Reformed The Securities Market Law.

Original Language Title: Refórmase la LEY DEL MERCADO DE VALORES.

Read the untranslated law here:


I.- State's interest to promote economic and social development, creating conditions for have a modern and efficient financial system that offers different options of saving and investment in the economy.
II.- by Legislative Decree No. 809, dated February 16, 1994, published in the Official Gazette No. 73a, Volume No. 323, dated April 21 of that year, it was approved law on the securities market, to develop an efficient stock market in an environment of healthy competition, with a public offering thereof, conducted by authorized financial intermediaries with complete and audited information about issuers of such securities and markets organized as are the stock exchanges, where transactions are conducted safely and expeditiously, and ensuring adequate flow of information to the general public is provided.
III.- That the creation of a Law on Investment Funds, involves the implementation of reforms to the Securities Market Act to harmonize these legal bodies.
in exercise of its constitutional powers and initiative of Deputies Douglas Leonardo Mejia Aviles, Veliz Antonio Echeverria, Luis Roberto Angulo Samayoa, Francisco José Zablah Safie and David Edwin Victor Alejandro Zamora.
DECREES the following reforms:
Art. Refórmese 1. Article 3 as follows:
"Art. 3. Any value that is publicly offered and the issuers thereof shall be entered in the Stock Market Public Registry, which for this purpose by the Superintendency, and then enroll in a stock exchange. Registration in the Superintendency shall be final.
Excepted from the above the State and the Central Reserve Bank of El Salvador, as well as securities issued by them, which may be publicly offered without settling them in the aforementioned Public Registry. In the event that the State or the Central Reserve Bank of El Salvador wish to trade their securities on a stock exchange, but will present the certification agreement authorizing the issue or the respective Legislative Decree, who shall inform the respective Exchange

2 to the Superintendency. Notwithstanding the foregoing, if the emissions to those referred to in this paragraph except they be settled in the Stock Market Public Registry, issuers must submit to the Superintendency the information that reasoned resolution is required of them by the Council in the form and periodicity to be determined.
The exception in the first part of the preceding paragraph does not include the decentralized autonomous institutions. "
Art. Refórmese 2. Article 4 as follows:
"Art. 4. Securities issued by Banks shall be governed by the provisions of the Banking Law, Law on Cooperative Banks and Savings and Credit Societies, and what about the Organic Law of the Central Reserve Bank of El Salvador , especially with regard to their marketability and term, including matters relating to registration or not on a stock exchange. The notes and other securities issued in series or tranches, shall be entered in the Stock Market Public Registry bearing the Superintendency and then enroll in a stock exchange, subject only to the requirements listed in paragraphs f), g), h), i), j) of Article 9 of this Act.
individual securities issued by banks that sign on a stock Exchange, will in accordance with the instructions that it may establish, having the respective exchange, communicate to the superintendence, including at least the characteristics of the securities to be issued and the amounts approved, so that this information can be viewed by the public through the website of the Superintendency or otherwise prepared for that purpose, without the need for this entity the record. "
Art. 3. Adiciónese Article 6, paragraph four, letters l), m), n), o), p) and q) as follows:
l) Open Investment Fund;
M) Closed Investment Fund;
N) Investment Fund Managers;
O) Participation Shares Open Investment Fund Foreigners;
P) Participation quota Closed Investment Funds Foreigners; and
q) authorized to market participation fees of foreign investment funds entities. "
Art. 4. Refórmese Article 9 as follows:

"Art. 9. The Superintendent, at the request of a House of Brokers, settle in the Stock Market Public Registry to issuers and their securities issues, within fifteen working days from the day following receipt of the request reference and detailed information in this article.

