in accordance with the project presented referred to in letter a) of Article 10 of these Norms, which has been previously authorized, having the Superintendence a deadline of ten business days for said verification. If there are differences between the public constitutive deed and the project thereof authorized by the Superintendence, it must communicate this to the applicant within the deadline indicated in the preceding clause, so that the authorizing notary proceeds to make the respective adjustments, and the testimony of the public deed must be presented again before the Superintendence, within a deadline of twenty business days from the date of communication of the inconsistencies or differences for verification. Art. 15.- If it is determined that there are no inconsistencies between the public constitutive deed and the reviewed deed project, or in the case that the inconsistencies communicated according to what is established in the previous article have been overcome; the Superintendence will proceed within a deadline of five business days to extend a certificate signed by the Superintendent of the Financial System, containing the favorable qualification of said deed, with the object that it can be presented in the Commercial Registry for the corresponding registration.

Once the testimony is registered and the statutes are deposited in the Commercial Registry, the Manager will send a copy of said instruments to the Superintendence.
CHAPTER III
AUTHORIZATION OF THE COMMENCEMENT OF OPERATIONS OF INVESTMENT FUND MANAGERS

Authorization for the commencement of operations and registration of the Manager Art. 17.- Once the public constitutive deed is registered in the Commercial Registry, the Manager will request authorization for the commencement of operations from the Superintendence, for which it must present:
a) Note signed by the legal representative of the Manager, in which it requests the Superintendence the authorization for the commencement of operations and its corresponding entry in the Registry; b) Legible copy of the certification of the point of the Minutes of the General Shareholders' Meeting in which the election of the Board of Directors is recorded, prior to its registration in the Commercial Registry, in the case that they have not been appointed in the constitutive act; c) Legible copy of the point of the Minutes of the General Shareholders' Meeting or of the Board of Directors, by virtue of which the appointment of the General Manager or Executive Director has been made; d) Legible copy of the Tax Identification Number (NIT) or its Graphical Representation, and of the Taxpayer Registration Number of the Manager; (3)

Alameda Juan Pablo II, between 15 and 17 Av. Norte, San Salvador, El Salvador.
Tel. (503) 2281-8000 www.bcr.gob.sv
CNBCR-07/2015 NDMC-02
COMMENCEMENT OF OPERATIONS, REGISTRATION AND MANAGEMENT OF OPERATIONS OF INVESTMENT FUND MANAGERS Approval: 19/03/2015 Validity: 08/04/2015 e) Organizational chart of the Manager with indication of the position and name of the administrators and directors, specifying the position to be held regarding support staff; f) Curriculum Vitae and documents that prove that the persons who will work for the Manager, developing functions directly related to the management of the Funds, have the necessary technical and professional capacity for the performance of said activities, such as the General Manager; Investment Manager or the persons in charge of administering the investments. Any change in the personnel performing these functions must be communicated to the Superintendence within five days of occurrence, sending the information required in this letter. g) Plan or business model, for the first three years, referring to the central aspects of the activities it intends to perform, potential demand for the services it offers, market analysis, main risks and disadvantages, indicating whether it will hire the services of other entities including commercializers; (3) h) Detail of infrastructure and technical resources adequate to its activity program in accordance with the plan or business model; i) Legible copy of the agreement for the appointment of the external auditor, in the case that it has not been appointed in the constitutive act, which must be previously registered in the Commercial Registry; j) Budget of fixed expenses of the Manager for the first year of operation; k) Accounting systems that will be used by the Manager and the description of the computer platform on which it has been developed, description of its information systems, description of information backups, security and controls in the systems. The accounting systems must be presented in accordance with the applicable legal provisions; l) Automated information systems related to the registration of participants, online or batch processing on information regarding placement or redemption of participation shares, control of the investments of each of the Funds it administers, valuation of Fund investments and calculation of the share value and other operations it must perform to fulfill its purpose, attaching the inventory and description of the computer systems and databases that the Manager will use in its operations, as well as the description of the computer platform on which they have been developed, presenting additionally, the backup procedures manual and description of policies and security controls applied to the computer systems and databases in accordance with Annex No. 3 of these Norms. For the case of batch processing, this must be performed at least twice during the working day; m) Internal control manuals for the operation in each of the entity's operational processes; n) Organization and procedures manuals that allow it to fulfill its functions adequately, considering
within these the detail of the

