Technical Standards for the Transfer of Information for the Supervision of Investments of the Pension System

Alameda Juan Pablo II, between 15 and 17 Av. Norte, San Salvador, El Salvador.
Tel. (503) 2281-8000 www.bcr.gob.sv
CNBCR-11/2022
NSP-56
TECHNICAL STANDARDS FOR THE TRANSFER OF INFORMATION FOR THE SUPERVISION OF INVESTMENTS OF THE PENSION SYSTEM Approval:
30/12/2022
Validity: 30/12/2022

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

CONSIDERING:

I. That by Legislative Decree No. 614, of December 20, 2022, published in the Official Journal No. 241, Volume No. 437, of December 21, 2022, the Comprehensive Law of the Pension System was issued, by which the Pension System for workers in the private, public, and municipal sectors was created, which comprises the set of rules and measures that Pension Fund Administrators will apply.

II. That Article 42 of the Comprehensive Law of the Pension System establishes that Pension Fund Administrators, in the exercise of their functions, may contract services with other companies, such as those for information processing and others related to their operations.

III. That Article 78 of the Comprehensive Law of the Pension System establishes that the value of the share in which each Pension Fund is expressed will be determined daily based on the economic value or market value of the investments.

IV. That Article 82 of the Comprehensive Law of the Pension System establishes the investment regime for the resources of the Pension Funds that each Pension Fund Administrator must comply with.

V. That the second paragraph of Article 2 of the Law on Supervision and Regulation of the Financial System requires that members of the financial system comply with current regulations and the adoption of the highest standards of conduct in the development of their business, acts, and operations in accordance with what is established therein.

VI. That Article 32 of the Law on Supervision and Regulation of the Financial System establishes that the Superintendence may require supervised entities direct access to all data, reports, or documents regarding their operations through the means and form that it defines.

VII. That Article 35 of the Law on Supervision and Regulation of the Financial System establishes that directors, managers, and other officials holding positions of direction or administration in the members of the financial system must conduct their business, acts, and operations complying with the highest ethical standards of conduct, and must ensure the efficient functioning of systems for recording, processing, storage, transmission, production, security, and control of information flows.

VIII. That Article 159 of the Comprehensive Law of the Pension System establishes that the Central Reserve Bank of El Salvador will issue the Technical Standards and Resolutions necessary to allow the development of what is established in the aforementioned Law.

THEREFORE,

in 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 OF INFORMATION FOR THE SUPERVISION OF INVESTMENTS OF THE PENSION SYSTEM

CHAPTER I
OBJECT, SUBJECTS, AND TERMS

Object
Art. 1.- These Standards aim to define the guidelines that will be applied in the process of transfer and exchange of information between the subjects obligated to comply with these Standards and the Financial System Superintendence, related to securities market operations and the purchases and sales made by Pension Fund Administrators, both with resources from the Pension Funds they administer and with their own resources.

Subjects
Art. 2.- The subjects obligated to comply with the provisions established in these Standards are:
a) Stock exchanges constituted in El Salvador and registered with the Financial System Superintendence; b) Brokerage Houses through which Pension Fund Administrators purchase or sell securities with the resources of the pension funds; and c) Pension Fund Administrators.

Terms
Art. 3.- For the purposes of these Standards, the terms indicated below have the following meaning:
a) AFP: Pension Fund Administrator; b) Senior Management: Executive President, Executive Director, General Manager, or acting person, and executive positions reporting to them;

c) Central Bank: Central Reserve Bank of El Salvador; d) Exchange(es): Stock exchange or stock exchanges constituted in El Salvador and registered with the Financial System Superintendence; e) Houses: Brokerage Houses; f) Code: The one that identifies each of the entities providing services related to the Pension System; g) Fund(s): Pension Fund(s); h) SP Law: Comprehensive Law of the Pension System; i) Primary Market: That in which issuers and buyers participate directly or through brokerage houses, in the purchase and sale of securities offered to the public for the first time, in accordance with the Securities Market Law; j) Secondary Market: That in which securities are traded for the second or more times. In it, issuers are no longer the offerors of said securities, in accordance with the Securities Market Law; k) SP: Pension System; and l) Superintendence: Financial System Superintendence.

CHAPTER II
ON THE INFORMATION ON INVESTMENTS REQUIRED FROM PENSION FUND ADMINISTRATORS

Art. 4.- The directors and administrators of the AFPs must inform Senior Management in writing about any investment they have made in instruments in which the investment of the Funds with their own resources is authorized. This information must be reported to the Superintendence on the next business day after the investment was made.

Art. 5.- Each AFP will present to the Superintendence the details of its operations, which will include the daily movement of securities. This information will be sent in accordance with what is established in the Technical Standards for the Request for Information to Pension Fund Administrators for Control (NSP-41) issued by the Central Bank through its Standards Committee.

