Technical Standards for the Transfer, Merger, or Liquidation of Voluntary Pension Savings Funds

Alameda Juan Pablo II, between 15 and 17 Av. Norte, San Salvador, El Salvador. Tel. (503) 2281-8000 www.bcr.gob.sv Page 1 of 33 CNBCR-11/2022 NSP-71 TECHNICAL STANDARDS FOR THE TRANSFER, MERGER OR LIQUIDATION OF VOLUNTARY PENSION SAVINGS FUNDS Approval: 30/12/2022 Validity: 30/12/2022

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

CONSIDERING:

I. That Legislative Decree No. 614, dated December 20, 2022, published in Official Diary No. 241 Volume No. 437, of the 21st of the same month and year, issued the General Law of the Pension System. II. That Article 133 of the General Law of the Pension System establishes that Voluntary Pension Savings Funds shall be governed by the provisions of Chapter I of Title II of said Law, and in their case, by the Investment Funds Law. III. That the fourth clause of Article 136 of the General Law of the Pension System establishes that any natural person, as well as employers, may make contributions to one or more Voluntary Pension Savings Funds, being able to withdraw resources, transfer all or part of the resources they maintain in voluntary accounts to other voluntary accounts or to other Voluntary Pension Savings Funds, subject to the conditions and obligations agreed upon in the Plans.

IV. That the third clause of Article 138 of the General Law of the Pension System establishes that the transfer of resources between voluntary accounts of the same natural person or employer shall be free from the payment of any type of tax. The same treatment shall apply when an employer transfers the resources from their voluntary accounts to the voluntary accounts of their employees.

V. That Article 141 of the General Law of the Pension System establishes that the Central Reserve Bank of El Salvador will issue the necessary technical standards that allow the development of Chapter I of Title II of said Law. VI. That Article 159 of the General Law of the Pension System establishes that the Central Reserve Bank of El Salvador will issue the necessary Technical Standards that allow the development of what is established in said Law.

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 TRANSFER, MERGER OR LIQUIDATION OF VOLUNTARY PENSION SAVINGS FUNDS

Alameda Juan Pablo II, between 15 and 17 Av. Norte, San Salvador, El Salvador. Tel. (503) 2281-8000 www.bcr.gob.sv Page 2 of 33 CNBCR-11/2022 NSP-71 TECHNICAL STANDARDS FOR THE TRANSFER, MERGER OR LIQUIDATION OF VOLUNTARY PENSION SAVINGS FUNDS Approval: 30/12/2022 Validity: 30/12/2022

TITLE I GENERAL ASPECTS

UNIQUE CHAPTER OBJECT, SUBJECTS AND TERMS

Object Art. 1.- The object of these Standards is to establish the procedure and minimum requirements that financial institutions administering Voluntary Pension Savings Funds must observe in the process of total or partial transfer of the resources that natural persons or employers maintain in the individual voluntary pension savings accounts of participants, as well as in cases where the transfer, merger or liquidation of the Voluntary Pension Savings Funds they administer is carried out.

Subjects Art. 2.- The subjects obliged to comply with the provisions established in these Standards are the financial institutions that administer Voluntary Pension Savings Funds authorized by the Superintendence of the Financial System: a) Banks regulated by the Banks Law; b) Cooperative Banks regulated by the Law on Cooperative Banks and Savings and Credit Societies; c) Investment Fund Managers regulated by the Investment Funds Law; d) Pension Fund Administrators, regulated by the General Law of the Pension System; and e) Savings and Credit Societies regulated by the Law on Cooperative Banks and Savings and Credit Societies.

Terms Art. 3.- For the purposes of these Standards, the terms indicated below have the following meaning: a) AFP: Pension Fund Administrators authorized by the Superintendence of the Financial System; b) Contributions: Resources or sum of money that are delivered to an Institution Administering Voluntary Pension Savings Funds by a natural person or by the employer to the participant's individual voluntary savings account; c) Central Bank: Central Reserve Bank of El Salvador; d) Individual Account: Individual voluntary pension savings account in the name of a natural person, which contains the data of contributions, transfers and withdrawals made by natural persons or by the employer if applicable and the returns generated by said contributions;