Alameda Juan Pablo II, between 15 and 17 Av. Norte, San Salvador, El Salvador.
Tel. (503) 2281-8000 www.bcr.gob.sv
CNBCR-07/2015 NDMC-02
COMMENCEMENT OF OPERATIONS, REGISTRATION AND MANAGEMENT OF OPERATIONS OF INVESTMENT FUND MANAGERS Approval: 19/03/2015 Validity: 08/04/2015 investment administration procedure including the charges of the participants in said procedure and their obligations, as well as the formats of forms to be used in the accounting and operability of the entity; o) Contingency and business continuity plans; p) Policy and procedure for the performance of own investments by the Manager, when this activity is included in the business model, said procedure must indicate the obligation to keep a record for each of the investments made; q) Policies to be adopted in accordance with Article 35 of the Supervision Law, Article 25 letter j) of the Funds Law and the Technical Norms issued by the Central Bank on this matter, among which can be mentioned:
i. Policies and mechanisms for the management of risks in the Manager's operations, including those related to preventing and impeding the execution of operations related to money laundering, terrorist financing and financing of the proliferation of weapons of mass destruction. The policy must include at minimum the methodology to systematically perform the identification, measurement, control and mitigation, as well as the monitoring and communication in an adequate manner for each of the different types of risks identified; (4)
ii. Policies on ethical standards of conduct;
iii. Management of conflicts of interest, insider information; and
iv. Corporate governance policies.
Regarding the handling of conflicts of interest, it is required to have a detail of the conflicts identified at the stage of commencement of operations, as well as the mechanisms for their mitigation and disclosure, which will be reviewed by the Superintendence at the time of verification of the accounting systems and other requirements referred to in the fourth clause of this Article. (3) In the case of letter c), if the Board of Directors has not been elected in the public constitutive deed, in order to corroborate that it coincides with the Board of Directors published in the notice referred to in Article 11 of these Norms; once said certification is registered in the Commercial Registry, a copy of it must be sent to the Superintendence. In the case that the published list does not coincide with the certification of the point of the minutes in which the Board of Directors is chosen, the Superintendence, at the expense of the applicants, will make a new publication for the purposes of Article 11 of these Norms. The Superintendence will verify the accounting, information, control and internal procedures systems of the company, verifying that the computer systems have their applications and processes duly documented, including the records of changes in them, maintenance policies, licenses and authorizations, backup mechanisms and information recovery procedures. (3) The application and documentation may be presented through the means made available by the Superintendence, which may be electronic. In any case, the deadline referred to in the first clause of Article 17-A of these Norms will begin to count from the business day following the presentation of the application. (3)

Authorization Procedure for the Commencement of Operations of the Investment Fund Manager (3) Art. 17-A.- Upon receipt of the application for authorization for the commencement of operations of the Investment Fund Manager, in accordance with what is established in Article 17 of these Norms, the Superintendence will proceed to verify compliance with the requirements defined in the Funds Law and in these Norms, having up to thirty business days for the authorization or denial of the commencement of operations of the Investment Fund Manager. (3) If the application is not accompanied by the complete and duly formatted information detailed in Article 17 of these Norms, the Superintendence, in the absence of necessary requirements, may require the applicants to present the missing documents within a deadline of ten business days counted from the day following the notification, a deadline that may be extended at the request of the interested persons, when there are reasons justifying it. (3) The Superintendence in the same warning will indicate to the applicants that if they do not complete the information within the aforementioned deadline, it will proceed without further procedure to archive the application, reserving its right to present a new application. (3) If after the analysis of the documentation presented according to Article 17 of these Norms, the Superintendence has observations or when the documentation or information presented does not result sufficient to establish the facts or information intended to be accredited; the Superintendence will warn the applicants to remedy the deficiencies communicated to them or present additional documentation or information required of them. (3) The applicants will have a maximum deadline of ten business days counted from the day following the notification, to remedy the observations or present the information required by the Superintendence. (3) The Superintendence may, through a reasoned resolution, extend the deadline indicated in the preceding clause by up to ten additional business days, when the nature of the observations or deficiencies foreseen so requires. (3)

Suspension of the Deadline (3)
Art. 17-C.- The thirty (30) business days period indicated in the first paragraph of Article 17-A of these Standards shall be suspended for the days that elapse between the notification of the request to complete information or documentation referred to in the second and fifth paragraphs of said Article, until the interested parties remedy the observations required by the Superintendent. (3)

Regarding the Resolution of Authorization (3)
Art. 18.- If the Superintendent finds no objections or if the observations made have been remedied, it will issue the agreement authorizing the start of operations of the Manager within a period not exceeding fifteen (15) business days, ordering in that act its Registry Entry in the corresponding Registry, which must be carried out within a maximum period of five (5) business days from the authorization issued. (3) The Superintendent will proceed to notify the resolution in which it authorizes or denies the authorization request for the start of operations of the Investment Fund Managers, within a maximum period of three (3) business days from the date the authorization resolution is issued. (3)

