Reforming The Law Of Securities.

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

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LEGISLATIVE ASSEMBLY-REPUBLIC OF EL SALVADOR ____________________________________________________________________





I-That it is the State's interest to promote economic and social development, creating conditions for a modern and efficient financial system that offers different options for saving and investing in the economy.

II.-That by Legislative Decree No. 809, dated February 16, 1994, published in the Journal Officer N ° 73 BIS, Volume N ° 323, dated April 21 of that same year, the Law of the Market of Values was approved, to develop an efficient market of values, in an environment of healthy competition, with a public offer of the same, conducted by authorised financial intermediaries, with complete and audited information on the issuers of such securities and on the markets organised as the Stock Exchanges, where transactions are carried out in a safe and expeditious manner, and the flow of information that is appropriate for the general public is provided.

III. creation of an Investment Funds Law, entails the realization of reforms to the Law of the Market of Values to harmonize these legal bodies.


in use of its Constitutional faculties and at the initiative of the Deputies Douglas Leonardo Mejía aviles, Antonio Echeverria Veliz, Luis Roberto Angulo Samayoa, Francisco Jose Zablah Safie and Edwin Victor Alejandro Zamora David.

DECCRETA, the following reforms to the:


Art. 1.-Reform Article 3, as follows:

" Art. 3.-Any value that is the subject of a public offer, as well as the issuers thereof, must be settled in the Public Stock Registry, which for this purpose will take the Superintendence, and subsequently be registered on a Stock Exchange. The record in the Superintendence will be final.

The State and the Central Reserve Bank of El Salvador, as well as the securities issued by them, will be exempt from the above. need to settle them in the aforementioned Public Stock Register. In the event that the State or the Central Bank of El Salvador wishes to negotiate its securities on a stock exchange, they will only submit to the respective Exchange the certification of the agreement authorizing the issuance, or the respective Legislative Decree, who you should report it

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to the Superintendence. Notwithstanding the foregoing, if the issues referred to in this paragraph are not settled in the Public Stock Register, the issuing entities shall forward to the Superintendence the information which, by reason of their reasoned resolution, is required by the Council in the form and periodicity to be determined by the Council.

The exception referred to in the first part of the foregoing paragraph does not include the Decentralized Autonomous Institutions. "

Art. 2.-Reform Article 4, as follows:

" Art. 4.-The securities issued by Banks shall be governed by the provisions laid down in the Law of Banks, the Law of Cooperative Banks and Savings and Credit Societies, and in this respect the Organic Law of the Central Reserve Bank of El Salvador, especially as regards its negotiability and deadline, including the related to its registration or not on a Stock Exchange. Marketable debt securities and other securities issued in series or tranches shall be settled in the Public Stock Registry that carries the Superintendence and subsequently enrol in a Stock Exchange, complying only with the requirements (f), (g), (h), (i) and (j) of Article 9 of this Law.

Individual securities issued by the Banks which are entered on a Stock Exchange shall do so in accordance with the instructions laid down by the Securities Exchange. Respective bag, communicate it to the Superintendence, pointing at least the characteristics of the values to be issued and the amounts approved, so that this information can be consulted by the public, through the website of the Superintendence or other means enabled for such purpose, without the need for this entity to register them. "

Art. 3.-Add to Article 6 (4), point (l), (m), (n), (o), (p) and (q) as follows:

L) Of Open Investment Funds;

m) Of Closed Investment Funds;

n) Of Investment Funds Managers;

o) Foreign Open Investment Fund Participation Fees;

p) Foreign Closed Investment Fund Participation quotas; and,

q) Of entities authorized to market share of fund shares Foreign Investment. "

Art. 4.-Reform Article 9, as follows:

" Art. 9.-The Superintendence, at the request of a House of Brokers, will settle in the Public Registry Stock Exchange to the issuers and their corresponding securities issues, within a period of up to fifteen working days, counted from the day after received the request in reference and the information detailed in this article.

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The Brokers ' Houses will be responsible for ensuring compliance with the requirements and obligations on the part of those who intend to settle as issuers in the Public Stock Register and to register later on a Stock Exchange; or, to claim to settle their issues in the said register or to register them on the Stock Exchange Corresponding values. In any event, the issuer will be responsible for the information it provides to be truthful, accurate and complete.

