Law Of Investment Funds.

Original Language Title: LEY DE FONDOS DE INVERSIÓN.

Read the untranslated law here: http://www.asamblea.gob.sv/eparlamento/indice-legislativo/buscador-de-documentos-legislativos/ley-de-fondos-de-inversion/archivo_documento_legislativo



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DECREE No. 776 THE LEGISLATURE OF THE REPUBLIC OF EL SALVADOR, CONSIDERING
:
I.- State's interest to promote economic and social development, creating conditions revitalize the stock market to have a modern, efficient and diversified financial system that offers multiple options of saving and investment in the economy.
II.- according to international experience, investment funds generate profits and stimulate economic activity with small investors access to capital markets, diversification of investment and channeling savings into productive sectors, thus contributing to higher economic growth.
III.- to develop investment funds in El Salvador, it is necessary to have a legal framework that clearly defines the rights and obligations of the participants, so that appropriate transparency conditions are established, a framework specialized supervision according to international practices and a legal structure that allows resources investors are legally and financially separate from the entity that manages, being necessary to further regulate the marketing in El Salvador quotas Investment Funds constituted in the exterior, setting requirements for this activity.
IV.- That is necessary to provide the Superintendency of the Financial System, the authority to supervise investment funds, the companies that manage them, its operations and its participants.
THEREFORE,
in exercise of its constitutional powers and initiative of Deputies: Douglas Leonardo Mejia Aviles, Veliz Antonio Echeverria, Luis Roberto Angulo Samayoa, Francisco José Zablah Safie and David Edwin Victor Alejandro Zamora.
DECREES the following: LAW

INVESTMENT FUNDS

2 TITLE I GENERAL PROVISIONS CHAPTER ONE


Art Object of the Act. 1. This Act is to regulate and establish the framework for the supervision of investment funds, their share of participation, companies that manage them and their operations; as well as other participants referenced. It also regulates the marketing of participation shares of foreign investment funds.
In matters not provided for in this Act shall apply the provisions of the Securities Market Act and failing that, the provisions of the Commercial Code and other laws that are applicable.

Investment Fund Art. 2. An investment fund will consist of the set of input from various investors will be referred to unitholders; It will be managed by a corporation that Management will be called, at the risk of investors. The value of the contributions of the participants, as well as any kind of performance they receive will depend on the financial result of the Fund's assets. This Fund is the exclusive property of the participants, being an independent and different from the Investment Fund Manager heritage. Each Fund will be expressed in participation fees, in order to determine the part that corresponds to each of the investors in the equity of it.
The Management Investment Fund must invest the assets in securities and other assets; in addition, you can keep in bank deposits, all in accordance with the provisions of this Act, the provisions in the rules of each Fund and the specific regulations issued by the Central Reserve Bank of El Salvador.
When referring to actions of the Fund is made in this Act, it should be understood that the person making them is the Investment Fund Manager in its capacity as administrator.

Art Classification. 3. For the purposes of this Act, the Investment Funds are classified as:
a) Investment Funds Open: Those who do not have a defined term and unitholders may redeem their shares at any time share, fully or partially ; and
b) Investment Funds Closed: Those who have a defined term and unitholders may only receive what their respective shares of their shares at end of term of the Fund and in cases provided in this Act, may their participation quotas be traded on the secondary market.
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For Investment Funds Open, there may be different kinds of participation shares in the same Fund, which differ from each other by the fees and expenses applicable to them and not for investment From the bottom. The participation fees within each class have equal value and features.
designations

Art. 4. In the course of this Act, the following names are used:
a) "Fund" for investment fund;
B) "Management" for Investment Funds Management;
C) "Funds Open" Open for Investment Funds;
D) "closed funds" for closed-end funds;
E) "Bag" by stock exchange;
F) "Unitholders" by investors in an investment fund;
G) "Superintendent" by Financial System Superintendent;
H) "Council" by Board of the Superintendency;
I) "Superintendent" for Superintendent of the Financial System;
J) "Registry", by Stock Market Public Registry; and
k) "Central Bank" by Central Reserve Bank of El Salvador.

Supervising Body Art. 5. The Superintendency within its purview, is the administrative authority to which it corresponds monitor compliance and implementation of the provisions of this Act; also supervise Gestoras, operations and other participants regulated by it.

Regulatory Entity Art. 6. The Central Bank, within its field of competence, issue the necessary technical standards for the application of this Act.
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GESTORAS TITLE II CHAPTER I NATURE, ORGANIZATION AND AUTHORIZATION

Legal Nature and Purpose Art. 7. The Managers will be constituted as corporations with fixed capital, indeterminate term, domiciled in El Salvador. Its share capital is divided into registered shares or represented by book entries. Will aim to administer the funds, according to the rules laid down in this Act.
The term "Investment Fund Manager" is mandatory and exclusive use in the name and trade name of these companies. No entity that has not been authorized by the Superintendency, may use that expression or a derivation thereof, who use or acting as such without having previously been authorized in accordance with this Act, it shall be punished by the Superintendency.
No Manager will use in its name or trade name "National" or any other expression that would suggest that it is an entity created by the State or supported by it. Constitution

Art. 8. To be a Manager, you must request authorization from the Superintendency, accompanied by the following information:
a) Projects of constitution and statutes;
B) Name, age, profession, address and nationality of the applicants;
C) An indication of the amount of capital formation and the amount of the guarantee to be;
D) Name, age, profession, address and nationality of the shareholders who constitute the Management and the amount of their respective subscriptions;
E) name, age, profession, address, nationality, experience and banking or credit of the directors and managers initial references;
F) Affidavit of each relevant controlling shareholders or if any initials, directors and administrators who are not in any of the situations described in the Arts. 14 and 17 of this Act, respectively; and
g) tax Creditworthiness of the Ministry of Finance and municipal solvency of each of the shareholders, directors and managers.

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Art. 9. Having received the information that the previous article referred to the Superintendency verify and published in a national newspaper and on its website, for once and stakeholder account, the list of drivers or relevant shareholders where appropriate, as well as the initial Directors and managers, within a period not to exceed fifteen working days.
This publication will aim that anyone can challenge it becomes aware that any of the disqualifications and prohibitions contained in Arts. 14 and 17 of this Act, attended by the Directors, managers or shareholders that will be part of the Management. Objections must be submitted in writing to the Superintendent within fifteen days from the day following the publication, together with relevant evidence. The information will be confidential. Similarly, the Superintendency may of its own motion, objecting to proposals when people aware that those disqualifications or prohibitions concur in them. In both cases it will be resolved after hearing the director, manager or shareholder who attends presumed inability or prohibition.