Art. 19.- At the expense of the Manager, the Superintendent must publish in printed media of national circulation or another digital publication platform with greater or equal coverage, or on its website, in accordance with what is established in the current legal framework, the agreement authorizing the start of operations within five (5) days following the issuance of said agreement. Managers must start operations within a maximum period of six (6) months, counted from the notification of the authorization agreement; otherwise, it will become void. The start of operations does not imply the active management of a Fund. The functioning of the Fund begins from the moment it reaches the minimum equity and number of participants required by the Fund Law. (3) When the Superintendent denies the start of operations of a Manager, the Superintendent will publish such denial on its website or by digital means. (3)

After obtaining the agreement authorizing the start of operations, the Manager must request from the Superintendent the authorization referred to in Article 26 of the Fund Law for the persons who will carry out the commercialization of the participation shares and those in charge of administering the investments of each Fund.

CHAPTER IV
SOCIAL CAPITAL OF THE MANAGER

Social Capital
Art. 20.- The minimum amount of social capital for the constitution of a Manager shall be five hundred thousand United States dollars (500,000 USD), as established in Article 19 of the Fund Law. This capital must be subscribed and paid in full in cash by means of a certified check, cashier's check, or bank draft, drawn against a bank regulated by the Bank Law and credited through the deposit of the corresponding check in the Central Bank or in another bank regulated by the Bank Law.

Reduction of Capital
Art. 21.- The Manager may agree to the reduction of its social capital with the prior authorization of the Superintendent. Under no circumstances shall it be authorized that said capital be reduced below the amount established according to Article 19 of the Fund Law. For this purpose, when requesting it, the Manager must present the following:
a) Request signed by the legal representative of the Manager; b) Copy of the respective General Shareholders' Meeting agreement; and c) Justification report of the capital reduction explaining that the operations of the Manager and the Funds it administers will not be affected by this reduction. Once the capital reduction is authorized, the Manager will observe the procedure established for the modification of the deeds in accordance with Article 12 of the Fund Law. The Manager, for the reduction of capital, must also consider what is established in the Commercial Code.

Application of Losses
Art. 22.- In case of losses in a fiscal year, at the General Shareholders' Meeting where such results are known, an agreement must be taken to cover them, according to the order established in Article 21 of the Fund Law.

Capital Deficit or Equity Due to Application of Losses Art. 23.- Without prejudice to what is stipulated in the previous article and to the actions that correspond to the Superintendent in the exercise of its supervisory function, when the amount of the Manager's minimum capital is reduced to figures lower than those established in the Fund Law due to the application of losses, the Manager will have a period of sixty (60) days from the date such situation occurs to reintegrate it. At no time shall the Manager's equity be less than the social capital required in the Fund Law. The Manager must present to the Superintendent within the first ten (10) days of the period, a plan and schedule of contributions to adjust to the required capital levels, which must be complied with within the established term. Once the deficit is remedied, the Manager must comply with what is established in Article 48 of these Standards. If the deficiency persists, its authorization to operate will be revoked in accordance with what is provided in Article 38 of the Fund Law. The revocation will produce the dissolution and liquidation of the Manager with the pertinent legal effects.

CHAPTER V
ACTS AND OPERATIONS OF THE MANAGER

Acts and Operations
Art. 24.- The Manager must carry out all acts, contracts, and operations necessary for the administration and functioning of the Funds, in particular it will have the powers indicated in Article 24 of the Fund Law.
In the operations carried out by the Manager, it must keep segregated the cash and securities accounts for each Fund it administers, as well as its own accounts.

Commissions and Expenses
Art. 25.- Every commission and expense must be expressed in the Internal Regulations of the respective Fund, as well as in the placement prospectus. The administration commission and other necessary expenses will be at the expense of each Fund, and other commissions may be established at the expense of the investor, attending to what is established in the Consumer Protection Law and always provided that such commissions are clearly revealed in the issuance prospectus and the Internal Regulations of the Fund. Commissions will be expressed as percentages or amounts, and for expenses, their concept will be clearly detailed. Commissions at the expense of the Fund or the investor must include the payment that the Manager makes to the commercializing entity.

