Technical Standards for the Calculation of the Participation Share Value and Allocation of Participation Shares

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NDMC-11
TECHNICAL STANDARDS FOR THE CALCULATION OF THE PARTICIPATION SHARE VALUE AND ALLOCATION OF PARTICIPATION SHARES Approval: 09/14/2016 Effective Date: 10/03/2016 THE COMMITTEE OF NORMS OF THE CENTRAL RESERVE BANK OF EL SALVADOR, CONSIDERING:
I. That Article 5 of the Investment Funds Law establishes 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 said law.
II. That Article 6 of the Investment Funds Law stipulates that it is the responsibility of the Central Reserve Bank of El Salvador to issue the necessary technical standards that allow for the application of said Law.
III. That Articles 54 letter x) and 67 letter x) of the Investment Funds Law establish that the Internal Regulations of each Fund must contain at least the procedure for calculating the value of the participation share based on technical standards established by the Central Reserve Bank of El Salvador.
IV. That Article 60 of the Investment Funds Law establishes that participation shares will be valued daily, dividing the value of the Fund's equity by the number of subscribed and paid participation shares.
V. That Article 90 of the Investment Funds Law establishes that the value of the Fund's equity will be calculated by subtracting its liabilities from the value of its assets.
VI. That Article 102 of the Investment Funds Law establishes that in the process of valuing investments made by Funds, they must consider, for the case of local financial instruments, the prices provided by a specialized agent in securities valuation, or when the financial instruments are from foreign issuers, additionally may consider prices from an international stock exchange or financial information system recognized by the Superintendency of the Financial System, and that in both cases, when it is not possible to obtain information from the aforementioned sources, the Managers may define a methodology of their own for such purpose.
VII. That Article 2 of the Supervision and Regulation of the Financial System Law establishes that the Financial Supervision and Regulation System has as its object to preserve the stability of the financial system, for which it will dictate technical standards in concordance with best international practices on the matter.
THEREFORE, in virtue of the regulatory powers conferred by Article 99 of the Supervision and Regulation of the Financial System Law,

NDMC-11
TECHNICAL STANDARDS FOR THE CALCULATION OF THE PARTICIPATION SHARE VALUE AND ALLOCATION OF PARTICIPATION SHARES Approval: 09/14/2016 Effective Date: 10/03/2016 AGREES TO issue the following:
TECHNICAL STANDARDS FOR THE CALCULATION OF THE PARTICIPATION SHARE VALUE AND ALLOCATION OF PARTICIPATION SHARES
CHAPTER I
OBJECTIVE, SUBJECTS AND TERMS
Objective
Art. 1.- These Norms have the objective of establishing the provisions for the determination of the Equity of the Investment Fund, the calculation of the value of the participation share, the periodicity thereof, and the allocation of participation shares to the participants of the Investment Funds. For the case of the valuation of participation shares of Closed Real Estate Funds, as well as Closed Funds that invest in securities issued by companies whose shares are not traded on the stock exchange and whose purpose is investment in specific business projects to be developed in the medium and long term, the specific provisions contained in the technical norms issued for such effect by the Committee of Norms of the Central Reserve Bank shall be applicable. Subjects Art. 2.- The subjects obliged to comply with these Norms are the Authorized Investment Fund Managers by the Superintendency of the Financial System to administer Investment Funds according to what is established in the Investment Funds Law. Terms Art. 3.- For the purposes of application of these Norms, the terms indicated below have the following meaning:
a) Specialized Agent in Securities Valuation: Entity authorized by the Superintendency of the Financial System according to Chapter III of Title IV of the Securities Market Law for the provision of the service of calculation, determination, and supply or provision of information on prices for valuation of securities of the entities of the financial system and those they administer on behalf of third parties; b) Central Bank: Central Reserve Bank of El Salvador; c) Stock Exchange: Stock Exchange constituted in El Salvador and registered in the Superintendency of the Financial System; d) Portfolio or Investment Portfolio: The total of the instruments or operations in which the resources of the Investment Funds are invested. e) House: Brokerage House, authorized and registered in the Superintendency of the Financial System; f) Open Funds: Open Investment Funds;

