Law Of Investment Funds.

Original Language Title: LEY DE FONDOS DE INVERSIÓN.

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LEGISLATIVE ASSEMBLY-REPUBLIC OF EL SALVADOR ____________________________________________________________________

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DECREE NO 776

THE LEGISLATIVE ASSEMBLY OF THE REPUBLIC OF EL SALVADOR,

CONSIDERING:

I.-That it is the State's interest to promote economic and social development, creating conditions that will dynamize the stock market in order to have a modern, efficient and diversified financial system that offers multiple savings and investment options in the economy.

II.-That according to the experience International, the Investment Funds generate profits and encourage economic activity with the access of small investors to the capital market, the diversification of investments and the channeling of savings to productive sectors,

III.-That in order to develop the Investment Funds in El Salvador, it is necessary to have a legal framework, which clearly defines the rights and duties of the participants, such as The way in which appropriate conditions of transparency are established, a supervisory framework specialized according to international practices and a legal structure that allows the resources of the investors to be legally and financially separate from the entity that manages them, being necessary in addition, to regulate the In El Salvador, investment funds constituted abroad, establishing requirements for carrying out this activity.

IV. to supervise the Investment Funds, the companies which administer them, their operations and their participants.

BY TANTO,

in use of their constitutional powers and at the initiative of the Deputies: Douglas Leonardo Mejia Avilés, Antonio Echeverria Veliz, Luis Roberto Angulo Samayoa, Francisco Jose Zablah Safie and Edwin Victor Alejandro Zamora David.

DECRETA the following:

INVESTMENT FUNDS ACT

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TITLE I

CHAPTER ONLY GENERAL PROVISIONS

Object of Law

Art. 1. This Law is intended to regulate and establish the framework for the supervision of the Investment Funds, their participation shares, the companies that administer them and their operations, as well as other participants to whom it refers. In addition, it regulates the marketing of foreign investment fund participation fees.

In the matters not provided for in this Law, the provisions of the Securities Market Law, and in its absence, the provisions of this Law, will apply. Trade Code and other applicable laws.

Investment Fund

Art. 2.-An Investment Fund will be made up of the set of contributions of various investors to whom it will be called participants; it will be administered by an anonymous company that will be called Gestora, for account and risk of the investors. The value of the contributions of the unit-holders, as well as any type of performance they receive, will be based on the financial result of the Fund's assets. This Fund is the exclusive property of the unit-holders, being an independent and different patrimony to that of the Management of Investment Funds. Each Fund shall be expressed in participation shares, in order to determine the share of each investor within its equity.

The Management of Investment Funds shall invest this equity in securities and other goods; in addition, it may keep it in bank deposits, all in accordance with the requirements of this Law, as laid down in the rules of procedure of each Fund and the specific regulations issued by the Central Reserve Bank of El Salvador.

When this Law refers to actions of the Fund, it should be understood that the performs is the Investment Funds Manager in its administrator character.

Classification

Art. 3.-For the purposes of this Act, the Investment Funds are classified as:

a) Open Investment Funds: Those who do not have a defined time limit and unit-holders can rescue their participation shares in any time, total or partially; and,

b) Closed Investment Funds: Those who have a defined time limit and unit-holders will only be able to receive what corresponds to them from their participation fees at the end of the Fund's term and in the cases established in the This Law, with its participation quotas being negotiated in secondary market.

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In the case of Open Investment Funds, there may be different classes of participation in the same Fund, which differ from each other for the fees and charges applicable to them and not for the investments of the Fund. Participation quotas within each class will have equal value and characteristics.

Denominations

Art. 4.-In the course of this Law, the following denominations shall be used:

a) "Fund", by Investment Fund;

b) "Gestora", by Management of Investment Funds;

c) "Open Funds", by Open Investment Funds;

d) "Closed Funds", by Closed Investment Funds;

e) "Exchange", by stock exchange;

f) "Participates", by investors in an Investment Fund;

g) "Superintendence", by Superintendence of the Financial System;

h) "Council", by Superintendence Board of Directors;

i) "Superintendent", by Superintendent of the Financial System;

j) "Registration", by Public Stock Registry; and,

k) "Central Bank" by Central Reserve Bank of El Salvador.

Supervisory Entity

Art. 5.-The Superintendence, within its sphere of competence, is the administrative authority to which it is responsible to monitor the compliance and enforcement of the provisions of this Law; likewise, to supervise the Gestoras, their operations and others participants regulated by the same.

Regulatory Entity

Art. 6.-It is up to the Central Bank, within its sphere of competence, to issue the necessary technical standards to allow the application of this Law.

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TITLE II MANAGERS

CHAPTER I NATURE, CONSTITUTION AND AUTHORIZATION

Nature Legal and Finality

Art. 7.-The Gestoras shall be constituted as anonymous fixed-capital companies, with an indefinite period of time, domiciled in El Salvador. Its share capital shall be divided into nominative shares or represented by notes on account. They shall be intended to administer the Funds, in accordance with the rules laid down in this Law.

The expression "Gestora de Fundas de Inversión" is a compulsory and exclusive use in the name and commercial name of these companies. No entity that has not been authorized by the Superintendence, may use that expression or a referral thereof, who uses it or acts as such without having previously been authorized under this Law, will be sanctioned by the Superintendence.

No Gestora will use in its denomination or trade name the expression "National" or any other that may suggest that it is an entity created by the State or backed by it.

Constitution

Art. 8.-To constitute a Gestora, authorization must be sought from the Superintendence, accompanied by the following information:

a) Projects of writing of social constitution and of the statutes;

b) Name, age, profession, domicile and nationality of the applicants;

c) Indication of the amount of the social capital of the constitution and the amount of the guarantee to constitute;

d) Name, age, profession, domicile and nationality of the shareholders to be the Gestora, as well as the amount of their respective subscriptions;

e) Name, age, profession, domicile, nationality, experience and banking or credit references of the initial Directors and administrators;

f) The affidavit of each of the initial controlling or relevant shareholders, where appropriate, Directors and administrators who are not in any of the situations provided for in Arts 14 and 17 of this Law, respectively; and,

g) Tax Solvency of the Ministry of Finance and municipal solvency of each of the shareholders, Directors and administrators.

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Art. 9.-Received the information referred to in the previous article, the Superintendence will verify and publish in a national circulation newspaper and on its website, for once and for the account of the interested parties, the payroll of the shareholders controllers or relevant to their case, as well as to the initial Directors and administrators, within a period not exceeding 15 working days.

Such publication shall be intended to be objectionable by any person who has knowledge that some of the inabilities and prohibitions contained in Arts 14 and 17 of this Law, concurring in the Directors, administrators or shareholders who will be part of the Gestora. Objections shall be submitted in writing to the Superintendence within a period of 15 days from the day following that of the publication, together with the relevant evidence. The information shall be of a confidential nature. Similarly, the Superintendence may of its own motion, object to the persons proposed when it has knowledge that the referred inabilities or prohibitions are in them. In both cases it will be resolved after hearing the director, administrator or shareholder in whom the inability or prohibition is assumed.

In the event that the shareholders are legal persons, the payroll of their shareholders must also be published. shareholders who hold ten percent or more of their capital or of the partners that have that percentage of social participation.

Once the legal requirements are met, the authorization to constitute the Gestora will be issued by Council resolution, no longer than sixty days.

Notified this resolution, shall proceed to the granting of the constitutive writing within a period not exceeding thirty days, counted from the said notification.

Shareholders and Relevant Shareholders

Art. 10.-For the purposes of this Law, a shareholder, whether natural or legal person, shall be understood to have the character of a controller when he or she owns, directly or through an individual, individually or jointly with others shareholders, of more than fifty percent of the representative shares of the capital of the Gestora. If there are no controlling shareholders, the requirements established for them in this Law must be fulfilled by the owners, directly or through the person, individually or jointly with other shareholders, 10% or more of the shares issued by the Gestora, to which they will be referred to as relevant shareholders. Only natural or legal persons may be controlling or relevant shareholders.

Review of Testimony and Authorization of Operations

Art. 11.-The testimony of the writing of the social constitution and the statutes of the Gestora must be presented to the Superintendence for review before its registration or deposit, as appropriate in the Register of Commerce, it must corroborate within a period of not more than ten working days from the date of its submission, that the terms stipulated therein are in accordance with the projects previously approved. The constitutive writing of the Gestora may not be entered in the Register of Commerce, nor may the statutes be the subject of the deposit, without the fact that they bear a reason subscribed by the Superintendent in which the favorable rating of the said instruments. Once the testimony has been entered in the Register of Commerce and the statutes have been deposited in the Register, the Gestora will transmit a certified copy of these instruments to the Superintendence.

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Fulfilled the requirements of this Law, verified accounting and information systems, as well as the internal controls and procedures of the institution, registered its social deed, deposited its statutes in the Register of Commerce, the Council shall authorize the registration and the beginning of operations of the Gestora; authorizing the registration of the (a) which shall be effected within a maximum of five working days from the date of Council authorization.

The Superintendence shall publish, in a national circulation newspaper, the agreement in which the authorization of the beginning of operations of the Gestora, with charge to that Gestora, is recorded.

Modification of Writes

Art. 12. The draft amendments to the social pact, dissolution and liquidation of a Gestora, as well as its statutes, shall be subject to prior authorization by the Council, and once the corresponding scriptures have been granted or agreed to the amendments to the statutes, as appropriate, to be submitted to verify their conformity with the authorized, which will be made reason subscribed by the Superintendent in the respective testimony or agreement, without which they will not be able register or deposit in the Register of Commerce. Once the testimony has been entered in the Register of Commerce or deposited its statutes, the Gestora will transmit a certified copy of these instruments to the Superintendence.

Board of Directors

Art. 13.-The Gestora shall be administered by a Board of Directors, composed of at least three owners ' Directors and equal number of alternates.

The Directors of the Gestora shall, in addition to the requirements laid down in the Code of Trade for the Directors of public limited liability companies, the following:

a) Being of recognized good repute;

b) Contar with extensive knowledge and experience proven at least five years, in financial and administrative matters; and,

c) Being over thirty years old.

When the Superintendence will find that a director does not meet or no longer meet the above requirements, will expire its management and will proceed in accordance with article 15 of this Act.

Inskills of Directors and Administrators

Art. 14.-They are indefable to be Directors or administrators of a Gestora:

a) Directors, administrators or employees of any other Gestora and shareholders holding more than ten percent of the capital of another Gestora;

b) Managers, proxies, financial advisors of a member company of the same financial conglomerate of the Gestora, who negotiate securities;

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c) Those who are in a state of bankruptcy or suspension of payments, and in any case, who have been legally qualified as responsible for a wrongful or wrongful bankruptcy;

d) The debtors of the tax and the Salvadoran financial system classified in any of the categories of greatest credit risk, according to the rules (i) the conditions for the application of the This inability shall also apply to those Directors who own twenty-five percent or more of the shares or contributions in companies that are in the aforementioned situation. It shall also be non-working persons who are in a similar situation abroad;

e) Those who have been administrators, such as Directors or Managers, or officials of an institution or entity that is a member of the financial system in which they are It will administratively demonstrate its responsibility for such institution or entity, starting with the law of Privatization of the Commercial Banks and of the Associations of Savings and Loan, to have incurred in financial deficiencies of twenty percent or more of the minimum required by the Law, has received contributions from the State or Institute of Deposit Insurance for the purpose of its consolidation, has been brought in by the competent body, or has been restructured, and consequently, its authorization to operate would have been revoked. In the case of legal representatives, general manager, executive director and directors with executive positions of financial institutions, they shall be presumed to have held responsibility for any of the above mentioned circumstances. The presumption before those persons who have ceased their posts two years before such a situation has been presented shall not apply; nor shall those persons who have participated in the reorganisation of financial institutions, in accordance with the provisions of the The Law on the Sanitation and Strengthening of Commercial Banks and Associations of Savings and Loan, without prejudice to the responsibility for which they incur after that sanitation;

f) Those who have been sentenced by sentence executed in the country or abroad, for having committed or participated dolously in the

g) Persons who have been legally proven to be involved in drug trafficking and related crimes, and with money laundering and other assets, in the country or in the country foreign;

h) Those who have been declared indeft to this kind of office or who have been punished administratively or judicially for their participation in violations of the laws and regulations of a financial nature, in particular the acquisition of of public funds without authorization, the granting or receipt of related excess loans of the permitted limit and of the financial crimes, whether the aforementioned declarations of inabilities or sanctions have been dictated in the country or abroad;

i) The President and the Vice President of the Republic, the Ministers and the Deputy Minister of State, the Directors and Deputy Directors of the Ministries, the Secretaries and Deputy Secretaries of the Presidency of the Republic, the Deputies, the Magistrates of the Supreme Court of

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Justice and the Chambers of the Second Instance, the holders of the institutions that make up the Public Ministry and the Municipalities, the President and Magistrates of the Court of Auditors of the Republic and the Presidents of State institutions and enterprises of an autonomous nature;

j) Those who are legally incapable;

k) Directors or administrators of a Gestora whose authorisation to operate has been revoked by the Superintendence, except to check that they have no responsibility for such a situation; and,

l) The Presidents or Directors of the Banks, Microfinance, Savings and Credit Associations and others financial.

The inabilities contained in the literals (c), (e) and (g), as well as the first part of the literal (d), which are in the spouse of a director or administrator, will entail for him his inability, provided he is under the deferred community regime or profit participation.

Directors and administrators, within thirty days of having taken possession of their posts and in the month of January each year, they shall submit affidavit to the Superintendence, stating, if necessary, that they are not indefable to carry out the charge and must inform the institution at the latest by the third business day of its inability, if it occurs later.

Inskill Declaratory

Art. 15.-When any of the causes of inability mentioned in the previous article exist or exceed, the management of the director or administrator shall lapse and the Board shall be replaced or restructured, as the case may be, in accordance with the case to the social pact of the Gestora.

Corresponding to the Superintendent, either on its own initiative or at the request of a party, to declare the inability, after hearing the director or administrator, within the period of eight working days counted from the day on which the notify, to exercise its right of defence. All of the above, without prejudice to the corresponding civil or criminal liability.

However, the acts or contracts authorized by an indeft director or administrator, before their inability to be declared, shall not be invalidated by this circumstance with respect to the Gestora, or with respect to third parties, except that it is established that they acted in bad faith.

Shareholders

Art. 16.-Everyone may own shares of a Gestora, without prejudice to the provisions of the second paragraph of this Article, and Article 17 of this Law to the controlling or relevant shareholders. Within the shareholding of each person, they shall also be considered to have in companies that are shareholders of the Gestora.

