Third Resolution Approving the Regulation on Insider Information, Relevant Facts, and Market Manipulation

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Superintendencia del Mercado de Valores de la República Dominicana CERTIFICATION The undersigned, Mr. Ervin Novas Bello, Manager of the Central Bank of the Dominican Republic (hereinafter "Central Bank"), on behalf of the Governor of the Central Bank, ex officio member and President of the National Securities Market Council (hereinafter "Council"); and Mrs. Fabel María Sandoval Ventura, Secretary of the Council, CERTIFY that the text below constitutes a faithful and complete copy of the Third Resolution, R-CNMV-2022-10-MV, adopted by the Council in the meeting held on Tuesday, the twenty-sixth (26) day of July in the year two thousand twenty-two (2022), which is kept in the archives of this Secretariat, namely:

"THIRD RESOLUTION OF THE NATIONAL SECURITIES MARKET COUNCIL OF DATE TWENTY-SIX (26) OF JULY OF THE YEAR TWO THOUSAND TWENTY-TWO (2022). R-CNMV-2022-10-MV REFERENCE: Approval of the Regulation on Privileged Information, Relevant Facts, and Market Manipulation.

WHEREAS!
That on the seventeenth (17) day of May in the year two thousand twenty-two (2022), the Superintendent of the Securities Market (hereinafter "Superintendent") submitted to the knowledge and consideration of the National Securities Market Council (hereinafter "Council") the draft Regulation on Privileged Information, Relevant Facts, and Market Manipulation (hereinafter "Draft Regulation").

That pursuant to the powers granted by Law No. 249-17, of the Securities Market of the Dominican Republic, which repeals and substitutes Law No. 19-00, of the eighth (8) day of May in the year two thousand (2000), promulgated on the nineteenth (19) day of December in two thousand seventeen (2017), and its modification (hereinafter "Law No. 249-17"), and the Internal Regulation of the Council, adopted by this collegiate body through the First Resolution, R-CNMV-2018-06-MV, issued on the twenty-ninth (29) day of November in the year two thousand eighteen (2018) (hereinafter "Internal Regulation of the Council"); the Council, duly convened and in session, deems it appropriate to state the following:

F
Mr
CONSIDERING:
Av. César Nicolás Penson No. 66, Gazcue, Santo Domingo, Dominican Republic

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Superintendencia del Mercado de Valores de la República Dominicana

1. That, in accordance with Article 10 of Law No. 249-17, the Securities Market Superintendence (hereinafter "Superintendence") is composed of a collegiate body, the Council, and an executive official, the Superintendent.
2. That the aforementioned law, in the main part of its Article 13, establishes that the Council is the superior body of the Superintendence, with essentially normative, supervisory, and control functions.
3. That, in addition to the above, paragraph 5 of the cited Article 13 confers upon the Council the attribution to "[d]ictate, upon proposal of the Superintendent, the regulations for the application of this law".
4. That, likewise, Article 25 of Law No. 249-17 reiterates that "[t]he Council is the competent body to establish regulations regarding the activities of the securities market indicated in this law."
5. That paragraph I of said article adds that "[i]n the exercise of regulatory power, the Council and the Superintendence shall observe the principles of legality and the rules of public consultation, participation, and transparency contained in the Constitution of the Republic and the laws in force."
6. That Article 4 of the aforementioned Law No. 249-17 establishes that the securities market shall be governed with strict adherence to the Constitution of the Republic, what is prescribed in said law and in the regulations and resolutions issued by the Council and the Superintendence, in the area of their respective competencies; being applicable subsidiarily, in matters not specifically provided for in the aforementioned norms, the general provisions of administrative law, corporate, commercial, monetary and financial legislation, trust law, common law, and commercial usages, in the order cited.
7. That it is worth highlighting that Article 2 of the aforementioned Law No. 249-17 reveals that the provisions contained in said statute apply to all natural and legal persons who carry out activities, operations, and transactions in the securities market of the Dominican Republic, with public offer securities that are offered or traded within the national territory.
8. That, parallel to this, in the paragraph of the cited article it is established that "[n]atural and legal persons who carry out any of the activities or services provided for in this law, shall be subject to the regulation, supervision, and oversight of the Securities Market Superintendence, regarding the exercise of those mentioned activities or services." 53K