Modification in Commissions or Expenses
Art. 26.- Any modification to the commissions or expenses referred to in Article 25 of these Standards must be communicated to the public. The modification will begin to govern after fifteen (15) business days counted from the date of publication for Open Funds and for Closed Funds, fifteen (15) days after being notified of the Superintendent's authorization. In the case of Open Funds, the communication of the modification will be carried out by the Manager by means of a highlighted notice in the newspaper of national circulation, established in the Internal Regulations, in the Fund's Placement Prospectus, and on its website; whereas, for a Closed Fund, the communication may be direct or by any means that allows the management to be corroborated, in the form established in the Internal Regulations. The Manager must send a copy of the publication made to the Superintendent at the latest three (3) business days after it is carried out.

Responsibilities of Directors and Administrators Art. 27.- The directors, administrators, and managers of the Managers, at all times, must ensure that the Funds they administer are managed under criteria of honesty, prudence, and efficiency, as good merchants in their own business, and are executed complying at all times with the regulatory provisions to which they are obligated, their policies, internal regulations, and procedures. They will also be responsible for ensuring that the information provided to the Superintendent and the public is truthful and reflects with transparency the true financial situation of the Manager.

Customer Service
Art. 28.- The Manager is obliged to have a procedure to attend and resolve complaints and claims from its participants, creating a formal service to attend the claims raised by the participants, must establish the corresponding mechanisms and procedures, with reasonable response times. Additionally, it must indicate the place, address, telephone, or email address through which investors can present their claims. The procedure detailed in the preceding paragraph, including attention deadlines, must be made known to the participants in the Internal Regulations of the Fund.

Prohibitions
Art. 29.- The Manager, its representatives, directors, related persons, or employees cannot carry out acts for their own benefit or that of third parties, to the detriment of the participants or the Funds they administer, and will be subject to the prohibitions established in Article 29 of the Fund Law. In addition, they cannot carry out the following activities:
a) Develop or promote operations that have as their objective or result the artificial evolution of the value of the participation share, preventing market manipulation behaviors, in accordance with Article 100 of the Market Law;

b) Administer or commercialize Funds without having the corresponding authorization as established in Article 8 of the Fund Law, or without having obtained the authorization of the respective Fund as required by Articles 52 and 62 of the Fund Law; c) Grant loans under any title with Fund money, except for active repo operations, provided it is contemplated in its investment policy. It also cannot allocate Fund resources to support its own liquidity as a Manager or of any other company belonging to its business group or financial conglomerate, because the investments made with resources from a Fund will have as their sole object the obtaining of adequate profitability, as established in Article 96 of the Fund Law; d) Delegate in any way the responsibilities as administrator of the Fund's investment portfolio that correspond to it according to what is established in Article 30 of the Fund Law; e) Accept participation shares in the Fund as guarantee for credits that they have granted to the participants of said Fund; f) Carry out fictitious transactions of purchase and sale of securities or other assets that make up the Fund to the detriment of the participants; g) Manipulate the value of the assets of the Fund it administers or the value of the participation shares, applying correctly the authorized methodologies for the calculation of said value; and h) Not respect the order of entry of redemption payment requests for the benefit of its own operations, of the companies belonging to its business group or financial conglomerate, other Funds managed by the same Manager, or third parties.

Participation of the Manager in a Fund
Art. 30.- The Manager and companies belonging to its same financial conglomerate or business group may be holders individually or jointly of the participation shares of a Fund administered by said Manager, up to the maximum percentages established in Article 28 of the Fund Law. If excesses to said maximum percentages occur due to market fluctuations or any other justified cause, it will proceed in accordance with what is regulated in the second paragraph of said Article. In the case of excesses, the Manager must communicate to the Superintendent by note the reason for the excess and the measures to be taken to regularize to the percentages established in the Fund Law; it must publish this situation on its website during the period that the excess lasts. The Manager, within a period of three (3) business days following the regularization, must communicate to the Superintendent if the situation had incidences or repercussions on the Fund.

Obligation of Indemnification and Liability
Art. 31.- The Manager is obliged to indemnify the participants of the Fund according to the terms established in Article 27 of the Fund Law, for the execution of the actions prohibited by virtue of the Fund Law or for the omission of any of its obligations. The Manager must keep control of the payment of indemnifications.

