510 OF 1999

(August 3)

Official Journal No 43,654 of 4 August 1999

COLOMBIA CONGRESS

For which provisions are made regarding the financial and insurance system, the public securities market, the Banking and Securities Superintendents and the granting of powers.

DECRETA:

CHAPTER I.

FINANCIAL SYSTEM INCOME CONDITIONS

ARTICLE 1o. Modify Article 80 of the Organic Statute of the Financial System as follows:

1.1 Number 1o., 4o. and 5o., will remain so:

1. Minimum capital of financial institutions. The minimum amounts of capital to be credited for requesting the establishment of institutions subject to supervision and supervision of the Banking Superintendency, with the exception of insurance intermediaries, shall be thirty-three billion. of pesos ($33,000,000,000.00) for banking establishments; of twenty billion pesos ($20,000,000,000.00) for savings and housing corporations; of twelve billion pesos ($12,000,000,000.00) for financial corporations; Eight billion pesos ($8,500,000,000.00) for the companies of commercial financing; of ten billion pesos ($10,000,000,000) for the reinsurers and those insurance companies that carry out activities own of the reinsurers companies; of two thousand five hundred million ($2,500,000,000) for trust companies; five billion pesos ($5,000,000,000) for pension fund management companies; two thousand five hundred million ($2,500,000,000) for fund management companies (c) the amount to be used for the purposes of the following: pension funds, when the company manages pension and unemployment funds, and two billion pesos ($2,000,000,000) for other financial institutions. In the case of insurance undertakings, with the exception of those which are the exclusive subject of the offer of the export credit insurance industry and those carrying out activities of the reinsurer companies, the capital The minimum will be four billion pesos ($4,000,000,000.00), without prejudice to the technical assets that must be credited to operate in a given class, according to the rules that the National Government will issue. These amounts shall be automatically adjusted annually in the same direction and percentage in which the price index to the consumer supplying the DANE varies. The resulting value will be approximated to the multiple in millions of pesos immediately above. The first adjustment will be performed on the 1st. In January 2000, on the basis of the variation in the consumer price index during 1998, in order to keep the figures mentioned in this Article up to date at constant values in 1998.

It will be up to the national government to adopt general rules, fix the minimum capital to be accredited by the financial institutions governed by special rules which are subject to control and supervision of the Banking superintendence and insurance companies which are the sole object of the offer of the export credit insurance industry.

4. The minimum amount of capital provided for in the first paragraph of this Article shall be permanently fulfilled by the entities in operation. For this purpose, the minimum working capital shall result from the sum of the following capital accounts: subscribed and paid capital, guarantee capital, reserves, surplus by premium for placement of shares, non-distributed profits of previous financial years and revaluation of assets, and the accumulated losses shall be deducted. The bonds must also be taken into account in the terms of paragraph 1. from the numeral 5 of this article. Also, in the case of entities that are subject to the measures referred to in Articles 48, literal i) and 113 of this Statute, account may be taken of subordinated loans, convertible into shares or redeemable with resources obtained by the placement of shares to be granted to the financial institution, under the conditions laid down by the National Government. Such loans may be granted by financial institutions in the cases and under the conditions laid down by the Government.

5. Financial institutions which, when applying this law, do not comply with the additional minimum capital requirements laid down by it, shall gradually increase their capital in order to comply with these requirements in the following periods: three (3) years in the case of commercial financing companies, and two (2) years in the case of banks, savings and housing corporations, financial corporations, trust companies and other entities to which refers to the first of this article. It will be up to the national government to identify the terms and conditions within which such gradual increases in capital should occur.

When an institution fails to accredit the required minimum capital within the specified term, it shall be settled, merged or converted into any other of the regulated types of institution, provided that it complies with the law requirements for that institution. effect. This is without prejudice to the fact that the Banking Superintendence may adopt the precautionary measures provided for in this Statute.

PARAGRAFO 1o. The paid value of the obligatorily convertible bonds will be taken into account, for the purposes of compliance with this article, when in the respective prospectus it is determined that, in the settlement events, the amount of their value shall be subordinated to the payment of the external liability and provided that the requirements set out in Article 86 (2) of this Statute are met, in harmony with numerals 3 and 4 of the same Article.

In any case, bonds obligatorily convertible into shares may not be financed by the issuing company, nor by its parent, subsidiaries, subordinates or natural or legal persons linked to them.

PARAGRAFO 2o. They will not be required to increase their capital to meet the minimum standards set in this article, commercial finance companies and financial corporations within three months, From the entry into force of this law, adopt a plan of progressive dismantling to gradually reduce, within three (3) years, the fetches that they carry out through deposits of the public. This plan must be submitted to the approval of the Banking Superintendence. Entities that comply with the adjustment plan may continue to develop the active operations for which they are authorized, including in the case of financing companies, the conclusion of leasing contracts, provided that increase their capital annually in the same direction and percentage in which the consumer price index is increased. The entities referred to in this paragraph, who do not wish to carry out the activities of the financial institutions themselves, shall be subject to the arrangements of commercial companies, after the dismantling programme has been completed, for which the corresponding adjustments in their statutes.

ARTICLE 2o. Modify Article 53 of the Organic Statute of the Financial System as follows:

2.1 The literal d) of the 3o number. Article 53 of the Organic Statute of the Financial System will be as follows:

(d) a study that successfully demonstrates the feasibility of the company, which should be extended for the insurance entities to the business classes to be developed; this study should indicate the technological and administrative infrastructure to be used for the development of the object of the institution, the internal control mechanisms, a management plan for the risks inherent in the activity, as well as the additional information requested for the Banking Superintendency effect;

2.2 Add article 53 of the Organic Statute of the Financial System with the following literal:

(f) For the formation of entities whose capital are real beneficiaries of foreign financial institutions, the Banking Superintendency may make its authorization subject to the accreditation of the capital, directly or indirectly, with the external entity, consolidated supervision by the competent foreign authority, in accordance with the principles generally accepted in this field at international level. It may also require a copy of the authorization issued by the competent body of the outside of the institution to participate in the financial institution in Colombia, when such authorization is required in accordance with the applicable law. The same requirements may be required to authorise the acquisition of shares by a foreign financial institution.

In all cases, even if the persons intending to participate in the constitution of the new entity do not have the financial character, and in order to develop adequate supervision, the Banking Superintendency may require that the information that it considers relevant to the beneficiaries of the financial institution's share capital is provided to it both at the time of its establishment and at a later date.

2.3 Article 53 (5) and (7) of the Organic Statute of the Financial System will be as follows:

5. Authorization for the constitution. Assortment the procedure referred to in the previous number, the Banking Superintendent must resolve on the application within the six (6) months following, counted from the date on which the petitioner has submitted all the documentation which generally requires the Banking Superintendence. Notwithstanding the foregoing, the term provided for in this numeral shall be suspended in cases where the Banking Superintendence requests additional information or clarifications. The suspension will operate until the date the full response is received by the petitioner.

The Superintendent will deny authorization to constitute the entity when the request does not satisfy the legal requirements. Likewise, the applicant shall deny when in his judgment the applicants have not satisfactorily accredited the character, responsibility, suitability and creditworthiness of the persons involved in the operation, in such a way that they inspire him on how they will participate in the management and administration of the financial institution.