To register an issuer or an issue in the Public Stock Registry and for subsequent registration on a Stock Exchange, it shall be present in the Superintendence, the following information:

a) Copies of the testimony of the issuer's social constitution and its duly registered reforms in the Register of Commerce, as well as its existing statutes deposited in the register referred to above, if applicable; or Legislative decree supporting the respective request;

b) Nomina of partners, associates or shareholders with their participation within the issuer's capital, as well as its administrators and administrative proxies, relating the data relevant to their relevant identity documents. The reference payroll shall contain information updated to the date of the respective application;

c) The issuer's financial statements, corresponding to the last three financial years, duly audited by external auditors registered in the Public Stock Registry that carries the Superintendence. In the case of issuers having less than three years of existence, the audited financial statements they hold at the date of the application shall be submitted;

d) Where the issuer belongs to a business group, it shall provide: the name or social reason of the entities that make up the group; the financial statements of the controlling entity and the issuing institution; payroll of those holding a participation of more than ten percent in the social capital and the directors of these, in addition to the consolidated financial statements of the issuer with the entities in which it is The president of the Social Security Council of the Social Security Council of the Social Security Council (B&A) said that the president of the Social Security Council will hold more than fifty percent in the social capital, as well as the payroll of the directors and those who are Accounts that record transactions between the entities in the group shall be indicated. In the event that the securities issues are endorsed by an entity other than an institution governed by the Law of Banks and the Law of Cooperative Banks and Savings and Credit Societies, the latter shall provide, where appropriate, the information before indicated.

The Superintendence will require the consolidated financial statements of the business group to which the issuer belongs, provided that any of the members of the issuer has commercial or financial relations with the issuer, and that The issuer has reserves of 10 percent or more in some of the system financial institutions;

e) If there are business relationships, the related name or social reason must be provided;

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f) Competent Authority Agreement authorizing issuance. The issuance of securities representing the individual participation of its holders in a collective credit by an issuer may be approved by the issuer with only the agreement of its Board of Directors or the corresponding management body, except for issues of convertible bonds into shares, for which the authorization of the Extraordinary General Meeting will be necessary;

g) Class of value to be registered and its characteristics, the testimony of the public deed of issuance of marketable debt securities issued in series or tranches; 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 the issuer carries for that effect, if it is a matter of Limited Companies of Variable Capital.

The series or tranches of the emissions shall be determined by the competent authority of the issuer in accordance with its social pact, after the material seat giving the Superintendence and prior to placing on a Stock Exchange. Such series or tranches shall be communicated to the Superintendence by means of a House of Brokers, and a copy of the agreement or resolution adopted by the competent authority of the issuer shall be attached;

h) Prospectus for the issuance of an authorised person, which shall contain audited financial statements, consolidated as appropriate, opinion of the auditor and any relevant information on guarantees of the issuer's issuance, rights and duties. It shall also contain the full views of the respective Risk Classifiers. If the issuer belongs to a business group, it must include the payroll of the entities that make up the group;

i) When the issue is secured with movable or immovable property the documents shall be presented as check the existence, the value and the guarantee constitution document; and,

j) The Risk Classification of the securities to be registered, issued by a Risk Classifier. In the case of shares, the issuer's classification shall be accepted. The Superintendence may require another classification when it is assumed that the Classifier has inadequately applied the classification methodology, has contravened the Law when classifying, or the information has been manipulated.

Received only the previous information in complete form by a House of Brokers, and having the Superintendence verified the fulfillment of the legal and normative requirements that correspond, the registration will be carried out within the time limit. Notwithstanding the foregoing, the Superintendence may request additional information or documentation from the above, where the documentation or information submitted shall not be sufficient to establish the facts or information that they intend to credit. In such circumstances, or in the event that the corresponding information is not presented in due form, the Superintendence for one time, will prevent the Casa de Corredores de Bolsa respective to remedy the deficiencies communicated to it or present documentation or additional information, as appropriate, thereby interrupting the deadline. Once the brokerage house has remedied the deficiencies

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in mention or submitted the documentation or information required in due form, continue to run the indicated period and, within it, the corresponding seat in the Public Stock Registry will be authorized.

The provisions regarding the deadline in the first part of the preceding paragraph shall not apply, when the securities seat is applied for in the Public Stock Register, the characteristics of which

Asgranted the issuer or the issue in the Public Stock Registry, the Casa de Corredores respective will request their registration to a Stock Exchange, and will accompany to the application, the certification of the seat concerned and the information which has been submitted to the Superintendence. The issuer or the issue shall be reported by the Exchange to the Superintendency.

The seat of an issuer or of an issue in the Public Stock Registry shall only be subject to verification of compliance with the established requirements. in the law and in the legislation which the competent authority dictates. The seat in reference shall not imply certification of the quality of the issuer's value or solvency. This statement must be included in the documents by means of which securities are offered to the public, with the following literally being shown: " The securities which are the subject of this offer are settled in the Public Registry of the Superintendence of the Financial System. Their registration does not imply certification on the quality of the issuer's value or solvency. " In any event, this indication shall be included in the prospectus, securities in its case and in the issuer's advertising in respect of its emissions.