Alameda Juan Pablo II, between 15 and 17 Av. Norte, San Salvador, El Salvador. Tel. (503) 2281-8000 www.bcr.gob.sv Page 3 of 33 CNBCR-11/2022 NSP-71 TECHNICAL STANDARDS FOR THE TRANSFER, MERGER OR LIQUIDATION OF VOLUNTARY PENSION SAVINGS FUNDS Approval: 30/12/2022 Validity: 30/12/2022 e) Custodian: Company specialized in the deposit and custody of securities registered in the Public Registry of the Superintendence of the Financial System; f) Employer: Natural or legal person who agrees, through a contract or institutional plan, to make contributions to the individual account of a natural person with whom they maintain a labor relationship; g) Fund or Voluntary Fund: Voluntary Pension Savings Fund; h) Administering Institution: Financial institution that offers Voluntary Pension Savings Funds, which are registered in the Public Registry of the Superintendence of the Financial System. The administering institutions that can offer Voluntary Pension Savings Funds are those indicated in Article 2 of these Standards; i) Origin Administering Institution: Administering Institution from which the resources of the individual account to which a participant is linked are transferred in total or in part; j) Destination Administering Institution: Administering Institution to which the resources of an individual account to which a participant is linked are transferred; k) Funds Law: Investment Funds Law; l) SP Law: General Law of the Pension System; m) Participant: Natural person in whose name the individual voluntary pension savings account is located; n) Individual Plans: Contracts between a natural person and the respective Administering Institution, by which the obligations and rights of natural persons to make contributions to a Fund and to use these resources are established, as well as the obligations and rights of the Administering Institution; o) Institutional Plans: Contracts between an employer and the respective Administering Institution, by which the obligations and rights of the employer to make contributions and to use the resources contributed to the Fund in favor of their employees are established, as well as the obligations and rights of the Administering Institution; p) Prospectus: Corresponds to the instrument that contains the characteristics of each Voluntary Pension Savings Fund, as well as the description of its operation; q) Registry: Public Registry of the Superintendence of the Financial System; r) Superintendence: Superintendence of the Financial System; and s) Superintendent: Superintendent of the Financial System.

Alameda Juan Pablo II, between 15 and 17 Av. Norte, San Salvador, El Salvador. Tel. (503) 2281-8000 www.bcr.gob.sv Page 4 of 33 CNBCR-11/2022 NSP-71 TECHNICAL STANDARDS FOR THE TRANSFER, MERGER OR LIQUIDATION OF VOLUNTARY PENSION SAVINGS FUNDS Approval: 30/12/2022 Validity: 30/12/2022 TITLE II PARTIAL OR TOTAL TRANSFER OF RESOURCES FROM VOLUNTARY PENSION SAVINGS ACCOUNTS

CHAPTER I GENERAL ASPECTS

Transfer of resources Art. 4.- The resources of the participant's individual account, at any time, may be transferred in part or in total to other individual accounts of the same holder in the same Fund or other Voluntary Funds administered, either by the same Administering Institution or another. The transfer request may be made by the participant or employer through physical or electronic means, according to the conditions established in the contracts or individual or institutional plans as applicable. When a participant is linked to a Fund through a contract or institutional plan, they may request the transfer of the resources and returns of their individual account, provided that the resources are already their property according to the conditions established in the contract or institutional plan, for which the participant is the owner of the contributions made by their employer. Authorization, Registration (NSP-59), approved by the Central Bank through its Committee of Norms, the Administering Institution must inform the participants of the compliance with the conditions established by the employer.

Grounds for transfer Art. 5.- Participants and employers may carry out the total or partial transfer of the individual account in the following cases: a) By express decision, for which they must notify the Administering Institution; or b) By liquidation of the Administering Institution. When the employer requests the transfer of the resources from the individual accounts of their employees linked to a contract or institutional plan, the participant or employee may request to remain with the Origin Administering Institution, provided that the resources are their property, having met the conditions established by the employer, in which case they must possess or open a new individual account and sign an individual contract or plan with the Administering Institution and request the transfer of the resources.

Alameda Juan Pablo II, between 15 and 17 Av. Norte, San Salvador, El Salvador. Tel. (503) 2281-8000 www.bcr.gob.sv Page 5 of 33 CNBCR-11/2022 NSP-71 TECHNICAL STANDARDS FOR THE TRANSFER, MERGER OR LIQUIDATION OF VOLUNTARY PENSION SAVINGS FUNDS Approval: 30/12/2022 Validity: 30/12/2022 CHAPTER II TRANSFER BETWEEN INDIVIDUAL VOLUNTARY SAVINGS ACCOUNTS

Procedure for transfer between Individual Accounts Art. 6.- To carry out the total or partial transfer of the resources from the participants' individual accounts, the participant or employer according to the respective individual or institutional contract or plan must follow the following procedure: a) Request in advance the opening of an individual account in the participant's name, if they do not have one, in a Fund in the same or another Administering Institution, complying with the technical process for the Authorization, Registration and Operation of Voluntary Pension Savings Funds (NSP-59), approved by the Central Bank through its Committee of Norms; b) The Destination Administering Institution must deliver to the participant or employer a physical or electronic receipt on the linkage to a Fund with the information established in Annex No. 1 of these Standards; and c) Present a request, through the means and reception channels defined by the Origin Administering Institution according to the minimum content included in Annex No. 2 of these Standards, attaching the receipt delivered by the Destination Administering Institution in accordance with what is established in Annex No. 1 of these Standards.

