Reforming The Law Of Securities.

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

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1. Decree No. 792, the Legislative Assembly of the Republic of EL SALVADOR: I.-that the State interest is to promote the economic and social development, creating conditions for a modern and efficient financial system that offers different options of saving and investment in the economy.
II.-that by Legislative Decree N ° 809, dated February 16, 1994, published in the official journal N ° 73 BIS, Tome N ° 323, dated 21 April of that same year, was approved the law of the stock market, to develop a stock market efficient, in an atmosphere of healthy competition, with a bid of the same driven by financial intermediaries authorized, with complete and audited information on issuers of such securities and the organized markets such as the stock exchanges, where transactions are conducted in a safe and expeditious manner, and making sure to provide the flow of appropriate information to the public in general.
III.-that the creation of an investment fund law, entails the realization of reforms to the law of the stock market to harmonise these legal bodies.
Therefore, use of his constitutional powers and at the initiative of the deputies Douglas Leonardo Mejia Aviles, Antonio Echeverría Veliz, Luis Roberto Angulo Samayoa, Francisco José Zablah Safie and Edwin Victor Alejandro Zamora David.
DECREES, following reforms to the: law of the market of values article 1.-reforming article 3, in the following manner: "article 3.-any value that is the subject of public offerings, as well as issuers of them must settle the stock public register, which for this purpose take the Superintendency, and subsequently enroll in a stock." Registration in the Superintendence 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 subject to public offering, without need to settle them in the above mentioned stock public record. In the event that the State or the Central Reserve Bank of El Salvador wish to negotiate their values in a bag, only presented to the respective Stock Exchange certification agreement authorizing issuance, or the respective legislative decree, who shall report it 2 the Superintendent's office. However, if emissions referred to in this subsection are not settled in the public stock market record, CAs shall send to the Superintendent information which, by a reasoned decision, is required to by the Council in the manner and frequency determined by this.
The exception referred to in the first part of the preceding paragraph does not include to the autonomous decentralized institutions."
Article 2.-reforming article 4, in the following manner: "article 4.-securities issued by banks, will be governed by the provisions laid down in the banking law, law of cooperative banks and credit unions, and that in this respect has the organic law of Central Bank reserve of El Salvador, especially in relation to its marketability and term , including related to your registration or not on a stock exchange. The negotiable debentures and other securities issued in series or sections, should settle in the register public stock carrying the Superintendency and subsequently enroll in a stock exchange, only complying with the requirements indicated in the literal f), g), h), i), and j) of article 9 of this law.
Individual securities issued by banks registered in a stock exchange, will do so in accordance with instructions that this set, and bag respective, communicate it to the Superintendency, indicating at least the characteristics of securities issue and approved amounts, so that this information can be consulted by the public, through the Superintendence web site or otherwise enabled for this purpose ", without that this entity register them."
Article 3.-Add to article 6, fourth paragraph, the letters l), m), n), or), p) and q) follows: l) of funds investment open;
(m) of closed-end investment funds;
(n) of investment fund managers;
or) quota of participation of foreign open mutual funds;
(p) of closed foreign investment funds participation fees; (y, q) of entities authorized to sell shares of participation of foreign investment funds. "
Article 4.-reforming article 9, in the following manner: "article 9.-the Superintendent, at the request of a House of runners, will seat in the public register stock issuers and their corresponding emissions values, within a period of up to fifteen working day period from the day after receipt of the request in reference and information detailed in this article."