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Superintendencia del Mercado de Valores de la República Dominicana
9. That among the powers vested in the Superintendent in accordance with Article 17, paragraphs 2 and 11, the following stand out:
"2) Comply with and enforce the provisions of this law and its regulations, ensuring the correct application of its principles, policies, and objectives.
11) Request the information that must be supplied by the natural and legal persons registered in the Registry."
10. That Law No. 249-17 defines in its Article 3, paragraph 15, that relevant fact "[i]s the fact or event regarding a market participant and its financial group, which could positively or negatively affect its legal, economic, or financial position, or the price of securities in the market."
11. That, parallel to this, the cited article, in its paragraphs 16 to 19, delimits the concepts of: (a) confidential information as that which by its nature or possible impact must be handled with strict discretion by the members of this collegiate body, officials, and staff of the Superintendence; (b) non-public information as that which is outside the scope of Law No. 200-04, General Law on Free Access to Public Information, of date twenty-eight (28) of July in the year two thousand four (2004); (c) privileged information as that referred to one or more market participants, their businesses, their public offer securities, or the market that could affect their legal, economic, or financial position, when it is not public domain; (d) reserved information as that which is outside public access because its dissemination could put at risk the stability or financial security of the securities market or its participants.
12. That the term market manipulation was specified in Article 3, paragraph 25, of Law No. 249-17 as "the act carried out by one or more persons, both natural and legal, through which the free interaction between supply and demand is interfered with or influenced, artificially varying the volume or price of public offer securities, with the purpose of obtaining a benefit for oneself or third parties, as well as disseminating false or misleading information to the market for this purpose."
13. That, in this sense, the existence of a regulation that disposes the applicable provisions regarding the use, control, reservation, delayed disclosure of privileged information, as well as establishing the classification and treatment of relevant facts and market manipulation, is fundamental.

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Superintendencia del Mercado de Valores de la República Dominicana privileged information, as well as establishing the classification and treatment of relevant facts and market manipulation.
14. That through communication received in the Council's Secretariat on the seventeenth (17) day of May in the year two thousand twenty-two (2022), the Superintendent submitted to the knowledge and approval of this collegiate body the Draft Regulation, together with its annex.
15. That the aforementioned letter states that, in compliance with the applicable legal framework, the Draft Regulation was submitted to public consultation from the fourth (4) day of October to the eighth (8) day of November in the year two thousand twenty-one (2021), inclusive.
16. That, likewise, from the documents accompanying the Superintendent's communication, it is highlighted that, as a result of the aforementioned consultative process, comments were received from: the Dominican Association of Investment Fund Management Companies, Inc. (ADOSAFI), the Dominican Association of Stock Brokers, Inc. (APB), BHD LEON Financial Center S.A., the Dominican Securitization Company S.A. (TIDOM), the Popular Savings and Loans Association (APAP), the Cibao Savings and Loans Association (ACAP), the risk rating company Fitch Ratings, the entity CEVALDOM Centralized Securities Depository S.A., and the Stock and Securities Market of the Dominican Republic, S.A. (BVRD).
17. That from the pieces composing the file, a matrix is highlighted that collects the observations presented, duly analyzed and responded to by the technical team of the Superintendence; subsequently, as part of the administrative procedure and in attention to the principles of transparency and participation, working tables were held with interested sectors on the twenty-eighth (28) and twenty-ninth (29) days of April in the year two thousand twenty-two (2022).
18. That, likewise, in the documents presented to the Council, there is a list of relevant data in which it is explained that the Draft Regulation contemplated the following improvements from the consultation process, namely:
I
The scope of application of the regulation is clarified.
I
The definitions are reviewed in accordance with Law No. 249-17.
I
The prohibition of use of Privileged Information is clarified with respect to centralized securities depositories, management companies of centralized trading mechanisms, central counterparty entities, management companies of operation registration systems for securities in the OTC market, and price providers. Av. César Nicolás Penson No. 66, Gazcue, Santo Domingo, Dominican Republic