Brokers Las Casas, will be responsible for ensuring compliance with the requirements and obligations of those seeking to establish itself as issuers in the Public Registry Stock Market and then enroll in a stock exchange; or that seek to settle their emissions in such registration or recording in the corresponding Stock Exchange. In any case, the issuer is liable that the information you provide is truthful, accurate and complete.
To register an issuer or issue with the Public Registry Stock Market and for subsequent registration in a stock exchange, it must be submitted to the Superintendency, the following information:
a) Copies of the testimony of the articles of incorporation office of the issuer and its duly registered in the Trade Register reforms and its current statutes deposited at the aforementioned record, if any; or if applicable, relate the Legislative Decree supporting the respective application;
B) List of partners or shareholders with its participation in the capital of the issuer, as well as its management and administrative structure, relating the relevant data corresponding identity documents. Payroll reference date must contain the date of the respective application information;
C) The financial statements of the issuer for the last three financial years, duly audited by external auditors registered in the Stock Market Public Registry that the Superintendency. In the case of issuers having less than three years of existence, must submit audited financial statements that have the date of the application;
D) If the issuer belongs to a business group, will provide: corporate name of the entities in the group; the financial statements of the parent entity and the issuer; payroll who are holders of a share of more than ten percent of the share capital and directors of these, plus the consolidated financial statements of the issuer with the entities in which it owns more than fifty percent in the capital as well as the list of directors and those who hold more than ten percent of the share capital of these. They should indicate the accounts recording transactions between group entities. If emissions of securities are guaranteed by an entity other than an institution regulated by the Banking Law and Law on Cooperative Banks and Savings and Credit Societies, it shall provide, where appropriate, the above information.
The Superintendency will require the consolidated financial statements of the corporate group to which the issuer belongs, whenever any of the members thereof have commercial or financial relations with the issuer, and that the issuer has constituted reserves sanitation ten percent or more than in any of the financial institutions of the system;
E) If there are business relationships, you must provide the corporate name of the related;

f) Agreement competent authority authorizing the issue. The issuance of securities representing the individual participation of their holders in a collective credit by an issuer, may be approved by the latter with only the agreement of its Board of Directors or corresponding governing body, except for issues of convertible bonds, for the authorization of the Extraordinary General Meeting will be necessary;
G) class value requested record and its characteristics, the testimony of the deed of issuance of corporate bonds issued in series or tranches; and in the case of shares, the testimony of the public deed of capital increase or certification of the increase in the book for that purpose carry the issuer, in the case of Variable Capital Joint Stock Companies.
Series or sections of emissions shall be determined by the competent authority of the issuer pursuant to its articles of incorporation, the material seat after granting the Superintendency and prior to placement on a stock exchange. Such series or tranches shall be communicated to the Superintendency through a brokerage house, must attach a copy of the agreement or decision on the matter has taken the competent authority of the issuer;

H) prospectus signed by an authorized person, which must include audited financial statements, consolidated auditor's report and any information relevant to issue guarantees, rights and duties of the issuer if applicable. It should also contain full views of the respective risk sorters. If the issuer belongs to a business group, should include the list of entities in the group;
I) When the issue be guaranteed with real or personal property shall be submitted documents to prove the existence, valued and warranty document of incorporation; and
j) risk classification of securities to be registered, issued by a Risk Rating. In the case of shares, the issuer classification will be accepted. The Superintendency may require other classification when it is presumed that the Classification has improperly applied the methodology of classification, has contravened the law by classifying, or has been manipulated information.
Having received the above information only in full by a House Brokers, and having the Superintendency verified compliance with legal and regulatory requirements that apply, it shall make the appropriate register within the prescribed period. Notwithstanding the foregoing, the Superintendency may request additional information or documentation the indicated above, when the documentation or information that has been submitted is not shown sufficient to establish the facts or information seeking to be accredited. In such circumstances, or in the case that the information is not presented in due form, the Superintendency for once, will prevent the House Brokers respective Exchange to remedy the deficiencies communicated or present additional documentation or information as appropriate, thus interrupting the prescribed period. Once the brokerage house has remedied the deficiencies

mention or presented in the documentation or information be required in due form, will continue to run the period indicated and, within it, will proceed to authorize the corresponding entry in the Stock Market Public Registry.
The provisions with respect to the term in the first part of the preceding paragraph shall not apply, when the seat of securities in the Stock Market Public Registry requested, whose characteristics differ significantly to those recorded in the Salvadoran market values. Poised
the issuer or issue in the Stock Market Public Registry, the House of Brokers respective registration request to a stock exchange, and shall accompany the application, certification of the corresponding seat and the information has been submitted to the Superintendency . Joined issuer or issue, the Exchange will communicate it to the Superintendency.
The seat of an issuer or an issue in the Stock Market Public Registry, will only be subject to verification of compliance with the requirements of the Act and the regulations thereon issued by the competent authority. The seat reference does not imply certification on quality of value or the solvency of the issuer. This information must be within the documents through which public offering of securities is made, having to literally consign the following: "The object of this offer values ​​are recorded in the Public Registry of the Superintendency of Securities Financial System. Your registration does not imply certification of the value or quality of the issuer's solvency. " In any case, this information must be in the prospectus, if applicable values ​​and advertising of the issuer with respect to their emissions.
In the documents mentioned in the preceding paragraph, must also contain a reason to literally say. "The registration of the issue on the Exchange does not imply certification of the quality of value or solvency of the issuer" If
the issuer offer a guarantee issued by a regulated by the Banking Act and the Act on Cooperative Banks and Savings and Credit Bank on the entire issue, was relieved of meeting the requirements set forth in subparagraphs b) d) and e) of this Article to register as such and settle their issue and include in the prospectus information about groups and business relations.
When in compliance with what is stated in this article, the brokerage house does not submit to the Superintendency original documents, photocopy all this, must be notarized Salvador. "
Art. 5. Refórmese Article 9-A, as follows:

"Art. 9-A.- When attempting to form a public limited company by public subscription and promoters wish that the process of selling subscriptions is performed on a Stock Exchange will apply the rules contained in the Commercial Code and regulations for this effect may be issued. When reference is made to the office exercising supervision of the State in the Commercial Code, it is understood to be the Superintendency.
In any case, developers must provide, at least fifty percent of the share capital. This contribution will be in cash.

Promoters must attach to the application of social constitution by public subscription the program referred to in Article 198 of the Commercial Code, which should include a study on the feasibility of the project is concerned, clearly indicating the destination of the resources. This destination can not be changed.
The feasibility study in the preceding paragraph refers, it shall be deposited in the Registry of Commerce. From the date of such deposit, developers will have 180 days to complete the subscription process; Otherwise, they must return what captured. Subscriptions captured restricted accounts shall be maintained in accordance to what the Superintendency resolve the matter. Promoters should be widely disseminated on the project itself and its future managers.
The social designation included in the program, must be different from the name of any company registered in the Register of Commerce at that time, and from that moment may not be recorded in the said register, any society that claims to adopt the same name. This restriction will be in effect until the occurrence of any of the following circumstances:
a) Is within one hundred and eighty working days elapsed from the date the deposit to which it referred was made;
B) To submit for its corresponding entry in the Commercial Register, the Public Deed of incorporation of the company constituted by public subscription, which must bear a reason signed by the Superintendent stating compliance the same with the draft of constitution contained in the program deposited in the Registry of Commerce; and
c) If the Superintendent notifies the Registry of Commerce on the definitive suspension of the subscription process. "
Art. 6. Refórmese Article 10 and its heading, as follows:
Art. 10. The securities issued by states and central banks of Central American countries, as well as Regional and International Financial Organizations of which the State of El Salvador and the Central Reserve Bank of El Salvador are members, may be subject to tender public. When a House Brokers intends to negotiate such securities in the local market, must be processed prior authorization in the Superintendency, and for this purpose sufficient to submit a certificate issued by the Stock Exchange in which they were originally listed, or copy of the agreement authorizing the issuance of such securities or the respective Legislative Decree. Once granted the authorization from the Superintendency, such securities must be registered in a bag, so they can be offered to the public.
The securities issued by states and institutions responsible for the management of monetary policy of foreign countries not mentioned in the preceding paragraph; as well as those issued by companies, organizations, corporations or any kind of legal, public or private, of any foreign country may be publicly offered in the secondary market, where previously the request of a House of Brokers, settle in Stock Market Public Registry and register

later on a stock exchange, for which they must meet the following requirements:
a) are registered in a regulatory or supervisory body, or traded on an organized securities, such as stock exchanges, electronic market, over the counter markets or equivalent, which have similar or higher requirements of regulation and supervision with respect to those of El Salvador;
B) information values, is available in international stock systems or financial information recognized by the Superintendency;
C) come from a country or jurisdiction in which an organized securities market, which have similar or higher regulatory and supervisory requirements regarding El Salvador's work; Y,