Contracting of Services
Art. 32.- The Manager, in accordance with what is established in Article 30 of the Fund Law, may enter into service contracts with other companies that allow it to exercise its functions, such as in administrative, IT, and other areas. The Manager that administers Closed Real Estate Funds, among others, may contract services related to the maintenance of real estate, supervision of work, and valuation thereof. It is not allowed for the Manager to contract services for the administration of the Fund's investment portfolio. Under no circumstances can entities related to the Manager provide services to it without explicitly recognizing the costs thereof, which will be duly incorporated in the respective contracts as well as their form of payment. The prices of said services must be established strictly under market conditions. This does not prevent related entities to the Manager from providing services without cost, which must be established in the contract and revealed by the Manager. In the Placement Prospectus, the services to be contracted must be listed. The Manager must ensure that the entities it hires have the qualifications and capacity to perform their functions, taking into account the nature of the services they will provide, since the Manager is responsible to third parties for the quality of the contracted services as if it had carried them out. The Manager must assume the costs of indemnification of the Fund, immediately upon the occurrence of the event, when the contracted company commits fraud, error, or breach of contract that implies prejudice to the administered Fund.

Art. 33.- All services that the Manager contracts for the Funds will be backed by a contract, without prejudice to the provisions established for the commercialization of shares in the Technical Standards issued by the Central Bank regarding this matter. (2) Repealed (2) The Manager will carry out, prior to contracting, an evaluation on possible conflicts of interest with the entity to be contracted, and if such conflicts exist, it must mitigate them and, if applicable, reveal them according to its policy. Likewise, it must define the mechanisms it will use to evaluate the performance of the contracted services, as well as the monitoring it will carry out on them.

In the case of substitution of companies providing services; the Manager will notify said change to the Superintendent, presenting the new contract models to be signed.
The Manager, prior to contracting a company to provide the participant registration service, must request authorization from the Superintendent so that it verifies that the Company has the necessary technological and financial requirements to provide said service, as established in Article 49 of the Fund Law, the Technical Standards issued by the Central Bank regarding this matter. If the Manager decides to substitute the company that provides the participant registration service, it must request prior authorization from the Superintendent.

Service Contract Models
Art. 34.- The service contract models must be sent to the Superintendent for review as established in Article 30 of the Fund Law and must contain as a minimum, the following:
a) Object; b) Responsibilities of each contracting party; c) Products or deliverable services. Characteristics or expected contents thereof; d) Form of payment; e) Duration period; f) Clauses that oblige the subcontracted entity to keep strict confidentiality on the information to which it has access by reason of the provision of its services, as well as a clause relative to the work calendar to be carried out; g) Clauses that facilitate an adequate review of the respective service provision by the Manager or the Superintendent; h) Consignment of whether the service provider entity is related to the Manager; i) Conditions of nullity or rescission of the contract; j) Conditions for the resolution of conflicts; and k) Prohibitions applicable to the contractors, as established in the Fund Law and in these Standards. The Manager may use the contract models once they have been reviewed by the Superintendent and the pertinent observations have been overcome. If within the period of thirty (30) days that the Superintendent has to observe the models, it does not pronounce itself, it will be understood that it has no observations. Likewise, the Manager will reflect the contracting of these services in its accounting. Once the contracts are signed, it will send a copy of them to the Superintendent at the latest three (3) business days following the signing.

Commercialization of Participation Shares of Investment Funds Art. 35.- The Manager may carry out the commercialization of participation shares of the

Funds directly or through commercializing entities, as established in the Fund Law and the Technical Standards issued by the Central Bank regarding the same.

According to Article 46 of the Fund Law, the Manager and its agents must display in their customer service offices and on their website, in a font clearly visible to the naked eye, the following legend: "The amounts of money received as contributions for a Fund are investments at the account and risk of the investors, they are not bank deposits and do not have the guarantee of the Deposit Guarantee Institute."

The Manager must have a mechanism to establish the investor's risk profile.

It is not permitted for the commercializing entity to subcontract the service of marketing or redemption of participation shares.

The Board of Directors of the Manager must establish the profile and criteria that the entity must meet to be its agent.

Records

Art. 36.- It is the responsibility of the Manager to keep and maintain records with the following minimum content:

With respect to each of the Funds it administers:
a) A register of participants through electronic systems that allow recording of any operation or event that has an effect on its content. The register must detail all operations carried out by participants before the Manager with their participation shares, indicating: participant identification code; participant name, Identity Document and Tax ID (NIT); type of operation, total amount, quantity and class of participation shares, type of contribution if monetary or in kind (for Closed Funds) and the contribution amount, date of the operation, amount of withholdings made for income tax purposes, the assigned share value and encumbrances on the participation shares. The Manager may hire a company to keep this register; b) A register of contributions and redemption of shares containing as a minimum the participant identification code; sequential number assigned by the system; name of the commercializing agent that carried out the transaction; number of Fund shares of the participant; date and time of receipt of contributions, as well as the manner in which the contribution was made, whether in cash or in kind, electronic transfer or check; contribution amount; date and time of the redemption request; redemption amount; commissions to be charged if applicable, as well as the manner in which each was paid, that is, whether in cash, money transfer or securities if applicable; status of the request, if the redemption has already been applied including the date or is pending, specifying why it is in process;