NDMC-11
TECHNICAL STANDARDS FOR THE CALCULATION OF THE PARTICIPATION SHARE VALUE AND ALLOCATION OF PARTICIPATION SHARES Approval: 09/14/2016 Effective Date: 10/03/2016 g) Closed Funds: Closed Investment Funds; h) Funds: Open and Closed Investment Funds; i) Manager: Investment Fund Management Company; j) Financial Instrument: Any contract that gives rise to a financial asset, a financial liability, or an equity instrument in an entity; k) Funds Law: Investment Funds Law; l) Methodology: Valuation model that incorporates technical and statistical criteria, considering economic variables provided by official specialized sources in this matter, which provides for each one of the assets according to its nature, a price vector for its valuation; m) Participant: Investor in an Investment Fund; n) Price Provision Service: Service of calculation, determination, and supply or provision of information on prices for valuation of securities; o) Registry: Public Stock Registry of the Superintendency of the Financial System; p) Internal Regulations: Document containing all the characteristics and specific rules that govern the functioning of a certain Investment Fund; q) Superintendency: Superintendency of the Financial System; r) Value or Security: Any financial instrument, contract, or financial title that forms part of the investments of the entities of the financial system, according to what is established in the International Financial Reporting Standards; s) Fair Value: Price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants, informed individuals who participate freely and independently, on the measurement date; and t) Price Vector: Unique daily report with prices for securities or titles, established under a technical procedure and a methodology previously authorized by the Superintendency of the Financial System.
CHAPTER II
GENERAL PROVISIONS FOR THE VALUATION OF FINANCIAL INSTRUMENTS Art. 4.- The valuation of the financial instruments that constitute the investments of the Funds must be carried out individually for each one of them at market prices under the premise of fair value, according to the scope established in these Norms and on a daily basis, including weekends and holidays. Art. 5.- The valuation of the financial instruments of the Fund is the responsibility of the Manager, even if it had contracted the services of price provision. Likewise, the Manager is responsible for maintaining the valuations of the financial instruments of the Funds it administers according to market conditions and in accordance with what is established in the "Accounting Manual for Investment Funds" (NDMC-08), approved by the Committee of Norms of the Central Bank.

NDMC-11
TECHNICAL STANDARDS FOR THE CALCULATION OF THE PARTICIPATION SHARE VALUE AND ALLOCATION OF PARTICIPATION SHARES Approval: 09/14/2016 Effective Date: 10/03/2016 Art. 6.- The valuation of the financial instruments that constitute the assets of the Funds for the determination of their equity, as well as the calculation of the value of the participation share must be carried out in accordance with what is established in these Norms and through an automated information system in accordance with what is established in the "Technical Standards for the Authorization of Constitution, Start of Operations, Registration and Management of Operations of Investment Fund Managers" (NDMC-02). Said Automated Information System must include as minimum the daily information according to the following fields:
a) General Information
i. Name of the Investment Fund;
ii. Classification of the Investment Fund (Open or Closed);
iii. Total value of Fund assets (properly valued);
iv. Total value of Fund liabilities (properly valued);
v. Fund Equity (according to what is established in Article 10 of these Norms);
vi. Total number of participation shares of the Fund;
vii. Number of participation shares of the Fund by class of participation, when applicable;
viii. Value of the participation share of the Fund; and
ix. Value of the participation share of the Fund by class of participation, when applicable.
b) Information on the Fund's investment portfolio
i. Type of instrument;
ii. Code of the security issuance. (Mnemonic name or that which allows identifying it in the Fund's investment registry);
iii. Tranche or Series of the security issuance;
iv. Currency in which the instrument was issued;
v. Exchange rate used (when the instrument was not issued in US dollars);
vi. Reference date of the exchange rate used (when the instrument was not issued in US dollars);
vii. Source of the exchange rate (when the instrument was not issued in US dollars);
viii. Market price (used for the daily valuation of the instrument obtained from any of the sources established in Article 7 of these Norms);
ix. Quantity of securities in the portfolio, when applicable;
x. Nominal value;
xi. Market value (result of the daily valuation of the total amount of the investment in the security);
xii. Source of market price;
xiii. Daily variation of the market price per instrument (expressed in amount and percentage);
xiv. Daily variation of the market value (Capital gain or loss); and
xv. Status (available or reported).