In the documents referred to in the preceding paragraph, it must also state a reason that literally "The registration of the issue on the Stock Exchange does not imply certification on the quality of the issuer's value or solvency."

In case the issuer offers a guarantee issued by a Bank governed by the Law of Banks and the Law of Cooperative Banks and Savings and Credit Societies, on the entire issue, it will be exempted from the requirements stated in literals (b), (d) and (e) of this Article to register as such and to issue its issuance, as well as to include in the prospectus information relating to groups and business relationships.

When in compliance with the This article, the House of Brokers of the Stock Exchange will not present to the Superintendence original documentation, any photocopy you present, must be certified by a Salvadoran notary. "

Art. 5.-Reform article 9-A, as follows:

" Art. 9-A.-When an anonymous company intends to constitute a public subscription and the promoters want the process of selling the subscriptions to be carried out on a Stock Exchange, the rules contained in the Trade Code and the regulations which for this purpose are dictated. When the Trade Code refers to the office that exercises the supervision of the State, it will be understood that it is the Superintendence.

In any case, the promoters will have to contribute, at least, fifty percent of the social capital. This contribution should be made in cash.

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Promoters must attach to the application for a social constitution by public subscription the programme referred to in Article 198 of the Trade Code, which shall include a study on the feasibility of the project, clearly indicating the destination of the resources. This destination may not be modified.

The feasibility study referred to in the preceding paragraph must be deposited in the Trade Register. From the date of such deposit, the promoters will have 180 days to complete the subscription process; otherwise, they will have to return it. The subscriptions captured must be kept in restricted accounts, in accordance with the resolution of the Superintendence. The promoters will be required to broadcast widely on the project itself and its future administrators.

The social name included in the programme must be different from the name of any company registered in the Register of Trade to that date, and from that time on it may not be entered in the said register, no company intending to adopt the same name. This restriction will be in effect, until any of the following circumstances occur:

a) That the period of one hundred and eighty working days from the date on which the deposit was made has elapsed reference;

b) To be present, for its corresponding registration, in the Register of Commerce, the Public Scripture of the constitution of the company constituted by public subscription, which must bear a reason subscribed by the Superintendent, in which the conformity of the same with the draft writing of constitution contained in the program deposited in the Trade Registry; and,

c) In case the Superintendence notifies the Registry of Commerce about the final suspension of the subscription process. "

Art. 6.-Reform Article 10 and its heading, as follows:


Art. 10.-The values issued by the Central American States and Central Banks, as well as by Regional and International Financial Organizations of which the State of El Salvador or the Central Reserve Bank of El Salvador are Member States may be the subject of a public offer. Where a House of Brokers intends to negotiate such securities on the local market, it must process prior authorization in the Superintendence, and for that purpose it will suffice with a record issued by the Stock Exchange in which they were listed originally the same, or copy of the agreement authorizing the issuance of such securities or the respective Legislative Decree. Once the Superintendence has been granted authorization, these securities must be entered on a stock exchange, so that they can be the subject of a public offering.

The securities issued by the States and by the institutions responsible for the management of the monetary policy of foreign countries not mentioned in the preceding subparagraph; as well as those issued by companies, entities, corporations or all legal persons, public or private, of any foreign country, may be the subject of public offering on secondary market, provided that previously and at the request of a Brokers, settle in the Public Stock Register and sign up

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later on a Stock Exchange, for which you must meet the following requirements:

(a) That they are registered in a regulatory or audit body, or are listed on an organised securities market, such as Stock Exchanges, electronic markets, markets over the counter or their equivalent, which have similar or higher regulatory and supervisory requirements with respect to those of the Salvador;

b) That the information of the securities is available in international financial or stock information systems recognized by the Superintendence;

c) That they come from a country or jurisdiction in which A market of organized securities, which has similar or higher regulatory and supervisory requirements with respect to those of El Salvador; and,

d) that has at least one existing International Risk Classification. In the case of sovereign debt and shares, the Risk Classification of the country of origin or its issuer, as appropriate, shall be taken into account. The Central Bank may, by means of technical standards, determine the requirements to be met by foreign securities which by their nature do not have a Risk Classification, so that they may be subject to registration and negotiation in the local market.

The Risk Classifications granted abroad to the securities referred to in this Article shall be valid in El Salvador provided that they have been granted by International Risk Classification Societies, recognised by the Securities and Exchange Commission of the United States of America Commission (SEC), or which have been granted by Foreign Risk Classifying Societies that are registered in the securities market audit body of their respective country of origin.

