Reforming The Law On Securitization Of Assets.

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

Read the untranslated law here: http://www.asamblea.gob.sv/eparlamento/indice-legislativo/buscador-de-documentos-legislativos/reformase-la-ley-de-titularizacion-de-activos-1/archivo_documento_legislativo



1. Decree No. 332, the Legislative Assembly of the Republic of EL SALVADOR: I.-that is the State's interest to promote economic and social development, creating conditions for an efficient financial system, offering different options of financing to productive sectors of the country, so it is essential to strengthen financial instruments that stimulate capital market.
II. that by means of Legislative Decree N ° 470, on November 15, 2007, published in the official journal N ° 235, took no. 377 of December 17, 2007, approved the law of asset securitization, which aims to regulate the operations carried out in the process of securitization of assets, people involved in that process and to securities issued;
as well as establish its supervisory framework.
III.-that the securitization is an efficient financing tool, and its development in the country, allows the productive sectors to obtain resources to carry out new projects.
IV.-that the Sociedades de Responsabilidad Limitada, under the current code of Commerce, have common characteristics with the societies of Capital; However, it is necessary to adapt the legal framework of the law on securitization of assets, and adapt it to the new needs of the capital market, without implying abandoning the concept of completeness; Therefore, it is appropriate to incorporate into existing legislation, limited liability companies, to boost competition in a market developing.
V.-that the societies of limited liability, through the contributions of its partners may contribute, as well as existing corporations, to strengthen the securitisation, as a strategic element of economic development which serves to finance public and private investment projects.
VI.-that the capital market is developing in the country and is therefore necessary to update current legislation, to create greater competition and efficiency and dynamism in this market.
Therefore, use of his constitutional powers and at the initiative of the Deputy Francisco José Zablah Safie.

2 DECREES the following: reforms to the law of SECURITIZATION of assets article 1.-reforming article 4, in the following manner: "article 4.-the Titularizadoras will constitute as fixed capital formation, of undetermined term corporations domiciled in El Salvador. They may also act as fixed capital formation, of undetermined term limited liability companies, domiciled in El Salvador. They will have as exclusive object constitute, integrate and manage securitisation funds and issue securities with the funds, according to the rules laid down in this law.
Its share capital is divided into shares, shares represented by book-entry or participation certificates.
The expression "Titularizadora" is obligatory and exclusive use in the denomination of these societies. The use of the expression "Titularizadora" agencies that have not been approved in accordance with this law, shall be punished by the Superintendent."
Article 2.-Reformanse the literal "d" and "f" of article 5 in the following way: "d) name, age, profession, domicile and nationality of shareholders or partners who integrate the Titularizadora, as well as the amount of their respective subscriptions."; and, "f) affidavit of each initial shareholders or drivers and relevant partners, directors and managers, that are not in any of the situations set out in articles 12 and 16 of this law."
Article 3.-reforming article 6 follows: "article 6.-received the information referred to in the preceding article, the Superintendent shall publish in a newspaper of national circulation, only once and acuenta of those concerned, the list of shareholders or partners drivers or relevant in your case, as well as principals and administrators initial , within a period which shall not exceed five working days.
Such publication will be intended that anyone who has knowledge that any of the disabilities or prohibitions contained in articles 12 and 16 of this law, concur in directors, managers, shareholders or partners that form part of the Titularizadora, can object to them.
Objections must submit in writing to the Superintendent within a period of fifteen days from the day following the publication, by attaching relevant evidence. The information shall be confidential character. Similarly the Superintendent may ex officio object proposed people when he is aware that such disabilities or prohibitions concur therein.
In both cases, it will be addressed after hearing the director, Manager, shareholders or partners who is presumed if the inability or prohibition.

3 in the event that the shareholders or partners is a legal person, to be published also the list of shareholders, who have 25 percent or more of its capital or partners that have that percentage of social participation.
Once fulfilled the legal requirements indicated, permission to constitute the Titularizadora not more than thirty days, will be issued by resolution of the Council within a time that is appropriate to the granting of the constituent writing within one period not exceeding sixty days from the notification of this decision."
Article 4.-reforming the heading and text of article 7, in the following manner: "shareholders or partners drivers and relevant.7.-for the purposes of this law means that a shareholder or partner, either natural or legal person, holds the character of driver when it owns, directly or through intermediary person, individually or together with other shareholders or members" , of more than fifty percent of the shares or participation certificates representing the capital of the Titularizadora. In case there is no shareholders or partners drivers, the requirements laid down for them by this law, shall be met by the owners, directly or through intermediary person, individually or together with other shareholders or members, a ten per cent or more of the shares or participation certificates issued by the Titularizadora, identified as to which shareholders or relevant partners."
Article 5.-reform is the second paragraph of article 11, follows: "the Titularizadora directors must meet, in addition to the requirements laid down in the code of Commerce for directors of corporations and LLCs limited, the following:" Art.6.-reformed the literal "a" of the articulo12, in the following way: "to) the directors, managers or employees of any other Titularizadora and the shareholders or members that have more than ten percent of the capital of" Another Titularizadora."
.7-reform the heading and the text of the articulo15, in the following way: "of the shareholders or associates article 15.-any person may be owner of shares or participation certificates of a Titularizadora, except that are therein the prohibitions laid down in this law." Within social and stock shares of each person, will also be deemed that this may have on companies that are shareholders or partners of the Titularizadora."

