Technical Standards for the Trading of Foreign Securities

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

CONSIDERING: I. That Article 10 of the Securities Market Law establishes the requirements and conditions that must be met for securities issued abroad to be subject to a public offering in a Salvadoran stock exchange. II. That the same Article 10 of the Securities Market Law establishes that brokerage houses wishing to carry out operations with foreign securities must be authorized to do so. III. That Article 5 of the Law on Supervision and Regulation of the Financial System establishes that it is the responsibility of the Financial System Superintendence to authorize, suspend, or cancel the public offering of securities carried out in the stock market. IV. That the conditions under which foreign securities are traded are different in relation to the information available for investor decision-making as well as the characteristics of the available securities compared to Salvadoran issuances.

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 TRADING OF FOREIGN SECURITIES

CHAPTER I OBJECT, SUBJECTS, AND TERMS

Object Art. 1.- These Standards aim to regulate the public offering in the Salvadoran market of securities issued abroad, their authorization or registration, and trading in accordance with the Securities Market Law and what is established in these Standards; as well as the obligations of intermediaries and other participants in operations with said securities.

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Subjects Art. 2.- The subjects obliged to comply with the provisions established in these Standards are: a) Stockbroker agents authorized to carry out intermediation operations with foreign securities; b) Stock exchange; c) Brokerage houses authorized to carry out intermediation operations with foreign securities; and d) Companies specialized in the deposit and custody of securities.

Terms Art. 3.- For the purposes of these Standards, the terms indicated below have the following meaning: a) Broker Agent: Stockbroker agent, understood as the representative of a brokerage house, authorized by the Financial System Superintendence to carry out operations on its behalf in a stock exchange; b) Authorization of Foreign Securities: Procedure by which the Financial System Superintendence authorizes the public offering in El Salvador of securities issued by the States and Central Banks of Central American countries, as well as by regional and international financial organizations of which the State of El Salvador or the Central Reserve Bank of El Salvador are members; c) Central Bank: Central Reserve Bank of El Salvador; d) Stock Exchange: Stock exchange constituted in El Salvador and registered with the Financial System Superintendence; e) House: Brokerage house, registered with the Financial System Superintendence and authorized to carry out intermediation operations with foreign securities; f) Depository: Company specialized in the deposit and custody of securities constituted as a joint-stock company, registered and authorized by the Financial System Superintendence; g) Market Law: Securities Market Law; h) Registry: Public Stock Registry of the Financial System Superintendence; i) Foreign Securities Registry: Procedure by which the Financial System Superintendence authorizes the registry entry of security issuances issued by States and institutions responsible for managing the monetary policy of countries outside the Central American region, issued by societies, entities, corporations, or any type of legal persons, public or private, that are authorized to carry out a public offering of securities in their country of origin; j) International stock or financial information system: An international information system, recognized by the Financial System Superintendence, which provides electronic tools for financial analysis, data services, and news on all types of securities available and traded on international trading platforms; k) Repealed; and (1) l) Superintendence: Financial System Superintendence. (1)

CHAPTER II AUTHORIZATION OF FOREIGN SECURITIES

Public Offering of Foreign Securities Art. 4.- Foreign securities issued by the States and Central Banks of Central American countries, as well as by regional and international financial organizations of which the State or the Central Bank are members, may be subject to public offering, prior authorization by the Superintendence. Once authorized, said securities must be inscribed in a stock exchange to be subject to public offering in the Salvadoran secondary market, in accordance with the Market Law.

Application for Authorization of Foreign Securities Art. 5.- For the authorization of foreign securities in accordance with what is established in Article 4 of these Standards, the interested House must present to the Superintendence a request signed by its Legal Representative or Attorney-in-fact, accompanied by the following documentation (1): a) Certificate issued by the stock exchange where the securities were originally listed, or a copy of the agreement authorizing the issuance of said securities or the respective Legislative Decree, as applicable; and b) Information supplement of the authorized foreign securities, as required in Annex No. 1 of these Standards. The request and documentation may be presented through the means made available by the Superintendence, which may be electronic means. In any case, the time period referred to in Article 6 of these Standards will begin to run from the next business day after the request has been presented electronically. (1)

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Art. 6.- Upon receiving the request for authorization to trade a foreign security, with the documentation presented in full in accordance with what is established in Article 5 of these Standards; the Superintendence will proceed to verify compliance with the requirements defined by the Market Law and these Standards, and if these are met, it will grant authorization for the trading of the foreign security in the local market within a period of fifteen (15) business days counted from the day following the receipt of the request. To allow the House to request its inscription in a stock exchange, it will be sufficient with the communication of the favorable agreement issued by the Superintendence. (1)

CHAPTER III REGISTRATION OF FOREIGN SECURITIES

Foreign Securities Registry Art. 7.- Foreign securities issued by the States and by the institutions responsible for managing the monetary policy of foreign countries outside the Central American region; as well as those issued by societies, entities, corporations, or any type of legal persons, public or private, from any foreign country, may be subject to public offering provided they come from a country or jurisdiction in which an organized securities market functions, which has similar or superior requirements of regulation and supervision with respect to those of El Salvador and are entered in the Registry, in accordance with what is established in the Market Law. Once the securities are entered in the Registry, they must be inscribed in a stock exchange.