In any case, you will refrain from authorizing the participation of the following persons:

(a) Those who have committed crimes against the economic patrimony, laundering of assets, illicit enrichment, those established in Law 30 of 1986 or in Article 208 of the present Status;

(b) Those to which the extinction of the domain has been declared in accordance with Law 333 of 1996, when they have participated in the conduct of the conduct referred to in Article 2or. of that law;

c) Sanctioned for violation of the rules governing individual credit quotas;

d) Those who are or have been responsible for the mishandling of the business of the institution in whose direction or administration they have intervened;

e) Those who have been convicted of the crimes referred to in Article 43 of Law 222 of 1995, and

f) Administrators and tax reviewers who at the time of the takeover for the purposes of liquidation of a financial institution, by the Banking Superintendency, would have been found to be carrying out such charges, within the five (5) years following the date on which the measure was enacted.

When the application is filed or during the process of the application is established the existence of an ongoing process by the facts mentioned in the previous paragraph, the Banking Superintendent will be able to suspend the procedure until adopt a decision in the respective process.

For the purposes of determining the creditworthiness of the applicants, consideration shall be given to the analysis of the set of companies, businesses, assets and debts that affect them. In any event, in the case of persons wishing to be real beneficiaries of 10% (10%) or more of the capital of the institution, the assets to be credited by the applicant must be equivalent to at least 1.3 times the capital committed by the institution. to contribute to the new institution, including the latter. In addition, it must prove that at least one third of the resources it provides are its own and not a product of borrowing or other similar operations.

PARAGRAFO. When you want a financial institution administrator to be convicted of any of the offenses referred to in this numeral, he or she must be separated from his position immediately; in the case of a partner, shareholder or associate, shall be required to participate in the capital of the undertaking within a period of not more than six (6) months. Such participation may be reacquired by the institution under the conditions laid down by the Government. If the shares have not been acquired by a third party or by the institution at the end of that period, the holder of the shares may not exercise the rights to participate in the government of the company.

7. The Banking Superintendent shall issue the certificate of authorization within five (5) days following the date on which the regular constitution is credited, the payment of the capital in accordance with the provisions of this statute, the existence of of the technical and operational infrastructure necessary to operate regularly, as indicated in the feasibility study and the registration in the Fund of Guarantees of Financial Institutions, in the case of entities that agree with the rules governing them have insurance or guarantee from the Fund.

ARTICLE 3o. Modify Article 88 of the Organic Statute of the Financial System as follows:

3.1 Add the numeral 1 of Article 88 with the following point:

For the purpose of imparting your authorization, the Banking Superintendent must verify that the person interested in acquiring the shares is not in any of the situations mentioned in the 3o points. and 4. Article 53 (5) of this Statute and, in addition, that the investment to be made complies with the relations provided for in paragraph 5. 5. of the abovementioned number 5.

3.2 Add article 88 (3) to the following point:

In any case, it will be necessary to accredit to the Banking Superintendent prior to the acquisition, under penalty of ineffectiveness, that the investment that the interested wishes to make complies with the relations provided for in article 53, number 5, paragraph 5. of this Statute.

3.3 Add article 88 with the following number:

4. The provisions of this Article shall apply to all cases in which the transaction is intended to acquire ten percent of the capital or assets of an entity subject to the supervision of the Banking Superintendence, even if the is not represented in actions.

CHAPTER II.

REFORMS TO THE NATIONAL GOVERNMENT ' S POWERS OF INTERVENTION

ARTICLE 4o. Modify Article 48 of the Organic Statute of the Financial System as follows:

4.1 Article 48 (1) (h) shall be as follows:

h) To dictate rules that extend the mechanisms of prudential regulation in order to adapt regulation to international parameters.

4.2 Add the number 1 to Article 48 of the Organic Statute of the Financial System with the following literal:

i) to determine in general terms the property relations or other indicators that allow the financial institution to deteriorate, so that recovery programmes are adopted or implemented automatically and appropriate measures, all in the form, conditions, time limits and with the consequences that the Government will have. The measures envisaged may include, inter alia, those provided for in Article 113 of this Statute, the forced reduction of capital to a figure not less than the value of the net worth, the compulsory placement of shares without the right of preference, the forced disposal of assets, the prohibition of distributing profits, the creation of temporary management mechanisms with or without legal status in order to ensure the optimization of asset management to respond to liabilities, the combination of any of the above or others deemed appropriate under the conditions to be set by the Government.

CHAPTER III.

CAPITAL INVESTMENT REGIME REFORMS

ARTICLE 5o. Add the following number to the article 2or. of the Organic Statute of the Financial System:

7. Credit institutions may acquire and retain shares and bonds obligatorily convertible into shares issued by other credit institutions. In any event, no credit establishment may have the character of a beneficial owner of shares or bonds obligatorily convertible into shares issued by another entity of the same class. For this purpose, the following classes will be taken into account: banking establishments, financial corporations, savings and housing corporations, and commercial financing companies. This is without prejudice to the provisions of the international investment regime.

PARAGRAFO 1o. Commercial finance companies may invest in shares and bonds obligatorily convertible into shares issued by commercial companies whose exclusive object is to conduct business operating lease.

PARAGRAFO. transient. The investments of credit institutions in shares and bonds obligatorily convertible into shares which do not comply with the provisions of this Statute shall be renumbered within a maximum period of three (3) years from the date of entry into force of this law.

However, in the case of investments in shares and bonds convertible into shares issued by the companies described in Articles 2o. of Law 218 of 1995 and 1o. of Decree 890 of 1997, which do not comply with the provisions of this Statute, the maximum period for their disposal shall be five (5) years.

ARTICLE 6o. Add the following number to Article 110 of the Financial System Organic Statute:

8. Investment in stock exchanges. Institutions monitored by the Banking Superintendency may acquire and hold shares and bonds obligatorily convertible into shares issued by the stock exchanges.

ARTICLE 7o. Modify paragraph 1o. and literal (b) of the numeral 1 of Article 119, which shall remain as follows:

1. Investments in financial services companies and stock exchange companies. Banks, financial corporations, savings and housing corporations and commercial finance companies will be able to participate in the capital of trust companies, stock exchange companies, general warehouse warehouses and Pension and non-pension fund management companies, provided that the following requirements are met:

b) All investments in subsidiary companies and other authorized capital investments, other than those carried out by establishments in compliance with legal provisions, may not exceed in any case (100%) of the sum of the capital, property reserves and revaluation account of assets of the respective bank, financial corporation, savings and housing corporation or commercial financing company, excluding fixed assets without valorizations and discounted accumulated losses, and

ARTICLE 8o. Article 147 of the Organic Statute of the Financial System, will be as follows:

Investments authorized with own resources. Trust companies may participate in the capital of pension fund management companies and caesantias; stock exchanges and commission companies of these exchanges and stock exchanges of futures and options and commission companies bags. In addition, fiduciary companies may make investments in securities representing shares in mutual funds or international investment funds, the portfolio of which is made up of fixed-income securities exclusively, on the basis of and conditions that the Banking Superintendence establishes for the effect.

PARAGRAFO. The investments referred to in this Article shall be subject, as appropriate, to the forecasts set out in numerals 1, 2, and 3 of the href="organico_system_financial_system_pr004.html#119"> 119 of this statute.

However, the investment authorised to trust companies shall not be subject to the requirement referred to in point (c), numeral 1 of Article 119 of this Statute, as soon as the capital of the pension fund management company and In the case of non-member companies, the number of unemployed persons is less than 90% (90%).

CHAPTER IV.

REFORMS TO THE BANKING ESTABLISHMENT REGIME

ARTICLE 9o. Add the numeral 1 of 7or. of the Organic Statute of the Financial System with the following literal:

m) Perform the operations in which you treat item 5 of article 22 of this Statute.

ARTICLE 10. Add the numeral 1 of article 129 of the Organic Statute of the Financial System with the following literal:

d) Perform the operations in which you treat item 5 of article 22 of this Statute.

CHAPTER V.