Art. 37.- With respect to the Manager, in addition to the records established by the Commercial Code, it shall keep the following:
a) A register of the agents and commercializing entities contracted for the marketing of participation shares:
i. For agents, it must include: Full name of the agent; profession; type and number of personal identity document; Tax ID (NIT); address; telephone and nationality; date and number of Board session in which it obtained authorization to operate as a commercializing agent; date of hiring of the commercializing agent; date of withdrawal of the commercializing agent; and signature of the agent;
ii. For entities: Name; trade name or corporate name, date of start, renewal, extension, revocation of the mandate contract of the commercializing entity; legal representatives; monthly amounts marketed by them; domicile; and contact telephone;
b) A register of contracted services, detailing the trade name or corporate name of the company, the service provided, term and price; c) A register of investment operations on its own account, if any; d) A register of complaints and claims made by participants before the Manager, its agents and commercializing entities, indicating date, reason for the complaint, name of the person who presented it and the status of the complaints and claims presented. In this register, a copy of the received claims, the response given and the average time in which they were resolved shall be incorporated, justifying those cases that had delays with respect to the deadlines set forth in the established procedure; e) A register of indemnifications paid to the participant; and f) A register of differences or conflicts of interest arising between participants in their capacity as such, or between them and the Manager.

Art. 38.- Without prejudice to the specific provisions contained in the Technical Standards relating to the marketing of participation shares of Foreign Investment Funds issued by the Central Bank, the Manager that has authorization to market such shares, must keep a register that shall contain as a minimum: name and nature of the Fund, name and nature of the participants who acquire such participation shares, type and amount of the contribution, quantity of participation shares per participant, share value, amount of withholdings made for income tax purposes when applicable and expression of the currency of marketing of the participation shares.

Art. 39.- The control of the records must be kept through information systems, for which they must have mechanisms of security, integrity and consistency.

Information Archive

Art. 40.- The Manager must maintain, for a period of no less than ten years, an archive of all books, records and any other supporting documentation corresponding. It must also have historical information for the same period.

CHAPTER VI
CONTROL MEASURES

Conduct Standards

Art. 41.- In the development of its activities, the Manager, its employees as well as any person directly or indirectly related to it, must observe conduct standards, for which the Manager must implement the necessary procedures and controls for their proper observance, according to the Technical Standards issued by the Central Bank regarding the same.

Insider Information and Confidentiality Principle

Art. 42.- Information relating to the Fund that is not public and that could influence the value of the participation share of the Fund or its trading value, as appropriate, is considered insider information. This information includes prior knowledge of variations in share value, as well as subscriptions and redemptions for significant amounts to be made by a participant. Persons who have access to insider information must maintain absolute confidentiality of it and refrain from carrying out, directly or indirectly, operations regarding the instrument or security related to the information to which they have accessed, being applicable to them the Standards on reserved information established in article 35 of the Market Law, as well as the Technical Standards issued by the Central Bank regarding the same.

Decisions related to the investments and operations of the Fund, as well as the information relating to these decisions, are considered insider information. The Manager as well as all other persons who have access to such information must keep absolute confidentiality of it.

Information Barriers

Art. 43.- The Manager must establish policies that prevent the uncontrolled flow of information relating to investment decisions or other insider information to any other area of the entity and to companies or persons directly or indirectly related to the Manager. Investment decisions as well as their execution must be carried out separately, independently and autonomously from other activities carried out in another company related to the Manager.

The Manager must establish security measures regarding the handling and safeguarding of information, establishing access levels according to the functions and responsibilities of the position held by each employee. Considering for the establishment of said measures what is regulated in the Technical Standards issued by the Central Bank regarding the same.

Audit Committee

Art. 44.- The Manager must have an Audit Committee, at least two external directors must be part of said Committee. The Manager must notify the Superintendence of who constitutes said Committee specifying the external directors. The obligations of said Committee shall be those established in article 39 of the Supervision Law and those established in the Technical Standards regulating Risk Management that the Central Bank issues for such effect.