In the event that shareholders are legal persons, it shall also be published the list of its shareholders holding ten percent or more of their capital or partners who have that percentage of social participation.
After satisfying the legal requirements identified, the authorization to establish the Fund will be issued by decision of the Council, within no more than sixty days.
Notification of this resolution, shall proceed to grant the incorporation within a period not exceeding thirty days from such notification.

Controlling Shareholders and Relevant Art. 10. For the purposes of this Act, shall mean a shareholder, whether natural or legal person has the character controller when you own, directly or through an intermediary, individually or jointly with other shareholders, more than fifty percent of the capital shares of the Manager. In the absence of controlling shareholders, the requirements for in this Act shall be complied with by the owners, directly or through an intermediary, individually or jointly with other shareholders, of ten percent or more of the shares issued by the Fund, which shall be referred to relevant shareholders. They may only be relevant drivers or natural or legal persons shareholders.
Review Testimony and Operations Authorization
Art. 11. The testimony of the deed of social constitution and statutes of the Fund must be submitted to the Superintendent for review prior to registration or deposit, as applicable in the Register of Commerce and must confirm this in a period which may not be more than ten working days following its submission that the terms stipulated therein are consistent with the previously authorized projects. You may not be recorded in the Trade Register the incorporation of the Management or be subject to deposit the statutes with a reason not signed by the Superintendent stating the favorable rating of these instruments. Once registered the testimony in the Register of Commerce and deposited the statutes in the Register, the Manager shall transmit certified notary public of such instruments to the Superintendency copies.
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Fulfilled the requirements of this Act, verified the accounting and reporting systems and internal controls and procedures of the entity, registered social writing, deposited their statutes with the Registry of Commerce, the Council authorize the registration and the start of operations of the Manager; authorizing the registration thereof, which shall be made within a maximum period of five working days from the approval of the Council.
The Superintendent shall publish in a national newspaper, the agreement evidencing the authorization of the start of operations of the Manager charged to that Manager. Changing

Art Scriptures. 12. The draft deeds modification incorporation, dissolution and liquidation of a Management as well as statutes, must first be subject to the authorization of the Council, and once granted the corresponding deed or agreed changes in the statutes as appropriate, they will be submitted to verify compliance with the authorized what reason signed by the Superintendent on the testimony or the respective agreement, without which they can not join or be deposited in the Commercial Register will. Once registered the testimony in the Trade Register or deposited its statutes, the Management shall send a certified notary of these instruments to the Superintendency copies.

Board Art. 13. The Fund shall be administered by a Board, composed of at least three directors and an equal number of alternates.
The Directors of the Manager shall, in addition to the requirements of the Commercial Code for Directors of corporations, gather the following:
a) Be of recognized integrity;
B) Have extensive knowledge and proven experience of at least five years, in financial and administrative matters; and
c) Be over thirty years.
When the Superintendency finds there a director does not meet or no longer meets the above requirements, will expire management and proceed in accordance with Article 15 of this Law.
Disabilities of Directors and Management
Art. 14. The following are unfit to be directors or managers of a management:

A) The Directors, managers or employees of any other Manager and shareholders holding more than ten percent of the capital of another management;
B) Managers, attorneys, financial advisors a member company of the same financial conglomerate Management, negotiate securities;
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c) Those who are in a state of bankruptcy or receivership, and in any case, who shall have been qualified as legally responsible for a culpable or fraudulent bankruptcy;
D) tax debtors and the Salvadoran financial system classified in any of the higher credit risk categories, according to their respective technical standards as this situation persists. 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 above situation. They shall be non-working who are in a similar situation abroad;
E) Those who have been directors, as directors or managers, or officers of an institution or entity member of the financial system in which administratively demonstrate its responsibility for such institution or entity from the use of Law Privatization of Commercial Banks and Savings and Loan incurred in equity deficiencies of twenty percent or more than the minimum required by law, it has received contributions from the State or the Institute of Deposit Guarantee for sanitation, there It has been taken over by the competent body, or any restructured, and consequently, it had revoked its authorization to operate. In the case of the legal representatives, general manager, CEO and directors with executive positions in financial institutions, are presumed to have been responsible for any of the circumstances described above. the above presumption shall not apply to those who have left public office two years before such a situation has been filed; or those who participated in the consolidation of financial institutions, in accordance with the requirements of the Sanitation Law and Strengthening of Commercial Banks and Savings and Loan Associations, without prejudice to the responsibility who commit after this sanitation;
F) Those who have been sentenced by final judgment in the country or abroad, for having intentionally committed or participated in the commission of any offense;
G) Persons who have been judicial evidence of involvement in drug trafficking and related crimes related activities and money laundering and other assets in the country or abroad;
H) Those who have been declared unfit for this kind of charge or have been administratively or judicially sanctioned for their involvement in violations of the laws and regulations of a financial nature, especially raising funds from the public without authorization, the granting related or receiving in excess of the allowable limit and financial crimes loans either that those statements disqualifications or penalties have been issued in the country or abroad;
I) The President and the Vice President, Ministers and Deputy Ministers of State, Directors and Deputy Directors of the Ministries, Secretaries and Deputy Secretaries of the Presidency of the Republic, Deputies, Judges of the Supreme Court of
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Justice and the courts of second instance, the heads of the institutions of the Public Ministry and the Municipalities, the President and Judges of the Court of Accounts of the Republic and the Presidents of the institutions and autonomous state enterprises;
J) Those who are legally incapable;
K) Directors or managers of a management whose authorization to operate has been revoked by the Superintendency, except that prove they had no responsibility for that has been given such a situation; and
l) The presidents or directors of banks, microfinance institutions, savings and loan associations and other financial.
The disqualifications contained in paragraphs c), e) and g) as well as the first part of paragraph d), attending the spouse of a director or manager, will entail for this inability, provided it is under the regime deferred community or profit sharing.

Directors and administrators, within thirty days of taking up their duties and in January of each year, submit to the Superintendency affidavit, stating, if applicable, that are not unfit to hold office and must report no later than the third business day to that institution its inability, if it occurs thereafter.

Declaration of Inability Art. 15. Where there or come upon any of the grounds for disqualification mentioned in the previous article, expire managing director or administrator and proceed to the replacement or restructure the Board, as appropriate, in accordance to the social pact of the Management .
It will be up to the Superintendent, ex officio or at the request of a party, declare the disqualification, after hearing the director or administrator within eight working days from the date to be notified to exercise its right of defense. All this, without prejudice to civil or criminal liability that applies.
However, acts or authorized by a director or non-working administrator contracts before their inability to be declared not be invalidated by this circumstance with respect to the Manager, or with respect to third parties, unless it is established that acted bad faith.