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Superintendencia del Mercado de Valores de la República Dominicana I Corporate Processes that must be notified as Relevant Facts are clarified.
I
It is established that the obligation to have Codes of Conduct or Ethics, Policies, Guidelines, and Control Mechanisms applies to listed companies and issuers of fixed-income securities convertible into shares.
I
It is established that the Insider List applies to listed companies and issuers of fixed-income securities convertible into shares.
I
The typification of Relevant Facts is reviewed.
I
Clarifications and clarifications are made regarding Relevant Facts applicable to financial groups.
I
It is established that the Market Manipulation Activities indicated in the regulation are in addition to those indicated in Article 94 of the Regulation to Establish and Operate Centralized Trading Mechanisms.
I
The definition of Reference Index is reviewed.
I
The definition of Public Information is included.
I
It is clarified that the "indicators" established in the Annex are orientative as possible situations that may reveal Market Manipulation activity and cannot be considered by themselves as constituting such conduct. Therefore, securities market participants must take them into account when developing their own alerts, always adapting to the type of market and operation in question (e.g., fixed or variable income); the depth and size of the market; liquidity of securities; the number of participants; and other distinctive characteristics of the market in question." [sic]
19. That, subsequently, through communication received in the Council's Secretariat on the twenty-fourth (24) day of June in the year two thousand twenty-two (2022), the Superintendent reintroduced to the Council an updated version of the Draft Regulation.
20. That, as indicated in the aforementioned communication, the improvements inserted into the Draft Regulation were made with the objective that "the market has knowledge of when the security operates or not with the dividend or yield to be distributed, in the case of shares of listed companies, participation units of closed investment funds, and variable income securities of trust securities and securitization securities" [sic].
21. That, in attention to everything stated above, observing the favorable opinion of the Superintendent, together with the reports and documentation submitted by the technical area of the Superintendence, this collegiate body is of the opinion that the Draft Regulation can be favorably accepted. M

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Superintendencia del Mercado de Valores de la República Dominicana HAVING SEEN:
a. The Constitution of the Dominican Republic, voted and proclaimed by the National Assembly on the thirteenth (13) day of June in the year two thousand fifteen (2015), published on the tenth (10) day of July in two thousand fifteen (2015). b. Law No. 249-17, of the Securities Market of the Dominican Republic, which repeals and substitutes Law No. 19-00, of the eighth (8) day of May in the year two thousand (2000), promulgated on the nineteenth (19) day of December in two thousand seventeen (2017), and its modification.
c. Law No. 107-13, on the Rights of Persons in their Relations with the Administration and Administrative Procedure, of date the sixth (6) day of August in the year two thousand thirteen (2013).
d. Law No. 200-04, General Law on Free Access to Public Information, of date the twenty-eighth (28) day of July in the year two thousand four (2004). e. The Regulation of the General Law on Free Access to Public Information, approved through Decree No. 130-05, of date the twenty-fifth (25) day of February in the year two thousand five (2005). f. The Internal Regulation of the National Securities Market Council, issued through the First Resolution, R-CNMV-2018-06-MV, of date the twenty-ninth (29) day of November in the year two thousand eighteen (2018). g. The Regulation of the General Law on Free Access to Public Information, approved through Decree No. 130-05, of date the twenty-fifth (25) day of February in the year two thousand five (2005). h. The communication received in the Council's Secretariat on the twenty-fourth (24) day of June in the year two thousand twenty-two (2022), signed by the Superintendent, and annex cited.
i. The other documents that make up the file.
THEREFORE:
After having studied and deliberated on the matter, the Council, in the exercise of the powers conferred upon it by Law No. 249-17, by unanimous vote of its members, attending to the reasons exposed, Far Av. César Nicolás Penson No. 66, Gazcue, Santo Domingo, Dominican Republic

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Superintendencia del Mercado de Valores de la República Dominicana RESOLVES:
FIRST: APPROVE the definitive version of the Draft Regulation on Privileged Information, Relevant Facts, and Market Manipulation; whose text is transcribed below, in accordance with the document submitted by the Superintendence:

"DRAFT REGULATION ON PRIVILEGED INFORMATION, RELEVANT FACTS, AND MARKET MANIPULATION"