REFORMS TO THE FINANCIAL CORPORATIONS REGIME

ARTICLE 11. Article 11 of the Organic Statute of the Financial System, will be as follows:

Object 1. The purpose of the financial corporations. Financial corporations have as a fundamental object the mobilization of resources and the allocation of capital to promote the creation, reorganization, fusion, transformation and expansion of any type of enterprise, as well as to participate in the in its capital, to promote the participation of third parties, to grant them financing and to offer them specialized financial services that contribute to their development.

For the above purposes, an undertaking shall mean any economic activity organised for the production, processing, circulation, administration or custody of goods, or for the provision of services, irrespective of the form of the organisation to be adopted, the quality or the non-merchant of the person who develops it or the acts which are carried out or which are not listed as commercial. In this sense, the company can be developed by means of various legal figures, such as commercial fiducia, consortiums, temporary unions, joint venture and single-person companies.

Of the companies referred to in this Article, the institutions subject to the supervision and supervision of the Banking Superintendence are exempted, except for financial services companies and credit institutions. In relation to credit institutions, the operations referred to in subparagraphs (c), (i) and (m) of Article 12may be concluded, in the numeral 7 of the article 2or. and in article 26 of this Statute.

PARAGRAFO. Financial corporations will be able to carry out with the Nation, the territorial entities and their respective decentralized entities all operations authorized to this type of financial institution, subject to to the paragraph of article 2or. of Law 358 of 1997 and those that modify or replace it.

ARTICLE 12. 101 of Law 1328 of 2009. >

CHAPTER VI.

REFORMS TO THE SAVINGS AND HOUSING CORPORATIONS REGIME

ARTICLE 13. The item number 4 in item 2or. of the Organic Statute of the Financial System, will be:

4. Savings and Housing corporations. Savings and housing corporations are those institutions that primarily have the ability to capture resources to perform primarily active long-term mortgage credit operations.

ARTICLE 14. Section 1o. Article 18 of the Organic Statute of the Financial System, shall be as follows:

Object. Savings and housing corporations aim to promote private savings and channel it into the construction industry.

ARTICLE 15. Add article 22 of the Organic Statute of the Financial System with the following numeral:

5. Issuance of securities for construction and housing acquisition financing. The Savings and Housing Corporations may issue securities to finance the activities referred to in (a), (c), (d), (e) and (f) of Article 19 of this Statute. Such securities may represent loans granted to the public, including their guarantees or rights to the public, and the guarantees that have been agreed to support them, when they are intended to place financial assets of the public. the institution in the capital market, and may also have the general guarantee of the issuer, or with the other guarantees or commitments in respect of the management and financial performance of the respective assets that are necessary, in accordance with the provisions laid down in the issuing Regulation. They may also transfer their claims, including their guarantees or rights, to third parties or to the self-employed, and on the respective guarantees, in order for them to issue securities to be placed among the public.

When developing this authorisation, assets are mobilised in a directive or transferred to self-employed assets or to third parties for subsequent mobilisation, the assets sold or the assets of the respective assets shall be understood to be shall not be returned to the assets of the originator or issuer, in cases where the originator or issuer is in agreement, compulsory liquidation, administrative forced liquidation or any other process of a bankruptcy. However, where for any reason a remnant is left in favour of the financial institution, after payment of the accretion represented in the respective securities, the latter shall be restored to the mass of goods or to its assets, as the case may be.

The Superintendency of Securities will point out the requirements and conditions for the issuance and placement of the different titles that are issued in development of the planned, which will have to ensure its homogeneity and promote its liquidity. In any event, the securities referred to in this authorization, which are issued after the first (1o.) January 2000, shall be dematerialised.

PARAGRAFO 1o. The assignment of any warranty or right thereon, which is made to mobilize financial assets under the provisions of the first paragraph of this numeral, shall not produce any effects of novation and shall only be required to improve compliance with the provisions of Article 15 of Law 35 of 1993, or in the standard that replaces or modifies it, and its regulations. The Banking Superintendency shall have, in respect of the processes of mobilisation of assets referred to in this numeral, the powers provided for in the last paragraph of that rule.

PARAGRAFO 2o. The National Government will be able to determine the conditions under which the mortgage credit portfolio securitization processes for the financing of social interest housing will be guaranteed.

CHAPTER VII.

REFORMS TO THE REGIME OF COMMERCIAL FINANCE COMPANIES

ARTICLE 16. The numeral 5 of the article 2or. of the Organic Statute of the Financial System, will be:

5. Commercial finance companies. Commercial financing companies are the institutions that have as their main function to capture resources at term, with the primary objective of carrying out active operations of credit to facilitate the marketing of goods and services, and perform leasing or leasing operations.

ARTICLE 17. The literal j) of article 24 of the Organic Statute of the Financial System, shall be as follows:

j) Perform leasing operations.

ARTICLE 18. Article 26 of the Organic Statute of the Financial System, will be as follows:

For the acquisition of assets subject to leasing operations, commercial financing companies may receive credits from other credit institutions, the guarantees of which will be determined in the terms and conditions established by the National Government. However, the acquisition of assets by commercial finance companies to carry out operating leasing operations can only be financed by capital resources, from loans from other financial institutions. credit and bonds, the period of which is longer than one year.

CHAPTER VIII.

PRECAUTIONARY MEASURES AND TAKEOVER

ARTICLE 19. Modify Article 113 of the Organic Statute of the Financial System as follows:

19.1 Add a first paragraph to Article 113 whose text is as follows:

Without prejudice to the measures that financial institutions are required to adopt in compliance with the provisions that the National Government will dictate in the exercise of the powers conferred on it by the article 48, literal (i), of this Statute, the Banking Superintendence may individually adopt the measures provided for in numerals 1, 2, 3, 4, 5, 6 and 7 of this Article.

19.2 Add article 113 with the following numerals:

6. Recovery program. The recovery program is a measure aimed at preventing an entity subject to the control and surveillance of the Banking Superintendence from committing to take possession of its assets, assets or businesses or to subsus it. By virtue of that measure, the entity concerned shall adopt and submit to the Banking Superintendency a plan to restore its situation through appropriate measures, in accordance with the provisions of the National Government.

7. Without prejudice to Article 13 6) of Law 454 of 1998, the financial institutions of a cooperative nature subject to the supervision and supervision of the Banking Superintendence may to become public limited companies, in exceptional circumstances and with prior authorisation of the Banking Superintendence, by statutory reform adopted by its general assembly. In this case, the associates will receive shares in proportion to their contributions on the date of the respective assembly that determines the conversion.

8. In order to prevent the cooperative entities carrying out financial activity under the terms of Law 454 of 1998 from being the subject of the takeover measures provided for in this Statute, the Banking Superintendence or the Superintendence of the Solidarity Economy, as appropriate, may order at any time to suspend the compensation of the balances of the credits granted to associates against the social contributions.

9. In order to prevent a financial institution from committing to take possession of its assets or to remedy it, and provided that the Banking Superintendence considers that such measures may contribute to the restoration of the situation of the entity, the following special rules apply:

9.1 In case of merge:

(a) Article 56 of this Statute is numbered five (5) and twenty (20) days, respectively;

(b) The deadline for Article 56 (3) of this Statute shall be eight (8) days;

(c) The period provided for in Article 57 of this Statute shall be fifteen (15) days;

(d) The timescales for the numeral 1 of Article 58 of this Statute shall be fifteen (15) and ten (10) days, respectively;

e) The provisions of Article 58 2) (c) (c) of this Statute shall apply in respect of persons who are to have the status of administrators or shareholders of the absorbent entity;

f) It will not be necessary to publish the notice provided for in article 59, nor will the article 62 of this Statute apply;

g) There will be no place for the procedure provided for in Article 58 of the Organic Statute of the Financial System, whenever the Banking Superintendence has authorized the operation This is the case for a merger within the recovery program.