Shareholders Art. 16. Any person may own shares of a Fund Manager, subject to the provisions of the second paragraph of this article, and Article 17 of this Law for drivers or relevant shareholders. Within the shareholding of each person, also consider that they have in companies that are shareholders of the Manager.
May not be shareholders who are in circumstances that refer to subparagraphs c) and f) of Article 17 of this Law. When the Superintendency finds there a


9 shareholder is in the circumstances outlined above, the provisions shall apply in the second and third paragraphs of Article 18 of this Law.

Prohibitions Art. 17. There may be drivers or relevant shareholders, if any, acquirers who are in any of the following circumstances:
a) Those who are in bankruptcy or receivership;
B) Those who have been sentenced by final judgment, in the country or abroad, for having intentionally committed or participated in any crime;
C) Persons who are judicially has proven participation in related to drug trafficking and related crimes and money laundering and other assets in the country or abroad activities;
D) The Salvadoran financial system debtors classified in any of the higher credit risk categories, according to their respective technical standards, as this situation persists. This also applies to those who are in similar situation abroad;
E) Those who have been directors, as directors, managers, or staff member of an institution or entity of the financial system, which is proven administrative responsibility for such institution or entity from the effective date of the Privatization law of Commercial Banks and Savings and Loan Associations, have incurred in equity deficiencies of twenty percent or more than the minimum required by the law; received contributions from the State or the Deposit Guarantee Institute for sanitation, or operated by the competent authority; or it had been restructured and accordingly revoked its authorization to operate. In the case of the legal representatives, general manager, CEO and directors with executive positions in financial institutions, are presumed to have been responsible for any of the circumstances described above. the above presumption shall not apply to those who have left public office two years before such a situation has been filed; or those who participated in the consolidation of financial institutions, in accordance with the requirements of the Sanitation Law and Strengthening of Commercial Banks and Savings and Loan Associations, without prejudice to the responsibility who commit after this sanitation;

F) Those who have engaged in any of the legal conditions that do not allow them to hold the shareholder or have been sanctioned administratively or judicially, for their involvement in violations of the laws and regulations of a financial nature, especially the raising funds from the public without authorization, the granting or receipt of related excess of allowable limit and in financial crimes, whether default or penalty has been given in the country or abroad loans;


10 g) Those who can not prove the legitimate origin of the funds to acquire the shares;
H) Directors whose financial and asset situation is not economically proportional to the value of the shares intending to acquire;
I) Directors or managers of a Management, whose authorization to operate has been revoked by the Superintendency, except that prove they had no responsibility for that has been given such a situation; and
j) Those who are insolvent with the Treasury and the Municipality.
Case of a legal person, the circumstances preceding addition shall be considered with respect to shareholders who are holders of twenty five percent or more of the shares or contributions in society, or have that percentage of participation in it.
Art. 18. Drivers or relevant shareholders, if any, within thirty days of subscribed shares and in January of each year, submit to the Superintendency affidavit stating whether or not they are in any the circumstances are mentioned in the previous article and shall inform the institution, at the latest within three working days if the circumstance occurs later.
Having determined that they are in any of the circumstances mentioned in the previous article, prior procedure laid down in Article 15 of this Law, these shareholders may not exercise the personal or economic rights they are entitled to as shareholders of the Manager, until the circumstances they incurred, except for the transfer of ownership of the shares in any capacity is not exceeded; and the transfer shall be entitled to be paid the dividends that may correspond to them and not having them delivered by being suspended their rights. Similarly we will proceed when we do not communicate with shareholders and the Superintendency is identifying the circumstances.
When you have as overcome the causes that led to the suspension of those rights, shareholders may exercise them again.
CHAPTER II CAPITAL AND GUARANTEE

Social Capital Art. 19. The amount of capital for establishing a Manager may not be less than five hundred thousand dollars of the United States, which must subscribe to and fully paid in cash by certified check or cashier's check or cashier, drawn on a regulated by the Law on Banks and accredited by the deposit of a check in the Central Bank or another bank regulated by the Banking Law bank.
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The capital that the preceding paragraph to be updated as established by the Securities Market Law, for capital formation and operation so as to maintain their real value. In no time the assets of the Manager may be less than the capital regulated in this article.

Art Capital Reduction. 20. Only with the permission of the Superintendent, a Management may decide to reduce its share capital. In any case, that the authorized capital falls below the amount established under Article 19 of this Law, without prejudice to the third ordinal regulated in the following article.

Art Loss Application. 21. If there are losses in a year in the General Shareholders' Meeting that such results are known, must take the agreement to cover them, in the following order:
a) annual retained earnings from previous years and effectively perceived;
B) With equivalent to capital reserves applications; Y,

C) In charge of the capital stock of the Manager. This reduction of capital shall be made by reducing the nominal value of the shares, and in this case shall not apply the provisions in Article 129 of the Commercial Code. When the capital of the Manager is reduced to a level below that laid down in Article 19 of this Law, the Management will have a maximum of sixty days reintegrated, must submit to the Superintendency, in the first ten days of this period, a plan to meet the required levels. Warranty

Art. 22. Prior to the registration of an investment fund and up to a year after the liquidation of the Fund, it shall establish and maintain in force at all times a guarantee based on the assets of the investment funds it manages, for the benefit of partakers of these, to ensure compliance with all its obligations.
The guarantee may be in cash, bond or pledge securities. The deposit and securities must be issued by entities not belonging to the same financial conglomerate or business group of the Manager. In the case of the deposit, this must be issued by companies domiciled in El Salvador who have risk ratings, which determine technical standards by the Central Bank. In addition, the securities must be highly liquid and low risk, and be kept in companies that can provide this service under the Securities Market Act, as established by the Central Bank through technical standards.
The guarantee shall be updated at least monthly. Notwithstanding the foregoing, the Superintendent may require an update to the Management of the guarantee with a different periodicity, when market conditions warrant. In any case the guarantee will be adjusted to the higher of the following two parameters:
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a) Five hundred thousand dollars of the United States of America, which shall be updated as established by the Securities Market Act for capital formation and operation so as to maintain their real value; and
b) One percent of the sum of the assets of each of the managed funds, the previous business day.
The initial amount of the guarantee shall be as specified in paragraph a) of this article.
The Manager shall inform the Superintendency whenever the security is modified, either in amount or form of incorporation, adding supporting documents.
If execution of the guarantee, this answer proportion for each Fund administered by the Management according to the assets of each of them, being obliged the Manager, his immediate replacement, according to technical standards issued by the Central Bank . These rules also contain the way guarantee the unitholders affected will be distributed.
The Central Bank, through technical standards, establish the manner and time in which the Manager shall remedy the deficiencies of the guarantee when it is under the provisions of subparagraphs a) and b) of this article.
The Council shall determine and develop mechanisms to oversee risk management of the Manager, objectives and phases understand it; can also reasoned resolution, based on technical reports indicate that the Manager has a weak management of their risks, that increases security require up to twice the amount outstanding at the time of the request. The deadlines for submitting and validity shall be established by the Council.
Art. 23. The Managers shall designate as representative of the beneficiaries of the guarantee in the preceding article, a bank regulated by the Banking Act, a cooperative bank, an insurance company to a stock exchange or concerns a company specializing in the storage and safekeeping of securities, who by this Act empowers society to do so. Such companies must be domiciled in El Salvador and do not belong to the same financial conglomerate of the Manager. Companies which in their normal course of operations are authorized to issue bonds and guarantees, may not exercise their representative function when they issued the guarantee in Article 22 of this Law refers to.
The designated representative shall perform the functions following:
a) be the holder of the documents supporting the bank deposit, bail or pledge on securities;
B) Require the payment of the guarantee; and
c) Receive custody bank deposits, the proceeds of the bond or property pledged in case the guarantee becomes effective.