In the case of transfer requests by the employer, they must attach the detail of the names and their code or identification of the individual account of the employees associated with a contract or institutional plan.

Origin Administering Institution Art. 7.- The Origin Administering Institutions must keep available to the employer and the participant the transfer request form through physical or electronic means, in accordance with what is established in Annex No. 2 of these Standards. Art. 8.- The Administering Institution and the marketers may receive transfer requests according to the reception channels established in the prospectus and the respective contract, having to process the information in the computer system for the registration of contributions, transfers and withdrawals of the individual account, whether carried out by the participant or employer in accordance with what is established in the (NSP-59), approved by the Central Bank through its Committee of Norms. Art. 9.- The Origin Administering Institution must deliver to the participant, through physical and/or electronic means, the detail of the available contributions and the returns generated at the current share value on the day of issuance, to the effect that the participant decides

Alameda Juan Pablo II, between 15 and 17 Av. Norte, San Salvador, El Salvador. Tel. (503) 2281-8000 www.bcr.gob.sv Page 6 of 33 CNBCR-11/2022 NSP-71 TECHNICAL STANDARDS FOR THE TRANSFER, MERGER OR LIQUIDATION OF VOLUNTARY PENSION SAVINGS FUNDS Approval: 30/12/2022 Validity: 30/12/2022 the type of transfer to be carried out, any of the following situations being able to arise: a) That they transfer all of the contributions and the generated returns; or b) That they carry out a partial transfer of the resources available in their individual account, without this limiting the participant from carrying out a subsequent transfer. Process of transfer of resources by the Origin Administering Institution Art. 10.- The Origin Administering Institution will enter the received transfer requests into the system through the mechanisms established in the prospectuses of the respective funds, for the registration of contributions, transfers and withdrawals referred to in (NSP-59), approved by the Central Bank through its Committee of Norms. Art. 11.- Once the request is presented, the Administering Institution will proceed to verify the information provided by the participant or the employer, having to warn them within a maximum period of three business days in case of detecting errors, omissions or inconsistencies to the effect that they are remedied.

The Origin Administering Institution must refrain from establishing requirements, conditions or procedures that hinder or delay the process of transferring resources to the Destination Administering Institution. Art. 12.- The transfer of the participant's resources from the Origin Administering Institution to the Destination Administering Institution must be carried out within a maximum period of three business days from the day the transfer request was received or from having remedied the observations in accordance with Article 11 of these Standards. Once the transfer is executed, a receipt of the operation carried out will be delivered to the participant or employer, which must specify at minimum: a) Request number related to the transfer process; b) Date and time of the instruction; c) Fund in which the transfer is made; d) Amount of the transfer; e) Value and number of shares equivalent to the transferred amount; and f) Amount and percentage of commissions when applicable as defined in the prospectus. In the case of transfers of significant amounts, the periods established in the contract or plan and in the prospectus of the Voluntary Fund of the Origin Administering Institution must be considered. Likewise, the payment of the total amount of the transfer must be made through an electronic transfer to the Destination Administering Institution. Alternatively, the

Alameda Juan Pablo II, between 15 and 17 Av. Norte, San Salvador, El Salvador. Tel. (503) 2281-8000 www.bcr.gob.sv Page 7 of 33 CNBCR-11/2022 NSP-71 TECHNICAL STANDARDS FOR THE TRANSFER, MERGER OR LIQUIDATION OF VOLUNTARY PENSION SAVINGS FUNDS Approval: 30/12/2022 Validity: 30/12/2022 origin administering institutions may draw and deliver this amount to the Destination Administering Institution by check, account credit or other authorized means. Destination Administering Institution Art. 13.- The Destination Administering Institution must clarify to the participant or employer, at the time of subscribing the corresponding contract or plan or of verifying the information sent by the Origin Administering Institution, that the number of shares may vary depending on the share value that the Voluntary Fund to which the transfer has been made registers. Art. 14.- The Destination Administering Institution must adopt all necessary control mechanisms to verify that the received transfer coincides with the request made. In case discrepancies are identified, the Administering Institutions will carry out the relevant procedures to resolve them no later than the next business day after identification, being obliged to transfer the amounts that correspond. Art. 15.- The Destination Administering Institution must send to the participant or employer, through the agreed means, a receipt of the receipt of the resources, detailing at least the following: a) Name or identification of the Fund to which the transfer was made; b) Type of contract or plan: individual or institutional; c) Code or identification of the individual account; d) Amount transferred; e) Value and number of shares equivalent to the transferred amount; and f) Date of transfer.