Internal Control

Art. 45.- The Manager in the elaboration of job manuals, procedures, internal control systems and human resources, shall take into consideration, among others, the following aspects:
a) Ensure compliance with internal conduct standards and internal policies and procedures; b) Verify that the work performed by its employees and agents falls within the norms applicable to them; c) Verify that the consultations, claims and in general, the service provided to the participant by the Manager, complies with the procedures, deadlines and other rules that for such effect must be fixed in the Internal Regulations of the Fund; d) Verify that the recommendations or observations raised by the Superintendence, the internal auditor, Audit Committee or the external auditor, are timely complied with by the Manager; e) Train the employees who work for the Manager; and f) Communicate to the Superintendence, any fact detected in the exercise of its functions, that could be harmful to the participant.

Internal control activities must be conducted in close coordination with those of the Surveillance Committees of Closed Funds, without substituting their functions and responsibilities.

Internal Control System

Art. 46.- The Manager must elaborate an internal control system that allows verifying compliance with the policies, limits, processes and procedures established for the risk management of the entity. For this purpose, it must establish the necessary administrative, financial, accounting and technological controls. Particularly, it must establish a system to safeguard the asset of each Fund administered, considering aspects such as:
a) Policies for acquisition, custody, transfer and settlement of assets and liabilities, as appropriate; b) Segregation of functions policies; c) Procedures for authorization, review, recording and control of operations; d) Internal verification procedures; e) Measures for the protection of the computer system, documents, physical files and records of operations; f) Alternative information, recording and control systems; g) Alert system; h) Schedule for compliance with regulatory obligations; and i) Others established by the Technical Standards regulating risk management that the Central Bank issues for such effect.

The internal control system and its modifications must be authorized by the Board of Directors.

Segregation of Functions

Art. 47.- The Manager must establish a structure that allows adequate comprehensive risk management, with the proper segregation of functions and responsibilities, as well as the hierarchical levels of support operational areas, business areas and control that participate in the process, as well as the levels of dependence, in accordance with the size and nature of its operations.

For the purposes of segregation of functions within the Manager, the same person cannot perform the functions of risk management, Fund accounting and investment decision making.

For the purposes of separation of functions when the Manager belongs to a financial conglomerate, the provisions established in Article 134 of the Bank Law must be observed.

In the case that the Manager belongs to a business group, the Superintendence will evaluate the potential risks and conflicts of interest that may arise; if in said evaluation it determines that there is a potential risk for the participants of the Funds administered by that Manager, it must apply the measures that it has established according to what is required by Article 35 letter c) of the Supervision Law. In the case that the Manager has not provided measures or the adopted ones were not sufficient to minimize said conflicts, the Superintendence may take the prudential measures it deems convenient to protect the interests of investors in accordance with the applicable legal framework. (1)

CHAPTER VII
GENERAL PROVISIONS

Modification of Deeds

Art. 48.- In case of modification to the social pact, dissolution and liquidation of a Manager, as well as its statutes, the provisions of Art. 12 of the Fund Law shall be attended, the authorization of the Superintendence must be granted, within a period of thirty days from the presentation of the request with the complete documentation. Once granted, the Manager within the following ten days, will present the testimony to verify its conformity with what was authorized, of which a reason will be noted signed by the Superintendent of the Financial System in the respective testimony, without which they cannot be registered in the Commercial Registry.

Once the testimony is registered in the Commercial Registry or its statutes deposited, the Manager will send a copy of them to the Superintendence within a maximum period of thirty days.

Certification of photocopies, authentic signatures and translation of documents

Art. 49.- Any photocopy that is presented to the Superintendence in compliance with what is provided in these Standards, when applicable, must be certified by a notary authorized in El Salvador. In cases where the photocopies correspond to the Tax ID (NIT) or its Graphic Representation, notarial certification will not be required. Likewise, the signatures that match in any type of documentation, must be authenticated by a notary authorized in El Salvador. (3)

Public or authentic documents emanating from a foreign country, as well as their photocopies, may be admitted without the need for legalization or apostille, provided that they allow reasonably verifying their authenticity, integrity and content, in accordance with what is established in article 4-A of the Administrative Procedures Law. (4)

In case the documentation is not in the Castilian language, it must be translated in accordance with what is established in the Law on Notarial Practice of Voluntary Jurisdiction and Other Diligences.

Information Update

Art. 50.- Without prejudice to the deadlines established in the Technical Standards relating to relevant events issued by the Central Bank, Managers will communicate to the Superintendence any change related to the Registration, the day after the event occurred, sending the documentation within a maximum period of eight business days from the moment the change is formalized.

Likewise, any modification made to the information referred to in article 17 of these Standards, must be communicated to the Superintendence within a period of ten business days following the occurrence of the modification.