3. the houses of runners, will be responsible for ensuring compliance with the requirements and obligations of those who intend to settle as emitters in the public stock market record and subsequently sign up on a stock exchange; Alternatively, who intend to establish their emissions in the mentioned registry or register them in the stock matching. In any case, the issuer shall be liable that the information provided is truthful, accurate and complete.
To register an issuer or an emission in the register public stock and for entry in a stock exchange, must be presented in the Superintendency, the following information: a) copies of the testimony of the deed of incorporation of the issuer and its amendments duly inscribed on the register of Commerce, as well as its current statutes duly deposited in the aforementioned register social If it be the case; or if applicable, relate the legislative decree that supports the respective application;
(b) list of partners, or shareholders with their participation in the capital of the issuer, as well as their managers and agents administrative, relating the relevant data of their relevant identity documents. Payroll reference should contain updated information to the date of the respective application;
(c) the financial statements of the issuer, for the last three years, duly audited by external auditors registered in the register public stock which has Superintendence. In the case of issuers that have less than three years of existence, must submit audited financial statements that have the date of the application;
d) in the event that the issuer belongs to a business group, should provide: name or business name of the entities that make up the Group; the financial statements of the parent entity and CA; Payroll who are holders of a stake of more than 10% in the share capital and of the directors of these, also the consolidated financial issuer with entities where is holder of more than fifty percent in the capital, as well as the payroll managers and who are holders of more than 10% in the registered capital of these. Accounts that record transactions between the companies of the group must be indicated. In the event that the emissions values are guaranteed by an entity that is not an institution regulated by the law on banks and cooperative banks and savings and credit Societies Act, this must provide, where appropriate, the above information.
The Superintendent will require the consolidated financial statements of the business group to which belongs the issuer, whenever any of the members of the same commercial or financial relations with the issuer, and the issuer have constituted reserves of sanitation of ten percent or more in any of the financial institutions of the system;
e) in the event that there are business relations, must provide the name or business name of the related;

(4 f) competent authority agreement authorizing the issuance. The issuance of securities that represent the individual participation of the holders in a collective credit in charge of an issuer, may be approved by this with only the agreement of its Board of directors or corresponding administrative body, except for emission of bonds convertible into shares, which will require the authorisation of the extraordinary General meeting;
(g) class of value being requested to register and its characteristics, the testimony of the public deed of issuance of negotiable bonds issued in series or sections; and in the case of shares, the testimony of the public deed of capital increase or the certification of the increase in the book that, to this effect, carry the transmitter, if case of Variable Capital corporations.
Series or sections of the emissions shall be determined by the competent authority of the issuer in accordance with its articles of incorporation, subsequent to the seat material providing the Superintendency and prior to placement on a stock exchange. These series or sections should be given to the Superintendent by a bag house of brokers, and must attach a copy of the agreement or resolution on the matter has taken the competent authority of the issuer;

(h) leaflet issue signed by authorized person, which must include audited, consolidated financial statements where appropriate, opinion of the auditor and any relevant information on issuing guarantees, rights and duties of the issuer. It must also contain the complete views of the respective risk classifiers. If the issuer belongs to a group of companies, you must include the list of entities that make up the Group;
(i) when the broadcast is guaranteed with movable or immovable property must submit the documents evidencing the existence, the valued and the creation of Security document; and j) the classification of risk values to register, issued by a sorting of risk. In the case of shares, the classification of the issuer will be accepted. The Superintendent may require another classification when suspected that sorting machine has improperly applied the methodology of classification, has breached the law by classifying, or been tampered with the information.
Received only the above information in the form completed by a House of brokers, and having the Superintendence verified compliance with legal and regulatory requirements that apply, will proceed to carry out the relevant registration within the time limit. However this, the Superintendent may request information or additional documentation indicated above, when the documentation or information that has been presented proves not enough to establish the facts or information intending to register. In such circumstances, or in the event that the relevant information is submitted in due form, the Superintendent only once, will prevent the respective stock exchange brokers home so he rectified the shortcomings that communicate you or submit documentation or additional information, as appropriate, interrupted in this way the deadline. Once the House of brokers has corrected deficiencies 5 in mention or presented the documentation or information required to properly, it will continue running the indicated and, within the same term, shall authorize the corresponding seat in the public stock market.
The provisions with respect to the term in the first part of the preceding paragraph, shall not apply, when prompted for the seat of securities in the register public stock, whose characteristics differ significantly to those registered on the Salvadoran stock market.
Seated the issuer or issue in the register public stock, the respective House of brokers will request your registration to a stock exchange, and will accompany the application, the certification of the corresponding seat and the information that has been submitted to the Superintendency. Registered the issuer or issue, the stock exchange shall notify the Superintendent.
Seat of an issuer or broadcast in the public stock market, will only be subject to the verification of compliance with the requirements laid down in the law and in the regulations that handed down by the competent authority in this regard. Seat in reference does not imply certification of the quality of the value or the solvency of the issuer. This mention shall appear on the documents by means of which becomes a public offer of securities, must be entered literally as follows: "the values object of this offer are settled in stock public record of the Superintendence of the financial system. Registration does not imply certification of the quality of the value or the solvency of the issuer". In any case, this mention shall appear in prospectuses, values in your case and in the advertising of the issuer with respect to their emissions.
In the documents referred to in the preceding paragraph, shall also include a reason that literally says: "the inscription of the emission in the bag does not imply certification of the quality of the value or the solvency of the issuer."
((In the event that the issuer offers a guarantee issued by a bank that is regulated by the law on banks and the law of cooperative banks and credit unions, on the entire issue, is you shall meet the requirements outlined in the literal b), d) and e), of this article to register as such and to establish their emission as well as include in the prospectus information about groups and business relations.
"When in compliance with stated in this article, the Casa de Bolsa broker not introduced to the Superintendency original documentation, all copy submitted, must be certified by notary Salvadoran."
Article 5.-reforming article 9-A, in the following manner: "article 9-A-when a Corporation intends to be constituted by public subscription and developers want to make the process of selling subscriptions on a stock, apply you the standards contained in the code of Commerce and regulations that are handed down for this purpose." Where in the code of Commerce is made allusion to the office exercising State supervision, means that it is the Superintendent.
In any case, the promoters must provide, at least fifty per cent of the share capital. This contribution must be in cash.