The Exchange Brokers ' Houses who wish to carry out transactions with the securities referred to in this Article, shall request prior authorisation from the Superintendence. The Superintendence will grant authorization when the applicant's House of Brokers establishes that it counts, at all times, with the human and technological resources necessary to provide the investors with the information on the securities to register to appear on international securities or financial information systems. The authorisation granted by the Superintendence shall be for a maximum period of one year and its extension shall be subject to a prior assessment by the Superintendence of compliance with the requirements which were considered for initial authorisation. If the assessment results in the House of Brokers lacking the capacity or means necessary for the execution of such operations, the renewal shall be denied. In the same way, the authorization will be revoked if in the year of granted the requirements considered to be granted are not improved.

Prior to the negotiation of the values, there must be an agreement between a society specialized in the the deposit and custody of Salvadoran securities and a foreign exchange that facilitates and safeguards the custody and immobilization of the securities that are the subject of the negotiations. In addition, the settlement must establish the manner of settlement of such operations.

The Brokers ' Houses may perform operations outside a Salvadoring Stock Exchange,

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only to acquire on primary market or to trade on secondary market outside the Republic the securities referred to in this provision, provided that they are settled in the Public Stock Register and entered on a Stock Exchange, as appropriate. In these cases, the transaction must be registered on a Stock Exchange, each Exchange must keep a record of all operations of this type that the Houses carry out.

The Houses of Brokers shall report to the Superintendence on operations with foreign values that they carry out, indicating the characteristics of the values transferred and the participants. This Article shall not apply to the trading on the local market of shares of foreign investment funds, whether they are closed, open or representative of stock indexes or fixed income. The marketing of the abovementioned quotas shall be governed by the provisions of the Investment Funds Act. "

Art. 7.-Reform Article 33, as follows:

" Art. 33.-The issuers of securities of public offering, in order to comply with the provisions of article 3 of this Law, must request through a House of Brokers, their seat in the Public Registry of the Stock Market that carries the Superintendence and its subsequent registration on a stock exchange, as well as the issue of its securities issues; to do so, they must present the information referred to in this Law and comply with the requirements laid down in the regulations and in the instructions given to the

Bags will have a deadline of ten working days to resolve on the entries, counted from the date of the filing of the respective application accompanied by the corresponding information; in case the information is not presented in due form, the Exchange for one time will prevent the House of Brokers I have to say that I do not want to make a point. Received the information will continue running the deadline, and within it, will proceed to be resolved on the inscription.

The Board of Directors of the respective Exchange by point of record may delegate to the President, or any other of its members, the power to resolve on the exchange of securities issuers and their related issues. "

Art 8.-Reform the last paragraph of Article 41, as follows:

" After each trading session, the Stock Exchanges, through their website and in any other means, shall make available to the published a bulletin indicating the completed transactions, the amounts of securities traded and their prices, as well as the firm offers for both purchase and sale in respect of each negotiated value. '

Art. 9.-Reform Article 43, as follows:

" Art. 43.-If the number of the Houses of Brokers registered on a Stock Exchange is reduced to two, or the amount of minimum capital of a Stock Exchange, it shall be reduced to figures lower than those laid down in this Law, without prejudice to the actions which it In the case of the Superintendence in the exercise of its oversight function, the Stock Exchange in question must notify the Superintendence of such facts. In the first case, the Superintendence will give a period of one hundred and eighty days for a new House of Brokers, which can be extended once for an equal period, to

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request from the Securities Exchange. If the deadline or its extension persists the deficiency, the Superintendence will revoke the authorization to operate the Stock Exchange, which will be done in accordance with the procedure laid down in article 18 of this Law. The recall will result in the dissolution of the Stock Exchange in question, with the relevant legal effects.

When the Superintendence becomes aware of the reduction of capital referred to in the preceding paragraph, it will grant a Ninety-day period to be remedied. If it is not remedied, the Superintendence at the request of the Exchange concerned may extend the period for up to 90 additional days. If the property deficiency persists, the Superintendence will proceed to revoke the Stock Exchange in question, the authorization to operate, which will be done in accordance with the procedure outlined in the previous paragraph.