It shall not be shareholders who are in the circumstances to which they refer (c) and (f) of Article 17 of this Law. When the Superintendence will note that a

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shareholder is in the circumstances indicated above, the provisions of the The second and third points of Article 18 of this Law.

Bans

Art. 17. They may not be controlling or relevant shareholders, if any, the acquirers who are in any of the following circumstances:

a) Those in a state of bankruptcy or suspension of payments;

b) Those who have been sentenced by executed judgment, at home or abroad, for having committed or participated in any crime;

c) Persons who have been judicially checked for participation in related activities with drug trafficking and related crimes and money laundering and other assets, in the country or in the

d) The debtors of the Salvadoran financial system classified in any of the categories of greatest credit risk, according to the respective technical standards, as long as such situation persists. The above will also apply to those in a similar situation abroad;

e) Those who have been administrators, such as Directors, Managers, or officials of an institution or entity that is a member of the financial system, in which it is administratively demonstrated its responsibility for the fact that the said institution or entity, from the time the Law of Privatization of the Commercial Banks and the Associations of Savings and Loan, has been Twenty percent or more of the minimum required by the Law; received contributions the State or the Deposit Insurance Institute for its reorganisation, or the competent body has intervened; or it has been restructured and has accordingly revoked its authorisation to operate. In the case of legal representatives, general manager, executive director and directors with executive positions of financial institutions, they shall be presumed to have held responsibility for any of the above mentioned circumstances. The presumption before those persons who have ceased their posts two years before such a situation has been presented shall not apply; nor shall those persons who have participated in the reorganisation of financial institutions, in accordance with the provisions of the The Law of Sanitation and Strengthening of Commercial Banks and Associations of Savings and Loan, without prejudice to the liability in which they incur after such sanitation;

f) Those who have incurred any of the legal conditions which do not allow them to hold the quality of a shareholder or have been punished, administratively or judicially, for their participation in violations of the laws and regulations of a financial nature, in particular the collection of public funds without authorization, the granting or receipt of related loans in excess of the permitted limit and financial crimes, whether the non-compliance or penalty has been given at home or abroad;

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g) Those who cannot demonstrate the legitimate origin of the resources to acquire the shares;

(h) Those that are not economically and financially proportional to the value of the shares they intend to acquire;

i) The Directors or administrators of a Gestora, whose authorization to operate has been revoked by the Superintendence, except to check that they had no responsibility to has given such a situation; and,

j) Those who find themselves insolvent with the Fisco and the Municipality.

Dealing with a legal person, the foregoing circumstances shall also be considered in respect of the shareholders who hold the of twenty-five percent or more of the shares or contributions in the company, or have that percentage of participation in the company.

Art. 18.-The controlling or relevant shareholders, if any, within thirty days of having subscribed to the shares and in the month of January of each year, will submit an affidavit to the Superintendence, stating whether they are found or not within any of the circumstances referred to in the preceding Article and shall inform the said institution, at the latest within three working days of the following, if the circumstance occurs later.

are found in one of the circumstances mentioned in the previous article, the procedure laid down in Article 15 of this Law, the shareholders shall not be able to exercise the personal or property rights that they are entitled to as shareholders of the Gestora, until the circumstances in which they incurred are exceeded; with the exception of the transfer of the right of ownership of the shares to any title; and by transferring them they shall be entitled to be paid the dividends which they correspond to them and which they would not have given them for being suspended their rights. Likewise, it will proceed when the shareholders do not communicate it and it is the Superintendence that identifies the circumstance.

When the causes that gave rise to the suspension of the aforementioned rights are exceeded, the Shareholders will be able to exercise them again.

CHAPTER II SOCIAL CAPITAL AND GUARANTEE

Social Capital

Art. 19.-The amount of registered capital of a Gestora may not be less than five hundred thousand dollars of the United States of America, which must be subscribed and paid in full in cash by means of certified check or cashier's check or The Bank of the Bank of the Central Bank of the Bank of the Central Bank of the Central Bank of the Central Bank of the Central Bank of the Republic of Central Bank of the Central Bank of the Republic of Central Bank of the Republic of Central Bank of the Republic of

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The social capital referred to in the foregoing paragraph shall be updated as established by the Law of the Stock Market, for the capital of constitution and operation, so that it maintains its real value. At no time will the Gestora's estate be less than the social capital regulated in this article.

Capital Reduction

Art. 20.-Only with the authorization of the Superintendence, a Gestora will be able to agree to the reduction of its social capital. In any event, such capital shall be permitted to be reduced below the amount established in accordance with Article 19 of this Law, without prejudice to the provisions of the third paragraph of the following article.

Application of Losses

Art. 21.-If there are losses in an exercise, in the General Meeting of Shareholders in which such results are known, the agreement must be taken to cover them, according to the following order:

a) With the annual profits held for exercises previous and effectively perceived;

b) With applications equivalent to capital reserves; and,

c) From the paid social capital of the Gestora. This decrease in social capital must be effected by reducing the nominal value of the shares, and in this case the provisions of Article 129 of the Trade Code will not apply. When the social capital of the Gestora is reduced to a level lower than that established in Article 19 of this Law, the Gestora will have a maximum period of sixty days to reintegrate it, and must present to the Superintendence, in the first ten days of this deadline, a plan to conform to the required levels.

Warranty

Art. 22. -Prior to the registration of an Investment Fund and up to one year after the liquidation of the Gestora, it shall constitute and maintain in force at all times a guarantee according to the assets of the Investment Funds which it administers, in the benefit of their members, to ensure compliance with all their obligations.

The guarantee may be made in cash, security or securities. The security and securities shall be issued by entities that do not belong to the same financial conglomerate or business group of the Gestora. In the case of bail, the bond must be issued by companies domiciled in El Salvador that have the classification of risk, which is determined by technical standards by the Central Bank. In addition, the securities must be high-liquidity and low-risk, and be kept in custody in companies that can provide that service under the Securities Market Act, as established by the Central Bank through technical standards.

Guarantee shall be updated at least monthly. Notwithstanding the foregoing, the Superintendent may require the Gestora to update the guarantee at a different frequency, when market conditions warrant it. In any case the warranty will be appropriate to the one that is greater than the following two parameters:

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a) Quinientos thousand dollars from the United States of America, amount to be updated as establishes the Securities Market Act for the capital of constitution and operation in a manner that maintains its real value; and,

b) One percent of the sum of the assets of each of the Funds administered, on the previous business day.

The initial amount of the warranty will be as indicated in the literal (a) of this article.

Management shall inform the Superintendency whenever the guarantee is modified, either in its amount or in its form of constitution, adding the documents.

In case of execution of the guarantee, it will respond to pro rata Each Fund that the Gestora manages according to the assets of each of them, the Gestora is obliged, to its immediate replenishment, according to technical norms that the Central Bank dictates. These rules will also contain the way in which the guarantee will be distributed among the affected members.

The Central Bank, by means of technical standards, will establish the form and time limit in which the Gestora will remedy the deficiencies of the guarantee when is below what is set out in literals (a) and (b) of this article.

The Council shall determine and develop the mechanisms to monitor the management of the management of the management, the objectives and the stages it comprises; may also be based on reasoned resolution, based on technical reports indicating that the Gestora presents a weak management of its risks, requiring that it increase the guarantee to double the amount in force at the time of the requirement. The deadlines for filing and validity will be set by the Council.

Art. 23.-The Managers shall appoint as the representative of the beneficiaries of the guarantee referred to in the previous Article, a Bank governed by the Law of Banks, a cooperative bank, an insurance company, a stock exchange or a a company specializing in the deposit and custody of securities, to whom this Law empowers them. Such companies must be domiciled in El Salvador and not belong to the same financial conglomerate of the Gestora. Companies which, in their normal operations, are entitled to issue bonds and guarantees, may not exercise the function of representative when they have issued the security referred to in Article 22 of this Law.

Designated representative shall perform the following functions:

a) Be the holder of the supporting documents of the bank deposit, of the bond or of the pledge on securities;

b) Require payment of the guarantee; and,

c) Receive in the custody of bank deposits, the proceeds of the bond or the goods pledged in the case of being effective the warranty.

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If the guarantee consists of a bond, the granting entity shall pay the value required by the representatives of the beneficiaries of the same up to their guaranteed amount, within ten days of the application for payment of the bail.

When the guarantee consists of a pledge on securities, for registration no the creditors need to be individualised, with the name of their representative, with the replacement of the replacements. If it is necessary to make notifications and citations that according to the Law must be practiced to the creditors, they will be understood to be fulfilled when they are made to their representative.

Without prejudice to the definitive execution of the guarantee, the Superintendent authorized by this Law, to adopt by means of reasoned resolution, the provisional execution of the guarantee as a precautionary measure, in the event that the interests of the members so require, either inside or outside of a administrative procedure. For such purposes, it shall provide the necessary instructions to the representative of the beneficiaries of the guarantee to make the relevant request. The money to be obtained from the provisional execution shall be maintained by the representative in his custody in a bank account in a Bank governed by the Law of Banks, until the circumstance that gave rise to the precautionary measure is diluted in final judgment.

Where the precautionary measures referred to in this Article are delayed outside an administrative procedure, the administrative procedure shall be promoted within 10 working days of the measure being taken.

The entities that under this provision are entitled to serve as representatives of the guarantee in mention, they must be subject to the technical standards that the Central Bank may issue for this purpose.

CHAPTER III ACTS AND OPERATIONS OF THE MANAGER

Acts and Operations

Art. 24. The Gestora shall carry out all the acts, contracts and operations necessary for the administration and operation of the Funds. In particular, it will have the following powers:

a) Receive input from unit-holders;

b) Manage the Funds, subscribe to contracts and other documents necessary for that purpose;

c) Place the participation fees of the Funds;

d) Execute the investment policy of each Fund, as provided for in this Law and in the respective rules of procedure;

e) In the case of Open Funds, pay full or partial bailouts and distribute benefits. Dealing with Closed Funds, distributing benefits from the Funds you manage

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and reinstate the value of its share shares for the purpose of decreasing

f) In the case of the Closed Funds, initially designate the members of the Supervisory Committee referred to in Article 77 of this Law; and,

g) Other acts and operations that are necessary for the fulfilment of its purpose, authorize the Council.

Responsibilities of the Gestora

Art. 25.-It shall be the responsibility of the Gestora, as determined by the rules of procedure of each Fund; and, in any case, the following:

a) The good management and administration of the Funds it administers. For the results obtained, it will only respond when in this process losses caused by dolo or fault are incurred in its actions, declared as such in executed judgment;

b) To carry accounts separated by each Fund to administer, independent of the accounts corresponding to the Gestora;

c) Fulfill in quality of administrator with all the formal obligations of a tax character that implies the administration of the Funds and answer jointly and severally with the Fisco of the substantive tax obligations contained in the Code Tax and other laws of the matter;

d) Enterate to the Fund, the amounts corresponding to the payment of taxes caused by the legal acts concluded by the Fund as the Fund's administrator, being obliged to carry out payments to the extent that taxes are generated;

e) Avoid situations that generate conflict of interest between it and the unit-holders, in case they arise, resolve them in favor of the latter;

f) Meet all the provisions of the rules of procedure of the Funds to be administered;

g) Provide, in the case of Closed Funds, information to the Supervisory Committee relating to its financial position and that of the Fund, as well as other information requested by the Fund in the exercise of its functions, all with the minimum frequency to be established between them;

the external auditor of the Open Funds. For the case of the closed funds, you must name it for the first fiscal year and for the next financial years, in the event that the Ordinary Board of members does not do so. When applicable, it will appoint the tax auditor, in the same way as the external auditor;

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i) Pay, in charge of the Gestora's estate, civil liability indemnities arising from damages caused to members, due to intentional or culpable conduct incurred in the administration of the Funds, without prejudice to personal, civil or criminal liability, deductible to its Directors, Managers, auditors external and any other executive or member of the participating executive staff in the administration. Such payment shall be made to the extent that the guarantee provided for in Article 22 of this Law is insufficient;

j) Comply and ensure that the Funds it administers comply with the updating of policies and mechanisms for the management of risks, including, among other actions, identifying, evaluating, mitigating and revealing them in accordance with international best practices. These policies will include measures to prevent non-compliance with regulatory requirements; and those that will be adopted in the event that they have incurred, and the parameters that will be defined in both situations. guide the action and those responsible for implementing them;

k) Publish, through electronic means, the level of risk exposure of each of the Funds administered on the basis of technical standards issued by the Central Bank; and,

l) To comply with the provisions of the Anti-Money and Asset Laundering Law, for which it will implement procedures to verify the source of the resources.

The Gestora is prohibited from carrying out acts for its own benefit or from third parties, to the detriment of the members of the Funds it administers.

Investment Managers

Art 26.-The persons who work with the Gestora or with its mandatories, making the marketing of shares of the Funds and those responsible for managing the investments of the Funds, must be authorised by the Superintendence, in accordance with the technical standards issued by the Central Bank For this purpose.

The marketing companies must comply with the provisions of the Anti-Money and Asset Laundering Law, for which they will implement procedures to verify the origin of the resources.

Compensation to the Fund

Art. 27. The Gestora shall be obliged to indemnify the members of the Fund for the damages caused by it, its representatives, Directors, Managers, external auditors, members of its staff and any other person providing services to it, to the detriment of those members, as a result of the execution or omission, as appropriate, of any of the actions that under this Law, are prohibited to the Gestora. The persons referred to above who have participated in such proceedings shall be jointly and severally liable for reimbursement, without prejudice to administrative or judicial responsibility, whether civil or criminal, to be brought against those who They will be involved. In this case the appropriate action will be exercised in accordance with the provisions of the Civil and Commercial Code.

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Limits and Bans

Art. 28.-The Gestora and the companies belonging to the same financial conglomerate or business group may not be holders individually or together more than 15% of the shares of each Open Fund managed

If excess to the above limits due to fluctuations in the market or otherwise justified cause, the Gestora will have to notify the Superintendence of the excess.

within three working days of the excess occurred. From the date of notification, the Gestora will have sixty days to regularise the percentages indicated above. The time limit may be extended for justified reasons and when authorised by the Council.

In cases where market conditions warrant it, the Council may temporarily amend the limits referred to in this Article.