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If the guarantee consist in a deposit, the issuing entity must pay the value required by the representative of the beneficiaries of it until the guaranteed amount, within ten days of the request for payment of the deposit have been submitted.
When the collateral consists pledge on securities, for registration will not be necessary to identify the creditors, sufficient to state the name of your representative, chalking replacements that are effected. Should be necessary notifications and citations according to the law should be practiced to the pledgee, they shall be deemed to be fulfilled his representative.
Without prejudice to the final execution of the guarantee, the Superintendent is empowered by this Act to adopt by reasoned decision, the provisional execution of the guarantee as a precautionary measure in the event that the interests of the unitholders so require either inside or outside an administrative procedure. For this purpose, give the necessary instructions to the representative of the beneficiaries of the guarantee, to make the relevant request. The money obtained from the provisional execution, the representative shall keep in their custody in a bank account in a bank regulated by the Banking Act, until the circumstances that gave rise to the injunction ascertain a final judgment.
When the precautionary measures referred to in this Article shall be decretaren outside an administrative procedure, this should be promoted within ten working days of the measure had been issued.
Entities under this provision are authorized to act as representatives of the security in question, shall be subject to technical standards to that effect issued by the Central Bank.
CHAPTER III ACTS AND OPERATIONS MANAGEMENT

Acts and Operations Art. 24. The Manager shall perform all acts, contracts and operations necessary for the administration and operation of the Funds. Especially you have the following powers:
a) Receive contributions from participants;
B) Manage the Funds, enter into contracts and other documents needed for that purpose;
C) Place the participation shares of the Funds;
D) To implement the investment policy of each Fund, in accordance with this Law and the respective rules of procedure;
E) In the case of open-end funds, pay full or partial surrenders and distribute benefits. In the case of closed-end funds, distribute benefits under the Funds it manages


14 and return to shareholders the value of their participation shares by way of capital reduction or withdrawal rights;
F) In the case of closed-end funds, initially appoint the members of the Supervisory Committee pursuant to Article 77 of this Law refers; and
g) Other acts and operations as being necessary for the fulfillment of its purpose, authorized by the Council. Responsibilities of the Management

Art. 25.- will be responsibilities of the Manager, which determine the internal rules of each Fund; and in any case the following:
a) Good management and administration of the Funds it manages. By the results, it will only respond when the process is incurred losses caused by fraud or negligence in their performances, declared as such by final judgment;
B) Carry separated by each Fund it manages, independent of which corresponds to the accounting Management accounting;
C) Comply as an administrator with all the formal obligations of tax nature involving the administration of the Funds and respond jointly to the Treasury of the substantive tax obligations contained in the Tax Code and other laws of matter;
D) acquainting the Treasury under the Fund, the amounts corresponding to taxes caused by the legal acts concluded by as Administrator of the Fund, being obliged to make such payments to the extent that taxes are generated;
E) Avoid situations that create a conflict of interest between her and the participants, if they arise, resolve them in favor of the latter;
F) Comply with all the provisions of the rules of procedure of the Funds it manages;
G) Provide, in the case of closed-end funds, information to the Committee concerning its financial situation and Surveillance Fund and other may request in the exercise of their functions, all with the minimum periodicity established between them;

H) Appoint the external auditor of Open Funds. In the case of closed-end funds, shall appoint for the first fiscal year and for the coming years, if the Annual General Meeting of shareholders is not done. Where applicable, appoint the tax auditor, in the same way as the external auditor;
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i) Paying out of the assets of the Manager, the compensation liability arising from loss or damage caused to shareholders due to willful or negligent behavior incurred in the administration of the Funds, without prejudice personal, civil or criminal liability, deductible its directors, managers, external auditors and any other officer or member of the executive staff involved in administration. Such payment shall be made to the extent that the security provided for in Article 22 of this Law be inadequate;
J) To comply and ensure that the Funds it manages comply updating policies and mechanisms for risk management, having among other things, identify, assess, mitigate and disclose them in line with international best practices. In these policies the measures taken to prevent possible breaches of regulatory requirements will be included; and take in the event that it has incurred, in both situations must define the parameters that will guide the actions and those responsible for implementing them;
K) Publish, through electronic means, the level of risk exposure of each managed based on technical standards issued by the Central Bank Funds; and
l) Comply with the provisions of the Law Against Money Laundering and Asset, for which it will implement procedures to verify the origin of the resources. The Management
performing acts for their own benefit or third parties, to the detriment of the shareholders of the Funds it manages is prohibited. Traders and

Art Investment Managers 26. People who work with the Manager or its marketing performing mandatory participation shares of the Funds and those responsible for managing the investments thereof, shall be authorized by the Superintendency, in accordance with the technical standards issued by the Central Bank for this purpose.
The traders must comply with the provisions of the Law Against Money Laundering and Asset, for which it will implement procedures to verify the origin of the resources.

Compensation Fund Art. 27. The Management is obliged to compensate the shareholders of the Fund for damages caused by it, its representatives, directors, managers, external auditors, staff members and any other person providing services, to the detriment of those participants as a result of the execution or omission, as appropriate, of any of the actions under this Act, it is prohibited to the Manager. The above mentioned persons involved in such proceedings, shall be jointly responsible for the repayment, subject to administrative or judicial responsibility, whether civil or criminal, to be deducted against of those found involved. In this case the appropriate action shall be exercised in accordance with the provisions of the Civil and Commercial Code.
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Limitations and Prohibitions Art. 28.- The Management and the companies belonging to the same financial conglomerate or business group, they may hold individually or jointly over fifteen percent of the quotas of participation of each Open Fund administered by that Management and forty percent each Closed Fund.
If excess above the limits by the effects of fluctuations in the market or otherwise cause occurs, the Manager shall notify the Superintendent within three business days following the occurrence of the excess. From the date of notification, the Manager shall have sixty days to regularize the above percentages. The period may be extended for cause and when authorized by the Council.
In cases where market conditions warrant, the Board may temporarily change the limits referred to in this article.
Art. 29.- are contrary to this law the following acts or omissions, if any, made by the Manager, its officers, directors, employees or related persons, as appropriate:

A) Conducting operations with assets of the Fund for improper, direct or indirect benefits; the use of assets of the Fund so as to ensure secure obligations of the Manager or third parties;
B) To assume commitments with stakeholders on the recovery of the value of their contributions; as well as any different from themselves the result of the financial management of the Fund performance;
C) Charges Fund any service other than authorized in the Act, agreed in the contract subscription fees for participation or in the rules, or terms and conditions other than those which they are established;
D) Charges Fund any service provided by persons related to the Management of the same or entities in the financial conglomerate to which it belongs, in more onerous than the prevailing market conditions;
E) The use, in own or another's benefit, information relating to operations carried out with the Fund's assets;
f) Disclosure of information relating to the acquisition, sale or retention of
assets of the Fund, other than those required to participate in the respective operations on behalf of the Management people;
G) The acquisition of assets by the Management for himself, and make their representatives, directors, managers or employees within the disposal of these made by the Fund Management as manager five days. In the case of low liquidity assets, this period shall be sixty days;
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h) The disposal of own assets by the Manager or its directors, officers, managers and employees within the acquisition of these five days for the Fund. In the case of low liquidity assets, this period shall be sixty days;
I) The acquisition, sale, lease or usufruct of assets of the Fund or the Management acting, its directors, officers, managers or employees as counterparty;
J) The acquisition, sale, lease or usufruct of assets for the Fund or to related to the Manager, other Funds managed by it, to run by Gestoras related to it funds, companies of the same financial conglomerate or business group of the Manager or administered by Gestoras the same financial conglomerate or business group of the Manager, unless these are carried out in accordance with the requirements and conditions set by the Central Bank through technical standards Funds, considering that transactions with securities they must perform in organized, such as a stock market;
K) divestitures or acquisitions of assets that make the Manager, its directors, officers, managers or employees, if they prove to be more advantageous for them that the respective divestments or acquisitions of these assets for the Fund made in the same day, unless it is transferred to the Fund corresponding price difference, within the two days of the operation;
L) The granting of loans or guarantees granted by the Manager or by persons related to it, to the Fund; and the granting of loans or guarantees in favor of the Manager or persons related to it, granted or constituted with the Fund's assets; and,
m) Others reasoned resolution determined by the Board, the consequences are contrary to this Law or create conflicts of interest.
The assets referred to in this article are those which are of the same species, class, type, number, section, issue and issuer, as applicable.
Shall mean assets of low liquidity, those who are not frequently traded in significant volumes and, in formal secondary markets. The Central Bank technical standards determined by the characteristics of illiquid assets.
For the purposes of this Act, are persons connected to the Management to in Article 204 of the Banking Act, as related to these notes.
Also considered contrary to this Act, the transactions indicated in the previous paragraphs that are made with spouses or relatives within the second degree of consanguinity or affinity first people related to the Manager, and their representatives, directors or employees.
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Contracting Services Art. 30. The Management, for the exercise of his duties, contract services with other companies, such as information processing and related operations, except those related to the management of the investment portfolio of the Fund.

The quality of contracted services is the responsibility of the Manager, which will respond to third parties as if she had made. It will also be responsible for complying with requests for information made by the Superintendency of the aforementioned services.
Contracts to provide services shall contain provisions to ensure that outsourced entities observe strict confidentiality regarding the information to which they have access, because of the provision of services.
Models contracts such services must be previously submitted to the Superintendent for review, having no later than thirty days from receipt, to require the necessary changes when they contain clauses that oppose legislation, the internal rules of each Fund or deemed to violate the rights of shareholders. If within this period the Superintendency has voted not be understood that no further observations. Publication of Financial Statements

Art. 31. Each Manager will publish two national newspapers and on its website, its financial statements to June 30 and thirty states and December 1 of each year; the latter shall be accompanied by the opinion of the external auditor. You must also send to the Superintendency monthly financial statements.
The Central Bank will issue technical standards to determine the content of the publication referred to in this article.

External Audit Art. 32. The external auditors of the Fund shall be registered with the Superintendency and meet the minimum audit requirements as indicated in the Securities Market Act. Fees and Expenses

Art. 33. All fees and expenses shall be detailed in the rules of procedure of the respective Fund and be supervised by the Superintendency. The management fee and other necessary expenses will be paid by each Fund may be established commissions charged to investors, based on the provisions of the Consumer Protection Act.
The fees are expressed as percentages or amounts, and expenses are clearly detailed concepts.
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Disclosure Art. 34. It will be permanent obligation of the Manager, disclose any facts or essential information regarding the Funds or manages itself, such as operations with resources of the Funds with members companies of the financial conglomerate, business group or persons related to the Manager; and changing drivers or relevant shareholders, directors, managers or legal representative. This disclosure must be made by no later than the next business day the event occurs that is of their knowledge.
In addition, the Manager shall disclose essential facts or information that has certainty regarding companies, Securitization Funds, Investment Funds or any issuer whose securities the resources managed by it funds remain invested, no later than the next business day on which the event occurs or is your knowledge.
The Manager shall send to the Superintendency the information referred to in the preceding paragraphs, within the time limits established therein, consigning the effect that the fact or information could result in the Fund or the relevant Fund. The Superintendency publish that information on its website or other technological means.
For each Fund it manages, the Management shall publish on its website or other means for that purpose to determine the technical standards, a report containing, among others, the value of the participation fee, commissions received by the Manager, expenses are charged to the Fund, performance and essential facts or information referred to in the first two paragraphs of this article. This information will be updated daily. In addition, each month will publish the value of the fund assets and the aggregate amount of the Fund's investment structure. Likewise, the rules of procedure of the Fund, an extract from it, its risk rating, your monthly financial statements, the prospect of placing participation fees and an extract thereof shall be maintained. They should be kept posted the value of the quota, the risk classification and financial statements, comprising at least the last two years. In addition, the Manager must send monthly to each participant a statement of investment showing their individual participation.

The Manager, for purposes of transparency and price formation, must report daily to the stock exchanges, agents specializing in valuation of securities, the Superintendency and any other entity that is authorized by law, on each of the buying and selling of securities that the resources of the Funds made, detailing prices. Also, it must inform the Superintendency the details of the investments of the Funds and allocated to each investment, open-end funds for daily and closed-end funds according to the frequency of valuation of its investment value.
The Central Bank will issue technical standards to determine the content of the information referred to in this article and the related disclosure.

Confidential Information Art. 35. The Management, regarding confidential information, shall be governed by the provisions of the Securities Market Law.