Application for Registration of Foreign Securities Art. 8.- For the registration of foreign securities, the interested House must present a request signed by its Legal Representative or Attorney-in-fact attaching the following information and documentation: (1) a) Documentation allowing to corroborate that said securities meet the characteristics established in letters a) and b) of the second paragraph of Article 10 of the Market Law; b) Current international risk classification of the issuance. In the case of sovereign debt, the risk classification of the country of origin will be taken into account. When referring to shares, the risk classification to be considered will be that of the issuer. Additionally, documentation must be presented evidencing the international stock or financial information system in which the classification is maintained available and updated for consultation by Salvadoran investors;

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c) Documentation allowing to corroborate that the classification is issued by a risk rating agency recognized by the Securities and Exchange Commission (SEC) of the United States of America, or that it has been issued by foreign risk rating agencies registered with the market regulator of their respective country of origin; d) The prospectus of the issuance to be registered, disseminated by the issuer; and e) An information supplement for Salvadoran investors, which must contain the necessary information for an investor to make an informed decision about the security, including as a minimum, when referring to debt instruments, what is detailed in Annex No. 1 of these Standards. When it corresponds to equity securities, it must include as a minimum what is detailed in Annex No. 2 of these Standards; the supplement must be in Spanish. (1) When it corresponds to the registration of new securities of the same issuer that present similar characteristics, such as: class, risk rating, and currency, only the documentation established in letters a) and d) of this article and the update of the supplement must be presented. (1)

Art. 9.- In the case of foreign securities that do not have at least one current international risk classification, they may be subject to registration by the Superintendence, attaching the following information to the request: a) The audited Financial Statements of the last fiscal year in accordance with the legal requirements established in their jurisdiction and the work report of the last fiscal year, when the issuer has it; and (1) b) Operational, governance, or risk reports of the issuer, among others, in accordance with the information available to said issuer and in accordance with the applicable jurisdiction. (1) c) Repealed (1) The House may indicate in the request the respective electronic links in which the information in the previous letters is available for consultation and review.

Art. 10.- Once the documentation is presented, the Superintendence will proceed to the analysis and resolution of the registration request, as stipulated in Article 12 of these Standards.

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CHAPTER IV PROCESS OF REGISTRATION OF FOREIGN SECURITIES

Art. 11.- The request for registration of foreign securities must be presented by the House to the Superintendence, in full and with the formal requirements in accordance with what is provided in these Standards, to start the registration period of fifteen (15) business days counted from the day after the request has been presented. The request and documentation may be presented through the means made available by the Superintendence, which may be electronic means. In any case, the time period referred to in Article 6 of these Standards will begin to run from the next business day after the request has been presented electronically. (1)

Process of Inscription in the Foreign Securities Registry Art. 12.- Upon receiving the request for registration of foreign securities, with the information established in Article 8 in full and in Article 9 of these Standards when it corresponds to foreign securities that do not have a risk classification, the Superintendence will proceed to verify compliance with the requirements defined by the Market Law and these Standards, having a period of up to fifteen (15) business days to carry out the entry in the corresponding Registry. Once this period has expired and without communicating observations to the Broker House, the Superintendence will proceed to inscribe it in the Foreign Securities Registry. (1).

If the request is not accompanied by the complete information detailed in Articles 8 and 9 of these Standards, the Superintendence, due to the lack of necessary requirements, may warn the House that within a period of ten (10) business days counted from the day following the notification, it must present the missing documents, a period that may be extended at the request of the House when there are reasons justifying it. (1) The Superintendence in the same warning will indicate to the House that if it does not complete the information within the aforementioned period, it will proceed without further procedure to archive the request, reserving its right to present a new request. (1) If after the analysis of the documentation presented in accordance with Articles 8 and 9 of these Standards, the Superintendence has observations or when the documentation or information presented does not prove sufficient to establish the facts or information intended to be accredited in accordance with what is stipulated in Article 10 of the Market Law and these Standards; the Superintendence will warn the respective House only once to remedy the deficiencies communicated or present additional documentation or information requested. (1) The House will have a maximum period of ten (10) business days counted from the day following the notification, to resolve the observations or present the additional information required by the Superintendence. (1) The Superintendence may, through a reasoned resolution, extend by another ten (10) business days, the period indicated in the previous paragraph, when the nature of the observations or deficiencies warned requires it. (1)