9.2 The acquisition cases will apply the following rules:

(a) The acquiring institution may commence the acquisition of shares by agreement of its board of directors. However, it may only be taken up with the prior authorisation of the shareholders ' assembly. In the event where the assembly does not authorize the transaction, the acquiring entity shall proceed to the disposal of the shares within the time limits laid down by the law;

(b) The period stipulated in Article 64 of this Statute shall be fifteen (15) days.

9.3 In the case of the disposal of assets, liabilities and contracts, the following rules apply:

a) It will be necessary to obtain the prior authorization of the Banking Superintendence, which will have a period of fifteen (15) days to decide;

(b) The rules of Article 68 and those of this law shall apply, even if the disposal of assets and liabilities does not reach the percentage fixed by Article 68 (5) of this Statute;

(c) The decision of disposal may be taken by agreement of the board of directors or of the body which does its own times;

(d) The provisions of Article 68 (2) of this Statute in respect of the transferor shall not apply;

(e) The provisions of Article 68 (3) of this Statute shall not apply. A notice shall be published in a newspaper of broad national circulation within ten (10) days of the date on which the authorisation of the Banking Superintendence has been received. Within 10 days of the publication of the notice referred to above, persons who are party to fiduciary business, concluded on the basis of the qualities of the entity, may object to the transfer. In this event, the person concerned may request that the transfer be made to another institution, which may be accepted by the trust entity. Otherwise, the contract may terminate the contract in advance, without prejudice to any such damages. The provisions of this paragraph shall not apply to guarantee business, as well as to those whose purpose is to develop processes of securitization or in which there are third parties that are holders of rights derived from such businesses, events in which, if there is disagreement over the transfer, the same shall be made to the trustee who appoint the persons concerned by the procedure established by the Government. In respect of other contracts, the consent of the transferred contractor shall not be required;

(f) Where the total or part of the asset of an institution is transferred to another entity, such transfer may be made by virtue of a public deed in which the assets to be transferred shall be reported on a global basis, indicating their amount and item according to the institution's last balance sheet.

In these cases, the transfer of the goods and their corresponding guarantees and ancillary rights, will operate in full right, without the need for notifications, inscriptions, or express acceptance of the obligated. This is without prejudice to the fact that in the case of securities securities the corresponding endorsement must be made and that in the case of goods whose tradition by law must be effected by registration in a register, the same shall be carried out in accordance with the rules corresponding, event in which in the same writing or in other subsequent writing, in the case of goods requiring this kind of solemnity, such goods shall be individualized. In the event that a third party has acquired the assets by an act that is enforceable against third parties with a certain date prior to the writing, the third party shall not be affected by its rights;

(h) The provisions of this numeral shall also apply to cases where the entity has been the subject of a takeover.

10. Non-profit legal entities of a civil nature, except cooperative entities, subject to supervision and supervision of the Banking Superintendence may request, even if their indicators do not present critical levels, the respective authorization for this entity to become public limited liability companies. This conversion must be adopted as a statutory reform and will not produce a solution to the existence of the institution as a legal person, neither in its contracts nor in its assets.

ARTICLE 20. Modify Article 114 of the Organic Statute of the Financial System as follows:

20.1 The text of Article 114 in force on the date of issue of this law shall be identified with number 1, and the following ordinal shall be added to it:

h) When there are serious inconsistencies in the information provided to the Banking Superintendence that in the case of the Superintendency does not allow the actual situation of the entity to be properly known;

i) When the entity does not meet the minimum operating capital requirements provided for in Article 80 of this Statute;

j) When you breach the recovery plans that have been adopted.

20.2 Add article 114 with the following numeral:

2. The Banking Superintendence shall take immediate possession of the assets, assets and business of a supervised entity, when any of the following facts are present:

(a) Where their technical heritage has been reduced below 40% (40%) of the minimum level provided for by the appropriate heritage standards;

(b) Where the time limit for the submission of recovery programmes has expired or the targets of recovery have not been met, in cases which the National Government points out in a general manner, in accordance with Article 48, literal (i).

ARTICLE 21. Article 115 of the Organic Statute of the Financial System, will be as follows:

The Banking Superintendent, prior to the Advisory Council and with the approval of the Minister of Finance and Public Credit, will be able to take immediate possession of the assets, assets, and business of an institution under surveillance.

The takeover will aim to establish whether the entity should be liquidated; whether it is possible to place it in a position to properly develop its social object, or whether other operations can be performed to achieve better conditions for depositors, savers and investors to be able to obtain full or partial payment of their assets. The corresponding decision shall be taken by the Banking Superintendency within a term of not more than two (2) months, which may be extended by an equal term.

The above will not prevent if in the development of the settlement process it is found that it is possible to place the entity in a position to develop its social object or to carry out acts that allow the savers, investors or depositors to obtain better conditions for the full or partial payment of their accreances in accordance with the provisions of this article, are adopted, upon decision in such sense of the Banking Superintendence, the measures for the effect. Similarly, if during the administration of the institution it is found that it is not possible to re-establish it so that it develops its social object regularly, the measures may be taken, after a decision taken by the Banking Superintendence, necessary for settlement.

ARTICLE 22. Article 116 of the Organic Statute of the Financial System, will be as follows:

The takeover involves:

a) The separation of the directors and directors of the management of the goods from the intervention. In the decision to take possession, the Banking Superintendence may refrain from separating certain directors or directors, unless the takeover is in violation of the rules governing the individual credit quotas or risk concentration, without prejudice to the fact that they may subsequently be separated by the special agent at any time;

b) The separation of the tax reviewer, except that due to the circumstances that gave rise to the intervention, the Superintendence decides not to remove it. This is without prejudice to the fact that it can subsequently be removed by the Banking Superintendence. The replacement of the tax reviewer will be designated by the Financial Institutions Guarantees Fund. In the case of liquidation, Fogafin may entrust the tax reviewer with the performance of the comptroller's own duties;

(c) The origin of the registration of the cancellation of any charge constituted in favor of the intervention on any goods whose mutation is subject to registration, except express authorization of the designated special agent. The registrars may not enter any act affecting the domain of the property of the property of the intervention, subject to penalty of ineffectiveness, unless such act has been carried out by the person mentioned above;

(d) The suspension of the ongoing execution processes and the impossibility of admitting new processes of this class against the entity which is the object of the takeover by reason of obligations prior to that measure. The executive processes will apply the rules provided for in Articles 99 and 100 of Law 222 of 1995, and where reference is made there. concordato shall be understood to be related to the process of taking possession. The appropriate action shall be forwarded to the Special Agent;

e) The cancellation of the liens issued prior to the taking of possession that affect the assets of the entity. The Banking Superintendency will deliver the corresponding trades;

(f) The suspension of payments of the obligations caused until the moment of the inauguration, when the Banking Superintendency so provides, in the act of taking possession. In the event where the payments have not initially been suspended, the Banking Superintendence shall, at the time it considers it appropriate, decree such suspension. In such a case, the payments shall be made during the settlement process, if available, or within the process intended to restore the institution so that it can develop its social object in accordance with the programme adopted by the Guarantee Fund. Financial institutions or agree with creditors. However, the payroll will continue to be paid normally, to the extent that the entity's resources permit it;

g) The interruption of the prescription and the non-operation of the expiry date with respect to the credits by the entity that have arisen or become due before the inauguration.