20 CHAPTER IV MERGER, DISSOLUTION AND LIQUIDATION OF THE FUND MANAGER Fusion

Gestoras Art. 36. The merger of Gestoras requires prior authorization by the Council and shall be made according to the rules established in the Commercial Code. It is excepted the provisions of the Code, to make the publication of the merger agreement and the final balance of each of the Investment Managers, which must occur only once in a national newspaper; the merger will be executed, provided that there be no opposition, after thirty days of the publication.
Prior to the granting of the authorization referred to in the preceding paragraph, the Superintendent shall have complied with the provisions of the Competition Act.
The merger agreement and the testimony of the merger may not register with the Registry of Commerce, with no reason signed by the Superintendent stating the authorization. Permanence

Art contractual conditions. 37. In case of a merger, the conditions of subscription contracts participation fees and internal regulations of each Fund Managers merged, be respected as originally stipulated. Grounds for

Dissolution and Liquidation Art. 38.- Without prejudice to the grounds established in the Commercial Code, shall the dissolution and liquidation of Management, in the following cases:
a) reduction of equity below the minimum amount required by this Act;
B) inability of the Fund to establish or maintain the safeguards required by this Act;
C) judicial declaration of bankruptcy; and
d) When a continuous period of one year has elapsed without the Management be administered at least one Fund or without it be marketed participation fees of at least one foreign investment fund. The Council, for once, at the request of the Manager may extend up to six months the deadline stated above.
Effects of Causes of Dissolution and Liquidation
Art. 39. Occurred any of the grounds for dissolution and liquidation, the Board shall notify these grounds to the Manager and given a hearing, to present the arguments that apply, which will take place within four working days of notice. Exhausted due process and based on technical reports and information available, the Council shall issue a decision revoking or not the authorization to operate the Manager, which makes
21

referred to in Article 11 of this Law. If the resolution is revoked must cancel its entry in the Register, within a maximum period of five working days of such revocation.
In carrying out the revocation of the operating authority of the Manager, it, within the respective notification fifteen days, shall proceed to transfer to another Manager of the Funds it manages.
For the transfer of the Funds, with the exception of the period, you must observe the provisions of Article 94 of this Law.
The cancellation in the Register of the Manager, not inhibited to perform the acts necessary for the transfer of funds, whether open or closed. The Manager will continue under the supervision of the Superintendency during the transfer period.
Effect on Open Funds

Art. 40.- The Management to which notification of the revocation of its authorization shall, within three working days of the aforementioned notification, to send him to the Superintendency of the Financial System, a suggestion of the Manager to which it will transfer the Open funds they manage as well as the plan for transfer. The Superintendency shall authorize the Manager and the plan of transfer of funds within a fixed period of three working days after submission, or authorize the transfer to another Manager of your choice, and recommend the appropriate modifications to the plan presented, and according to all the technical requirements that may apply. In the case that the actions of the Management does not correspond to the plan submitted and approved, the Superintendent shall appoint an auditor, remain applicable in this regard, the rules for the appointment of inspectors with powers of administration or under the box established in the Law Supervision and Regulation of the Financial System.
Effect on Closed Funds
Art. 41. In the case of closed-end funds that is administering the Manager, the Superintendent shall inform the revocation referred to in Article 39 of this Law, the Supervisory Committee, to it within five days following receipt of the communication, urgently convene a Special Extraordinary Assembly of shareholders, which will be held five days after the call made. In this Assembly, the Management or failing the Oversight Committee shall report on the financial situation of the Fund and that information, the participants will decide on the transfer of the Fund to another Manager of your choice or on its liquidation, naming his once the liquidator. This decision shall circulate the Supervisory Committee to the Superintendent, within five business days. If this assembly is not carried out for lack of quorum, it will be held on second call two hours after the first.
The Assembly will be constituted on first call with the attendance of shareholders representing three quarters of the participation fees paid, and the second call, shall be deemed legally held half plus one of the number of paid participation fees present or represented. In both cases, the resolutions are adopted by half plus one of the shares present or represented participation. Regarding the call, it will observe the provisions of section 82 of this Act, except as regards deadlines and the provisions of the last paragraph.


22 Unable to agree to take the first and second call for lack of the quorum, a third call must be made within three to eight following to the first and second call business days, which is deemed legally reunited with at least 25% of the number of paid participation shares present or represented.
Shall not apply the provisions of Article 85 of this Law to the Assembly covered by this provision.

Voluntary Dissolution and Liquidation Art. 42. Once you have revoked the authorization to operate the Management and canceled the registration, if the General Shareholders' Meeting acknowledges the grounds for dissolution in this Chapter, such dissolution shall proceed until they have transferred funds or shall have been appointed liquidators of these, as appropriate. The liquidation of the Fund will be conducted under the Commercial Code.

Compulsory Dissolution and Liquidation Art. 43. When concur the grounds for dissolution contained in this Act or the Code of Commerce, and the General Meeting of Shareholders not it finds the grounds for dissolution, the Superintendent shall ask the Attorney General's Office to request the dissolution of judicially the Manager until after they have moved on or the Funds or its liquidator appointed. During this trial, the Manager can not continue operations.
Dissolved the Manager and ordered its liquidation, the judge proposed by the Superintendent, appoint one or more liquidators must add to its name the phrase "in liquidation". Liquidators

Art. 44. In the period of liquidation of the Fund, the liquidators shall have the powers set out in the Commercial Code and must not undertake new operations.

Failure to comply with the provisions of the preceding paragraph, the liquidators will incur in civil and criminal as may be appropriate, notwithstanding that must respond with their personal assets for damage to the assets of the Fund in liquidation responsibilities or third.


23 TITLE III INVESTMENT FUNDS CHAPTER
I
OPERATION OF FUNDS SECTION A PARTICIPATION FEES Participation fees

Art. 45. The contributions made by investors in a Fund will be expressed in securities or financial instruments denominated participation fees.
For Open Funds, the Manager maintains its own records for control of the participation fees, having checked the contributions received by the Manager by investors with an account statement issued by it; these quotas will not be transferable. The participation shares of closed-end funds, must be represented by book entries.
Investors in an Open Fund may only make their contributions in cash; in a Closed Fund money also they may be realized at real estate, which must be free of all encumbrances and be accompanied by the solvency of the Tax Administration Investor. The Central Bank will issue technical standards for the development of this provision.
Natural persons who are participants in an Open Fund may designate beneficiaries of their participation shares, which shall be recorded in the subscription agreement of participation shares, to effect his death the Management update registration sharers with the new holders of the securities. In the case of closed-end funds beneficiary designation shall be in accordance with the provisions of the Act Annotations Electronic Securities Account.