CHAPTER III
ON THE INFORMATION REQUIRED FROM STOCK EXCHANGES

Art. 6.- Exchanges must have mechanisms for the electronic sending of daily information required by the Superintendence, related to stock market operations carried out in the primary and secondary markets, as well as with repo operations, identifying transactions carried out by the AFPs; they must also allow the Superintendence real-time access, at the level of consultation, to their stock market information systems or through computer applications, via Internet or electronic data transmission.

Notwithstanding what is established in the preceding paragraph, the sending of information may be replaced by access through objects such as tables, views, or any mechanism that displays the information to be consulted by the Superintendence with the same periodicity, safeguarding the integrity of the information. The variables related to stock market operations to be reported by the exchanges or made available to the Superintendence will be in accordance with what is established in Annex No. 1 of these Standards.

Transmission Schedule of Information
Art. 7.- In case there is sending of information to the Superintendence in accordance with the previous article, stock exchanges will transmit daily to the Superintendence all information on stock transactions, no later than 15:45 hours on the day the operation is executed; if access is through objects such as tables, views, there should be no time restrictions for consultation.

Art. 8.- Both the daily sending of information on stock operations, as well as remote access to stock market information systems, will not represent any cost to the Superintendence under any concept.

Technical Details for the Submission of Information to the Superintendence Art. 9.- The Superintendence will send to the exchanges, with a copy to the Central Bank, within a maximum period of thirty days after the effective date of these Standards, the technical details related to the sending of the information requested in Annex No. 1 of these Standards. The technical details will be limited to the collection of information in accordance with what is regulated in these Standards. Exchanges that currently already provide information to the Superintendence in accordance with what is required in the aforementioned annex will continue to deliver it by the same means.

CHAPTER IV
ON THE INFORMATION REQUIRED FROM BROKERAGE HOUSES

Art. 10.- Houses, when representing the AFPs in the purchase or sale of securities belonging to the Fund, must inform the Superintendence about the natural or legal persons with whom the AFPs carry out these transactions.

Art. 11.- Houses will send to the Superintendence daily information on the operations that the AFPs carry out through their intermediation in the primary or secondary markets operating in the exchanges, as well as repo operations, on the same day they are negotiated, both with Fund resources and with own resources.

The variables related to stock market operations to be reported by the houses will be in accordance with what is established in Annex No. 2 of these Standards.
In case there are corrections to the information sent, they must be reported to the Superintendence.

Technical Details for the Submission of Information to the Superintendence Art. 12.- The Superintendence will send to the houses, with a copy to the Central Bank, within a maximum period of thirty days after the effective date of these Standards, the technical details related to the sending of the information requested in Annex No. 2 of these Standards. The technical details will be limited to the collection of information in accordance with what is regulated in these Standards.

CHAPTER V
OTHER PROVISIONS AND VALIDITY

On the Information Required from the Central Bank Art. 13.- The transfer of all information necessary for the valuation of investments in the instruments detailed in letters a) and b) of Article 161 of the SP Law will be in the form established prior to the effectiveness of the aforementioned law.

On the Economic Value or Market Value of Pension Fund Investments Art. 14.- The valuation of the instruments in which Pension Funds are invested, referred to in the third paragraph of Article 78 of the SP Law, will be in the form established prior to the effectiveness of the aforementioned law.

Sanctions
Art. 15.- Non-compliance with the provisions contained in these Standards will be sanctioned in accordance with what is established in the Law on Supervision and Regulation of the Financial System.

Repeal
Art. 16.- Technical Standards for the Transfer of Information for the Supervision of Investments of the Pension Savings System (NSP-20), approved in Standards Committee Session No. CN-08/2019 of May twenty-four, two thousand nineteen by the Standards Committee of the Central Reserve Bank of El Salvador.

Unforeseen Aspects
Art. 17.- Aspects not provided for in terms of regulation in these Standards will be resolved by the Central Bank through its Standards Committee.

Validity
Art. 18.- These Standards will enter into force as of December thirty, two thousand twenty-two.