D) they have at least one existing international risk classification. In the case of sovereign debt and equities will take into account the risk classification of the country of origin or of the issuer, as applicable. The Central Bank, through technical standards, determine the requirements for foreign securities which by their nature do not have Risk Classification, so that they can be registered and trading in the local market.
Risk ratings issued abroad to the values ​​referred to in this article shall be valid in El Salvador provided they have been granted by Classification Societies International Risk, recognized by the Securities Commission of the United States of America called securities and Exchange Commission (SEC), or which have been granted by foreign Risk Classification Societies which are registered in the supervisory body of the stock market in their respective country of origin.
The brokerage houses wishing to conduct operations with the values ​​which this article refers, must request authorization prior to the Superintendency. The Superintendency shall grant the authorization when the House applicant Brokers attesting that account, at all times, with human and technological resources to provide investors with information about the values ​​to register to appear in the international financial systems market information or . The authorization granting the Superintendency will have a maximum duration of one year and its extension is subject to a prior assessment that entity make compliance with the requirements that were considered for initial authorization. If the evaluation results in the House of Brokers lacks the capacity or the means necessary for the execution of such operations, the renewal will be denied. Similarly, the authorization shall be revoked if granted within one year of the requirements for granting be considered desmejoren.
Prior to the trading of securities, there must be an agreement between a company specializing in the storage and safekeeping of securities and Salvadoran foreign and security that provide custody and immobilisation of the securities trading. In addition, in the Convention shall establish the form of settlement of such transactions.
Las Casas Brokers can perform operations outside a Salvadoran Stock Exchange,

only to purchase in the primary market or secondary market trading outside the Republic values ​​referred to this provision, provided they are settled in the Public Registry Stock Market and registered on a stock, according appropriate. In these cases, the transaction must be registered in a stock exchange, with each bag to keep track of all operations of this type Houses made.
Las Casas Brokers must report daily to the Superintendency of transactions in foreign securities by indicating the characteristics of the traded securities and participants. This Article shall not apply to trading in the local market share quotas of foreign investment funds, whether closed, open or representative stock index or fixed income. Marketing quotas indicated above shall be governed by what available about the Investment Funds Act. "
Art. 7. Refórmese Article 33 as follows:
"Art. 33.- Issuers of publicly offered securities, in order to give effect to what is stated in Article 3 of this Law shall apply through a House of Brokers, his seat on the Stock Market Public Registry that the Superintendency and subsequent registration on a stock exchange, as well as that of its securities; for it shall submit the information required under this Act and meet the requirements of the regulations and the instructions that the matter be issued.
The bags have a period of ten business to decide on the registration days from the date of filing of the application accompanied by the relevant information; if that information is not presented in due form, the bag only once to prevent the House respective brokers to remedy the deficiencies of information, interrupting the run. Information received will continue to run the run, and within it, will proceed to decide on the registration.

The Board of Directors of the respective Exchange by point record may delegate to the President, or any other of its members, the power to decide on the registration Exchange issuers of securities and their related emissions. "| 8. || Art Refórmese the last paragraph of Article 41 as follows:
"After each negotiating session, the Stock Exchange, through its website and in any other medium, shall put publicly available a newsletter that completed transactions are indicated, the amounts of securities traded and their prices, as well as firm offers both buying and selling in relation to each negotiated value. "
Art. 9. Refórmese Article 43 as follows:
"Art. 43. If the number of brokerage houses registered in a stock exchange were reduced to two, or minimum capital of a stock exchange, were reduced to less than those established in this Act figures, without prejudice to actions that are incumbent to the Superintendency in the exercise of its oversight function, the Stock Exchange in question shall notify the Superintendent such facts. In the first case, the Superintendency will grant within one hundred eighty days for a new house Corridors, which may be extended once for an equal period is constituted, to

request concerned the Stock Exchange. If the expiry or extension persist deficiency, the Superintendent shall revoke the authorization to operate the respective stock exchange, which will be done according to the procedure laid down in Article 18 of this Law. The revocation will produce the dissolution of the Exchange Securities concerned with the relevant legal purposes.
When the Superintendency aware of the capital reduction to the preceding paragraph, it shall allow a period of ninety days to remedy it. If not remedy a, the Superintendency at the request of the Stock Exchange concerned, may extend the term up to ninety additional days. Patrimonial deficiency persists, the Superintendency will proceed to revoke the Stock Exchange in question, the authorization to operate, which will be done according to the procedure outlined in the preceding paragraph.
Revocation If the Superintendent shall disseminate immediately on its website and in a national newspaper, under the Stock Exchange, no later than two business days after that decision. "
Art. 10. lntercálese between Articles 60 and 61, Article 60-A and heading, as follows:
"Individual Portfolio Management
Art. 60-A.- Las Casas Brokers can perform individual operations portfolio management, understanding this as all investments made by such companies, with the resources of an investor, on behalf of this and their property, for which they must hold a contract with the investor in the investment choices according to your needs, your risk profile and established a certain period; Likewise, the contract shall stipulate that investor risk such investments will be made by the Houses of Runners account and. In any case, these contracts may be of accession.
In such contract shall be set forth the broad parameters of investment of the investor as well as the rights and obligations of the parties. Houses Brokers must express that accept the management requested by the investor and the authorizations granted to perform them.
Las Casas Brokers, for operations individual portfolio management, prior to the Superintendency requested authorization must perform these operations with the diligence of a good trader in own business.