Placement Art. 46. ​​Primary placement of participation shares of the Funds may be made directly by the Manager, through brokerage houses or other legal persons authorized by the Council, in accordance with the requirements set by the Bank technical standards Central. For these purposes, the Manager shall sign contracts mandate legal persons referred to in this clause, expressly empowering them to represent and bind it in everything that is related to the subscription and payment of participation fees within the limits of its mandate.
In the case of closed-end funds, the primary placement of shares of participation may be made in the stock market in which they would be registered.
Managers must keep an updated record of legal persons they conferred mandate, as provided in the first paragraph of this article. The register shall contain the general data of the mandatory and be available to the Superintendency.
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The Management and mandatory must display in their offices to the public the following legend: "The amounts of money you receive in contributions to an investment fund investments are at the risk of investors are not bank deposits and are not guaranteed Institute Deposit guarantee ". They must also explain to the potential investor the characteristics of this form of investment, indicating that the originally provided amount may increase or decrease.
Art. 47.- When an investor acquires participation shares of a Fund, or later in the case of closed-end funds emissions for the first time, the Manager or his mandatory must deliver a complete copy of the following documents: Rules of the Fund, extract thereof, subscription contract duly signed participation fees, placement prospectus participation fees and additionally an extract from it. In the subscription agreement of participation shares, must contain the delivery of the documents mentioned in this article.
The documents referred to in the preceding paragraph, except the subscription agreement of participation shares, they may be transferred at the option of the investor, through magnetic or electronic media.
The extract content of the Regulation and the prospectus referred to this Article shall be established by the Central Bank through technical standards. Transfer


Art. 48. Transfers of participation shares of closed-end funds represented by book entries shall be made by accounting transfer, by entries in the records of the Custodian, which will be full without further requirements, exchange and subject to rules of autonomy , all according to the Law on Electronic Annotations Securities Account.

Register of Unitholders Art. 49.- The Manager shall keep a record of all those who have participant quality, separating them according to how they have acquired the participation shares of the Fund, as follows:
a) Unitholders who subscribe and deliver their contribution should be recorded at time of mailing; and
b) Unitholders who have acquired the participation fees for different subscription means, be recorded at the time ownership is established.
When a quota share is owned jointly owned, their owners must appoint one of them to represent them against the Management.
The Manager may hire a company so you can keep track referred to this article. The Central Bank will dictate the technical standards established technological and financial requirements to be met by companies wishing to provide this service; and preflight
25

compliance, the Superintendency authorize the Manager so you can hire. In addition to the foregoing, this contract shall comply with the regulations in Article 30 of this Law.

Prohibition for Financial Institutions Art. 50.- banks regulated by the Banking Law, its subsidiaries and financial entities regulated by the Act on Cooperative Banks and Savings and Credit Societies may not acquire participation fees Funds that invest directly or indirectly in equities. All this in addition to regulations in Article 28 of this Law.
FUNDS OPEN SECTION B Operation

Art. 51. Open-end funds must have a minimum net worth of three hundred and fifty thousand US dollars from the United States and at least fifty participants; or ten participants, if there is at least one institutional investor, amount and number to be achieved within one hundred eighty days from the date on which the Fund is recorded in the Register between them. After the aforementioned period, the Fund shall comply with the requirements permanently covered in this article.
In case of breach of the requirements contained in this article, the Manager will communicate no later than the next business day to the Superintendent, who for reasoned resolution may grant a period not exceeding ninety days for compliance. If not achieved, the Manager shall notify the Superintendent within two working days for the purposes of the liquidation of the Fund, which shall be in accordance to what is stated in Arts. 103 et seq of this Act.
Are institutional investors for purposes of this Law, Banks, Pension Funds, Insurance Companies, Reinsurance Companies and Investment Funds duly authorized. They will also have that character that determined by the Central Bank through technical standards, whenever any of the following conditions are met:
a) That its primary purpose is to make financial investments with third-party resources; and
b) the volume of transactions, nature of their assets or other features, allow to qualify their participation in the relevant market.
The minimum equity referred to this article will be updated as established by the Securities Market Act for capital formation and operation
Fund Registration Request and Authorization Documents
Art. 52.- The Management must submit with the application for registration of Open Funds, the following documents:
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a) Rules of Procedure of the Fund;
B) placing Prospectus participation fees;
C) Model contract subscription of participation shares between the Manager, acting as administrator of the Fund and the participant;
D) method of valuation of investments in securities in accordance with Article 102 of this Act; and
e) Other documents that the nature of the Fund requiring the submission.

Registration application has been filed with the information required by this Act, the Council shall have a period of up to thirty working days to authorize the Internal Regulations of the Fund and the prospect of placing participation fees. For the Council authorize the subscription model contract of participation shares, the Superintendency must comply with the regulations in Article 22 of the Consumer Protection Act. Registration

Art Fund. 53.- Open Funds shall be entered in the Register kept by the Superintendency for such purposes.
The Manager shall submit the final in the preceding article refers to documents, as authorized by the Superintendency also accompanying the constituent documents of the security required in Article 22 of this Law, within no more than fifteen working days from the date of notification of approval of such documents. The Superintendency settle the Fund within a period not exceeding five working days from the date on which the Manager present the final documents.
Open Funds not be registered on the stock market they will be settled only in the registry.
For the purposes of this Act, it shall mean a Fund began operations when seated in the registry.

Rules Art. 54. The Rules of each Open Fund shall contain at least the following:
a) Expression "Investment Fund Open" followed by a name that individualize it from any other Fund authorized by the Superintendency;
B) Definition of classes participation fees, if any;
C) Investment of resources and diversification of investments, specifying, where applicable, the risk classification of the assets in which the Fund will invest and considering the treatment of excess investment;
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d) Policy liquidity of its assets;
E) Policy indebtedness;
F) the Management Committees charged, indicating whether they are from the Fund or the investor, expressed as percentages or amounts;
G) Expenditure from the Fund will be clearly detailing their concepts;
H) Rules regarding mandatory information to unitholders will be delivered, in addition to the established in this Act;
I) Indication of national newspaper that the publications law requires be made and they are imposed;
J) Rules for subscription and redemption of participation fees;
K) Procedures to resolve differences or conflicts between the participants in their capacity as such, or between them and the Management;
L) Maximum percentages of participation of shareholders;
M) Selection criteria and renewal of the external auditor and tax where applicable, of the Fund;
N) Policies pursuant to the legal provisions on the Fund's operations with related parties, management of conflicts of interest and allocation operations when various Funds are administered;
O) policies, measures and procedures whose purpose is the proper solution of conflicts of interest between the Fund and its respective Management, such as investments and transactions with related persons, transactions between funds and transactions between the Fund and its Management;
P) Deadline for ransom, specifying the amount corresponding to those bailouts that represent significant amounts of total assets;
Q) Definition of a significant amount in daily terms for rescue purposes;
R) form and frequency conversion contributions and redemptions of participation fees;
S) Form of subscription payment of participation fees;
T) input systems and rescue, as well as systems and entities involved placement and redemption of participation fees;
U) Systems custody of the securities that make up its assets;
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v) Rules of administration and liquidation, considering the maximum percentage of fees on assets of the Fund would correspond to the liquidator;
W) Indicator has risk classification;
X) The procedure for calculating the value of the participation fee, which will be made based on technical standards set by the Central Bank.