Art. 29. The following actions or omissions, if any, made by the Gestora, its representatives, directors, persons or employees, as appropriate:

a), are contrary to this Law:

a) assets of the Fund to obtain undue, direct or indirect benefits; the use of the assets of the Fund to ensure and to ensure obligations of the Gestora or third parties;

b) Assume commitments to the members of the Fund the recovery of the value of their contributions; as well as of any kind of performance other than the results of the Fund's financial management;

c) Charges to the Fund of any service other than that authorized in the Law, the contract for the subscription of participation shares or the rules of procedure, or

d) Charges to the Fund of any service provided by persons related to the Management of the same or by companies of the financial conglomerate to which it belongs,

more onerous conditions than those prevailing on the market;

e) The use, for its own or other benefit, of information regarding operations to be performed with the assets of the Fund;

f) Disclosure of information relating to the acquisition, disposal or preservation of

assets of the Fund, to persons other than those who are required to participate in the respective operations, representing the Gestora;

g) The acquisition of assets by the Gestora for itself, and those made by its representatives, Directors, Managers or employees, within five days of the disposal of these carried out by the Gestora as the Fund's administrator. For low-liquidity assets, this term will be sixty days;

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h) The disposal of own assets by the Gestora or its Directors, representatives, Managers and employees within five days of the acquisition of these for the Fund. In the case of low-liquidity assets, this period shall be sixty days;

i) The acquisition, disposal, lease or usufruct of assets of the Fund or the Fund in which the Gestora, its Directors, representatives, Managers or employees;

j) The acquisition, disposal, leasing or usufruct of assets of the or for the Fund to persons related to the Gestora, to other funds administered by it, to funds administered by Gestoras related to it, to companies of the same financial conglomerate or business group of the Gestora or administered funds by Managers of the same financial conglomerate or business group of the Gestora, unless these are carried out in accordance with the requirements and conditions laid down by the Central Bank by technical standards, whereas transactions with securities must be held in organized markets, such as a Stock Exchange;

k) The assets or acquisitions of assets carried out by the Gestora, its Directors, representatives, Managers or employees, if they are more advantageous to them the respective disposal or acquisition of these assets, carried out in favour of Fund on the same day, except if the corresponding price difference is transferred in favour of the Fund within two days of the operation;

l) The granting of loans or guarantees made by the Gestora or by persons In the case of the Fund, as well as the granting of loans or guarantees in favour of the Gestora or persons related to it, granted or constituted with the assets of the Fund; and,

m) Other than by reasoned resolution determines the Council, the consequences of which are contrary to this Law or create conflicts of interest.

The assets referred to in this article are those of the same kind, class, type, series, tranche, issue and issuer, as the case may be.

Low-liquidity assets, those that are not transacted and in significant volumes, in formal secondary markets. The Central Bank will determine by technical standards the characteristics of the assets of low liquidity.

For the purposes of this Law, it is persons related to the Gestora that Article 204 of the Law of Banks, notes as related to

These are also considered to be contrary to this Law, the transactions indicated in previous literals that are performed with the spouses or relatives within the second degree of consanguinity or first affinity of the related persons. the Gestora, as well as its representatives, Directors or employees.

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Hiring Services

Art. 30. The Gestora may, for the performance of its duties, contract services with other companies, such as the processing of information and other related operations, except those relating to the management of the investment portfolio. of the Fund.

The quality of the contracted services is the responsibility of the Gestora, which will respond to third parties as if it had carried out them. It will also be responsible for complying with the information requirements of the Superintendence on the above mentioned services.

Service delivery contracts must contain provisions to ensure that the subcontracted entities shall be kept strictly confidential about the information to which they have access, due to the provision of their services.

The models of the contracts of the services concerned must be previously referred to the Superintendence for its review, with a deadline of no more than 30 days from its receipt, in order to require the necessary changes when they contain clauses that oppose the legislation, the rules of procedure of each Fund or are considered to be violative to the rights of the members. If the Superintendence is not pronounced within the aforementioned period, it is understood that it has no observations.

Publication of Financial Statements

Art. 31. Each Gestora shall publish in two national circulation newspapers and on its website, its financial statements at 30 June and at the end of each year of December of each year; the latter shall be accompanied by the opinion of the external auditor. In addition, you will need to send your financial statements to the Superintendency monthly.

The Central Bank will dictate the technical standards that determine the content of the publication referred to in this article.

External Audit

Art. 32.-The external auditors of the Gestora must be registered with the Superintendence and comply with the minimum audit requirements as indicated in the Law of the Securities Market.

Commissions and Expenses

Art. 33.-All commissions and expenses shall be detailed in the rules of procedure of the respective Fund and shall be supervised by the Superintendence. The commission by administration and other necessary expenses will be in charge of each Fund, with the possibility of establishing commissions from the investor, in accordance with the provisions of the Law of Consumer Protection.

The commissions will be expressed as percentages or amounts, and for expenses will clearly detail their concepts.

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Disclosure of Information

Art. 34.-It shall be the permanent obligation of the Gestora, to disclose any facts or essential information concerning the Funds it manages or itself, such as operations carried out with funds from the Funds with member companies of its conglomerate financial, business group or persons related to the Gestora; and the change of controlling or relevant shareholders, Directors, administrators or legal representative. This disclosure must be carried out no later than the following business day that the event occurs or is of its knowledge.

The Gestora shall disclose facts or essential information of which it is certain that it is a company, a fund of Securitization, Investment Funds or any issuer in whose securities the resources of the Funds managed by it are kept invested, no later than the following business day in which the event occurs or is of their knowledge.

The Gestora the information referred to in the preceding points should be sent to the Superintendence; in compliance with the time limits laid down therein, including the effect that the event or information may have on the Gestora or the Fund concerned. The Superintendence shall publish such information on its website or other technological medium.

For each Fund it administers, the Gestora shall publish on its website or other means which for this purpose determine the technical standards, a report containing, inter alia, the value of the participation fee, fees charged by the Gestora, expenses which are charged to the Fund, performance and facts or essential information referred to in the first two points of this Article. This information will be updated daily. In addition, each month the value of the Fund's assets and the aggregate structure of the Fund's investments shall be published. In addition, the Fund's rules of procedure, an extract from the Fund, its risk classification, its monthly financial statements, the prospectus for the placement of shares and an extract from the Fund should be maintained. The value of the quota, the risk classification and the financial statements shall be kept published, comprising at least the last two years. In addition, the Gestora must send each participant a statement of account of the investments that shows their individual participation.

The Gestora, for the purposes of transparency and price formation, must report daily to stock exchanges, securities valuation agents, Superintendency and any other entity that is entitled to Act, on each of the transactions in the purchase and sale of securities with the resources of the Funds perform, detailing prices. In addition, it should inform the Superintendency of the details of the investments of the Funds and the value assigned to each investment, for the Open Funds daily and for the Funds Closed according to the periodicity of their

The Central Bank will dictate the technical standards that determine the content of the information referred to in this article and its corresponding disclosure.

Reserved Information

Art. 35.-The Gestora, as regards reserved information, shall be governed by the provisions of the Securities Market Act.

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CHAPTER IV MERGER, DISSOLUTION AND LIQUIDATION OF MANAGER

Merger of Managers

Art. 36. The merger of Gestoras requires prior authorization from the Council and must be carried out in accordance with the rules laid down in the Trade Code. Except as provided for in that Code, when the merger agreement and the last balance sheet of each of the Managers are published, it shall be carried out only once in a national circulation journal; the merger shall be executed, provided that there is no opposition, after thirty days of the said publication.

Prior to the granting of the authorization referred to in the previous paragraph, the Superintendence must have complied with establishes the Competition Act.

The merger agreement and the testimony of the merger write register with the Trade Registry, without any reason subscribed by the Superintendent in which the authorization is registered.

Permanent Conditions of Contract

Art. 37.-In the event of a merger, the conditions set out in the participation fee subscription contracts and in the internal regulations of each Fund of the merged Managers shall be respected as originally stipulated.

Causals Dissolution and Liquidation

Art. 38.-Without prejudice to the causes established in the Code of Commerce, the dissolution and liquidation of a Gestora shall proceed, in the following cases:

a) By reduction of the property below the minimum amount required by this Law;

(b) By the inability of the Gestora to constitute or maintain the guarantees required by this Law;

c) By judicial declaration of bankruptcy; and,

d) When a period of one year has elapsed without the Gestora being find at least one Fund or without the Fund being placed on the market for participation of at least one Foreign Investment Fund. The Council, for one time, at the request of the Gestora may extend the period referred to above for up to six months.

Effects of Dissolution and Settlement Causals

Art. 39.-Any of the causes of dissolution and liquidation, the Council, shall notify the Gestora of these causes and give it a hearing, in order to present the corresponding allegations, which shall be made within four days The following shall apply from the relevant notification. Exhausted due process and based on technical reports and available information, the Council will dictate resolution revoking or not the authorization to operate the Gestora, to which it does

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reference to Article 11 of this Law. If the resolution is a recall, you must cancel your seat in the Register, within a maximum of five working days from the recall.

When the recall of the authorization to operate the Gestora is carried out, it is, within of the 15 days following the respective notification, shall proceed to the transfer to another Management of the Funds which it administers.

For the purpose of the transfer of the Funds, with the exception of the time limit, the provisions of Article 94 of the this Law.

The cancellation in the Register, of the Gestora, does not inhibit it to carry out the acts necessary to carry out the transfer of the Funds, whether these are Open or Closed. The Gestora will continue to be supervised by the Superintendence during the transfer period.

Effect on Open Funds

Art. 40.-The Gestora to which you are notified of the revocation of your authorization shall, within three working days of the notification referred to above, refer you to the Superintendence of the Financial System, a suggestion from the Gestora to the which will move the Open Funds it manages, as well as the corresponding transfer plan. The Superintendence shall authorize the Gestora and the plan of transfer of funds within three working days following the filing, or authorize the transfer to another Gestora of their choice, and recommend the modifications corresponding to the plan submitted, and in accordance with all technical requirements to be met. In the event that the actions of the Gestora do not correspond to the plan presented and authorized, the Superintendence must appoint an intervener, being applicable in this respect, the rules for the appointment of interventors with faculties of administration or cash-in-charge established in the Financial System Supervision and Regulation Act.

Effect on Closed Funds

Art. 41.-In the case of the closed funds managed by the Gestora, the Superintendence shall communicate the recall referred to in Article 39 of this Law to the Supervisory Committee, in order to be, within the five The following days of receipt of the communication, the Special Special Assembly of the participants shall be convened as a matter of urgency, which shall be held five days after the convening of the convocation. In this Assembly, the Management Committee or the Supervisory Committee shall report on the financial situation of the Fund and with that information, the members shall decide on the transfer of the Fund to another Management of their choice or on their settlement, appointing the liquidator in turn. This decision shall be communicated by the Supervisory Committee to the Superintendency within five working days. If this assembly is not held for lack of a quorum, it must be held on a second call two hours after the first.

The Assembly shall be constituted on first call with the assistance of members representing three quarters parties to the contributions paid, and the second call, shall be deemed to be legally held in half plus one of the number of contributions paid in attendance or represented. In both cases, the agreements shall be adopted in half plus one of the shares in the present or represented share. With respect to the convocation, it shall be observed in Article 82 of this Law, except as regards the deadlines and the provisions of its last paragraph.

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Faced with the impossibility of taking agreement in the first and second convocation due to lack of quorum a third call must be made within three to eight working days of the first and second convocation, which shall be deemed to have been legally met with at least 25% of the number of shares paid present or represented.

Not applicable as set out in Article 85 of this Act to the Assembly regulated by this provision.

Voluntary Dissolution and Settlement

Art. 42.-Once the authorization to operate the Gestora has been revoked and its registration has been cancelled, if the General Shareholders ' Meeting recognizes the cause of dissolution of this Chapter, such dissolution shall proceed until they have been moved. the Funds or the liquidators of the Funds have been appointed, as appropriate. The liquidation of the Gestora shall be carried out in accordance with the Trade Code.

Forced Dissolution and Settlement

Art. 43.-When the cause of dissolution contained in this Law or in the Code of Commerce is present, and the General Meeting of Shareholders does not recognize the cause of dissolution, the Superintendent must ask the Attorney General of the Republic to (a) request judicially the dissolution of the Gestora until after the transfer of the Fund or the Funds or the appointment of its liquidator. During this judicial process, the Gestora will not be able to continue carrying out operations.

The Gestora will be dissolved and its liquidation ordered, the judge, on a proposal from the Superintendent, will appoint one or more liquidators, and must add to its name the phrase "in liquidation".

Liquidators

Art. 44.-In the period of liquidation of the Gestora, the liquidators shall have the powers established in the Commercial Code and shall not carry out any new operations.

Failure to comply with the provisions of the foregoing paragraph shall make it the liquidators in the civil and criminal liability to which they have taken place, without prejudice to their personal property for the damage caused to the estate of the Gestora in liquidation or third parties.

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TITLE III INVESTMENT FUNDS

CHAPTER I FUND OPERATION

SECTION A PARTICIPATION QUOTAS

Participation quotas

Art. 45.-The contributions made by investors to a Fund shall be expressed in securities or in financial instruments denominated participation shares.

For the Open Funds, the Gestora shall carry its own records for the control of the Fund. of the participation fees, the contributions received by the Gestora by the investors with a statement of account issued by the latter; these quotas will not be transferable. The participation fees of the Closed Funds, must be represented by annotations in account.

Investors in an Open Fund will only be able to make their contributions in money; in a Closed Fund, in addition to money they will be able to carry them out in real estate, which must be free of all taxes and be accompanied by the solvency of the Tax Administration of the Investor. The Central Bank shall issue technical standards for the development of this provision.

Natural persons who are members of an Open Fund may designate beneficiaries of their participation fees, which shall be stated in the contract. (a) the subscription of shares, to the effect that the Gestora will update the register of members with the new holders of the securities. In the case of the Closed Funds the designation of beneficiaries shall be made in accordance with the provisions of the Law on Electronic Annotations of Securities in Account.

Placement

Art. 46.-The primary placement of shares of the Funds may be carried out directly by the Gestora, by means of the brokerage houses or by other legal persons authorized by the Council, in accordance with the requirements of the by means of technical standards, establish the Central Bank. For these purposes, the Gestora must enter into a contract of mandate with the legal persons referred to in this paragraph, expressly empowering them to represent it and to oblige it in all matters related to the subscription and payment of participation, within the limits of its mandate.

In the case of the Closed Funds, the primary placement of participation fees may be performed on the Stock Exchange in which they are registered.

The Managers must keep a record updated of the legal persons to whom they have conferred a mandate, in accordance with the provisions of the First point of this article. Such registration shall contain the general data of the mandates and be available to the Superintendence.

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The Gestora and its mandataries will have to display in their public service offices the legend next: "The amounts of money that are received as contributions to an Investment Fund are investments for the account and risk of investors, are not bank deposits and do not have the guarantee of the Deposit Insurance Institute." In addition, they should explain to the potential investor the characteristics of this form of investment, indicating that the amount originally contributed can increase or decrease.