In the event in which the payment cessation or the liquidation of the entity is enacted, or its net worth is reduced below fifty percent (50%) of the subscribed capital, it shall cease to be subject to the regime of the presumptive income;

(h) All depositors and creditors, including those who are guaranteed, shall be subject to the measures to be taken for the taking of possession, whereby they exercise their rights and make any guarantee available to them effective in the case of the institution involved, they must do so within the process of taking possession and in accordance with the provisions governing it. In relation to loans with real guarantees, account shall be taken of the preference which corresponds to them, as the case may be, in the second degree if they are movable and third-grade guarantees if they are immovable.

PARAGRAFO. The separation of the administrators and the tax reviewer because of the takeover, at the time of the takeover or later, results in the termination of the work contract for a fair cause and therefore no will generate compensation.

2. I finish. Within a term of no more than two (2) months carry-over from the holding, the Banking Superintendency, after the concept of the Financial Institutions Guarantees Fund, shall determine whether the institution should be the subject of liquidation, if measures can be taken so that the same can develop its object according to the rules that govern it or if other measures can be taken that allow the depositors, savers or investors to obtain the total payment or a payment part of its appropriations in accordance with this Article. In the last two cases, the Fund of Guarantees of Financial Institutions will present to the Banking Superintendence the program that will follow in order to achieve the fulfillment of the measure and in which the deadlines for the payment of the appropriations. Such a programme may be modified where circumstances so require, an event which shall be communicated to the Banking Superintendence and to the interested parties. This is without prejudice to the possibility of agreements between the creditors and the entity which is the subject of the takeover.

In the event that the entity's liquidation is available by the Banking Superintendency, the takeover will be held until the legal existence of the entity ends or until the remaining assets are delivered to the liquidator. appointed by the shareholders, after the external liability has been paid. If it is decided to take the necessary measures to enable the institution to develop its social object in accordance with the rules governing it or other measures to obtain the full or partial payment of the credits of the depositors, savers and In the form provided for in this article, the takeover will be maintained until the Banking Superintendence, after the Financial Institutions Guarantee Fund, determines the restitution of the entity to the shareholders.

Where the institution's liquidation is not available, the taking of possession may not exceed the time limit of one (1) year, extended by the Banking Superintendency, for a period not exceeding one year; if, within that period, difficulties are not remedied, The Bank's Superintendency will provide for the dissolution and liquidation of the supervised institution. This is without prejudice to the fact that the Government by executive decision authorizes a major extension when required by reason of the characteristics of the entity.

ARTICLE 23. Article 117 of the Organic Statute of the Financial System, will be as follows:

Settlement as a result of takeover

1. The decision to liquidate the entity shall, in addition to the own effects of the takeover, involve the following:

a) The dissolution of the entity;

(b) The enforceability of all term obligations in charge of the intervention, whether commercial or civil, whether or not they are being held, without prejudice to the provisions of the rules governing the operations of futures, options and other derivatives;

c) The formation of the mass of goods;

(d) Automatic termination of the term of two (2) months following the execution of the administrative act, of the current insurance contracts, whatever their class, concluded by an insurance undertaking in respect of which The Banking Superintendency provides for settlement. The Banking Superintendency may extend this period to six months in the case of compliance and life insurance. In the administrative act which orders the liquidation of an insurance undertaking, the following automatic termination shall be made. The foregoing unless the entity concerned is the subject of the possession of the corresponding contracts, which must be done in any event in the case of insurance contracts which grant the social security coverage provided for in Law 100 of 1993 and Decree-Law 1295 of 1994 and those for compulsory insurance for road accidents. For this purpose, account shall be taken of the corresponding mathematical reserves which constitute the pension savings of the insured person and if the rights arising from the guarantee of the Nation are in the case, in accordance with Law 100 of 1993;

e) Workers ' labour rights will enjoy the corresponding legal protection in the settlement process.

2. Term of validity of the measure. The holding of the entity shall be retained until the end of its legal existence, except where delivery is made to the liquidator appointed in the shareholders ' meeting.

When settlement is available, the settlement may not be extended for more than four (4) years from its inception. This is without prejudice to the fact that the government may extend it by executive resolution for a longer term on account of the size of the entity and the conditions of settlement.

ARTICLE 24. Article 291 of the Organic Statute of the Financial System, will be as follows:

Principles governing the takeover

Corresponds to the President of the Republic, in the exercise of the functions conferred by the numeral 25 of article 189 of the Political Constitution, to point out the way the process will be developed (a) the holding, and in particular the manner in which the assets of the institution are to be liquidated, to carry out the acts necessary to place it in a position to develop its social object or to carry out the necessary acts to obtain better conditions for the full or partial payment of the assets of savers, depositors and investors; the form and opportunity in which the claims or claims are to be presented; the sums that can be cancelled as administrative expenses; the way in which the claims will be recognised and paid, the objections will be decided; return goods which must not be part of the mass, and in general, acts which in the course of the taking of possession may or must be rdalized.

These powers shall be exercised by the President of the Republic, subject to the principles and criteria laid down in Article 46 of the Organic Statute of the Financial System and to the following general rules:

1. The taking of possession may be taken only by the grounds provided for in the law.

2. The same shall be for the protection of the financial system and depositors and savers in order to enable them to obtain the payment of their assets from the assets of the institution and, if applicable, the deposit insurance.

3. The decisions to be taken will take into account the real possibility of remedying the causes which led to the takeover and the need to avoid situations which would put at stake the stability of the financial sector and the economy in general.

4. The decision of taking possession shall be of immediate compliance through the official official for the effect by the Superintendent and if the same cannot be personally notified to the legal representative, it will be notified by a notice that will be fixed in public place of the offices of the administration of the registered office. The replacement facility will not suspend the execution of the measure.

5. It shall be for the Financial Institutions Guarantee Fund to designate the special agent, who may be a natural or legal person, to be able to act both during the initial stage, as well as in administration or liquidation, and may have one advisory board with representation of the creditors in the form that the government establishes.

6. Special agents shall develop the activities entrusted to them under their immediate responsibility.

7. The Financial Institutions Guarantee Fund shall monitor the activity of the Special Agent, without prejudice to the supervision of the Banking Superintendence on the entity under management, until its decision is taken. liquidation.

8. Special agents shall carry out transitional public functions, without prejudice to the applicability, where appropriate, of the rules of private law to acts which they carry out on behalf of the entity which is the subject of the takeover.

9. Solution mechanisms will be developed to allow the participation of the private sector.

10. The measures to be taken may include, inter alia, the reduction of capital, the issue and placement of shares without the right of preference, the transfer of assets or liabilities, mergers or divisions, the payment of claims by means of the (a) the provision of trust rights in trusts in which the assets of the institution are located, the advance payment of the securities, the creation of temporary management mechanisms with or without legal status in order to procure the optimization of asset management to respond to liabilities, as well as any other that is consider appropriate to achieve the purposes of the intervention. Similarly, charges may be cancelled on the assets of the institution, without prejudice to the creditor's privilege on the relevant value.

11. The liquidation of the assets of the institution, where applicable, shall be done through market mechanisms and under conditions that allow the value of the assets of the institution to be obtained.

12. The process may be suspended when the circumstances so warrant, with the consequences indicated by the Government, an event in which the Fund of Guarantees of Financial Institutions may assume the representation of the entity for the purposes of there is a place.

13. It shall lay down rules for the completion of the liquidation, where there are assets which have not been eligible or legal situations which have not been established. Such mechanisms may include, inter alia, the award of remaining assets to creditors as payment of their claims or to the shareholders, if applicable, or the delivery of such assets to a given entity in which those assets or shareholders, If it is the case, convince.