6. the promoters shall attach to the social Constitution by public subscription request programme referred to in article 198 of the code of Commerce, which should include a study on the feasibility of the project, clearly indicating the destination of the resources. This target cannot be changed.
The feasibility study referred to in the preceding paragraph, shall be deposited in the register of Commerce. From the date of such deposit, promoters will have 180 days to complete the subscription process; otherwise, they must return the captured. Captured subscriptions must be kept in restricted accounts, in accordance with what in this regard meet the Superintendency. The promoters must be wide dissemination on the project itself and its future managers.
The corporate name that were on the program, must be different from the name of any registered company in the trade register at that date, and thereafter may not be registered in the mentioned registry, any company that intends to adopt the same denomination. This restriction will be in effect, until any of the following circumstances: to) that has elapsed the period of one hundred eighty days counting from the date that the deposit was made to which has become a reference;
(b) that is present to their corresponding registration in the trade registry, the public deed of incorporation of the company incorporated by public subscription, which must be a reason endorsed by the Superintendent, indicating compliance with the draft articles of association contained in the program deposited in the register of Commerce; (y, c) in case that the Superintendency to notify the trade register on the definitive suspension of the subscription process. "
Article 6.-reforming article 10 and its heading, in the following manner: "offer public Art. 10 foreign securities-securities issued by States and of the Central American countries central banks, as well as by financial bodies regional and international of which the State of El Salvador or the ECB reserve of El Salvador are members, may be tender." When a broker House intends to negotiate such securities in the local market, you must obtain prior authorization in the Superintendency, and for this purpose will suffice with a certificate issued by the stock exchange which is originally listed them, or copy of the agreement that authorizes the issuance of such securities or of the respective legislative decree. Once granted the authorization for the Superintendence, such values must be entered in a bag, so that they can be subject to tender.
Securities issued by States and by the institutions responsible for the management of monetary policy from foreign countries not mentioned in the previous paragraph; as well as those issued by companies, entities, corporations or any legal, public or private persons, from any foreign country, may be subject to public offering in secondary market, provided that previously and at the request of a House of brokers, settle in the public stock market record and registering 7 later on a stock exchange, for which it must comply with the following requirements (: a) which are registered in a regulatory or supervisory body, or traded on an organized stock market, such as stock exchanges, electronic, markets on the counter or its equivalent, markets which have similar or higher requirements of regulation and supervision with regard to the case of El Salvador;
(b) that the information of the values, is available in stock information systems or international financial recognized by the Superintendent;
(c) that it should come from a country or jurisdiction in which operate an organized stock market, which have similar or higher requirements of regulation and supervision with regard to the case of El Salvador; and,