NDMC-11
TECHNICAL STANDARDS FOR THE CALCULATION OF THE PARTICIPATION SHARE VALUE AND ALLOCATION OF PARTICIPATION SHARES Approval: 09/14/2016 Effective Date: 10/03/2016 c) Asset Information
i. Total market value of the Fund's investment portfolio;
ii. Total value of capital gain or loss of the Fund's investments;
iii. Total value of certificates of deposit or bank accounts of the Fund (excluding contributions by subscriptions credited before the cut-off time of day "t");
iv. Detail and value of assets other than financial investments; and
v. Total value of assets other than financial investments of the Fund.
d) Liability Information
i. Total redemptions paid on the day, when applicable;
ii. Detail and amount of commissions and expenses applied to the fund; and
iii. Detail and value of the total liabilities of the fund.
For valuation purposes, the financial information that the automated information system uses must be in United States dollars with a minimum of eight (8) decimals.
Art. 7.- For the purposes of valuing financial instruments at fair value, the Manager, in attention to Article 102 of the Funds Law, must obtain the respective prices from the following sources:
a) Specialized Agents in Securities Valuation authorized by the Superintendency, in the case of financial instruments of local issuers, in accordance with letter a) of Article 3 of these Norms; and b) International stock exchange or financial information systems recognized by the Superintendency or Specialized Agents in Securities Valuation, in the case of financial instruments of foreign issuers. In case it is not possible to obtain the prices of the Fund's financial instruments for their respective valuation at fair value from any of the sources indicated in the previous letters, the Manager may elaborate a methodology of its own for the valuation of said instruments, having to present it to the Superintendency at the time of requesting the registration of the respective Fund in accordance with what is established in the Investment Funds Law and required in the "Technical Standards for the Authorization, Registration and Functioning of Investment Funds" (NDMC-06), approved by the Committee of Norms of the Central Bank. Valuation Methodologies Art. 8.- The methodologies elaborated by each Manager must comply at least with the requirements on the elaboration of valuation methodologies according to the "Technical Standards for Specialized Agents in Securities Valuation" (NDMC-09), approved by the Committee of Norms of the Central Bank. Art. 9.- The Manager that contracts the price provision service of a Specialized Agent in Securities Valuation and identifies an error in the price vector calculated by this, must carry out the respective challenge of said vector before the corresponding Agent, in accordance with the "Technical Standards for Specialized Agents in Securities Valuation" (NDMC-09), approved by the Committee of Norms of the Central Bank.

NDMC-11
TECHNICAL STANDARDS FOR THE CALCULATION OF THE PARTICIPATION SHARE VALUE AND ALLOCATION OF PARTICIPATION SHARES Approval: 09/14/2016 Effective Date: 10/03/2016
CHAPTER III
VALUE OF THE PARTICIPATION SHARE
Calculation of the value of the participation share Art. 10.- The participation shares of a Fund will be valued daily, including weekends and holidays, from the day it receives the first contribution. The daily valuation aims to generate the value of the Fund's equity to obtain the value of the participation shares; all expenses applied to the Fund must be reflected on a daily basis. For the case of credited subscriptions, on the first day of operations of the Fund, the value of the share will correspond to the nominal value. To obtain the value of the participation share on a determined date "t", the following steps must be followed:
a) Daily balance: preparation of a balance sheet that includes the valuation of financial instruments according to the last active price vector. The value of the Fund's equity will be the result of subtracting creditor accounts from the sum of all its assets at fair value; b) Calculation of the value of the participation share: the value of the participation shares of day "t" is established by dividing the value of the Fund's equity of day "t" without considering the subscriptions and redemptions of the day, by the number of subscribed and paid participation shares at the beginning of day "t". The value of the equity and the quantity of shares correspond to those calculated based on what is established in this article. From the above, the calculation of the value of the participation share of a Fund will be obtained by the following formula:
VCt = PNt / NCt
Where:
VCt = Value of the participation share on day "t".
PNt = Daily equity on day "t" without considering contributions by credited subscriptions nor redemption requests presented before the cut-off time of day "t". Nevertheless, they include payments of redemptions made.
NCt = Number of subscribed and paid participation shares, without considering contributions by credited subscriptions, nor redemption requests presented before the cut-off time of day "t".