Art. 47.-When an investor first acquires shares of a Fund's participation, or subsequent issues for the case of the Closed Funds, the Gestora or his or her mandataries shall provide him with a full copy of the following documents: Rules of Procedure of the Fund, extract of the Fund, subscription contract of shares of duly signed participation, prospect of placement of shares of participation and additionally an extract from it. In the participation fee subscription contract, you must record the delivery of the documents mentioned in this article.

The documents referred to in the preceding paragraph, except for the subscription contract of the shares of the participation, may be delivered to the investor, via magnetic or electronic means.

The content of the extract of the Regulation and the prospectus referred to in this article shall be established by the Central Bank using technical rules.

Transfer

Art. 48. Transfers of shares of closed funds represented by notes to the accounts shall be made by means of an accounting transfer, by means of seats in the records of the Depositary, which shall be without further requirements, would change and subject to autonomy rules, all according to the Electronic Securities Log Act.

Register of Participates

Art. 49.-The Gestora shall keep a record of all who have a quality of participation, separating them according to the way in which they have acquired the Fund's participation shares, as follows:

(a) The members who subscribe and (b

members who have acquired the participation fees for a means other than that of the subscription shall be registered at the time the entitlement is established.

When a holding fee belongs to co-ownership, its holders must designate a one of them to represent them in front of the Gestora.

The Gestora will be able to hire a company so that it can take the record referred to in this article. The Central Bank shall lay down the technical standards which shall lay down the technological and financial requirements to be met by the companies wishing to provide this service;

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Your compliance, the Superintendence will authorize the Gestora to be able to hire you. In addition to the above, this procurement must comply with the provisions of Article 30 of this Law.

Prohibition for Financial Entities

Art. 50.-The banks regulated by the Law of Banks, its subsidiaries and the financial institutions regulated by the Law of Cooperative Banks and Savings and Credit Societies, will not be able to acquire shares of participation of Funds that invest, directly or indirectly in shares. All of this in addition to what is regulated in article 28 of this Act.

SECTION B OPEN FUNDS

Operation

Art. 51. The Open Funds must have a minimum worth of three hundred and fifty thousand dollars from the United States of America and at least fifty participants; or ten participants, if among them there is at least one institutional investor, amount and number to be reached within one hundred and eighty days, counted from the date on which the Fund is established in the Register. After the aforementioned deadline, the Fund must comply permanently with the requirements of this article.

In case of non-compliance with the requirements contained in this article, the Gestora will communicate it at the latest. on the working day following the Superintendent, who, by reasoned resolution, may grant a period of no more than ninety days for compliance. If not achieved, the Gestora shall inform the Superintendent within two working days of the liquidation of the Fund, which shall be carried out in accordance with the provisions of the Arts. 103 et seq. of this Law.

institutional investors for the purposes of this Law, the Banks, Pension Funds, Insurance Companies, Reinsurers and Investment Funds duly authorized. Such a character shall also be determined by the Central Bank by means of technical standards, provided that any of the following conditions are met:

a) That its primary purpose is to make financial investments with resources of third parties; and,

b) That the volume of transactions, the nature of their assets or other characteristics, allows to qualify their market share as relevant.

The minimum equity referred to in this Article shall be updated as established by the Securities Market Act for the capital of constitution and operation

Fund Registration and Document Authorization Request

Art. 52.-The Gestora must accompany the application for registration of the Open Funds, the following documents:

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a) Internal Fund Rules;

b) Prospecting for the placement of participation fees;

c) Model of the subscription contract for participation fees between the Gestora, acting as the fund manager and the participant;

d) Method of valuation of investments in securities pursuant to Article 102 of this Law; and,

e) Other documents which, by the nature of the Fund, need to be submitted.

Submitted the application for registration with the information required by this Law, the Council shall have a period of up to thirty working days to authorize the Rules of Procedure of the Fund and the prospectus for the placement of participation fees. In order for the Council to authorize the subscription contract model for participation fees, the Superintendence must comply with the provisions of Article 22 of the Consumer Protection Act.

Register of the Fund

Art. 53. The Open Funds shall be established in the Register bearing the Superintendence for such purposes.

The Gestora shall submit the definitive documents referred to in the preceding article, as authorized by the Superintendence, in addition to the documents constituting the guarantee required by Article 22 of this Law, no longer than fifteen working days from the notification of the authorization of such documents. The Superintendence shall establish the Fund within a period not exceeding five working days from the date on which the Gestora submits the final documents.

The Open Funds shall not be entered on the Stock Exchange, they shall only be settled in the Register.

For the purposes of this Act, a Fund will be understood to initiate operations when it is seated in the Registry.

Rules of Procedure

Art. 54.-The Rules of Procedure of each Open Fund shall contain at least the following:

a) Expression "Open Investment Fund", followed by a name that individualizes it from any other Fund authorized by the Superintendence;

b) Definition of participation rate classes, if any;

c) Investment policy and diversification of investments, detailing, where applicable, the risk classification of assets in which invest the Fund and consider the treatment of investment excesses;

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d) Liquidity policy for your assets;

e) Debt policy;

f) Commissions to be charged by the Gestora, indicating whether they are in charge of the Fund or the investor, expressed as percentages or amounts;

g) Expenses to be charged to the Fund, clearly detailing their concepts;

h) Rules regarding mandatory information to be delivered to unit-holders, in addition to that set out in this Act;

(i) Indication of the national circulation newspaper in which the publications required by the Law are to be carried out;

j) Rules for the subscription and redemption of the participation fees;

k) Procedures for to resolve differences or conflicts between members in their capacity, or between them and the Gestora;

l) maximum participation rates for participants;

m) Criteria for the selection and renewal of the external and fiscal auditor where appropriate, from the Fund;

n) Policies in accordance with the legal provisions on the Fund operations with related persons, management of conflicts of interest and assignment of operations when different Funds are administered;

o) Policies, measures and procedures the object of which is the appropriate solution of conflicts of interest between the Fund and its respective Gestora, such as: investments and transactions with related persons, operations between Funds and operations between the Fund and its Management;

p) Deadline for the payment of ransoms, specifying which corresponds to those bailouts representing significant amounts of the total of their assets;

q) Defining a significant amount in daily terms for rescue purposes;

r) Form and periodicity of contribution conversion and participation fee bailouts;

s) Form of payment of subscription of shares of participation;

t) Input and rescue systems, as well as systems and entities involved in the placement and redemption of participation fees;

u) Custody systems of the securities that integrate their assets;

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v) Management and settlement rules, contemplating the maximum percentage of fees in respect of to the assets of the Fund which would correspond to the liquidator;

w) Indication that has a risk classification;

x) The procedure for the calculation of the value of the participation fee, which shall be carried out on the basis of technical standards Set the Central Bank.

Placement Package

Art. 55.-The Open Funds must have a prospectus for the placement of participation fees, which will incorporate the following aspects:

a) General information about the Fund Manager;

b) Information about the constitution Fund legal;

c) Risk classification of the Fund;

d) Class of share;

e) Description of the Fund's investment policy and investment diversification, detailing the types of assets in which they will invest, treatment of excess investment and other background to enable knowledge of risks and potential returns of the Fund;

f) Description of the Fund's borrowing policy;

g) Description of fees and expenses, specifying whether they are from the Fund or the investor;

h) Summary of the information that must be required

i) Procedure for the subscription and redemption of the participation fees;

j) Maximum percentage of shares of the participants in the Fund;

k) Indication of the time limit for the payment of the participation ransoms;

l) Periods of contribution conversion and participation fee bailouts;

m) Form of payment for subscription of participation fees;

n) System of contributions and rescue, as well as systems and entities involved in the placement and rescue of participation fees; and,

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o) Any other information that the Gestora considers.

The Gestora must put the the provision of the listing particulars to the public, in its offices and in those of its members, and must be given to any person who so requests. This leaflet may be delivered in printed, electronic or magnetic media, as requested by the person concerned.

Amendments to the Fund

Art. 56.-Any amendment to the Rules of Procedure of an Open Fund, the prospectus for the placement and the model of the subscription to the subscription of participation shares shall be authorized by the Council, at the request of the Management and Subsequently, the Fund's seat in the Register must be amended.

The modifications to the name of the Fund, the investment policies, the commissions that the Gestora receives, the expenses charged to the Fund and other changes of the same relevance, after being authorized by the Superintendence, must be communicated to the public by the Manager, by means of a prominent notice published in the newspaper established in the Rules of Procedure of the Fund. In such cases, the modifications shall be effective 15 days after their publication.

Prior to the publication of the notice referred to in the preceding paragraph, the Gestora shall report such modifications directly to the participants, either by means of printed, electronic or magnetic means as requested by him, to enable them to corroborate this management. Such information must specify the content of each change.

The Central Bank will dictate the technical standards that allow for the development of this article.

Participation Quota Rescue

Art. 57.-The members of an Open Fund shall be entitled at any time to request the Management of the full or partial redemption of their shares against the Fund's assets.

For these purposes, the Gestora shall keep a record of the special in which the subscription and redemption requests for their order of entry are recorded, indicating the date and time of each request.

The participants shall exercise their right to rescue, giving notice to the Gestora through systems that the rescue operation will be verified and their rights will be protected and verifiable, be covered by the Fund's Rules of Procedure.

Additionally, in the event that the rules of procedure so provide, the President of the Gestora may receive requests for the rescue of participation fees and the payment of the payment to the unit-holders. In this case, the date and time of each request referred to in the second paragraph of this article shall correspond to the time when the request is received by the president.

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Payment of the Rescues

Art. 58.-The payment of the ransoms must be made in accordance with the deadline and other conditions set out in the Rules of Procedure of each Fund, and the Gestora may do so in an extraordinary manner with the values of the Fund's investment portfolio, is required or authorised by the Council, motivated by situations which may result in strong variations in the price of the instruments to the detriment of the unit-holders or by serious disturbances on the stock market. Such extraordinary payment with securities shall be made in compliance with the diversification and proportionality of the securities that make up the Fund.

The Managers may establish in the internal regulations of the Funds they administer, the for the redemption and payment of participation fees for those bailouts made on a day that represent significant amounts in relation to the Fund's assets.

Art. 59.-For the purposes of the foregoing Article, significant amounts shall be deemed to be of significant amounts, those which upon being rescued on a given day, require the liquidation of an important part of the Fund's investment portfolio, in such conditions that such bailouts could be expected, on their own, to generate a considerable decrease in the value of the Fund's assets.

The Managers will have to define in the respective internal rules, a significant amount in daily terms for each Fund that they administer, such as a fixed amount or as a percentage of the equity Fund, corresponding to the day before the date of the request for ransom.

The systems for the rescue and payment of participation quotas that are defined for those rescues that represent significant amounts daily on the patrimony of the Fund, they shall at least provide for the maximum period for their payment and the fee structure to be applied. Such time limit shall be laid down in the Fund's Rules of Procedure and the subscription of participation fees.

Exceptionally in duly justified extreme cases, such as public calamity, national emergency, serious market imbalance or situations which could cause serious injury to investors, the Council, on its own initiative or at the request of the Gestora, may extend the time limits referred to in the preceding paragraph and Article 58 of this Law, as well as temporarily suspending the subscription of new fees or the payment of ransoms.

Participation Quotas Value

Art. 60.-Participation fees will be valued daily, dividing the value of the Fund's equity between the number of shares, subscribed and paid.

In the event that there are different classes of participation fees, each one of them will be assessed on a daily basis by dividing the value of the equity part of the Fund corresponding to that class among the number of shares subscribed to and paid from that class.

The Central Bank shall issue the technical standards concerning the rules to be used for the conversion of contributions into participation and rescues of them.

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SECTION C CLOSED FUNDS

Operation

Art. 61.-The closed funds must have a minimum worth of three hundred and fifty thousand dollars from the United States of America and at least 10 participants, or two participants, if among them there is an institutional investor; the number to be reached within six months from the date on which the Fund is established in the Register. After the aforementioned deadline, the Fund must comply permanently with the requirements of this article.

In case of non-compliance with the requirements of this article, the Gestora will communicate it no later than the day Next to the Superintendent, who by reasoned resolution may grant a period of not more than one hundred and eighty days for his/her compliance. If not achieved, the Gestora shall inform the Superintendent within two working days of the liquidation of the Fund, which shall be carried out in accordance with the provisions of the Arts. 103 et seq. of this Law.

The minimum equity referred to in this article shall be updated as established by the Securities Market Act for the capital of incorporation and operation.

Application for Fund Registration and Document Authorization

Art. 62.-The Gestora shall accompany the application for registration of the Closed Funds with the following documents:

a) Draft Issuance Of Participation Fees;

b) Rules of Procedure of the Fund;

c) Prospect of participation rate placement;

d) Model of subscription contract of participation fees between the Gestora and the participant;

e) Method of valuation of investments in securities pursuant to Article 102 of this Law; and,

f) Other documents which by the nature of the Fund need to be submitted.

The Council it shall have a period of no more than 30 working days to authorise the Fund's Rules of Procedure, the prospectus for the placement of shares and the draft writing of shares of shares, counted from the date of submission of the application for registration of the Fund with complete information for the Council to authorize the model of the subscription of the participation quotas, the Superintendence must comply with the provisions of Article 22 of the Consumer Protection Act.

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Registry of the Fund and the Issue

Art. 63.-The closed funds, as well as their emissions, must be established in the register bearing the Superintendence for such purposes and must subsequently be registered on a stock exchange. For the registration of the issue, the requirements of the Law of the Market of Values must be met in that it does not contradict this Law.

The Gestora must present the definitive documents referred to in the previous article in accordance with the Superintendence, accompanied by the documents constituting the security required by Article 22 of this Law, within a period not exceeding thirty working days from the notification of the authorization of documents. The Superintendence shall establish the Fund and its issuance no longer than five working days from the date on which the Management submits the final documents.

A Fund initiates operations when it is established in the Register and on a Stock Exchange.

Features of the Emission

Art. 64.-In those cases where the primary placement of the participation fees is carried out by the Gestora or its mandates, the placement price determined by the Gestora shall be updated daily during the subscription period of the participation, in the form that is established in the respective issue. In any event, the price may not be less than that resulting from dividing the value of the Fund's equity between the total number of shares paid, both corresponding to the immediate day before the date of calculation.

The above paragraph shall not apply for the placement of shares held on the Stock Exchange.

Art. 65. In the event that the initial assets are higher than the minimum set out in Article 61 of this Law, the time limit for the issuance, subscription and payment of the participation fees may not exceed three years. This period shall be counted, in the case of the first issue of participation shares, since the Fund and the issue are settled in the Register and on a Stock Exchange. Due to this deadline, the capital will be reduced to the amount actually paid, without prejudice to the provisions of Article 61 of this Law.