(d) that you have at least one classification of existing international risk. In the case of sovereign debt and the actions it will take into account the risk classification of the country of origin or of their issuer, as appropriate. The Central Bank, by means of technical standards, may determine the requirements that must be satisfied the foreign securities which by their nature do not meet risk classification, so that these can be subject to registration and trading on the local market.
Risk ratings granted abroad the values referred to in this article shall be valid in El Salvador provided that they have been granted by societies sorters of risk international, recognized by the Securities Commission of the United States of America called the Securities and Exchange Commission (SEC), or which have been granted by societies sorters risk foreign that are registered in the supervisory body of the market values of their respective country of origin.
The houses of bag runners wishing to perform operations with the values referred to in this article, must apply for authorization to the Superintendency. The Superintendent shall accredit when requesting brokers House credit has, at all times, the human and technological resources to provide investors information about the values to register to appear in international financial or stock market information systems. The authorization given in the Superintendence shall have a maximum duration of one year and its extension shall be subject to a prior assessment that that entity carried out in compliance with the requirements that were considered for initial authorisation. If the assessment resulting in runners House lacks the capacity or the resources necessary for the execution of such operations, the renewal will be refused. Similarly, the authorization shall be revoked if within one year of granted considered requirements desmejoren to grant it.
Prior to the negotiation of values, there must be an agreement between a company specializing in deposit and custody of securities Salvadoran and a foreigner who facilitate and give security to the custody and detention of values subject to negotiation. In addition, the Convention must set the form of settlement of such transactions.
The homes of brokers may be operations out of a bag of values Salvadoran, 8 only to acquire in primary market or trading in the secondary market outside the Republic values referred to in this provision, provided they are seated in the public stock market record and enrolled in a bag, as appropriate. In these cases, operation should be registered on a stock exchange, and each bag must keep a record of all operations of this type that houses.
Houses of brokers must inform daily to the Superintendency on operations with foreign securities that they carried out, indicating the characteristics of the traded securities and the participants. This article shall not be applicable to the trading in the local market of shares of participation of foreign investment funds, be they closed, open or representative of stock indices and fixed income. "The commercialization of the above quotas shall be governed by what concerning the law of investment funds."
Article 7.-reforming article 33, in the following manner: "article 33.-issuers of publicly offered securities, in order to comply to the stated in article 3 of this law, must apply through a House of brokers, their seat in stock public record that carries the Superintendence and entry in a bag" as well as the their emission values; to do so must submit the information referred to in this law and meet the requirements set out in the regulations and instructions that are issued in this regard.
Bags will have a period of ten working days to resolve on the inscriptions, from the date of the presentation of the respective request accompanied by the relevant information; If that information is not presented in due form, the bag only once will prevent to the respective House of brokers that remedy the shortcomings of the information, interrupting the time limit. Received information will continue running the term, and within it, will have to resolve on the inscription.
The directive Board of the respective bag by point of Act may delegate the President, or any other of its members, the right to resolve on the inscription on the transmitters of values and their corresponding emissions Exchange."
Art 8.-reforming article 41, follows last paragraph: "After each negotiating session, the stock exchanges, through your website, internet and other means, shall be publicly available a newsletter in which we indicate completed operations, the quantities of traded securities and their prices, as well as offers firm both purchase and sale relative to each negotiated value."
Article 9.-reforming article 43, in the following manner: "article 43.-If the number of homes of brokers listed on a stock exchange is redujere two, or the amount of capital of a stock exchange, is redujere to figures lower than those laid down in this law, without prejudice to actions that are incumbent upon it to the Superintendent in the exercise of its oversight function the stock exchange concerned shall notify the Superintendent such facts. In the first case, the Superintendent will grant within one hundred and eighty days that constitute a new House of brokers, which may be extended once for a period equal to 9 application of the interested stock. If the expiry of the term or its extension persists deficiency, the Superintendent revoke authorization to operate the respective Stock Exchange, which will be made in accordance with the procedure laid down in article 18 of this law. The recall will result in the dissolution of the stock in question, the relevant legal effects.
When the Superintendent was aware of reduction of capital referred to in the preceding paragraph, shall accord within ninety days to remedy it. If not it remedied within period, the Superintendent at the request of the interested bag, may extend the deadline by up to 90 additional days. If asset deficiency, the Superintendency will proceed to revoke the stock concerned, authorization to operate, which shall be in accordance with the designated procedure in the previous section.
In the event of revocation the Superintendency must disseminate it immediately on its web site and in a national newspaper, charged to the stock exchange, later than two business days after such a resolution."
Article 10.-lntercalese between articles 60 and 61, the 60-A article and their heading, in the following manner: "Individual portfolio article 60-A.-the homes of brokers management may perform operations of individual portfolio management, understanding this as a set of investments that perform such societies, with the resources of an investor, on behalf of this and your property , for which will be held with the investor a contract that established the selections of investment according to your needs, your risk profile and a certain period; Likewise, the contract provide that such investments will be carried out by the House of brokers for account and risk of the investor. In any case, these contracts may be accession.
In the contract concerned must be consigned general parameters of investment of the investor, as well as the rights and obligations of the Contracting Parties. Houses of corridors should be expressed that they accepted management requested by the investor and the authorizations granted to perform them.
Houses of corridors, for operations of individual portfolio management, request authorization to the Superintendency, and must perform these operations with the diligence of a good dealer in own business.