14. The takeover processes will be applied as provided for in Articles 103 and 104 of Law 222 of 1995 and for that purpose it will be understood that Provisions refer to the concordatum refer to the taking of possession. The special agent may terminate existing contracts at the time of the takeover if they are not necessary for the administration or liquidation.

15. The taking of possession and in general the conformed processes shall not impede the fulfilment of the operations carried out by the entity or on behalf of the entity in the market of securities where this is appropriate for the same. In any event, the taking of possession shall not prevent the Stock Exchange from making effective, in accordance with the rules governing it, the guarantees granted to comply with an operation in which an entity is an object of takeover.

16. Complaints that are submitted in a timely manner shall be transferred to the persons concerned and shall be decided by the special agent by administrative act which shall be notified by edict.

17. Mechanisms may be established to compensate the entity's assets for loss of purchasing power or damage due to the loss of performance that depositors, savers or investors may suffer from the lack of timely payment.

18. The action taken by savers, depositors or investors against persons who have carried out the irregular conduct which gave rise to the taking of possession, in order to obtain compensation for the damage caused, shall be subject to the same provisions as set out in Article 98 3) of this Statute.

19. During the whole process, including the administration of the entity or its liquidation, agreements may be concluded between the creditors and the intervention entity, which may be approved by the favorable vote of fifty-one percent (51%) of the creditors and at least half of the creditors, including in this calculation the value of the deposits in which the Fund has been subrogated. In other respects, such agreements shall be subject to the rules of the Concordatary regime.

20. The measures taken shall take into account the need to protect the assets of the institution and to avoid its loss of value.

ARTICLE 25. Article 300 of the Organic Statute of the Financial System, will be as follows:

1. In case of liquidation, the credits will be paid according to the rules of precedence provided by the law. In any event, if the Financial Institution Guarantees Fund pays the deposit insurance or a guarantee, the same shall be entitled to obtain the payment of the sums it has cancelled, under the same conditions as the depositors or savers.

2. The amounts corresponding to liabilities not claimed by creditors or shareholders in the course of the liquidation process, as the case may be, shall be delivered to the Financial Institutions Guarantees Fund for the reserve in accordance with Article 318 of this Statute.

3. Once all the external liabilities have been cancelled or the time limit for claiming their payment has expired and in this case, the sums corresponding to the Guarantee Fund of the Financial Institutions, the shareholders may designate the liquidator to continue the process. From that time on, the rules of the Trade Code and its accompanying provisions shall apply to the liquidation.

4. The settlement may be reopened where after the declaration of termination of the legal existence of a legal person becomes aware of the existence of property or rights of ownership of such entity, or of legal situations defined. In this case, the reopening will be carried out by the term that points out the Fund of Guarantees of Financial Institutions and will have the exclusive object to liquidate those assets or to define such legal situations.

5. The sums to be paid by the insurer subject to settlement by way of claims payments shall be cancelled as first class credits after the tax credits.

Without prejudice to the provisions of this statute for the sums paid for deposit insurance, the obligations in favour of the Bank of the Republic, for the purpose of liquidity or other operations, of the Guarantee Fund Financial institutions and the Fund of Guarantees of Cooperative Entities, will enjoy the right to be covered with sums excluded from the mass of the liquidation of institutions monitored by the Banking Superintendence.

The amounts received for the cancellation of credits discounted, before or after the intervention, including those received when the corresponding guarantees are made, will be excluded from the mass of the liquidation and with the same pay the obligations arising from the respective rediscount transactions with the Bank of the Republic, when this intermediary is intermediary of external credit lines, Finagro, Bancoldex, Findeter, the Institute of Industrial Development and the Energy Financial National, as long as those entities have submitted the corresponding claim in settlement. The insolute balance of these claims shall constitute an obligation under the mass of the settlement and shall be subject to the precedence laid down in the law. This is without prejudice to the fact that the rediscount entity in its character as a credit holder can directly obtain payment or a payment in payment.

6. The goods excluded from the settlement mass which are duly identified shall be returned to those who are entitled to them at the time provided for in the Regulation. The sums received for the payment of discounted credits will be cancelled to the rediscount entity. Other persons who, according to the law, have the right to be paid with goods excluded from the mass, but who do not have rights over a particular property, will receive the payment of their credits in proportion to the remaining assets.

ARTICLE 26. Additionanse ordinal g), h), i) and j), as well as a paragraph 2 of article 299 of the System Organic Statute Financial. (g), (h), (i) and (j), as well as the paragraph 2 of Article 299 of the Organic Statute of the Financial System, shall be as follows:

g) The premiums received but not accrued by the insurer subject to the measure;

h) Goods given in leasing, which will be transferred to the licensee when exercising the option and paying the respective value. If the term of execution of the contract is pending and the party is unable to pay the corresponding present value, the contract and the good will be transferred to another entity legally entitled to develop leasing operations;

i) The money that the clients of the institution have paid or owe to him for the financing of foreign trade operations that already is affected to the specific purpose of being reimbursed to the lender of the outside. For this purpose, the correspondence between the financing granted to the institution concerned by the external lender and the financing granted by the institution to its clients shall be established;

j) In general, the identifiable species that are still in the power of the intervention entity belong to another person, for which sufficient evidence must be allowed.

PARAGRAFO. They will not take part of the balance of the credit institutions and will be counted in order accounts, the sums collected for third parties, in the development of mandate contracts, such as those corresponding to taxes, contributions and fees, as well as charges levied for social security and pension payments, as long as they are not transferred by express and written order of the mandant of ordinary deposits, savings accounts or investments.

ARTICLE 27. Modify the 7 of article 301 of the Organic Statute of the Financial System as follows:

27.1 The first paragraph of article 301 of the Organic Statute of the Financial System will be as follows:

7. Revoking actions. Where the assets of the institution concerned are insufficient to pay the full amount of recognised claims, the settlement of the following acts may be imposed by the liquidator within eighteen (18) months prior to the date of the date of of the providence that orders the inauguration.

27.2 Add the numeral 7 of Article 301 of the Organic Statute of the Financial System with the following ordinal:

f) The acts are free of charge.

27.3 The ordinal (e) of Article 301 (7) of the Organic Statute of the Financial System shall be as follows:

(e) Other acts of disposal or administration carried out at the detriment of creditors, where the third beneficiary of such act has not acted in good faith without fault.

CHAPTER IX.

PROVISIONS RELATING TO THE FINANCIAL INSTITUTION GUARANTEE FUND AND DEPOSIT INSURANCE

ARTICLE 28. Article 295 of the Organic Statute of the Financial System will be as follows:

4. Designation of the liquidator and the controller of the settlement. The Director of the Guarantee Fund of Financial Institutions shall appoint the liquidator and the comptroller, who may be natural or legal persons. The liquidator and the comptroller may be removed from their posts by the Director of the Guarantee Fund, when in the case of the latter they have to be replaced.

For the liquidator designation the following minimum requirements will be taken into account:

a) Being a professional with a university degree and having a minimum experience of five (5) years in areas related to financial or commercial activity, and

b) Personal and professional suitability, determined in accordance with the criteria used to authorize the possession of administrators and legal representatives of the entities monitored by the Banking Superintendence and the Superintendence of the Solidarity Economy.

For the designation of contralors the following minimum requirements shall be taken into account:

a) Being a Public Accountant, with a Professional Card, and

b) Credit experience and judgment of the nominee.

For legal persons, they must have been constituted at least with one (1) year prior to the date of their designation and accredit that they have the appropriate technical and operational infrastructure for the performance of the function and qualified personnel who meet the required requirements to be a liquidator or a natural person, as the case may be.

From his possession before the Director of the Fund, the liquidator and the comptroller shall assume their duties, without prejudice to the completion of the formalities for registration in the Chamber of Commerce of the principal domicile of the institution in liquidation.