Art. 66.-An issue shall be deemed to be unsuccessful, provided that conditions have been established to be met within a specified period of time, these would not have been fulfilled.

In case the subscription and payment of participation shares of the issue will be failed according to the conditions of the issue, the respective subscription and payment will be without effect.

The contributions in money that have been made in quotas of participation of a declared failed issue, must be returned to the respective unit-holders, with the participation fees being valued at a non-lower value to which the Fund's assets are divided between the number of participation fees actually paid; the repayment term may not extend beyond

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ten days of the end of the subscription period for participation fees. If the contribution made by an investor has consisted of real estate, if the property has been transferred, the product of its sale shall be returned to it, in the same period as the aforementioned; if it has not been disposed of, it shall be returned within a period of time. maximum of two months. The external auditor of the Fund shall deliver an opinion of all of the above.

During the period of placement of the participation fees and as long as the issue may be unsuccessful, the contributions made to the Fund may only be made available to the Fund. investing in high-liquidity and low-risk securities or deposits in banks domiciled in El Salvador, the Central Bank, by means of technical standards, shall establish the criteria to be met by an instrument to be considered high-liquidity and low-liquidity. risk.

Rules of Procedure

Art. 67.-The Rules of Procedure of each Closed Fund shall contain at least the following:

a) Expression "Closed Investment Fund", followed by a name that individualizes it from any other Fund authorized by the Superintendence;

(b) Duration of each Fund;

c) Investment policy of the resources, including at least the types of assets to be invested in and the diversification of the Fund's investments, considering the treatment of investment overruns;

d) Liquidity policy for its assets;

e) capital increase through the issuance of participation fees;

f) Debt policy;

g) Policy for the distribution of benefits obtained by the Fund;

h) Commissions to be charged by the Gestora, indicating whether they are charge to the Fund or the investor, expressed as percentages or amounts;

i) Expenses to be charged to the Fund, clearly detailing its concepts;

j) Rules regarding mandatory information to be delivered to unit-holders, in addition to what is established in this Law;

k) Indication of the national circulation newspaper in which it is carry out the publications required by the Law and those that they impose;

l) Procedures for resolving differences or conflicts between members in their capacity, or between them and the Gestora;

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m) Maximum participation rates for participants;

n) Criteria for selecting the external and fiscal auditor, if any;

o) Policies, in accordance with the legal provisions, on the operations of the Fund with related persons, management of conflicts of interest and assignment of operations when handled different Funds;

p) Policies, measures and procedures the object of which is appropriate conflict of interest settlement between the Fund and its management, such as: investments and operations with related persons, operations between Funds and operations between the Fund and its Gestora;

q) The privileges, duties and responsibilities of the Supervisory Committee and, if applicable, the remuneration of its members under the Fund;

r) Form and periodicity in which the Management shall report the ownership of shares of entities in which it is circumstantially the Fund becomes controller;

s) Materies that will correspond to the knowledge of the Assembly Extraordinary of participants, additional to those established in this Law;

t) Terms, conditions and deadlines in the event of making voluntary and partial capital decreases;

u) Causals that originate the right to withdraw;

v) Rules for the administration and settlement of the Fund;

w) Confirm that it has a risk classification; and,

x) The procedure for calculating the value of the participation fee, which shall be made on the basis of technical standards Set the Central Bank.

Placement Package

Art. 68.-The Closed Funds must include a prospectus for the placement of participation fees for each issue, which will incorporate the following aspects:

a) General information on the Fund Management;

b) Information on the Fund legal constitution;

c) Risk classification of the Fund;

d) Characteristics of the issue, such as its amount, time and price of placement, number of shares, form of daily price update placement during

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the subscription period, conditions in which an issue, assets in the the resources contributed during the period of subscription and identification of the management companies of the Gestora participating in the placement, if any;

e) Description of the investment policy and of the diversification of investments from the Fund, detailing the types of assets in which they will invest; treatment of excess investment, major sectors or investment projects and other background to enable knowledge of the risks and potential returns of the Fund;

f) Description of the Fund's profit distribution policy;

g) Causals that cause the right to withdraw, if they exist;

h) Description of policy on capital increases and decreases;

i) Description of debt policy;

j) Description of commissions and expenses, specifying whether they are from the Fund or the investor;

k) Summary of the information that is required to be delivered to the Fund's unit-holders;

l) Audited financial information of the Fund, in the case of second-issue issues; and,

m) Any other information considered by the Gestora.

Gestora shall make available to the public, in its offices and those of its president, the prospectus for placement, and must provide it to any person who requests it. This leaflet may be delivered in printed, electronic or magnetic media, as requested by the person concerned.

Exchange Registration

Art. 69.-Granted the issue in the Register, the Superintendence must inform the Gestora so that it proceeds to register the shares of participation in a stock exchange.

It will not be possible to make public offer of quotas of participation of a Fund Closed, without previously being settled in the Register and registered on a Stock Exchange authorized under the Securities Market Act.

Amendments to the Fund

Art. 70.-Any amendment to the Rules of Procedure of a Closed Fund, to the prospectus for placement, to the model for the subscription of participation shares and to the issue, shall require the prior authorization of the Council, Request of the Gestora. Such a resolution shall be notified within the following fifteen days of agreement and thereafter the Fund seat must be modified

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in the Register and its issuance, if any. Notwithstanding the foregoing, the amendments to the Rules of Procedure shall, prior to their presentation to the Superintendence, have been approved in an Extraordinary Assembly of members, in accordance with this Law.

The amendments to the documents referred to in the preceding paragraph shall enter into force 15 days after the notification has been notified of the authorization by the Council, within which time they shall be informed directly to the members by means of corroboration This is a very good management. This information must specify the content of each of the changes made. The Central Bank will dictate the technical standards that allow for the development of this article.

Emission Emissions

Art. 71.-In the same Fund there may be more than one issue. The emissions after the first one must be agreed upon in the Extraordinary Assembly of participants and the same legal requirements as necessary for the registration and registration of the first issue, adding the certification of the corresponding agreement of the Assembly of members.

Art. 72.-For the determination of the price of the placement of the following issues to the first, the unit-holders shall be given broad and reasoned information on the elements of valuation of the participation shares, supported at least, in two reports of independent experts in the field; the reports shall be available to the members five days in advance of the Assembly to approve the characteristics of the respective issue. Experts ' fees will be paid from the Fund.

Members will be entitled to a preferred option period to subscribe to the Fund's capital increase participation fees, which must be offered to them as at least once, on a pro rata basis, of the participation quotas they hold. This right is essentially renountable and transferable.

In the event that the Gestora or its mandates place the issues, the placement price during the subscription period of the participation fees will be updated daily in the form to be established in the respective issue. In any case, outside the preferred option period, the price may not be lower than the price determined for the respective preferred option period, nor to the extent that the daily value of the Fund's assets is divided between the number of paid participation, both on the immediate day before the date of the calculation.

As indicated in the preceding paragraph in respect of the placement price, no account shall be taken of the placements made on the Stock Exchange, which has been established under the terms of the issue. The agreement of the assembly of members on an increase in capital may not set a period of more than three years, counted from the date of the agreement of the same for the issue, subscription and payment of the respective shares. Due to the fact that no capital increase has been found, this period will be reduced to the amount actually paid, without prejudice to the provisions of Article 61 of this Law.

Art. 73.-Each time a preferential offer of subscription of participation shares is made, the Gestora must make available to the owners of participation shares with the right to participate in the preferential subscription, signed constances by the Manager who evidenced that circumstance. This

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right will be for those members registered in the respective registry with five working days of In advance of the commencement of the preferential offer.

The owners of participation shares with the right to subscribe to them or the transferee of these shares, will manifest in writing to the Gestora their intention to subscribe to the quotas of participation within a maximum period of 30 days from the date of publication of the notice referred to in the following paragraph. If nothing is said within that period, they shall be deemed to give up that right.

The conditions for the placing of shares of a Fund shall be published in the newspaper referred to in the Rules of Procedure of the Fund, by an outstanding notice, according to technical standards dictated by the Central Bank.

Art. 74.-For subsequent emissions, Article 66 of this Law shall apply in respect of the treatment of failed emissions, except as regards the calculation for the return of the contributions in money.

If the subscription and payment of the Participation will be without effect because the issue will fail, the Gestora will proceed to liquidate the investments made with the resources obtained in that placement.

The liquidation, for the contributions in money, the value obtained (a) to be returned to each of the unit-holders, taking into account the percentage of the number of the participation fees subscribed and paid by each of them, in relation to the total number of shares actually paid in cash from the failed issue. This value may not be less than that resulting from the division of the resources obtained in the failed placement between the total number of participation fees actually paid in money from that issue.

Distribution of Benefits

Art 75.-The Closed Funds shall distribute the net profits received during the financial year, in accordance with the distribution policy expressly set out in their respective Internal Regulations.

amount to be subtracted from the sum of profits, interest, profits, dividends and capital gains actually received, the total loss and expenses incurred in the period.

If the Fund has accumulated losses, the net profits received shall be used first to absorb them. On the other hand, if there are losses in an exercise, they will be absorbed with retained earnings, if any.

Capital decreases

Art. 76. The Closed Funds may make voluntary and partial reductions in their capital, in so far as the Rules of Procedure of the Fund provide for it, in the form, conditions and time limits specified therein. In addition, this Regulation should contain minimum information to qualify for the reduction of capital, payment dates and methodology for the calculation of the return value of the participation fees.

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These decreases may only be made for the purposes listed below:

(a) In order to restore to its members during the lifetime of the Fund the proportion that corresponds to them in the decrease of the capital; without prejudice to it, these will be able to increase equitably their right to the restitution of the value of the quotas participation, when others do not exercise it; and,

b) To reinstate the unit-holders the value of their share shares, if they choose to withdraw, when the duration of the Fund is agreed to be extended by the Assembly of members or changes or provisions granting that right are amended or deleted. In this case, the Rules of Procedure of the Fund shall include the causes for which the right to withdraw may be exercised.

The Gestora shall publish a notice in the newspaper referred to in the Rules of Procedure and transmit a communication to the the members of the relevant media which allow to corroborate this management, within two working days following the one in which the agreement was reached in the Extraordinary Assembly of members, indicating the reduction of capital or the agreement which gave rise to the right to withdraw, the period for its exercise and the date of payment of the value of its Participation quotas

Notwithstanding the provisions in the literal a) of this article, the Gestora, with the previous report of the Committee of Surveillance, must quote to the Extraordinary Assembly of members to adopt the agreement of not to carry out the

Without prejudice to the provisions of this article, capital may be reduced to absorb losses arising from the operations of the Fund, after agreement adopted in the Extraordinary Assembly of Members.

Surveillance Committee

Art. 77. Each Closed Fund shall have a Surveillance Committee composed of three members, elect the Ordinary Assembly and last one year in office, shall be paid from the Fund and may be re-elected, as determined in the Rules of Procedure. internal. Such members shall not be persons related to the Fund Management and at least one shall have the quality of participation. The members of the current Supervisory Committee will continue to carry out their duties until the new ones take office. The decisions of the Supervisory Committee shall be taken by a majority.

If the members of the Supervisory Committee are members of the Supervisory Committees of other Funds or are Directors or administrators of another Gestora, they shall inform the Superintendence.

The Gestora shall provide the members of the Supervisory Committee with full and documented information, at any time, of everything related to the operations of the Fund.

The Supervisory Committee shall meet at least twice a year, to receive the Gestora's report on the activities of the Fund, as well as the opinions of the external and fiscal auditors, if any.

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The Surveillance Committee must be informed before the Gestora convenes a Extraordinary Assembly, with the aim of having an opinion on the matters to be dealt with in that Assembly.

The Fund in the Register, the Gestora will proceed to appoint a provisional Supervisory Committee, which will last in its functions until the First Assembly of Members, in which the members of the Supervisory Committee shall be elected.

Requirements and Privileges

Art. 78. The members of the Supervisory Committee shall be of recognized good repute and shall have at least five years of proven financial and administrative experience or in accordance with the investment regime of the respective Fund.

Surveillance will have the responsibility to act exclusively in the best interests of the members, for which it will monitor the operations that the Gestora carries out with the resources of the Fund, being its attributions the following:

a) Verify the Management complies with the provisions of the Fund's Rules of Procedure and report on the Ordinary Assembly of Members.

b) Verify that the information for the participants is sufficient, truthful and timely.

c) To monitor that the investments, increases or decreases in capital and any other operations of the Fund are carried out according to this Law, to the technical standards dictated by the Central Bank and to the Fund's rules of procedure. If the majority of the members of the Supervisory Committee determines that the Gestora has acted in contravention of those provisions, the latter shall ask the Gestora to convene an Extraordinary Assembly of Members, where it shall inform that situation. The call shall be made within a period not greater than five working days, counted from the date of the agreement.

d) Propose to the Ordinary and Extraordinary Assembly of members the appointment of external auditors and when the Law requires it, propose to the Fund's fiscal auditor.

e) To report annually on its management to the Ordinary Assembly of members.

f) The others to establish this Law and the Rules of Procedure.

For the purposes provided for in literals (a), (b) and (c) of this Article, the Audit Committee may review the records, books and all documentation on the Fund. The Supervisory Committee shall immediately make known to the Superintendence any non-compliance it will detect on these aspects.

The members of the Supervisory Committee are required to carry out their duties diligently. (a) functions and reserves in respect of the Fund's business and may not take advantage of the information to which they have access by reason of their position and which has not been disclosed by the Gestora.

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The Central Bank will issue technical standards for the development of this article.

Assemblies de Participants

Art. 79.-In the Closed Funds, the participants shall meet in Ordinary or Extraordinary Assemblies.

The Ordinary Assemblies shall be held once a year, within five months of the closing date of each financial year, to decide

the extraordinary assemblies may be held at any time, when required by the needs of the Fund, in order to decide on any matter that the Law or the Rules of Procedure Internal of the Fund assign to the knowledge of those Assemblies and whenever such matters are pointed out in the call.

It will be the responsibility of the Gestora, or of whom the Assembly will preside, when that has not been represented, to raise a record of what happened and agreed during the session, which must be subscribed by at least two Members elected at the beginning of the Assembly for these purposes and must settle in the respective Book of Acts.

When, for any circumstance, the minutes of an Assembly in the respective Book cannot be settled, the development of the session will settle in the protocol of a notary.

The Central Bank will dictate the technical rules on formalities to be contained in the Book of Acts referred to in this article.