TITLE I
GENERAL PROVISIONS
SINGLE CHAPTER
Object, Scope of Application, and Definitions
Article 1. Object. This Regulation has as its object to establish the applicable provisions regarding the use, control, reservation, delay, and disclosure of Privileged Information. Likewise, it establishes the classification and treatment of Relevant Facts and Market Manipulation.
Article 2. Scope of Application. The following are subject to the formalities provided in this Regulation:
a. Securities market participants; b. Shareholders of listed companies in accordance with Article 245 of Law No. 249-17, of the Securities Market of the Dominican Republic, which repeals and substitutes Law No. 19-00 of the eighth (8) day of May in two thousand (2000), promulgated on the nineteenth (19) day of December in two thousand seventeen (2017) (hereinafter, the "Law");
c. Offerors regarding public acquisition offers; and,
d. Those other persons, natural or legal, expressly mentioned in this Regulation by reason of some condition, situation, or characteristic.
Paragraph. Likewise, compliance with the provisions of this Regulation regarding Privileged Information and Market Manipulation shall be subject to natural or legal persons who act, relate, or take knowledge of Privileged Information in the securities market when it affects Financial Instruments. In particular, it shall apply to any person who possesses Privileged Information by being in any of the following situations: F/

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Superintendencia del Mercado de Valores de la República Dominicana a) Be a member of the administration or supervision bodies of any securities market participant; b) Be a shareholder with Significant Participation in any securities market participant; c) Have access to Privileged Information in the exercise of their work, profession, position, or functions, or by receiving such information from any of the persons indicated above.
Article 3. Definitions. In addition to the definitions established in Article 3 of the Law, for the purposes and effects of this Regulation, the terms and concepts detailed below shall have the following meaning:
a) Relevant Fact. It is the fact or event regarding a market participant and its financial group, which could positively or negatively affect its legal, economic, or financial position, or the price of securities in the market. b) Reference Index. It is a rate, index, or figure that is made available to the public or published by those entities authorized by the Securities Market Superintendence (hereinafter, the "Superintendence") for such purposes and whose nature is not merely informative as it is used as a reference to determine the amount payable by a Financial Instrument or its value. c) Misleading Information. It is any manifestation that, in a fraudulent manner, seeks to induce investors to error or affect their behavior, including the omission of fundamental data, provided that such omission can induce error to the recipients or when the person knew or should have known that the reports or data supplied were totally or partially false or erroneous. d) Privileged Information. It is the information referred to one or more market participants, their businesses, their public offer securities, or the market that could affect their legal, economic, or financial position, when it is not public domain. e) Public Information. It is that information of public domain that has been disseminated indiscriminately to the general public or the Superintendence considers that it is available to the public due to the level of accessibility for a common investor, even if it has not been published as a Relevant Fact.

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Superintendencia del Mercado de Valores de la República Dominicana f) Reserved Information. It is Privileged Information or other information typified as a Relevant Fact that is outside public access, due to the fact that its dissemination could put at risk the stability or financial security of the securities market or its participants. g) Financial Instruments. They are public offer securities and other instruments offered and traded in any centralized trading mechanism or in the OTC market, composed of financial assets, instruments representing financial liabilities or equity, and derivative instruments, including any contract that has such securities or instruments as underlying. h) Market Manipulation. It is the act carried out by one or more persons, both natural and legal, through which the free interaction between supply and demand is interfered with or influenced, artificially varying the volume or price of public offer securities, with the purpose of obtaining a benefit for oneself or third parties, as well as disseminating Misleading Information to the market for this purpose. i) Offeror. Natural or legal person who makes the public offer, whether issuer, differentiated issuer, or a third party distinct from the issuer. j) Significant Participation. It is the control, directly or through third parties, of ten percent (10%) or more of the subscribed and paid capital of a company through the acquisition of shares or derivative instruments on the shares of said company. k) Listed Companies. They are anonymous companies whose shares are admitted to trading on a stock exchange.

TITLE II
ON PRIVILEGED INFORMATION
CHAPTER 1
Prohibition and Presumption of Use of Privileged Information
Article 4. Prohibition of use of Privileged Information. In accordance with what is established in the Law, the use of Privileged Information is prohibited for securities market participants and for any person linked to it by virtue of their position, employment, and status, and in general, for natural or legal persons who act, relate, or in any way take, knowledge of Privileged Information and intend to make use of it in the securities market. In particular, no person may:
a) Carry out or attempt to carry out operations in the securities market with Privileged Information, except for the cases expressly provided in the Law and this Regulation; b) Recommend that another person carry out operations in the securities market with Privileged Information or induce them to do so; or, c) Illicitly communicate Privileged Information. Paragraph I. This prohibition of use extends to any information established in Article 3 paragraph 18) of the Law and to any communication or knowledge that allows expanding or specifying the information possessed on a matter related directly or indirectly to one or more securities market participants.