4 Article 8.-reforming the first clause and the literal "e", "f", and "h" of article 16, in the following manner: "(Art. 16.-No podrán ser accionistas o socios controladores o relevantes en su caso, los adquirentes que se encuentren en alguna de las circunstancias siguientes: e) that can not prove the legitimate origin of the funds to acquire the shares and participations;"
(f) that its financial and asset situation is not financially proportional to the value of the shares and participations intending to acquire;
(h) those who have been declared non-working to hold the quality of shareholders or members or that they have been punished administrative or court for his involvement in serious violation to laws and regulations of a financial nature, in particular the capture of funds from the public without authorization, the granting or receipt of loans in excess of the allowable limit and in crimes of a financial nature; whether that concerned statements by disabilities or sanctions have been issued in the country or abroad."
Article 9.-reforming article 17, in the following manner: "Art.17.-shareholders or partners drivers, or relevant in your case, within thirty days after having subscribed the shares or social contributions and in the month of January of each year, shall submit the affidavit to the Superintendent stating that they are not within the circumstances referred to in the previous article and shall inform more no later than three business days following such institution, if the circumstance occurs later.
Having determined that they are in any of the circumstances referred to in the previous article, previous procedure laid down in article 14 of this law, the concerned shareholders

or partners may not exercise personal or patrimonial rights that correspond to them as shareholders or associates of the Titularizadora until the circumstance they incurred, with the exception of the transfer of the right of ownership of the shares or participation certificates is not exceeded and in making the entitled to retained dividends to pay them. In the same way be when not communicated by the shareholders or members and the Superintendent which identify the circumstances.
When you have to overcome the causes which gave rise to the suspension of rights, shareholders or partners may exercise them again."
Article 10.-reform the first paragraph and the third ordinal of article 21, in the following manner: "article 21." (- In case of losses in a year, at the General meeting of shareholders or partners that such results are known should take the agreement to cover them, according to the following order: 3) charged to the paid capital of the Titularizadora. This decrease of the share capital shall be made by reducing the nominal value of the shares or participation certificates 5 and in this case shall not apply the provisions of article 129 of the code of Commerce. When the capital of the Titularizadora is reduced to a level lower than that provided for in article 19 of this law, the Titularizadora will have a maximum period of sixty days to reinstate it, and must submit to the Superintendent in the first ten days of this period a plan to conform to required levels, which must be complied with in the planned term."
Article 11.-reforming article 39, in the following manner: "article 39." -Once authorization has been revoked to operate the Titularizadora, if the General meeting of shareholders or partners recognize the causes of dissolution that is this chapter, this will proceed until he or the funds have been transferred or liquidators, has been named as appropriate. The liquidation of the Titularizadora will take place in accordance with the commercial code."
Article 12.-reforming article 40, in the following manner: "Art.40-when concurring the grounds for dissolution contained in this Act or the commercial code and the General meeting of shareholders or members not finds the cause of dissolution, the Superintendent, based on the decision taken by the holders of the securities on the transfer or liquidation of the Fund , pursuant to article 37 of this law, shall ask the Attorney General to request judicial dissolution of Titularizadora until after that have been moved it or funds, or named its liquidators. During the judicial process, the Titularizadora not can continue operations that regulates this law."
Article 13. -This Decree shall enter into force eight days after its publication in the official journal.
GIVEN in the blue room of the Legislative Palace: San Salvador, seven days of the month of April of the year two thousand and sixteen.
LORRAINE GUADALUPE PENA MENDOZA, PRESIDENT.
GUILLERMO ANTONIO GALLEGOS NAVARRETE, ANA VILMA ALBANEZ DE ESCOBAR, SENIOR VICE PRESIDENT. SECOND VICE PRESIDENT.
JOSE SERAFIN RODRIGUEZ ORANTES, NORMAN NOEL QUIJANO GONZÁLEZ, THIRD VICE-PRESIDENT. FOURTH VICE PRESIDENT.
SANTIAGO FLORES ALFARO, FIFTH VICE PRESIDENT.
WILLIAM FRANCISCO MATA BENNETT, DAVID ERNESTO REYES MOLINA, FIRST SECRETARY. SECOND SECRETARY.

6 MARIO ALBERTO TENORIO GUERRERO, REYNALDO ANTONIO LOPEZ CARDOZA, THIRD SECRETARY. FOURTH SECRETARY.
JACKELINE NOEMI RIVERA AVALOS, JORGE ALBERTO ESCOBAR BERNAL, FIFTH SECRETARY. SIXTH SECRETARY.
ABILIO ORESTES RODRIGUEZ MENJIVAR, JOSE FRANCISCO MERINO LÓPEZ, SEVENTH SECRETARY. EIGHTH SECRETARY.
Presidential House: San Salvador, twenty-eight days of the month of April of the year two thousand and sixteen.
PUBLISHED, Salvador Sanchez Ceren, President of the Republic.
Juan Ramon Carlos Enrique Caceres Chavez, Minister of finance.
D. O. N ° 78 volume N ° 411 date: April 28, 2016 FN/adar 25-05-2016 legislative index