Ordinary Assembly

Art. 80.-They are the privileges of the Ordinary Assembly of members, the following:

a) To elect members of the Supervisory Committee annually, to set their diets in the event of being remunerated according to the Rules of Procedure, to approve their expenses, how to receive your annual report and the corresponding settlement of your expenses;

b) Approve the Fund's annual financial statements;

c) Approve the expenses related to the management and administration of the Fund to be presented by the Gestora.

(d) Name the external auditor and his/her alternate as well as the tax auditor if applicable and fix their emoluments.

For literals (a), (b) and (c) of this article, the Assembly may require adjustments that it considers relevant.

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Extraordinary Assembly

Art. 81.-They are the privileges of the Extraordinary Assembly of members, the following:

a) Approve the modifications proposed by the Gestora, the Supervisory Committee or the members to the Rules of Procedure of the Fund;

b) Agreed on the transfer

c) Agree to the early settlement of the Fund, appoint the liquidator, setting it remuneration and powers in accordance with this Law, and approve final expenditure at the end of the term. of the settlement;

d) Agree to merge with other Funds;

e) Approve the increase capital of the Fund by means of new emissions of participation shares and the characteristics and conditions of the Fund, fixing the amount to be issued, the time and the price of the placement;

f) Acordar capital decreases;

g) Taking knowledge of any situation which may affect the interests of the members;

h) Other matters which, in accordance with this Law and the Rules of Procedure of the Fund, correspond to their knowledge;

For the cases referred to in literals (b) (c) compensation to the Gesture for damages may be laid down in the Rules of Procedure caused to this, by a preset amount or percentage, when the replacement or liquidation has not come from causes attributable to it.

Convocation

Art. 82.-The Ordinary or Extraordinary Assemblies must be convened by the Gestora.

The Gestora shall convene an extraordinary assembly whenever in his judgment the interests of the Fund so warrant, so request the Supervisory Committee, the Superintendency or unit-holders representing at least ten per cent of the participation shares issued and paid.

Subject to the provisions of the above, the Superintendence or the Supervisory Committee, may call directly to Ordinary or Extraordinary Assemblies of members, as the case may be.

Assemblies convened under the application of the members, the Supervisory Committee or the Superintendence, shall be held within the maximum period of thirty days from the date of the respective request.

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Notwithstanding the provisions of this article, the convening of a General Assembly will not be necessary. Ordinary or Extraordinary, if the members or representatives of all the participation shares in which the Fund's assets are divided are assembled, they shall agree to settle in Assembly and approve the agenda unanimously.

Art. 83.-First and second convocation assemblies may be held on the same date with at least two hours of difference; they shall be announced in the same notice, which shall be published for once in the national circulation newspaper determined in the Rules of Procedure of the Fund. The publication must be made no later than ten days before the assembly is held, within which the day of publication of the convocation and the celebration of the Assembly shall not be counted.

The publication shall indicate the name of the Gestora and the name of the Fund; the day, time and place of celebration; the nature of the Assembly to which it is called; the quorum required; the agenda; as well as the name and title of those who sign the call.

In addition, it will be sent the call to each participant at least ten days in advance of the date of the assembly, which may be carried out by direct delivery or by any other means which the participant designates in writing and which permits to be kept on record of receipt, in any case shall contain the agenda to be developed. Participants who register in the respective registry after the call will be notified of the call at the time of their registration.

Participants in the Assemblies

Art. 84.-Only those who are registered in the register of members or their representatives may participate in the Assemblies. Each quota shall be entitled to one vote. The representation must be conferred by letter with a signed signature by notary.

Quorum

Art. 85.-The Ordinary Assemblies shall be constituted, on first call, with the assistance of members representing the half plus one of the contributions paid; and on the second call, with whatever the number of the shares of participation present or represented. The agreements will be adopted in both cases by half plus one of the participation quotas present or represented.

The Extraordinary Assemblies will be constituted, on first call, with the assistance of participants representing the three-quarters of the contributions paid; and on the second call, with the members representing one half plus one of the contributions paid. The agreements shall be adopted by three quarters of the participation fees paid in the case of the first call and three quarters of the participation fees present or represented in the case of the second call.

Third Call

Art. 86.-If the Extraordinary Assembly has not been able to be held for lack of quorum on the dates of the convocation, a new call will be made in accordance with this section, which cannot be announced simultaneously with the first and second convocation. In addition,

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express the circumstance of being third convocation and that, consequently, the Assembly will be valid whatever the number of participation quotas present or represented. The agreements will be adopted with half plus one of the participation fees present or represented.

SECTION D PROVISIONS SETTINGS

Custody

Art. 87.-The values in which the Managers invest the resources of the Funds, when appropriate according to their nature, must be in the custody of an entity authorized under the Law of the Market of Securities.

The Gestora must celebrate deposit and custody contracts with the entities that will provide this service, which shall contain provisions to ensure the security and fluidity of the custody service. In order to comply with this provision, the Central Bank will dictate the technical standards regarding information to be sent to the Superintendence by the company that provides the custody service.

Risk Classification

Art. 88.-Each Fund shall have at least one classification reflecting the risks of the assets belonging to that Fund and the operations it carries out, as well as the management quality of the Gestora. This should be done by a risk classification entity authorized in accordance with the Securities Market Law, and the first one should be made prior to the filing of the application for registration of the Fund. The Central Bank shall issue technical standards on minimum legal and financial aspects that risk classifiers should consider in their reports, as well as the periodicity with which the said Fund classifications will be updated.

Inembargability

Art. 89.-Assets in which a Fund invests may not be foreclosed or subject to any precautionary or precautionary measure by the creditors of the Gestora or the unit-holders.

Value of the Fund's Heritage

Art. 90.-The value of the Fund's assets shall be calculated by subtracting the value of its assets, liabilities.

Accounting

Art. 91.-The Central Bank, on the basis of generally accepted international accounting standards and principles, shall establish the manner in which the accounts of the Funds are to be kept, in such a way as to enable them to establish their actual financial situation and tax, as well as the effects

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as provided for in Article 209 of the Tax Code. Such accounting must be independent of the management's accounting.

Publication of Financial Statements

Art. 92.-Each Gestora shall publish in the national circulation paper provided for in the Rules of Procedure of the Fund, the financial statements of each of the Funds it administers, at the end of 30 June and at the end of December of each year; the latter must be accompanied by the opinion of the external auditor, with the number of shares and their unit value expressed in them. Such publication shall be made within a maximum period of 60 days from the dates indicated.

Notwithstanding the provisions of the above provisions and the information by the means referred to in Article 34 of the This Law, the participants will have access to the complete information on the financial statements and investments of the Fund in the offices of the Gestora and the mandatory societies.

The Central Bank will dictate the technical norms that determine the minimum content of the information to be published.

External Audit

Art. 93.-The Gestora shall appoint the external auditor of a Fund, prior to submitting the application for registration of the Fund.

The external auditor of the Fund shall be registered with the Superintendence and comply with the minimum requirements of the Fund.

The Superintendent, through reasoned resolution, may require additional external audits from the Fund, where it is necessary to clarify or investigate any facts. " or operation.

Transfer of a Fund

Art. 94.-Taking the agreement on the transfer of the administration of a Fund, whether or not for the dissolution of the Gestora, the Supervisory Committee, for the case of the Closed Funds or the Gestora, for the case of the Open Funds, shall inform the Superintendence, attaching the certifications of the transfer agreements and the certifications of the agreements of acceptance of the acquiring Gestora. In addition, the Supervisory Committee or the Gestora, as appropriate, shall communicate the shipment by means of an outstanding notice published in the newspaper established in the Rules of Procedure of the Fund. Likewise, the Superintendent will communicate this transfer to the Tax Administration.

The transfer of a Fund as a patrimonial unit can only be carried out in favor of another Gestora governed by this Law and must understand all the goods, rights and obligations constituting the assets and liabilities of each Fund, as well as guarantees, guarantees or guarantees.

The transfer of the Funds must be carried out within 30 days of the communication to the Superintendency, may be extended by the Council for an additional 30 days.

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If within the time limit set, the Funds have not been able to move to the acquiring Gestora, will proceed to its liquidation in accordance with the provisions of the Arts. 103 et seq. of this Law.

The acquiring Gestora will succeed in full rights to the former in its rights and obligations, including the taxes, after having completed the transfer of the Fund and the respective registration has been amended as regards the change from your administrator. When the modification is carried out in the Register, the acquiring Gestora will have one hundred and eighty days to make the necessary adaptations to comply with the provisions of this Law. The transfer of the Fund shall be certified by its external auditor.

The Central Bank shall issue the respective technical standards for the development of this article.

Fusion of Funds

Art. 95. The Council, at the request of a Gestora, may authorise the merger of funds. For the purposes of this Article, the Central Bank shall issue technical standards which shall establish the procedure for applying for merger authorization to the Superintendence and the documents accompanying such a request, including merger, amendments to the Internal Regulations and the models of contracts for the subscription of participation shares, as well as the information to be made available to the participants before and after the merger, considering the changes to the investment policies of the respective Funds and the method of calculation of the exchange ratio which will be used for the conversion of quotas. In order to grant the said authorization, the tax administration of the respective Funds must be presented in the terms provided for in the Tax Laws for these cases.

CHAPTER II INVESTMENT REGIME

Investment Object

Art. 96.-Investments made with the resources of the Funds will have the sole purpose of obtaining an adequate return, depending on the level of risk and the liquidity requirements defined in the investment policy contained in the respective Rules of Procedure. Any other object intended to give to such investments shall be considered contrary to the interests of the unit-holders and shall constitute a breach of the obligations of the Gestora.

The investments the Funds shall make value at market price.

In the case where the assets to be valued are immovable, they must be valued by experts registered with the Superintendency or other entities whose records are recognized, using for the valuables that practice, methods of recognized technical value approved by this.

The Central Bank will issue rules techniques that allow the development of this article.

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Investments

Art. 97.-The resources of the Open Funds and Closed Funds, without prejudice to the amounts they keep in cash, in current account, savings or time deposits, shall be invested in:

a) Securities issued or guaranteed by the State of El Salvador or by Autonomous Institutions of El Salvador;

b) Bonds and other securities issued or guaranteed by local banks;

c) Securities representative of the investor's individual participation in a collective credit Salvadoran companies or securities representing the participation in the equity of companies

d) Quotas for the participation of Open or Closed Funds regulated in accordance with this Law;

e) Securities issued in a process of securitization, according to the Salvadoran regulation;

f) Reportos with securities public offering as defined in the Fund's Rules of Procedure;

g) Securities issued or guaranteed by foreign countries, Central Banks or foreign banks or international bodies; shares and bonds issued by companies foreign securities; securities issued in a foreign securitization process and quotas Foreign investment fund participation; and,

h) Other public offering securities that are authorized by the Central Bank by technical standards, taking into account whether it is an Open Fund or a Closed Fund.

The investments they make reference to the previous literals, must be carried out on a Salvage Stock Exchange, except those made in shares of local and foreign Open Fund participation. They will also be able to negotiate the securities issued by the State of El Salvador and the Central Bank.

The Closed Funds, in addition to the above mentioned, will be able to invest in real estate located in El Salvador that will generate income that will come from of your lease or sale. If, as part of the development of the real estate acquired by a Fund, construction or remodeling is necessary, these can only be carried out by third parties, observing the procedures and safeguards that by means of rules Technical standards for the Central Bank. In order to invest in real estate at the time of purchase, the solvency of the Tax Administration of the owner of the property must be taken into account. Similarly, the Closed Funds may invest outside the stock exchange in securities issued by companies whose shares are not traded on the Stock Exchange and that its purpose is to invest in specific business projects to be developed in the medium and long term.

The Open Funds and Closed Funds, without prejudice to the foregoing, may also acquire shares in the primary market.

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In the case of Open Funds, at least twenty percent of its resources must be maintained. in cash, in bank deposits and in securities that meet the liquidity requirements that are established by the Central Bank by means of technical standards, considering the secondary market for the instruments. In cases where market conditions so require, the Council by reasoned resolution may temporarily modify the above percentage.

Additionally, with the resources of the Open Funds and the Closed Funds, may be carried out on markets organized in El Salvador or abroad, operations having as an exclusive object the risk coverage of the Fund's investments.

Where appropriate, the securities and other assets in which the funds are invested. Funds from the Fund shall be issued or transferred with the clause: "For the Investment Fund" followed by the name of the same and preceded by the name of the Gestora who administers it. The same will apply when these resources are deposited in current account, savings account or term.

The Central Bank will issue technical standards for the development of this article.

Investment and Indebtedness limits

Art. 98.-The Central Bank shall, by means of technical standards, establish the limits for investments which, with resources from the Funds, may be made in relation to, inter alia, the assets of the Funds, the assets of the issuer, the same issuer, the business group or conglomerate, considering for this purpose whether it is Open Funds or Closed Funds.

The limits to be established for the Funds in respect of investments in shares, bonds and other securities where they are in relation to the asset of the issuer, as well as the limits on investments made in the shares of a Fund of Investment or securities of a Holder's Fund shall also be applicable to the sum of investments held by all Funds administered by the same Gestora.

Current or savings accounts shall be excluded from those limits the Funds use for their operation, as well as the securities issued or guaranteed by the State of El Salvador and the Closed Funds that invest in companies whose shares are not traded on the Stock Exchange and that its purpose is investment in specific business projects to be developed in the medium and long term.

Except for Funds that invest in companies whose shares are not traded on the Stock Exchange and that their purpose is investment in specific business projects to be developed in the medium and long term, the Funds may not have direct control or the indirect nature of the issuer, an Investment Fund or a Holder's Fund. There shall be an expression of control, where an Investment Fund is able to secure the majority of votes in the general shareholders ' meetings and to elect the majority of the Directors in the case of Limited Societies, or to secure the majority of votes in the Assemblies and appoint the administrators or legal representatives or most of them, in other types of companies or in independent assets.

In the case of literal (g) of Article 97, the investments made by the Open Funds and Closed Funds shall not be greater than the percentage in relation to the assets of each Fund, the Central Bank through technical standards.

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The Central Bank will also establish the borrowing limits of the Open Funds and the Closed Funds in relation to their assets. The assets of the Fund may be taxed only to ensure that the Fund's own obligations are paid. Debts acquired by a Fund may only be charged against its assets.

Investment Policy

Art. 99.-The investment policy defined in the Rules of Procedure of each Fund shall indicate the minimum and maximum investment limits in each of the types of assets referred to in Article 97 of this Law, other, the following aspects:

a) Issuer or guarantor of the instruments, individually and with respect to the financial conglomerate or business group to which it belongs;

b) Risk classification category of the instruments debt;

c) Origin, national or foreign, of assets; and,

d) Concentration by industrial or economic sector of the issuers.