Extension Period (1) Art. 12-A.- The House may present to the Superintendence a request for extension of the period indicated in the fifth paragraph of Article 12 of these Standards, stating the reasons on which it is based and proposing, if applicable, the pertinent proof. (1) The extension period may not exceed ten (10) business days and will start from the next business day after the expiration date of the original period. (1)

Suspension of the Period (1) Art. 12-B.- The fifteen (15) business day period indicated in 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 Article 12 of these Standards, until the observations required by the Superintendence are remedied. (1) Once the documents are presented in due form, the Superintendence will proceed to respond to the request for authorization of the corresponding Registry. (1)

Art. 13.- In the case that the agreement by the Superintendence is favorable, the House within a maximum period of fifteen (15) business days counted from the receipt of said agreement, must pay the registry fees for each security and remit by the means indicated by the Superintendence the definitive information supplement for Salvadoran investors that the House will occupy for the trading of the security in question. (1).

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When the Superintendence receives the documentation and verifies that it is in accordance with what it authorized, it will proceed to issue the registry entry and notify the company specialized in the deposit and custody of securities, in accordance with what is established in Article 35 of the Law on Electronic Annotations of Securities in Account and to the requesting House within a maximum period of five (5) business days. (1)

Once the issuance is entered in the Registry, the House must proceed to inscribe the foreign securities in an authorized stock exchange in accordance with the Market Law. In any case, the inscription of the foreign security in the Registry, in no case implies certification on the quality of the security or the solvency of the issuer.

Archiving of Proceedings Initiated by Registration Request Art. 14.- The Superintendence will proceed without further procedure to archive the proceedings initiated in the registration procedure detailed in these Standards, when the following situations occur: a) The House has not remedied the observations or has not presented the information required in Articles 8 and 9 of these Standards; b) The Superintendence revokes the authorization for not having presented the information required in Article 13 of these Standards; and c) The House presents a note to the Superintendence, informing the desire to withdraw the request, at any time. In any case, the interested parties will maintain their right to present a new request to the Superintendence, which will give rise to a new procedure.

CHAPTER V AUTHORIZATION OF HOUSES TO CARRY OUT INTERMEDIATION OPERATIONS WITH FOREIGN SECURITIES

Application for Authorization Art. 15.- The House interested in carrying out operations with foreign securities must request the corresponding authorization from the Superintendence, through a request signed by its Legal Representative or Attorney-in-fact, accompanied by the following information and documentation: (1) a) Certification of the point of the minutes of the Board of Directors in which it is agreed to request the authorization to provide the service of intermediation with foreign securities;

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b) Manual of policies and procedures for the trading of foreign securities, in accordance with what is established in Article 30 of these Standards; c) Copy of the contract and/or subscription documentation that allows direct access to at least one international financial information system provided by systems such as Bloomberg, Reuters, or another equivalent system to these, recognized by the Superintendence, in accordance with what is established in Article 10 of the Market Law; (1) d) Format of the contract models to be signed with clients to provide the service of operations with foreign securities, which must be deposited in accordance with the Consumer Protection Law; (1) e) Copy of the contract, agreement, or other subscription documentation that proves the linkage with the foreign intermediary authorized to carry out operations with the securities to be traded; (1); f) Detail of the broker agents that will participate in the execution of the service of trading with foreign securities, which includes the name, age, profession, and domicile, as well as a copy of the documentation accrediting compliance with what is established in Article 33 of these Standards; and (1) g) Annual training plan for the personnel that will participate in the execution of the service of trading with foreign securities. In the contracts that the Houses sign with their clients, the following aspects must be included: object of the contract, obligations of the Houses in accordance with the Market Law, Consumer Protection Law, and these Standards, obligations of the clients, commissions to be charged, complaint procedures, contract termination clauses, domicile, among other clauses or provisions that the house incorporates considering the applicable legal framework. (1)

Authorization Art. 16.- Upon receiving the authorization request, with the complete information and documentation established in Article 15 of these Standards, the Superintendence will proceed to verify compliance with the requirements defined by the Market Law and these Standards, within a period of fifteen (15) business days. (1)

If the request is not accompanied by the complete information detailed in Article 15 of these Standards, the Superintendence, due to the lack of necessary requirements, may warn the House that within a period of ten (10) business days counted from the day following the notification, it must present the missing documents, a period that may be extended at the request of the House when there are reasons justifying it. (1) The Superintendence in the same warning will indicate to the House that if it does not complete the information within the aforementioned period, it will proceed without further procedure to archive the request, reserving its right to present a new request. (1) If after the analysis of the documentation presented in accordance with Article 15 of these Standards, the Superintendence has observations or when the docu