Las Casas Brokers must be identified at all times, securities, bank deposits, cash and ongoing operations of each investor must keep legal, accounting and financially separate from the rest of investors and their property. Houses Brokers shall be entitled to contract on behalf of investors, securities deposits and bank deposits, if and when you are prescribed and authorized by them in the contract that the first paragraph of this article refers to, looking for that purpose the provisions of the Law Against Money Laundering and Asset, especially with regard to the knowledge of investors. Securities acquired, where appropriate, according to their nature, must remain in custody in an entity authorized under the Act also Houses Brokers must report monthly and detail each of the investors, on the outcome. Bank deposits , investments, commissions earned, securities bought and sold during the corresponding period and the resulting balance.

Las Casas Brokers must keep a record for each investor, in which their bank deposits, investments, movements of funds received or delivered, as well as the securities purchased or sold, including performance pay, management fees and others. All movements must be accredited by issuing proof of income and expenses.
In no case the House of Brokers act differently from the provisions of the contract and the instructions verifiable manner and in advance received from the investor.
Las Casas Brokers will not guarantee returns or capital of the securities in the individual portfolio they manage.
The Central Bank will issue technical standards necessary for the application of this Article. "
Art. 11. Intercálese between Articles 67 and 68, Article 67-A and heading, as follows:
Securities Industry Foreign Art. 67-A.- Foreign companies may operate in the trading systems of Stock Exchange organized under Salvadoran law, not on behalf of investors domiciled in El Salvador, prior authorization from the Superintendency. The Superintendency shall grant the authorization in question, when it is so requested by the interested foreign company, through the Stock Exchange in which it intends to operate, and the applicant meets the following requirements:
a) In your country there is a source organized securities market, which have similar or higher regulatory and supervisory requirements with respect to those of El Salvador;
B) The company is legally incorporated under the laws of the country of origin;
C) who is authorized by the competent authority in their country of origin, to carry out the activities that a House of Stockbrokers incorporated under national law, is authorized to perform in the country;
D) To designate a representative established in El Salvador with sufficient powers to bind the company;
E) To bring an address in the city of San Salvador to receive notifications;
F) submission to protest the laws, courts and authorities of the Republic of El Salvador, in relation to acts, rights and obligations acquired in the Salvadoran territory, or who have effect on it;
G) has met the requirements of the internal regulations of the Stock Exchange in which it intends to operate as a foreign corporation; and

11 h) is obliged to give effect to the instructions issued by the Stock Exchange in which it intends to operate and regulations that may be applicable.
These companies are prohibited from providing any activities related to own a brokerage house, to persons or entities domiciled in El Salvador services. Excepted from the above, the services rendered between the foreign companies and brokerage houses organized under Salvadoran law.
The Superintendent shall revoke the authorization granted when the foreign company violates the provisions of this article. Prior to revoke the authorization, the Superintendency send to hear the foreign company in the direction that had been set up to receive notifications, for a period not exceeding eight working days to rule on the matter. After the prescribed period with foreign answered by or in absentia society, the Superintendent will decide on the revocation.

The Central Bank will issue technical standards necessary for the application of this Article. "
Art. 12. derogated Articles 113, 113-A, 113-B and 113-C.
Art. 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, on the fourth day of September of the year two thousand and fourteen.
OTHON Sigfrido Reyes Morales, president.

PRESIDENTIAL HOUSE: San Salvador, this twenty-ninth day of September in the year two thousand and fourteen.
Salvador Sanchez Ceren, President of the Republic.
Merlin Alejandrina Lopez Barrera, Deputy Minister of Trade and Industry,
charge of the Office.
Juan Ramon Caceres Carlos Enrique Chavez, Minister of Finance.
Tomo OJ No. 184 No. 405 Date: October 6, 2014
FN / pch 05/11/2014