In the event that the investment policy includes buildings, minimum and maximum limits on the geographical concentration of the issuers, the concentration of tenants, if the Case and concentration in a single building, for the definition of these limits must be met with the provisions of Article 96 of this Law.

When the Closed Funds invest in companies whose shares are not traded on the Stock Exchange and that their aim is to invest in business projects to be developed in the medium and long term, they must clearly express this in their investment policy. The same treatment shall be given in the case of the buildings, specifying the nature and the destination of the buildings.

In any case, the maximum limits to be observed by the Central Bank shall be observed in the technical standards which for that purpose it may issue.

Investment Ban

Art.-100.-It is prohibited to invest the resources of the Funds, in any form, in securities issued by the Managers governed by this Law.

Investment and Indebtedness event

Art. 101.-Where excess of the investment or debt limits referred to in Article 98 are incurred by the Central Bank or established in the respective internal regulations of the Funds, by effect of fluctuations. The Gestora shall notify the Superintendent of the market or otherwise justified cause. In cases where excesses do not obey these reasons, the person responsible for the breach will be subject to the respective administrative penalties.

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If the Fund receives in payment goods or rights the investment of which does not comply with this Law or in the respective internal regulations for justified reasons, the Gestora will communicate to the Superintendent this situation.

The Central Bank shall issue technical standards that permit the development of this article, considering among other aspects: notifications, regularisation and where appropriate recovery and sale of the assets.

Values of Investments in Values

Art. 102.-In the process of valuation of investments in securities held by the Funds, they should be considered:

(a) In the case of financial instruments of local issuers, the prices that provide an agent specializing in valuation of securities. Where the information provided by the source is not available, the Managers may define a methodology for the valuation of that instrument; and,

b) In the case of financial instruments of foreign issuers, the prices that provide an agent specializing in valuation of securities or a system of international securities or financial information recognized by the Superintendency. When it is impossible to obtain the information from the sources mentioned above, the Managers will be able to define their own methodology for valuation of this instrument.

The Gestora will have to present to the Superintendence the methodologies referred to in this Article at the time of the Fund's registration.

The Central Bank shall develop technical standards to facilitate the application of this article.

CHAPTER III SETTLEMENT OF FUNDS

Settlement

Art. 103.-A Fund may not be declared bankrupt, but shall only enter into liquidation, when any of the following causes:

a) When the Fund does not comply with Articles 51 and 61 of this Law;

b) When the participants in a Closed Fund dispute, in agreement adopted in Extraordinary Assembly; and,

c) When by effect of the revocation of the authorization to operate of the Gestora and the consequent cancellation of its seat in the Record, no management of the Fund has been moved to another Gestora.

In the case of the literal (b) the Supervisory Committee shall communicate it to the Superintendence within three working days following the celebration of the Extraordinary Assembly of Members,

the

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certification of the settlement agreement of the Fund and the appointment of the liquidator adopted in the assembly. The lack of communication to the Superintendence will bring to the Supervisory Committee the responsibility for the damages that will cause the participants.

When a Fund goes into liquidation, the Superintendence must communicate it to the Tax administration, in order to ensure that the Fund's liquidation proceeds simultaneously with the supervision of the Fund, in order to determine the tax liability as a matter of priority.

Settlement expenses, including the The fees of the Fund's liquidator shall be paid from the assets that make up the Fund. In the case of literal (c), settlement expenses may be claimed from the Management by the Fund's liquidator.

During the settlement process, the Fund will continue to be supervised by the Superintendency.

In the cases that the liquidator is not the Gestora, as of the date on which the liquidator takes possession, the Gestora shall be inhibited from any faculty of administration and disposal of the assets of the Fund.

Administration and custody regimes continue to apply to the Fund's assets subject to them, as long as they are not settled. The liquidation of a Fund does not imply the automatic termination of the corresponding administration or custody contracts, without prejudice to the ability of the liquidator to terminate them.

Open Fund Settlement

Art. 104.-The liquidation of an Open Fund will be carried out by its Gestora. In the case that the Gestora incurs in any of the causes of dissolution and liquidation regulated by this Law or when the Superintendent so determines, based on technical information, the latter must ask a Judge with competence in matters the appointment of a liquidator, proposing a term for that purpose.

When the causals referred to in the previous article are presented and no communication on the liquidation of the Fund is received in the Superintendence, this act of trade to safeguard the interests of the unit-holders, for which the Superintendent The appointment of the liquidator shall be requested by a qualified judge as a matter of urgency to request a Judge with jurisdiction in commercial matters, on the basis of a terna proposed by the Superintendent.

When the Judge is appointed to appoint the liquidator, he shall appoint him within the period of 16 working hours of receipt of the application until such time as this does not happen, the Council shall appoint a delegate in order to preserve the assets of the Fund, establishing its functions and fees in respect of the corresponding appointment. The latter under the Fund.

Once the liquidator has been appointed, the time limit for the settlement for an Open Fund may not exceed one year. Notwithstanding the foregoing, such time limit may be extended for a single time by the time allowed by the Council if the liquidation is carried out by the Gestora, or where appropriate, by the Judge who has appointed the liquidator.

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Closed-Fund Clearance

Art. 105.-The liquidation of the Closed Funds shall be carried out by a liquidator appointed in the Extraordinary Assembly of members, and may be the Gestora, provided that it has not incurred any of the causes of dissolution and liquidation

the case of the causals referred to in Article 103 of this Law, and no communication on the liquidation of the Fund is received in the Superintendence, the Fund will act as a job to safeguard the interests of the unit-holders, for which the Superintendent must request with an urgent qualification to a Judge with jurisdiction in commercial matters the appointment of a liquidator, starting from a terna proposed by the Superintendent.

When it is appropriate for the Judge to appoint the liquidator, he must appoint him within the term of an unextendable 16 working hours of the application as long as this does not happen, the Council shall appoint a delegate, in order to preserve the assets of the Fund, establishing its functions and fees in the appropriate appointment. The latter under the Fund.

Once the liquidator has been appointed, the time limit for the settlement for a Closed Fund shall be agreed in Extraordinary Assembly of members and in no case shall be more than five years.

Liquidator Faculties

Art. 106.-The liquidator of a Fund shall have the following powers:

a) Conclude the remaining outstanding operations;

b) Receivable what is owed to the Fund and pay its obligations, as a priority shall pay the debt

c) Sell the assets of the Fund;

d) Practice the final balance sheet of the settlement, which in the case of the Closed Funds, shall be subject to the discussion and approval of the members of the Extraordinary Assembly, convened by For this purpose;

e) Rissue to the Superintendence the final balance and make it publish by a single time in the national circulation newspaper which points out the Fund's Rules of Procedure.

f) Settle in proportion to the unit-holders its participation fees; and,

g) Grant the settlement deed, referring to the Superintendence certified copy of the testimony of the same.

In the case of the Closed Funds, the Assembly of members may establish other powers to the liquidator, provided that they do not contradict those established in this article and that they are necessary to carry out the liquidation.

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The liquidator shall forward to the Superintendence all the information it requires. It is strictly prohibited for the liquidator to initiate new operations.

For all tax purposes, the liquidators of the Investment Funds shall be considered to be jointly and severally liable as representatives of the Funds; and Prior to carrying out any type of performance, they must prove that quality to the Tax Administration, by means of the document in which they are chosen as such and the express acceptance of the charge.

The non-compliance with the This Article shall make the liquidator liable to the civil and criminal liability to which he place.

Art. 107.-The liquidation of a Fund shall be carried out in accordance with the rules of administration and settlement established in the Rules of Procedure of each Fund. Upon completion of the respective settlement process, your seat in the Register and its issues must be cancelled, if applicable.

Named the liquidator, the Gestora shall deliver all the assets, records and documents of the Fund to you; Delivery shall be entered in a detailed inventory to be subscribed by both parties. In case the Gestora fails to deliver, the delegate shall be appointed according to Arts 104 and 105 of this Law or by a delegate expressly appointed by the Council for this purpose.

When the Gestora is responsible for

the liquidation of a Fund must be audited by a firm of external auditors, enrolled in the Superintendence.

TITLE IV

UNICO CHAPTER

TAX REGIME

Art. 108.-The Open and Closed Investment Funds shall be excluded from the quality of the tax payers from the Transfer of Furniture and Services to the Service, from the payment of the Income Tax and from any other class of taxes, taxes and special contributions of a fiscal nature. However, the Real Estate Closed Investment Funds will have the character of taxpayers for the purposes of the Furniture Transfer Tax Act and the Services Provision.

Real estate transfers in favor of Closed Investment Funds, in terms of contributions and acquisitions that the Real Estate Closed Investment Funds perform, will be exempt from the Tax on the Transfer of Real Estate. The return of the property provided by the Fund, the issue of which has been declared failed, shall be deemed exempt from the Real Estate Transfer Tax, provided that such transfer is in favour of the participating party.

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Transfer of assets to form an Investment Fund, whether movable or immovable, be equally exempt from any rate of disposals, endorsements, registrations and margins.

Notwithstanding the provisions of this Article, the Gestora shall be obliged to present to the General Directorate of Internal Revenue, the statement of income tax per year or tax period, of each Investment Fund to administer.

For the five years following the establishment of the first Investment Fund, natural persons shall be exempt from the payment of Income Tax on income, income or earnings. from their participation shares in Open and Closed Investment Funds. Due to the above period, such income or income shall be treated as referred to in Article 4 (5) of the Income Tax Act and other applicable Laws.

Any income, income or income from the contributions In the case of participation in Open or Closed Investment Funds, obtained by legal persons, they will be subject to the tax treatment established in the Income Tax Law. In cases where the income received by the legal person comes from investments in securities exempt from the income tax, that income, revenue or profit shall be equally exempt. The profits or losses of capital obtained shall be declared by the participant in the exercise or period of imposition of its realization in accordance with the law referred to above.

The income tax shall be applied at the moment that the Gestora makes any payment to the participant or at the moment that this ransom its participation fees.

The Gestora will carry out control in monthly form of the paid to each participant and the sum of the value of the participation quotas that each Participate in the same period. At the end of the fiscal year the Gestora will calculate what is actually paid to each participant.

The Gestora, depending on the nature of each Investment Fund it manages, will keep a detailed record of the following:

a) Name and nature of the Investment Fund;

b) Name and nature of the unit-holders;

c) Detail of the income, revenue or profit and loss that make up the value of the Fund's share of the investments made by the Fund;

d) Type of contribution, if it is cash or in kind and amount of the contribution;

e) Value of the Fund's participation fees;

f) Quota of participation for each participant;

g) Monto of deductions made in respect of Income Taxes; and,

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h) Other data which by nature of the operations are relevant, in accordance with the rules techniques that the Central Bank must issue for that purpose.

Art. 109.-Securities issuers, brokerage houses, trusts, securitization or investment funds that pay interest, revenue, dividends and other profits to Investment Funds regulated in accordance with the provisions of the This Act will not apply income tax withholding.

Art. 110.-The tax regime governed by the foregoing provisions shall not apply to investments in participation of foreign investment funds, for which the treatment established in the Tax Laws shall be observed. However, the Gestoras shall be required to carry out the detailed register provided for in Article 108 of this Title, in so far as it applies to the placing on the market of foreign investment fund shares

TITLE V

FOREIGN INVESTMENT FUNDS

CHAPTER

Art. 111.-Participation of foreign investment funds, or their equivalent, may be marketed in accordance with the provisions of this Title.

The marketing of Foreign Investment Funds shall mean: promotion, placement and also the purchase or sale of shares of investment funds authorized in other countries.

The participation fees of the Foreign Investment Funds may only be marketed in El Salvador, when they have previously been registered with the Superintendence. The marketing of non-registered Foreign Investment Fund participation fees will be considered illegal collection and will be given the treatment established in the Securities Market Act for the collection of public funds without authorization.

Any persons or entities who are aware of any breach of the provisions of the foregoing paragraph, must submit the complaint corresponding to the Superintendence or the Office of the Prosecutor General of the Republic, for the deduction of the liabilities to which it takes place in the field of its respective jurisdiction. They will also be required to report the directors, administrators, accountants and internal and external auditors of the entities that violate the provision of the preceding paragraph.

The Central Bank by technical standards will define the quotas. of investment funds that are not subject to registration, such as those Foreign Investment Funds in which they are not allowed to invest the country's nationals in the country of incorporation of the funds.

The Superintendence will be the entity in charge of supervising the marketing in the country, of the participation quotas Foreign Investment Funds and will not be under their supervision the foreign manager or administrator who manages it, nor the fund itself.

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Authorization and Registration

Art. 112.-The Gestoras formed in accordance with this Law who wish to market shares of the participation of Foreign Investment Funds, must obtain authorization from the Superintendence and request the registration of the quotas in the Registry Public Stock Exchange.

The registration of foreign investment fund participation fees may only be requested by Gestoras incorporated in accordance with this Law.

Conditions for the registration of Participation of an Overseas Investment Fund.

Art. 113.-In order for the registration of the participation fees of a Foreign Investment Fund to be authorized, the Gestora shall verify the following conditions:

a) That the investment fund is authorized and supervised by an institution regulator of a country having similar or higher supervisory and regulatory requirements with respect to those of El Salvador;

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

c) That the investment fund has a minimum operating period of one year and an existing risk classification issued by internationally recognised risk classification societies; and,

d) That in the case of the Foreign Closed Investment Funds, their quotas are listed on organized securities markets that have similar or higher supervisory and regulatory requirements with respect to those of El Salvador.

Risk classifications granted abroad to the Funds Investment shall be valid in El Salvador provided that they have been granted by risk classifiers foreign securities, recognized by the Securities and Exchange Commission of the United States of America (SEC) or which have been granted by foreign-risk qualifying companies that are registered in the United States of America.

i

In addition to the conditions described above, the Gestora will have to present relevant aspects of the Foreign Investment Fund such as: name, date of their authorisation, country of origin, investment regime and time limit, together with the Regulation Internal and prospectus, all as appropriate to the characteristics of each fund.

For Investment Funds that do not have a risk classification for not being required in their country of origin, they must meet other requirements that by means of technical standards, establish the Central Bank, as regards the Investment Fund and its administrator. With regard to the Investment Fund, these rules will consider among other aspects: years of operation, significant number of participants and size in relation to their assets; with respect to their administrator: summary of their experience, risk classification if you have it, years of constitution and amounts administered, among others.

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When this Act refers to similar regulatory and supervisory requirements or superior to those of El Salvador, these requirements will be established by the Central Bank by means of technical standards.

