Reforming The Law On Securitization Of Assets.

Original Language Title: REFÓRMASE LA LEY DE TITULARIZACIÓN DE ACTIVOS.

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LEGISLATIVE ASSEMBLY-REPUBLIC OF EL SALVADOR

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DECREE N ° 332

THE LEGISLATIVE ASSEMBLY OF THE REPUBLIC OF EL SALVADOR,

CONSIDERING:

I-That it is the State's interest to promote economic and social development, generating conditions for an efficient financial system, offering different

financing options to the productive sectors of the country, so it is essential to strengthen the financial instruments that

II.-That by Legislative Decree No. 470, dated November 15, 2007, published in Official Journal No. 235, Volume N ° 377 of December 17

, the Law of Titularization of Assets, which is intended to regulate the operations that are performed in the process of securitization of assets, to the persons involved in the process, and to the securities issued therein;

as well as to establish its supervisory framework.

III.-That securitization is an efficient financing tool, and its development in the country, allows productive sectors to obtain resources

for new projects.

IV.-Limited Liability Societies, under the current Code of

Trade, have common characteristics with the Capital companies; however, it is necessary to adapt the legal framework of the Law of Entitlement of Assets, and adapt it to new needs of the capital market, without this

means to abandon the concept of integrality; therefore, it is relevant to incorporate existing legislation, to the Societies of Responsibility Limited, to empower the competition of a developing market.

V.-That Limited Liability Societies, through the contributions of their partners can contribute, as well as the existing Limited Companies already

to strengthen securitization, as a strategic element of economic development that serves to finance public and private investment projects.

VI.-That the capital market is developing in the country and therefore, it is necessary update existing legislation, to create more competition,

efficiency and Dynamism in this market.

BY TANTO,

in use of its Constitutional faculties and at the initiative of the Deputy Francisco José Zablah Safie.

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DECRETA the following:

REFORMS TO THE ASSET SECURITIZATION ACT

Art. 1.-Reform Article 4, as follows:

" Art. 4.-The holders shall be established as a fixed-term, non-fixed-capital company located in El Salvador. They may also be constituted as Companies of

Fixed-term limited liability liability in El Salvador. They shall be the sole object of constituting, integrating and administering Funds of Titularization and issuing securities with the Funds, in accordance with the rules laid down in this Law.

Its share capital shall be divided into shares

term "Titularizadora" is of compulsory and exclusive use in the denomination of these companies. The use of the expression "Holder" by bodies that have not been authorized to

compliance with this Law, will be sanctioned by the Superintendence. "

Art. 2.-Reform the literals "d" and "f" in Article 5, as follows:

" d) Name, age, profession, domicile and nationality of the shareholders or members that will integrate the holder, as well as the amount of their respective shares subscriptions. "; and,

" f) Affidavit of each of the initial shareholders or controlling and relevant shareholders, directors and directors, that they are not in any of the situations set out in Articles 12 and 16 of This Law. "

Art. 3.-Reform Article 6 as follows:

" Art. 6.-Received the information referred to in the previous article, the Superintendence will publish in a newspaper of national circulation, for once and for the interest of the interested parties, the payroll of the shareholders or members controlling or relevant in your case, as well as the initial directors and administrators

, within a period not exceeding five business days.

This publication shall be intended for any person who has knowledge of any

In the case of non-skills or prohibitions contained in Articles 12 and 16 of this Law, directors, directors, shareholders or members who will be part of the Holder, may object to them.

The objections shall be submitted in writing to the Superintendence within a period of 15 days from the day following the of the publication, attaching the relevant evidence. The information shall be of a confidential nature. Similarly, the Superintendence may object to object to the persons

proposals when it has knowledge that the referred to inabilities or prohibitions are in them.

In both cases, it will be resolved after hearing of the Director, administrator, shareholders or partners on whom the inability or prohibition is presumed to be present.

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In the event that shareholders or partners are legal persons, the the payroll of its shareholders, who hold twenty-five percent or more of its capital or of the partners that

have that percentage of social participation.

Once the legal requirements stated, the authorization to constitute the Titulariser

will be issued by Council resolution in no longer term 30 working days, in order to ensure the granting of the constitutive writing within a period not longer than 60 days from the notification of such a decision. "

Art. 4.-Reform the acapite and the text of article 7, as follows:

Shareholders or Controller and Relevant Partners

Art.7.-For the purposes of this Law a shareholder or partner shall be deemed to be a natural person

or legal, it holds the character of controller when it owns, directly or through interposita person, individually or jointly with other shareholders or partners, of more than fifty percent of the shares or participations social representative of the capital of the holder. In case of no

existing shareholders or controlling partners, the requirements established for them in this Law, must be fulfilled by the owners, directly or through the person, individually or jointly with other shareholders or members, of a ten per cent or more of the shares or shares/units issued by the Holder, to which they shall be referred to as shareholders or relevant partners. '

Art. 5.-Reform the second paragraph of Article 11, as follows:

" The Directors of the Board of Directors shall meet, in addition to the requirements set out in the Trade Code for the Directors of the Company Limited liability companies, the following: "

Art.6.-Reform the literal" a "of the article 12 ,as follows:

" a) The Directors, administrators or employees of any other Holder and shareholders or shareholders which hold more than 10% of the capital of another Holder. '

Art.7.-Reform the acapite and the text of the articulation15, as follows:

" From Shareholders or Partners

Art. 15. Everyone may be the owner of shares or social interests of a Holder, unless the prohibitions laid down in this Law are met. Within

each person's shareholding and social holdings shall also be considered to be the same in companies that are shareholders or members of the Holder. "

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Art. 8.-Reform the first indent and the literals "e", "f", and "h" in article 16, as follows:

" Art. 16.-They may not be shareholders or controlling or relevant partners where appropriate, the acquirers who are in any of the following circumstances:

e) Those who cannot demonstrate the legitimate origin of the funds to acquire the

f) Those who are not economically proportional to the value of the shares and units they intend to acquire;

(h) Those who have been declared indeft to be held the quality of shareholders or members or who have been punished administratively or judicially for their participation in

serious infringement of the laws and rules of a financial nature, in particular the collection of public funds without authorization, the granting or receipt of related loans in excess of the permitted limit and in the crimes of a financial character; whether

that the referred to the statements of inabilities or sanctions have been dictated in the country or abroad. "

Art. 9.-Reform Article 17, as follows:

" Art.17.-The controlling shareholders or shareholders, or relevant in their case, within thirty days of having subscribed to the shares or the social shares and in the month of January of each

year, they will submit affidavit to the Superintendence stating that they are not within the circumstances mentioned in the previous article and must report no later than three working days after that institution, if the circumstance occurs later.

Having determined which are in any of the circumstances referred to in the previous article, prior to the procedure laid down in Article 14 of this Law, the shareholders concerned

or partners may not exercise personal or property rights they are held as shareholders or members of the Holder until the circumstances in which they incurred are not exceeded, with the exception of the transfer of the right of ownership of the shares or social interests and when they are carried out.

will have the right to be paid the retained dividends. Likewise, it will proceed when the shareholders or members do not communicate it and it is the Superintendence that identifies the circumstance.

When the causes that gave rise to the suspension of rights are exceeded, the shareholders or partners may exercise them again. "

Art. 10.-Reform the first paragraph and the third paragraph of Article 21, as follows:

" Art. 21. -If there are losses in an exercise, at the General Meeting of Shareholders or Partners

in which such results are known, the agreement must be taken to cover them, according to the following order:

3º) Titulariser. This decrease in social capital must be done by reducing the nominal value of social equity or shareholdings

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and in this case the provisions of Article 129 of the Code of Commerce will not apply. When the social capital of the Holder is reduced to a level lower than the established

in Article 19 of this Law, the Holder will have a maximum period of sixty days to reintegrate it, and must present to the Superintendence in the first ten days of this deadline a plan to adjust to the required levels, which must be met in

the intended term. "

Art. 11.-Reform Article 39, as follows:

" Art. 39. -Once the authorization to operate the Holder has been revoked, if the General Meeting of Shareholders or Partners recognizes the cause of dissolution of this Chapter, this Chapter, this

will proceed until the funds have been transferred or have been appointed the liquidators of the latter, as appropriate. The settlement of the Holder shall be carried out in accordance with the Trade Code. "

Art. 12.-Reform Article 40, as follows:

" Art.40.-When the cause of dissolution contained in this Law or in the Code of Commerce is present and the General Meeting of Shareholders or Partners does not recognize the cause of dissolution, the Superintendent, based on the decision taken by the Teners of Securities on the transfer or liquidation of the Fund, in accordance with the provisions of Article 37 of this Law, must ask

the Office of the Prosecutor General of the Republic (i) request the dissolution of the Holder until after the date of the transfer of the Funds, or named its liquidators. During this judicial process, the Holder will not be able to continue the operations that this Law regulates. "

Art. 13. -This Decree will enter into force eight days after its publication in the Official Journal.

GIVEN IN THE BLUE HALL OF THE LEGISLATIVE PALACE: San Salvador, at the seven days of the month of April of the year two thousand sixteen.

LORENA GUADALUPE PEÑA MENDOZA, PRESIDENT.

GUILLERMO ANTONIO GALLEGOS NAVARRETE, ANA VILMA ALMASEZ DE ESCOBAR, FIRST VICE PRESIDENT. SECOND VICE-PRESIDENT.

JOSÉ SERAFIN ORANTES RODRÍGUEZ, NORMAN NOEL QUIJANO GONZÁLEZ, THIRD VICE-PRESIDENT. FOURTH VICE-PRESIDENT.

SANTIAGO FLORES ALFARO, FIFTH VICE PRESIDENT.

GUILLERMO FRANCISCO MATA BENNETT, DAVID ERNESTO REYES MOLINA, FIRST SECRETARY. SECOND SECRETARY.

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MARIO ALBERTO TENORIO GUERRERO, REYNALDO ANTONIO LÓPEZ CARDOZA, THIRD SECRETARY. FOURTH SECRETARY.

JACKELINE NOEMI RIVERA AVALOS, JORGE ALBERTO ESCOBAR BERNAL,

FIFTH SECRETARY. SIXTH SECRETARY.

ABILIO ORESTES RODRÍGUEZ MENJÍVAR, JOSÉ FRANCISCO MERINO LÓPEZ,

SEVENTH SECRETARY. EIGHTH SECRETARY.

CASA PRESIDENTIAL: San Salvador, at the twenty-eight days of April of the year two thousand sixteen.

PUBESQUIESE,

Salvador Sánchez Cerén, President of the Republic.

Juan Ramón Carlos Enrique Cáceres Chávez, Minister of Hacienda.

D. O. N ° 78

Took N ° 411 Date: April 28, 2016

FN/adar 25-05-2016

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