NDMC-11
TECHNICAL STANDARDS FOR THE CALCULATION OF THE PARTICIPATION SHARE VALUE AND ALLOCATION OF PARTICIPATION SHARES Approval: 09/14/2016 Effective Date: 10/03/2016 Art. 11.- During the subscription period of shares, while the minimum equity and number of participants are not reached, the Manager must update the value of the shares daily, observing for the case of Closed Funds what is established in Article 64 of the Funds Law. Nevertheless, the Manager must value daily the investments in which it has invested the received resources, according to the criteria established in these Norms. Value of participation shares by class Art. 12.- The value of the participation shares of each class will be that resulting from dividing the value of the part of the Fund's equity corresponding to said class by the number of subscribed and paid shares of that class. Validity of the value of the participation share Art. 13.- The validity of the value of the participation shares will be 24 hours based on the cut-off time. The value of the Fund's participation share will be determined after the operational closing of each day, established in the internal regulations. Disclosure of the value of the participation shares Art. 14.- The publication of the value of the participation shares must be done daily and will be the responsibility of the Manager. This publication must be available on the Manager's website and must be delivered either physically or electronically to the participants when requested by them, according to the means determined by the same. Art. 15.- For the disclosure of the value of the participation shares of the Funds, the Manager must do so considering at least four (4) decimals and in United States dollars. Art. 16.- The Manager must remit the next business day to the Superintendency the price vector employed to value the administered portfolio of each Fund and the values of the participation shares by class for each of these. This information must be remitted with a minimum of four (4) decimals.
CHAPTER IV
ALLOCATION OF PARTICIPATION SHARES OF THE FUNDS Art. 17.- The method of allocation of the value of the participation share will be carried out according to the rules indicated below:
a) Subscriptions made before the cut-off time of day "t" will be assigned to the value of the participation share calculated at the close of day "t".
Subscriptions are considered made before the cut-off time of day "t" when the request had been presented to the Manager or corresponding commercial entity before said cut-off time, indicated in the internal regulations and in the placement prospectus of participation shares, and the funds are credited and definitively applied in the bank accounts of the Fund, that is, when the contribution is confirmed in the account of the Investment Fund before the operational closing of the day defined by the Manager.

NDMC-11
TECHNICAL STANDARDS FOR THE CALCULATION OF THE PARTICIPATION SHARE VALUE AND ALLOCATION OF PARTICIPATION SHARES Approval: 09/14/2016 Effective Date: 10/03/2016 Subscriptions made after the cut-off time of day "t" will be assigned as if they had been made on the next business day, assigning them the value of the participation share calculated corresponding to that day. b) Redemptions made before the cut-off time of day "t" will be assigned to the value of the participation share calculated at the close of day "t". Redemptions made after the cut-off time of day "t" will be assigned as if they had been made on the next business day, assigning them the value of the participation share calculated corresponding to that day. Art. 18.- If due to situations or facts attributable to the participants, the allocation of participation shares is not carried out in accordance with what is stipulated in the subscription request presented before the cut-off time on day "t", the Manager must communicate such situation to the participant on that same day. If the situations or facts attributable to the participants that prevented such situation were overcome on another day different from the day of the request, this allocation must be carried out considering the value of the participation share, calculated at the close of the day in which the situation that prevented the allocation of the respective participations was solved, according to the request made by the participant originally.
CHAPTER V
OTHER PROVISIONS AND VALIDITY
Information Disclosure
Art. 19.- Entities subject to these Norms, when carrying out the contracting of the price provision service to value financial instruments, must reveal on their websites their source or the name of the contracted company, as well as reveal if there is any type of linkage. Sanctions Art. 20.- Non-compliance with the provisions contained in these Norms will be sanctioned in accordance with what is established in the Supervision and Regulation of the Financial System Law. Unforeseen Aspects Art. 21.- Unforeseen aspects in regulatory matters in these Norms will be resolved by the Committee of Norms of the Central Bank. Validity Art. 22.- These Norms will enter into force starting from October three, two thousand sixteen.