CHAPTER III STATEMENT OF ACCOUNT AND INFORMATION TO BE TRANSFERRED

Statement of account Art. 16.- Once the transfer of resources has been carried out, the Origin Administering Institution must issue and deliver to the participant or employer, through the means previously established by them, a final statement of account where the operations carried out in the last period during which they belonged to the Voluntary Fund administered by it are reflected. In case a partial transfer of resources has been requested, the statement of account of the following period in which it was carried out must reflect the decrease in the amount that the participant or employer maintains in the Voluntary Fund of the Origin Administering Institution. Technical Standards for the Submission and Disclosure of Information of Voluntary Pension Savings

Alameda Juan Pablo II, between 15 and 17 Av. Norte, San Salvador, El Salvador. Tel. (503) 2281-8000 www.bcr.gob.sv Page 8 of 33 CNBCR-11/2022 NSP-71 TECHNICAL STANDARDS FOR THE TRANSFER, MERGER OR LIQUIDATION OF VOLUNTARY PENSION SAVINGS FUNDS Approval: 30/12/2022 Validity: 30/12/2022 (NSP-61), approved by the Central Bank through its Committee of Norms.

Information to be transferred Art. 17.- For transfers between Voluntary Funds, the Origin Administering Institution will send electronically to the Destination Administering Institution the history of available contributions corresponding to the participant or employer of the individual accounts, in accordance with what is established in Annex No. 3 of these standards. In the case of partial transfers, the information to be sent will correspond to the history of the amount to be transferred. Art. 18.- All information that the Origin Administering Institution transfers to the Destination Administering Institution, by documentary and/or magnetic means, must be sent by note mentioning the information sent, which must be signed by the responsible person of the Origin Administering Institution and sealed when applicable. In the case of electronic transfers, the Origin and Destination Administering Institutions must establish the method of sending and acknowledgment of receipt.

TITLE III TRANSFER OF VOLUNTARY PENSION SAVINGS FUNDS

CHAPTER I GENERAL ASPECTS

Transfers of Voluntary Pension Savings Funds Art. 19.- The transfer of a Voluntary Fund can only be made in favor of another Administering Institution that has Voluntary Funds authorized by the Superintendence and will comprise all assets, rights and obligations that constitute the assets and liabilities of the Fund, as well as guarantees, sureties or bonds of this.

Grounds for transfer of a Voluntary Pension Savings Fund Art. 20.- The transfer of a Voluntary Fund will proceed for any of the following grounds: a) By revocation of the authorization to operate of the Administering Institution; b) By dissolution of the Administering Institution, in accordance with what is established in the Commercial Code; or c) By decision of the Administering Institution.

Alameda Juan Pablo II, between 15 and 17 Av. Norte, San Salvador, El Salvador. Tel. (503) 2281-8000 www.bcr.gob.sv Page 9 of 33 CNBCR-11/2022 NSP-71 TECHNICAL STANDARDS FOR THE TRANSFER, MERGER OR LIQUIDATION OF VOLUNTARY PENSION SAVINGS FUNDS Approval: 30/12/2022 Validity: 30/12/2022 CHAPTER II ON THE TRANSFER OF VOLUNTARY PENSION SAVINGS FUNDS

Transfer of Voluntary Pension Savings Funds by revocation of authorization to operate of the Administering Institution Art. 21.- Within three business days following the receipt of the notification of revocation to operate, the Administering Institution of the Voluntary Fund will send a note to the Superintendence, signed by the Legal Representative or Attorney-in-fact of the same, attaching the following: a) Suggestion of the Administering Institution to which the Voluntary Fund they administer will be transferred, in case the authorization to operate is revoked from the Administering Institution, in accordance with what is established in Article 40 of the Funds Law; b) Certification of the minute point in which the agreement to transfer the Voluntary Fund by the Board of Directors of the ceding Administering Institution is recorded; c) Certification of the Board of Directors agreement of the acquiring Administering Institution in which the acceptance of the administration of the Voluntary Fund to be transferred is recorded; d) Sworn Declaration issued by the acquiring Administering Institution in which it is recorded that it meets the requirements established in Article 25 of these Standards; and e) Action plan for the transfer of the Voluntary Fund, in accordance with what is established in Article 26 of these Standards. Art. 22.- In the peremptory period of three business days following the presentation of the transfer action plan, the Superintendence will authorize the transfer plan and the Administering Institution or another of its choice, and will recommend the corresponding modifications to the presented plan. The Superintendence will take into account the requirements established in Article 25 of these Standards. The Superintendence will notify the transfer authorization to the ceding Administering Institution, the acquiring Administering Institution and the Custodian, on the next business day after authorizing the transfer plan of the Voluntary Fund. The ceding Administering Institution must comply with the transfer plan authorized by the Superintendence. In the case that the actions of the ceding Administering Institution do not correspond to the presented and authorized plan, the Superintendence will proceed in accordance with what is established