The instruments or information that in this article or in this Law should be presented to the Superintendence or given to participants must be in Spanish. When they come from abroad in a language other than Spanish, they must be accompanied by their corresponding translation in accordance with the Law and treaties or international conventions. The Central Bank will determine through technical regulations the instruments or information that must comply with this requirement.

Commercialization of Foreign Open Investment Funds Participation quotas

Art. 114.-In order for a Gestora to be able to market shares of participation of an Overseas Open Investment Fund, it must provide the Superintendence with the following information:

a) Contract or document in which the authorization is established expresses the foreign manager or administrator of the Fund to enable the Gestora to carry out the marketing in the country; form and means for the custody, settlement and redemption of the shares of the Investment Fund, in which it is reported on the payment agent for the collection of the shares, as well as for the payment to the investors; and,

b) That the Gestora accredit that it has at all times the human and technological resources necessary to provide local investors with the necessary information on the quotas of the Investment Funds. Foreigners to market, which must be provided with the same periodicity and time in which it is made available to the investors of the country of origin of the Fund.

Verified the above and received in a complete way the information to which Article 113 of this Law and this Article and the observations which the Commission has made Superintendence has formulated, the Council will decide on the authorization of the Gestora as a marketing of the participation quotas and on the application for registration of the mentioned quotas in a period that must not exceed eight days

The Gestora will carry its own records for controlling the participation fees.

Marketing of Foreign Closed Investment Funds Participation quotas and their Negotiation

Art. 115.-In order for a Gestora to be able to market shares of participation of a Foreign Closed Investment Fund, it must prove at all times to the Superintendence the following:

a) That there is an agreement between a society specialized in the deposit and custody of Salvadoran securities and a foreign that facilitates and security for the custody and immobilization of the quotas that are the subject of the negotiations. In addition, the settlement will establish the settlement of such operations; and,

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b) It has the human and technological resources needed to provide investors with local information necessary on the shares of the investment funds to be marketed.

Verified the above and received in full the information referred to in Article 113 of this Law and the observations submitted that the Superintendence has formulated, the Council will decide on the authorization of the Gestora as a marketer of the participation shares and the application for registration of the shares, within a period not exceeding eight working days. The participation fees of a Foreign Closed Investment Fund must be entered on a Salvage Stock Exchange, after being registered with the Superintendence.

foreign organised securities market and which are representative of stock indexes or fixed income indices shall be considered as shares of foreign-closed investment funds and shall observe the provisions of this applicable title to the latter.

Mandatary Societies for the Marketing of Quotas of Foreign Investment Funds Participation

Art. 116.-The marketing of the shares of the Foreign Open Investment Funds may be carried out by the Gestora, by means of the brokerage houses or by legal persons authorized by the Council in accordance with the requirements that the Central Bank may establish by technical standards. For these purposes, the Gestora must enter into mandate contracts with the companies referred to in this paragraph, expressly empowering them for marketing.

The Managers must keep an up-to-date record of the legal persons to those who have conferred a mandate. Such registration shall contain the general data of the mandatories and be available to the Superintendence.

The Gestora and its mandatories shall display in their offices of attention to the public the following legend: " Investments in Foreign Investment Fund participation fees are not bank deposits and do not have the guarantee of the Deposit Insurance Institute. " They should also explain to the potential investor the characteristics of this form of investment, indicating that the initial investment contribution may increase or decrease according to the valuation of the Fund's participation fees.

Foreign Investment Funds, acquired by investors, must be registered in the name of the investors, and cannot be registered in the name of the trading entity.

Investor Risk Profile

Art. 117.-The marketing of foreign investment funds should consider the risk profile of the potential investor and his investment needs; in any case, if his profile with the selected Fund is not compatible, the The marketer should evidence the investor's acceptance and knowledge of this condition.

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Technical Standards

Art. 118.-The Central Bank will dictate the technical standards that allow the development of this title.

TITLE VI

UNICO CHAPTER

VIOLATIONS AND SANCTIONS

Precautionary Measures

Art. 119. In cases where the Superintendence is aware of acts of intent or fault of the Gestora affecting the Fund, the Council may, by reasoned resolution, issue precautionary measures to protect the interests of the participants, such as, appoint a delegate to preserve the assets of the Fund, assigning them their functions; order the execution of the guarantee; require increases in the amount of the guarantee according to the situation observed; suspend the transaction stock of participation shares; suspend the receipt of new contributions, bailouts, distribution of profits and decrease in the capital of a fund. The measures referred to in this Article shall be maintained as long as the causes of their application are not remedied and may be adopted without prejudice to the processing of an administrative procedure.

Precautionary measures referred to in this Article shall be delayed outside an administrative procedure, which shall be promoted within 10 working days after the measure has been issued.

Infringements and Sanctions

Art. 120.-Persons who infringe the provisions laid down in this Law shall incur administrative penalties, without prejudice to the civil liability in respect of damages and damages which may correspond to them or to the penalty, if the observed conduct is classified as a crime.

The Superintendence, for the imposition of the sanctions referred to in the foregoing paragraph, shall apply the provisions of the Law on Supervision and Regulation of the Financial System.

Art. 121.-Persons acting as a Fund Manager or Investment Fund Manager or using such an expression in their social reason, denomination or trade name, without having previously been authorized in accordance with this Law, shall be sanctioned. with a fine of up to five hundred urban minimum wages in the trade sector, following the procedure laid down in the Law on Supervision and Regulation of the Financial System.

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TITLE VII

GENERAL, TRANSIENT AND EFFECTIVE

CHAPTER I

GENERAL PROVISIONS

Technical Rules

Art. 122.-The Central Bank in relation to this Law will dictate the technical standards that empower the Law of Supervision and Regulation of the Financial System.

Publications

Art. 123.-The Superintendent may require the Gestora, by reasoned resolution, to publish any data, antecedents or information referred to the Funds which it administers, the public knowledge of which is necessary, within the time limit itself.

The Superintendence may publish any other information it deems relevant to promote market transparency.

Oversight Rights

Art. 124.-The Gestora will contribute to the cost of the public oversight service provided by the Superintendence with zero point seventy-five percent of the total annual revenues of the previous immediate exercise. The supervisory rights shall be entered in accordance with the provisions of the Financial System Supervision and Regulation Act.

CHAPTER II

SETTLEMENT OF PORTFOLIO MANAGEMENT OPERATIONS

Art. 125.-As of the entry into force of this Law, the Houses of Exchange Brokers that are authorized to carry out portfolio management operations in the terms established in Article 113-A of the Law of the Market Securities, whether or not they are providing such a service, may not enter into new contracts for the provision of the service, or administer new portfolios of those regulated in that article, or operate portfolios that have previously been provided to them. authorized and that they are inactive. In addition, the Superintendency will not be able to authorize the brokerage houses to perform portfolio management operations referred to in this paragraph. In such a case, notwithstanding the provisions of Article 113-B, of the Securities Market Act, if the limits provided for in subparagraphs (j), (n), (o), (p) and (q) of Article 113-A of that Law, are breached as a result of the liquidation of the Portfolios that the House of Brokers will administer to that date must immediately notify the Superintendence.

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Not later than sixty days after the entry into force of this Law, the Houses of Brokers will have to send to the Superintendence a plan on the process of liquidation of the portfolios that to that date they will administer. The deadline for finalizing the liquidation of the portfolios may not be greater than two years since the validity of this Law.

Without prejudice to the provisions of the foregoing, one year after the validity of this Law, the Houses of Stock brokers will not be able to receive new funds to be entered into managed portfolios.

Art. 126.-For each portfolio, the brokerage houses will have to open a bank account to their name, in a Bank authorized by the Superintendence to carry out passive operations in the country, indicating the name of the portfolio to which the account, it must be specified that these are resources in administration and that they are not part of the assets of the Casa de Corredores. The said resources will be inembargable by the creditors of these. The Houses of Brokers shall report, at least quarterly to the Superintendence, the movements of those accounts.

Art. 127.-The brokerage houses will have to notify investors about the start of the process of liquidation of the portfolios that they administer to that date. Such notification shall be effected in a personal manner and by means of two publications successively carried out in two national circulation papers, in which at least the obligation of the House of Brokers of the In the case of the case, the portfolio should be settled down to that date, the name of the portfolios being wound up, the name, name or social reason of the investors and the period within which they will be able to claim before the House of Stock brokers in question the amounts of money that correspond to them. The above will apply to portfolios that will be inactive at the date of entry into force of this Law.

The sums of money that belong to investors and that are not claimed within the the time limit set for that effect by the brokerage houses, must be deposited by them, in a bank account in the view, contracted exclusively for such purposes in a banking entity authorized to carry out transactions passive by the Superintendence. The Houses of Brokers may carry out debits on that bank account, with the sole purpose of giving to the investors, the balances that are due to that date, in so far as they are presented to claim them. In the event of the death of one of the investors, the aforementioned amounts of money must be given to the beneficiaries who appear in the corresponding contracts. If there is no designation of beneficiaries or if they have passed away, the amounts of money will be given to the investors ' heirs. The brokerage houses will be able to charge a single commission for the purpose of covering any expenses generated by the management of the bank account. In such a concept, the Houses of Brokers, will be able to deduct up to a zero point five percent annually, on the amount that corresponds to each investor at the moment of the delivery, making the deduction when these, their beneficiaries or their heirs,

Realized the deposit mentioned in the previous paragraph and after verification by the Superintendency that the funds have been duly deposited, the Corredores ' Houses will not be obligated to maintain in force the guarantee of good administration of the portfolio, nor the additional capital that regulates the Securities Market Act for the brokers authorized to manage portfolios.

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Art. 128.-Notwithstanding the provisions of the foregoing Article, the notification referred to in that provision has been made in due form and the time limit for investors to withdraw the sums of money from the the money that they were responsible for, and they do not do so, the brokerage house in question, may agree with another brokerage house or with any other entity audited by the Superintendence whose turn is compatible with this type of functions, the transfer of the administrative powers of the related bank account in the (a) the right of establishment of the account to be taken on the account for the sole purpose of giving to investors the amounts of money that correspond to them in the event that they are presented to the Withdraw. In any event, prior to the foregoing, the House of Brokers in question must proceed to notify through two successive publications in two national circulation newspapers, to the investors that they have not been presented to to withdraw the amounts of money which correspond to that date, the circumstances indicated above, by entering the name, reason or social name of the same and the name of the entity which will henceforth be responsible for delivering the each of them, the sums of money in reference. In this case, the brokerage houses must make the necessary steps to ensure that the bank account referred to in the previous article is in the name of the entity that will be responsible for the delivery of the amounts of money in reference.

The transfer of the administrative powers referred to in the preceding paragraph shall be carried out by the granting of an instrument among the entities involved.

Art. 129.-Translate ten years from the date on which the investors were notified of the initiation of the process of liquidation of the portfolios, in order to ensure that they were required to claim the amounts of money that they had received. and the beneficiaries, their beneficiaries or heirs do not do so, their right to claim will be prescribed and the sums of unclaimed money will pass in favour of the State, for which the corresponding entity, without further processing, must proceed to to immediately find out to the Treasury Department's General Directorate of Treasury, within the three First months after the deadline, the Superintendence must be informed.

Art. 130.-During the liquidation process, the opinion of the external auditors of the brokerage houses and of the entities involved, should make mention of the process of liquidation of each portfolio, indicating the fulfillment of the present legal provisions as applicable.

Art. 131.-During the entire settlement process, the brokerage houses and the entities involved must provide equal treatment to investors.

Art. 132.-The provisions of this Chapter shall be applicable in the process of settlement of the portfolios which shall be inactive at the entry into force of this Law.

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CHAPTER III

TRANSITIONAL AND EFFECTIVE PROVISIONS

Deadline for Elaboration of Rules

Art. 133.-The Central Bank shall have a period of up to one hundred and eighty days from the date of this Law, in order to draw up the technical standards that are essential for the establishment of the Gestoras and the beginning of the operation of the Funds.

Requests that under this Law receive the Superintendence, will be resolved until the rules referred to in the previous paragraph are approved.

Capital, Guarantee and Other Update

Art. 134.-The first update of the social capital of the establishment of the Gestoras, of the initial minimum guarantee and of the minimum assets of the Funds referred to in Articles 19, 22, 51 and 61 of this Law, shall be carried out in January of the year Two thousand seventeen and shall take as a basis the variation of the index of consumer prices from the validity of this Law to thirty-one of December of the year two thousand sixteen.

Art. 135.-The foreign securities which are of the same nature as the quotas of the Investment Funds referred to in the last paragraph of Article 115 of this Law, and which, at the entry into force of this Decree, are authorized or registered in the Superintendence and registered on a stock exchange, may continue to be the object of negotiation in the market of Salvadoran values with the requirements under which they were authorized or registered; in this case, the Superintendence will have to transfer of its seat to the Registry of the participation fees of the Foreign Closed Investment Funds Article 6 of the Securities Market Act.

VALIDITY

Art. 136.-This Law 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 twenty-one day of the month of August of the year two thousand fourteen.

OTHON SIGFRIDO REYES MORALES, PRESIDENT.

ENRIQUE ALBERTO LUIS VALDEZ SOTO, GUILLERMO ANTONIO GALLEGOS NAVARRETE, FIRST VICE PRESIDENT. SECOND VICE-PRESIDENT.

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JOSÉ FRANCISCO MERINO LÓPEZ, LORENA GUADALUPE PEÑA MENDOZA, THIRD VICE PRESIDENT. FOURTH VICE-PRESIDENT.

CARLOS ARMANDO REYES RAMOS, FIFTH VICE PRESIDENT.

GUILLERMO FRANCISCO MATA BENNETT, MANUEL VICENTE MENJÍVAR ESQUIVEL, FIRST SECRETARY. SECOND SECRETARY.

SANDRA MARLENE SALGADO GARCÍA, JOSÉ RAFAEL MACHUCA ZELAYA, THIRD SECRETARY. FOURTH SECRETARY.

IRMA LOURDES PALACIOS VÁSQUEZ, ERNESTO ANTONIO ANGULO MILLA, FIFTH SECRETARY. SIXTH SECRETARY.

FRANCISCO JOSE ZABLAH SAFIE, JOSE SERAFIN ORANTES RODRIGUEZ, SEVENTH SECRETARY. EIGHTH SECRETARY.

CASA PRESIDENTIAL: San Salvador, ten days of the month of September of the year two thousand fourteen.

PUBESQUIESE, Salvador Sánchez Cerén,

President of the Republic.

Tharsis Salomon López Guzmán Minister of Economy.

Juan Ramón Carlos Enrique Cáceres Chávez Minister of Finance.

D. O. No. 173 Took No. 404 Date: September 19, 2014.

FN/adar 16-10-2014

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