PARAGRAFO. While establishing a table of management fees and premiums, the Director of the Guaranty Fund shall set the fees that the settlement entity and the comptroller shall receive from the institution in liquidation. the liquidation for its management. The management premiums shall be defined by the rapid and efficient work performed by the liquidator, in accordance with the parameters and conditions determined by the Guarantee Fund.

It will also be made available to the entity for the amount and in the form that the Guarantee Fund determines.

The National Government should be empowered to determine and regulate a table in a term of six (6) calendar months in which the fees to be collected by the designated liquidator and comptroller shall be established, taking into account the size and complexity of the entity, as well as clear criteria of austerity and justice with the resources of savers.

ARTICLE 29. The ordinal f) of article 316 of the Organic Statute of the Financial System, will be as follows:

f) In cases of takeover, designate special agents of financial institutions.

ARTICLE 30. Modify Article 317 of the Organic Statute of the Financial System as follows:

30.1 The numeral 1 of Article 317, will remain as follows:

1. Institutions to register. For the purposes of the second part of the fourth book of this statute, the banks, the financial corporations, the banks, the financial corporations, the banks, the banks, the financial corporations, the banks, the banks, the banks and the financial institutions. commercial financing companies, savings and housing corporations, pension fund management companies, and other entities whose constitution is authorized by the Banking Superintendence and in respect of which the law establish the existence of a guarantee by the Guarantee Fund of the Institutions Financial.

30.2 Add article 317 of the Organic Statute of the Financial System with the following number:

3. Whenever the Banking Superintendency is granted the function of inspection, surveillance and control of other entities other than those on which it currently exercises this function, so that in any event the Guarantee Fund of Financial institutions may grant to these entities their security or deposit insurance, it will be necessary to carry out a study on the risk of each of them, for which account will be taken of the information sent by the Bank superintendence on the situation of the institution, its solvency levels and other indicators risk. On the basis of this study, the Board of Directors will decide whether to grant the guarantee or the insurance or whether it makes such a grant conditional on compliance with certain conditions.

In any case, the entities that collect savings from the public must warn about the existence or not of the deposit insurance and its scope, in accordance with the instructions that the Banking Superintendence will provide in this regard.

30.3 Add the item number 2 of article 318 of the Organic Statute of the Financial System, with the following literals:

m) Point out the officials who, in addition to the Fund Director, will have the legal representation of the Fund and point out its powers;

n) The others that point to the law.

ARTICLE 31. Add article 319 of the Organic Statute of the Financial System, with the following numerals:

2. In managing your income the Fund will be subject to the following rules:

(a) Income from deposit insurance premiums, payments for guarantees granted, as well as other income received for refunds, recoveries and other derivatives of their activities against the registered entities, with the exception of those made with resources from the Fund's own assets, shall be used for the formation of the reserves listed below on the basis of the entities in respect of which the payment is made: reserve for the payment of deposit insurance from banks, financial corporations, savings and housing corporations and commercial financing companies; reserve for the payment of the guarantee of funds of cesanties; reserve for the payment of the guarantee of pension funds, and reserve for the payment of pensions in charge of the risk managers professionals;

(b) In the event in which the law grants the Fund the power or the obligation to guarantee another class of entities, the resources to ensure the payment of such guarantees shall be administered in special and separate reserves;

(c) When the Fund obtains revenue for the purposes of operations carried out from the resources of the reserves or for the sale of assets or entities that it acquired in development of the processes provided for by the Organic Statute of the Financial System, such resources shall increase the corresponding reserves in the manner determined by the government;

(d) The resources of each of the reserves shall be used exclusively to pay for the claims or guarantees for which they were constituted, or to carry out support operations in respect of the entities to which they are refers to the respective reservation, in the terms of this law, and may not be used for other purposes. The amount of the resources that a reserve is allocated to carry out support operations, as well as its estimated net cost, may not exceed the sums that the Fund should pay for the deposit insurance or the respective guarantee, unless such an operation is necessary to avoid a liquidation which would threaten the stability of the financial system or cause serious damage to the national economy. The above without prejudice to the subsequent payment of the deposit insurance, if there is a place to it.

When you want the resources of a reserve to be insufficient to deal with a disaster, to pay a guarantee or to adopt a support measure, the Board of Directors of the Financial Institutions Guarantees Fund will adopt a recovery plan the reserve, which may include the increase of premiums above the limit provided for in Article 323 of this Statute. This plan must be approved with the favorable vote of the Minister of Finance and Public Credit, when he or she wants to provide for the realization of the plan, in whole or in part, with contributions from the General Budget of the Nation or through Debt with the guarantee of the Nation. In the event that according to this plan it is considered necessary to receive resources from the General Budget of the Nation, the Fund will advance the necessary procedures before the General Budget Directorate of the Ministry of Finance and Public Credit, for the necessary resources to be incorporated in the draft budget or for the other operations to be carried out;

e) The Financial Institutions Guarantee Fund will charge for its administrative work and the reserves, the sum indicated by its board of directors, which will consist of a percentage of the amount of the assets of the reserves or of the revenue of the Fund, which shall be calculated on the basis of the Fund's expenditure, in accordance with the Fund's budget, approved by the Board of Directors.

PARAGRAFO. transient. The resources which, at the date of entry into force of this law, constitute the patrimony of the Fund for Guarantees of Financial Institutions, shall be divided into two (2) parts: those which shall be retained as part of the Fund's own assets, and those which will be destined for the reserves. The Fund's Board of Directors shall be responsible for distributing the corresponding resources, taking into account the following principles:

(a) In order to determine the amount to be allocated to reserves, account shall be taken of the value of the sums which the financial institutions have contributed to the premiums for the deposit insurance or payment of the corresponding guarantees and their possible returns, minus the value of claims paid, and

(b) Resources for reserves shall be distributed among them in proportion to the amount of sums paid by the entities to which each of them refers.

3. The net cost to the Fund for the Guarantee of Financial Institutions for operations which it carries out in favour of an institution, may constitute, in accordance with the characteristics of the operation, a liability for the purposes of the financial institutions. the respective entity. The government shall state in a general manner the cases in which this liability is to be recorded, the priority to be cancelled and the effects thereof.

PARAGRAFO. Pursuant to article 63 of the Political Constitution, the resources of the Financial Institutions Guarantees Fund and the reserves are inembargables.

ARTICLE 32. Modify Article 320 of the Financial System Organic Statute as follows:

32.1 The literals (d) and (e) of Article 320 (1) of the Organic Statute of the Financial System shall remain as follows:

d) Grant loans to financial institutions within programs for the purpose of restoring the wealth of registered institutions. Such loans may be granted to the institution which is the subject of the recovery programme or to others participating in the recovery programme and may be intended to enable or facilitate the implementation of merger, acquisition, transfer of assets and liabilities or other programmes. figures intended to preserve the interests of savers and depositors;

e) Acquire the assets of the registered financial institutions to the Fund's board of directors.

32.2 Add article 320 numeral 1, with the following ordinal:

k) Within the general purpose of the Fund and the limits set in law, grant guarantees or compensate for losses or deficits in which financial institutions or investors who take ownership, absorb, merge or acquire assets or assume liabilities of a registered entity that are subject to the measures provided for in Articles 48, literal (i), href="organic_system_statule_pro004.html#113"> 113 and 115 of this Statute;

l) To conclude agreements with other public authorities with control, inspection and surveillance functions, in order to provide them with advice and support in the development of their activities, in the areas that are consistent with the object of the Fund.