In case of recall The Superintendence shall be circulated immediately on its website and in a national circulation newspaper, with a charge to the Stock Exchange, no later than two working days after that resolution. "

Art. 10.-lntercalese between Articles 60 and 61, Article 60-A and their epigraph, as follows:

Individual Portfolio Management

Art. 60-A.-The brokerage houses will be able to carry out individual portfolio management operations, being understood as the set of investments made by these companies, with the resources of an investor, in the name of the investor and his property, for which a contract will have to be concluded with the investor in which the investment selections are established according to their needs, their risk profile and a certain period of time; likewise, in the contract it will be stipulated that These investments will be made by the brokerage houses for account and investor risk. In no case shall these contracts be of accession.

The general investment parameters of the investor, as well as the rights and obligations of the contractors, must be included in the contract. The Brokers ' Houses must express their acceptance of the management requested by the investor and the authorizations granted to them.

The Houses of Brokers, to perform individual portfolio management operations, request prior authorization to the Superintendence, and must perform these operations with the diligence of a good merchant in his own business.

The Houses of Brokers must have identified at all times the values, deposits banking, cash and ongoing operations of each investor, and should keep them legal, accounting and financially separate from those of the other investors and those of their property. The Houses of Brokers shall be entitled to hire, in the name of investors, deposits of securities and bank deposits, provided that it is stipulated and authorized by them in the contract referred to in the first subparagraph of this article, observing for that effect the provisions of the Law Against the Laundering of Money and Assets, especially as regards the knowledge of the investors. The securities acquired, where appropriate, according to their nature, shall be kept in custody in an entity authorised in accordance with the Law. In addition, the brokerage houses should report monthly and in detail to each of the investors, on the result of: bank deposits, investments, accrued commissions, securities acquired and sold during the corresponding period and the resulting balance.

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The Brokers ' Houses must keep a record for each investor, including their bank deposits, investments, movements of funds received or delivered, as well as securities bought or sold, performance pay, management fees and others. All movements must be accredited by the issuance of receipts and returns.

In no case will the House of Brokers act differently than the contract and the instructions that have been issued.

brokerage houses should not be able to secure returns, nor the capital of the securities that make up the individual portfolio that they manage.

The Central Bank will dictate the technical standards which are necessary for the development of this Article. '

Art. 11.-Interact between Articles 67 and 68, Article 67-A and their epigraph, as follows:

Foreign Stock Brokers

Art. 67-A.-Foreign companies may operate in the trading systems of a Stock Exchange established under Salvadoran law, on behalf of investors not domiciled in El Salvador, prior to authorization of the Superintendence. The Superintendence shall grant the authorization in mention, when requested by the foreign company concerned, through the Stock Exchange in which it intends to operate, and the applicant complies with the following requirements:

a) in their country of origin there is an organized stock market, which has similar or higher regulatory and supervisory requirements with respect to those of El Salvador;

b) That the company is legally constituted according to the laws of the country of origin;

c) Which is authorized by the competent authority in its country of origin, in order to carry out the activities of a brokerage house constituted under the national laws, is authorized to carry out in the country;

d) To appoint a representative domiciled in El Salvador with sufficient powers to compel the company;

e) To indicate an address in the city of San Salvador to receive notifications;

f) To protest submission to the laws, courts and authorities of the Republic of El Salvador, in relating to the acts, rights and obligations which it acquires in the territory of El Salvador, or which have to be provided effects on the same;

g) That it has met the requirements required by the internal regulations of the Exchange in which it intends to operate as a foreign company; and,

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h) To be required to comply with the instructions issued by the Stock Exchange on the to operate and to the rules applicable to it.

These companies are prohibited from providing any type of services related to the activities of a brokerage house, to persons or entities domiciled in El Salvador. Except for the foregoing, the services that are provided to each other, foreign companies and the Houses of Exchange Brokers formed in accordance with the Salvadoran legislation.

The Superintendence will have to revoke the authorization granted, where the foreign company fails to comply with the provisions of this Article. Prior to revoking the authorization, the Superintendence will send to the foreign company, in the direction that it would have set to receive notifications, so that in a period not exceeding eight working days it will decide on it. After the deadline, as answered by the foreign society or in its rebellion, the Superintendence will decide on the recall.

The Central Bank will dictate the technical norms that are necessary for the development of the Article. '

Art. 12.-Defeat Articles 113, 113-A, 113-B and 113-C.

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 four days of September of the year two thousand fourteen.








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CASA PRESIDENTIAL: San Salvador, at twenty-nine days of the month of September of the year two thousand fourteen.


Salvador Sánchez Cerén, President of the Republic.

Merlin Alejandrina Barrera López, Deputy Minister of Trade and Industry,

Encharged to the Office.

Juan Ramón Carlos Enrique Cáceres Chávez, Minister of Finance.

D. O. No. 184 Took # 405 Date: October 6, 2014

FN/pch 05-11-2014

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