Modification of accounting systems and information systems

Art. 51.- Once the accounting systems and information systems are authorized, any modification that a Manager wishes to make to them must notify the Superintendence previously. When the Manager wishes to make changes to the databases, systems or computer programs that are related to products and services relating to the Funds, it must have the authorization of the Superintendence prior to its implementation. For these purposes, the Manager must present a request signed by the legal representative of the Manager, accompanying it with the respective Board of Directors agreement, as well as the report that supports said decision. The Superintendence will review the request and after the respective tests, if there are no observations, it will issue the authorization.

The Board of Directors must verify that at all times the technical, resource and information system requirements indicated in these Standards are met.

Changes in controlling or relevant shareholders

Art. 52.- Any change in the shareholding composition of the Manager when this implies new controlling or relevant shareholders must be communicated to the Superintendence prior to said change being final, for the corresponding evaluation of the new shareholder.

Controlling or relevant shareholders, within the thirty days following the signing of the shares and in the month of January of each year, will present a sworn declaration to the Superintendence, affirming whether they are or are not within any of the circumstances indicated in article 17 of the Fund Law and must inform said institution, at the latest within three business days following, if the circumstance occurs subsequently. The sworn declaration must be presented in accordance with Annex No.2 of these Standards.

CHAPTER VIII
OTHER PROVISIONS AND VALIDITY

Sanctions

Art. 53.- Non-compliance with the provisions contained in these Standards, will be sanctioned in accordance with what is established in the Supervision Law.

INVESTMENT FUND MANAGERS
MODEL OF SWORN DECLARATION FOR DIRECTORS AND ADMINISTRATORS OF THE MANAGER In the city of San Salvador, at the _______ hours of the day ________ of _______ of two thousand .
Before me, _______ notary of the domicile of ______________ appears the gentleman _________ of ________________ years, (profession or trade) _______, from the domicile _____________ whom I know (or do not know), holder of (or I identify by) Identity Document number (or passport number)______, with Tax Identification Number _______ who acts in his own name (or in representation of, in this case indicate if he is a legal representative or attorney and relate the power of attorney according to the case, at this moment or at the end) and TELLS ME: That in his capacity as future director or administrator of the company ________________________, UNDER OATH MAKES THE FOLLOWING DECLARATIONS: A) That he is not a director, administrator or employee of another Manager nor is a shareholder who owns more than 10% of the capital of another Manager; B) That he is not a manager, attorney or financial advisor of a member company of the same financial conglomerate of the Manager, that trades securities. C) That he is not in a state of bankruptcy or suspension of payments, and that he has not been judicially qualified as responsible for a negligent or fraudulent bankruptcy. D) That he is not a debtor to the treasury and the Salvadoran financial system classified in any of the highest credit risk categories. That he is not the owner of twenty-five percent or more of the shares or contributions in companies that are in the aforementioned situation, nor is he in a similar situation abroad. E) That he has not been an administrator, director, manager or official of an institution or entity part of the financial system in which his administrative responsibility has been demonstrated for said institution or entity, from the enforcement of the Law on Privatization of Commercial Banks and Savings and Loan Associations, to have incurred patrimonial deficiencies of twenty percent or more of the minimum required by law, to have received contributions from the State or the Deposit Guarantee Institute for its rehabilitation, to have been intervened by the competent body, or to have been restructured, and consequently, to have had its authorization to operate revoked. F) That he has not been convicted by a final judgment in the country or abroad, for having committed or participated fraudulently in the commission of any crime. G) That his participation in activities related to drug trafficking and related crimes, and with money laundering, terrorism financing and financing of the proliferation of weapons of mass destruction in the country or abroad has not been judicially proven. H) That he has not been declared ineligible in the country nor abroad, for this type of position nor has he been sanctioned administratively or judicially for his participation in infractions of laws and norms of a financial nature, especially the collection of public funds without authorization, the granting or receipt of loans related in excess of the permitted limit and in crimes of a financial
nature. I) That he is not the President or Vice President of the Republic, Minister, Vice Minister, Director or Subdirector of a Ministry, Secretary or Undersecretary of the Presidency of the Republic, Deputy, Magistrate of the Supreme Court of Justice or of the Courts of Second Instance, holder of the institutions that make up the Public Ministry or of the municipalities, President or Magistrate of the Court of Accounts of the Republic nor President of any state institution or company of an autonomous nature. J) That he is not legally incapacitated. K) That he has not been a director or administrator of a Manager whose authorization to operate has been revoked by the Superintendence of the Financial System. L) That he is not president or director of a bank,

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