Annex No. 1

DETAIL OF INFORMATION TO BE TRANSFERRED BY STOCK EXCHANGES TO THE SUPERINTENDENCE

The minimum information required will be the following:

N°	FIELD NAME	DESCRIPTION
1	Operation Date	Date of negotiation of the operation.
2	Operation Number	Consecutive number with which the exchange identifies the transaction of the reported instrument.
3	Buying House	Code assigned by the exchange to the buying house.
4	Selling House	Code assigned by the exchange to the selling house.
5	Title Code	Code used by the exchange to identify the issuance and series or tranche of the instrument.
6	ISIN Code	ISIN code of the instrument.
7	Operation Type	Code used by the exchange to identify the type of operation (to today, spot, or forward).
8	Term	Term in business days for the settlement of the instrument.
9	Market Type	Code used by the exchange to identify the type of Market in which the transaction was carried out, i.e., primary, secondary, international, or repos, for fixed income and equity.
10	Nominal Value	Nominal value traded of the instrument.
11	Number of Titles	Number of titles or quantity of sheets traded, both for fixed income and equity: - For physical titles, the number of sheets. - For dematerialized titles, the number 1 will be placed.
12	Price	For fixed income titles, the negotiated price of the instrument as a percentage of its par value must be specified. For equity titles, the unit price of the instrument will be specified.
13	Yield	Gross yield of the stock operation, according to what is calculated according to the methodologies used by the stock exchange.
14	Traded Value	Total amount of the transaction, i.e., the total nominal amount by the price paid.
15	House Commission Value	Amount of commissions paid to the Brokerage House.
16	Exchange Commission Value	Amount of commissions paid to the Stock Exchange.
17	Selling Client Code	Code assigned by the exchange by type of selling client.
18	Buying Client Code	Code assigned by the exchange by type of buying client.
19	Quantity of Titles	Quantity of titles: - Fixed income instruments and repos: quantity of sheets traded. - Equity instruments: quantity of shares or participation units of investment funds traded. - Dematerialized instruments will place 1.
20	Accrued Interest	Amount of accrued interest from the negotiation date or last coupon payment, until the settlement date of the instrument.
21	Settlement Date	Settlement date of the stock operation.
22	Repo Term (PlazoR)	Term of repos in days.
23	Maturity Date	Date of repurchase or maturity of the repo operation.

Annex No. 2

TRANSACTIONS OF PENSION FUND ADMINISTRATORS THROUGH BROKERAGE HOUSES

The information to be required will be the following:
a) Code and Name of the Reporting House: specifying the code assigned by the exchange and the corporate name of the House that made the purchase or sale bid of securities. b) Date: date to which the reported information corresponds. c) Sheet Number: number of the reported sheet, as well as the total number of sheets in the report, 1/n. d) The operations related to the purchases and sales of securities will be reported as follows:
i) In column (1), Buying Client Type, the code used by the exchange to identify the type of client must be specified, highlighting the following: 04, for transactions with Pension Fund resources and 05, for AFP transactions with own resources; ii) In column (2), Buyer, the name of the natural or legal person, national or foreign, who made the purchase bid of the security will be specified; iii) In column (3), Buyer Identification Document, the Tax Identification Number will be specified for the case of national natural or legal persons. The passport number, for foreign natural persons, and the Tax Identification Number of the legal representative, for foreign companies; iv) In column (4), Selling Client Type, the code used by the exchange to identify the type of client must be specified, highlighting the following: 04, for transactions with Fund resources and 05, for AFP transactions with own resources; v) In column (5), Seller, the name of the national or foreign natural or legal person who made the sale bid of the security will be specified; vi) In column (6), Seller Identification Document, the Tax Identification Number will be specified, for the case of national natural or legal persons; the passport number, for foreign natural persons, and the Tax Identification Number of the legal representative, for foreign companies. vii) In column (7), Operation Number, the consecutive number with which the respective exchange identifies the transaction of the reported instrument will be specified; viii) In column (8), Market, the market where the transaction was carried out must be reported. It can be primary (P), secondary (S), repos (R), and International (I). ix) In column (9), Instrument Code, the ISIN code of the instrument must be specified; x) In column (10), Quantity of Titles, the quantity of titles of the same series, tranche, and issuance, traded in the same operation will be specified; xi) In column (11), Number of Sheets, the range of the number of sheets of the same series, tranche, and issuance traded in the same operation will be specified (From Al), when applicable; xii) In column (12), Nominal Value, the total nominal value of the securities traded will be specified; xiii) In column (13), Price, for the case of fixed income titles, the agreed price of the security, as a percentage of its par value, must be specified. For equity titles, the unit price of the instrument will be specified, in United States dollars; xiv) In column (14), Traded Amount, for the case of fixed income titles, the total value of the transaction will be reported, as a percentage of the par value, excluding accrued interest and commissions of the Brokerage House and the Exchange. For equity titles, the total amount traded will be specified; xv) In column (15), Accrued Interest, the interest that the exchange reports in the transaction of the reported instrument will be reported; xvi) In column (16), Total Traded Amount, the total value of the transaction will be
reported, which, for the case of fixed income titles, will include the percentage of its par value, plus accrued interest. Commissions of the house and the exchange must not be included. For equity instruments, the total amount traded will be equal to the quantity of instruments traded multiplied by the price of the transaction.

Lineage: No known changes

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