32.3 Add the fourth indent of the literal d) of article 320 of the Organic Statute of the Financial System, with the following sentence:

In cases in which the composition of the board of the entity receiving the guarantee capital has been determined by law, the Fund shall be entitled to designate an additional number of members in such a manner that the composition of the Board reflects the Fund's participation in the capital, or to designate a single additional member who shall be entitled to issue a number of votes in proportion to the Fund's participation in the institution's capital.

32.4 Add the second paragraph of Article 320 (4) of the Organic Statute of the Financial System with the following sentence:

For these purposes, the Fund may subscribe to the portion of the capital that it deems necessary.

32.5 Add article 320 of the Organic Statute of the Financial System with the following numerals:

6. In the course of its operations, the Financial Institutions Guarantee Fund shall apply the following rules:

(a) The Fund may carry out the operations provided for in this law and in the rules that develop it to seek the recovery of financial institutions, where the liquidation of financial institutions may be avoided with their participation, or for seek payment from savers, investors or depositors or obtain better conditions, in accordance with the provisions of this Statute;

b) Prior to the adoption of the measures that correspond to it to support financial institutions, the Financial Institutions Guarantees Fund will take into account the cost that the financial institutions would incur in the face of the value it should pay for the reason for deposit insurance in the event of liquidation of the institution. The Fund will prefer those measures which, according to the study carried out, will enable it to properly meet its object at the lowest cost, taking into account the value of the deposit insurance. Notwithstanding the foregoing, in cases where the liquidation of the institution may endanger the stability of the financial sector or may cause serious damage to the economy, by decision of the Board of the Fund, approved with the vote In the case of the case in point where the cost of the insurance premiums or the cost of the insurance premium may be increased or the cost of the security of the deposit guarantee, the measures permitting such a risk to be increased shall be taken into account. the entities covered by the respective reserve, in so far as it is deemed necessary, without the the limit provided for by Article 323 ordinal e) of this Statute;

(c) Measures should be preferred which do not involve official participation in the capital of the entity which is the subject of the measure and which provide for the action of the actors participating in the financial market.

7. In addition to the powers provided for in this Article, the Financial Institutions Guarantee Fund, for the purpose of fulfilling its general purpose, may carry out the other support operations of financial institutions authorised by the Government. National in development of article 189, numeral 25, of the Political Constitution, subject to the principles of article 46 of the Organic Statute of the Financial System and the rules established in the (i)

The Banking Superintendence, at the request of the Fund of Guarantees of Institutions, may instruct the supervised entities to send to the latter the information that it requires for the performance of its functions. This is without prejudice to the ability of the Banking Superintendence to directly deliver to the Fund the information requested by it.

ARTICLE 33. The numeral 3 of article 322 of the Organic Statute of the Financial System, will be as follows:

3. The information relating to the support or rescue operations carried out by the Fund for the Guarantee of Financial Institutions in compliance with its purpose shall be subject to reserve, provided that this is necessary to preserve the trust of the public in the institutions subject to the measures, as well as the stability of those institutions.

ARTICLE 34. Addition to the following ordinals and paragraphs article 323 of the Organic Statute of the Financial System:

(f) Events not covered by deposit insurance shall be reported, including the captions or fractionations made by the financial institution against the express prohibition of the Banking Superintendence, provided that such prohibition has been timely revealed to the public;

(g) The obligations of the Fund for the purpose of deposit insurance or a guarantee may be fulfilled by payment directly to the depositor of the corresponding sum of money or by the use of other mechanisms enabling the same to receive at least a sum equal to the value covered by its accretion;

(h) The depositors may be cancelled from the holding, a sum of up to an amount equal to the value of the deposit insurance or the corresponding guarantee. Such payment shall have a free effect on insurance and security in the amount for which it is made. Credits may also be granted by the Financial Institution Guarantees Fund to the entity that is the subject of the measure to enable the institution to pay the amount of the deposit insurance deductible;

i) Conditions shall be established in order to prevent the same person from obtaining, directly or indirectly, a payment exceeding the amount covered by the insurance;

j) The date on which the financial court will be made may be set in order to determine the payment of the deposit insurance or the guarantee. Subsequent acts of savers or depositors may not result in the extension of the exposure or liability of the Fund.

PARAGRAFO 1o. The deposit insurance may be paid to the spouse or permanent partner and to the heirs of the beneficiary, without the need for a succession judgment, when the value of the same does not exceed the amount to which it does Article 127, numeral 7, of this Statute, for which the requirements to be met by the Board of Directors of the Fund of Guarantees of Financial Institutions shall be fulfilled.

PARAGRAFO 2o. The Financial Institutions Guarantees Fund may be able to coactivate the amounts it has paid for the purposes of the deposit insurance or the guarantees it grants, based on false or inaccurate information supplied by the insured or guaranteed entity or by the applicant, with the relevant interest. Such interest shall be charged at the maximum rate permitted by law, where the person concerned has acted with a serious fault or a fault. In other cases, where the inaccuracy originates in information provided by the institution, the institution shall pay the moratory interest. For the purposes of this numeral, an administrative act shall be issued in which the amount of the obligation is removed, without it being necessary to obtain the consent of the person concerned.

PARAGRAFO 3o. The Board of Directors of the Guarantee Fund of Financial Institutions will organize the guarantees that, according to the law, it must or can grant in favor of savers or investors, for which it will apply the provisions of this Article as soon as they are compatible with their nature, with the exception of the provisions in ordinal (a) and (e).

CHAPTER X.

BANKING SUPERINTENDENCY PROVISIONS

ARTICLE 35. The first paragraph of article 325 of the Organic Statute of the Financial System, shall be as follows:

1. Nature and objectives. The Banking Superintendence is a technical body, attached to the Ministry of Finance and Public Credit, with legal status, administrative and financial autonomy and its own patrimony, through which the President of the Republic exercises the inspection, surveillance and control over the persons performing the financial and insurance activity, and who is responsible for the following objectives:

ARTICLE 36. Add article 325 of the Organic Statute of the Financial System, with the following numeral:

3. Legal representation. The legal representation of the Banking Superintendence corresponds to the Banking Superintendent.

ARTICLE 37. Modify the number 3o. Article 326 b) of the Organic Statute of the Financial System, which shall be as follows:

(b) Dictate the general rules to be observed by the institutions under surveillance in their accounts, without prejudice to the autonomy recognized to them for choosing and using ancillary methods, in accordance with the law.

ARTICLE 38. Modifies the numeral 1 of article 95 of the Organic Statute of the Financial System, which will remain so:

Article 95. accounting.

1. General scheme. The Banking Superintendence is empowered to lay down general rules on accounting matters to be observed by supervised entities, without prejudice to the autonomy of the latter in order to choose and use ancillary methods, in accordance with with the law.

ARTICLE 39. Add article 334 numeral 1 of the Organic Statute of the Financial System with the following paragraph:

PARAGRAFO 3o. The minutes of the Banking Superintendent's Advisory Board and the working documents that support them will be reserved.

ARTICLE 40. Article 337 of the Organic Statute of the Financial System will be as follows:

4. Revenue. The resources needed to cover the operating and investment costs required by the Banking Superintendence will come from the following concepts:

a) The contributions imposed on the monitored entities;

b) The resources obtained by the sale of their publications, tender documents or merit contests, and photocopies;

c) The contributions, grants or donations that you receive for the fulfillment of your purposes;

(d) The fees charged for the lease of assets;

e) The resources from the services provided by the Entity;

f) The resources originated in the sale or lease of information systems and computer programs designed and developed by the Entity;

g) The resources to be transferred from the General Budget of the Nation;

h) Interest, income, and other benefits you receive from managing your own resources, and

i) Other income that has been or is recognized by law.

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