Houses of brokers must be identified at all times values, bank deposits, cash and operations in course of each investor, and must keep them legal, accounting and financially separate from the rest of investors and their property. The homes of brokers shall have the authority to contract on behalf of investors, securities deposits and bank deposits, provided it is so stipulated and authorized in the contract referred to in subsection first this article, noting to this effect the provisions of the Act against the laundering of money and assets, especially in relation to the knowledge of the investors. Acquired values, where required, by its nature, must be kept in custody in an approved entity in accordance with the law. Also the homes of brokers must inform monthly and in detail each of the investors, on the outcome of: bank deposits, investments, commissions earned, securities purchased and sold during the period that corresponds and the resulting balance.

10 houses of runners must keep a record for each investor, which include their bank deposits, investments, the movements of funds received or delivered, as well as the securities purchased or sold, performance pay, expenses of management and other. All movements must be accredited through the issuance of proof of income and expenses.
In any case the House of brokers will act differently to provisions of the contract and the instructions in a verifiable manner and prior has received from the investor.
Houses of runners must not make yields, or the capital of the values that make up the individual portfolio managed.
The Central Bank will issue technical standards which are necessary for the development of this article."
Article 11.-insert between articles 67 and 68, the 67-A article and their heading, in the following manner: "foreign stock market intermediaries article 67-A.-foreign companies can operate in the systems of trading in a stock constituted under Salvadoran law, borne by non-domiciled investors in El Salvador, authorization of the Superintendency." The Superintendent shall grant authorization in mention, when so requested him by interested foreign society, through the stock exchange in which it intends to operate, and the applicant complies with the following requirements: to) that in their country of origin there is an organized stock market, which have similar or higher requirements of regulation and supervision with regard to the case of El Salvador;
(b) that the society is legally constituted in accordance with the laws of the country of origin;
(c) that is authorized by the competent authority in their country of origin, to carry out the activities that a bag house of corridors according to national laws, is authorized to be in the country;
(d) to appoint a representative domiciled in El Salvador with sufficient powers to compel society;
e) that point to an address in the city of San Salvador for receiving notifications;
(f) to protest submission to the laws, courts and authorities of the Republic of El Salvador, in relation to acts, rights and obligations you purchase in the Salvadoran territory, or to be effect in it;
(g) that you have met the requirements of the internal rules of the stock exchange in which it intends to operate as a foreign company; and 11 h) that undertakes to comply to the instructions issued by the stock exchange in which it intends to operate and with the rules which it applies.
He is prohibited to these societies provide any type of service related to activities of a Casa de Bolsa broker, to persons or entities domiciled in El Salvador. They excepted, the services provided, foreign corporations and houses of runners bag constituted in accordance to the Salvadoran legislation.
The Superintendent shall revoke the authorization granted, when the foreign company fails to comply with the provisions of this article. Prior to revoke the authorization, the Superintendent will send to hear foreign society, in the direction which had been set to receive notifications, so that within a period not exceeding eight working days to rule on the matter. Once the designated period, with it answered by the foreign company or in their defiance, the Superintendent shall take a decision about the recall.
The Central Bank will issue technical standards which are necessary for the development of this article."
Article 12.-repeal of articles 113, 113-A, 113-B and 113-C.
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, to the four days of the month of September in the year two thousand fourteen.

Presidential House: San Salvador, twenty-nine days of the month of September in the year two thousand fourteen.
PUBLISHED, Salvador Sanchez Ceren, President of the Republic.
Merlin Alejandrina Barrera Lopez, Deputy Minister of trade and industry, in charge of the firm.
Juan Ramon Carlos Enrique Caceres Chavez, Minister of finance.
D. o. No. 184 volume no. 405 date: 6 October 2014 FN/pch 05-11-2014 legislative index