Offering Circular Art. 55.- Open Funds must have a prospect of placing participation fees, which will incorporate the following:
a) General information on the Fund Management;
B) Information on the legal establishment of the Fund;
C) Risk classification of the Fund;
D) share class;

E) description of the investment policy and investment diversification Fund, detailing the types of assets in which they invest, treatment of overinvestment and other records that reveal the risks and potential returns of the Fund;
F) Description of the debt policy of the Fund;
G) description of the fees and expenses, specifying whether they are from the Fund or the investor;
H) Summary of information that must necessarily be delivered to unitholders of the Fund;
I) Procedure for subscription and redemption of participation fees;
J) Maximum percentage of participation of shareholders in the Fund;
K) information concerning the deadline for the payment of ransoms;
L) contributions Frequency conversion and redemption of participation fees;
M) Payment of the subscription fees for participation;
N) System contributions and rescue, as well as systems and entities involved placement and redemption of participation fees; and
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o) Any other information that the Manager.
The Manager shall make available to the public in their offices and in their mandatory, the placement prospectus must give it to anyone who requests it. Such prospectus will be delivered in print, electronic or magnetic media, as it is requested by the applicant. Changes

Art Fund. 56. Any modifications made to the Rules of an Open Fund, the prospect of placement and subscription model contract of participation fees must be authorized by the Council, at the request of the Manager and subsequently must modify the Fund seat in the registry.
Changes to the name of the Fund, investment policies, fees received by the Manager, expenses from the Fund and other changes equally important, after being authorized by the Superintendency, shall be communicated to the public by the Manager, through a prominent notice published in the newspaper established in the Internal Regulations of the Fund. In these cases, the changes will take effect fifteen days after publication.
Before the publication of the notice referred to in the preceding paragraph, the Manager shall report such changes directly to unitholders, whether in print, electronic or magnetic media as he has requested it, to corroborate irrefutably this management. This information shall specify the contents of each of the changes.
The Central Bank will issue technical standards that allow the development of this article. Rescue

Participation Fees Art. 57. Unitholders of an Open Fund shall be entitled at any time, request the Manager full or partial redemption of its participation shares against assets of the Fund.
For this purpose, the Management shall keep a special register in which applications for subscription and redemption shall be recorded in order of entry, indicating the date and time of each request.
Shareholders exercise their right of redemption by giving notice to the Manager by systems providing convincing evidence of the rescue operation, safeguard their rights and are verifiable, which will be covered by the Internal Regulations of the Fund.
In addition, if the rules so provides, the mandatory of the Manager may receive requests for rescue and deliver participation fees paid to unitholders. In this case, the date and time of each request referred to in the second paragraph of this article, it shall at the time the request is received by the president.
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Redemptions Payment of Art. 58. The payment of ransoms must conform to term and other conditions laid down in the Rules of each Fund, the Manager may do so in extraordinary values ​​of the investment portfolio of the Fund, where required or authorized by the Council, motivated by situations that could result in significant variations in the prices of instruments to the detriment of shareholders or serious disturbances on the market. Such extra payment securities must comply diversification and proportionality of the securities that comprise the Fund.
The Managers may establish internal rules of the Funds it manages, rescue systems and payment of participation fees for those redemptions made on a day that represent significant amounts in relation to the assets of the Fund.

Art. 59. For purposes of the provisions of the preceding Article, by significant amounts, those being rescued on a given day, demand the liquidation of a significant portion of the investment portfolio of the Fund, under conditions that could be expected that such bailouts, by themselves, generate a considerable decrease in the value of the Fund's assets.
The Managers shall define the respective rules of procedure, a significant amount in daily terms for each Fund managed as a fixed amount or as a percentage of the assets of the Fund, for the preceding day of the date of redemption request.
Rescue systems and payment of participation fees to be defined for those bailouts represent significant amounts daily on the Fund's assets must contemplate at least the deadline for payment and fee structure will be applied . That period shall be established in the Internal Regulations of the Fund and the subscription agreement of participation shares. Exceptionally, in duly justified
such as public calamity, national emergency, serious imbalance or situations that could cause serious harm to investors, the Council, ex officio or at the request of the Manager extreme cases it may extend the time limits It referred to in the preceding paragraph and Article 58 of this Law, and to temporarily suspend the subscription of new shares or the payment of ransoms. Value

Participation Fees Art. 60.- The participation fees will be assessed daily, dividing the value of the fund assets by the number of participation shares, subscribed and paid.
If there are different kinds of participation shares, each will be assessed daily by dividing the value of the assets of the Fund corresponding to that class between the number of shares subscribed and paid share of that class .
The Central Bank will issue technical standards relating to the rules to be used regarding the conversion of contributions and participation fees rescues them.
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CLOSED FUNDS SECTION C Operation
Art. 61.- closed funds must have a minimum net worth of three hundred and fifty thousand US dollars from the United States and at least ten participants, or two participants, if there including an institutional investor; amount and number to be achieved within six months from the date on which the Fund is recorded in the Register. After the aforementioned period, the Fund shall comply with the requirements permanently covered in this article.
In case of noncompliance with the requirements of this article, the Manager will communicate no later than the next business day to the Superintendent, who by reasoned decision may grant a period not exceeding one hundred and eighty days for compliance. If not achieved, the Manager shall notify the Superintendent within two working days for the purposes of the liquidation of the Fund, which shall be in accordance to what is stated in Arts. 103 et seq of this Act.
The minimum capital referred to this article will be updated as established by the Securities Market Act for capital formation and operation.
Fund Registration Request and Authorization Documents
Art. 62.- The Management must accompany the application for registration of closed-end funds the following documents:
a) Project indenture participation fees;
B) Rules of the Fund;
C) placing Prospectus participation fees;
D) Model contract subscription of participation shares between the Manager and the participant;
E) method of valuation of investments in securities in accordance with Article 102 of this Act; and
f) Other documents that the nature of the Fund requiring the submission.
The Council shall have a period of no more than thirty working days to authorize the Internal Regulations of the Fund, the prospect of placing participation fees and the draft indenture participation fees, counted from the date of submission of the application for registration of the Fund with complete information for the Council to authorize the subscription model contract of participation shares, the Superintendency must comply with the regulations in Article 22 of the Consumer Protection Act.
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Fund Registration and Issue

Art. 63.- closed funds as well as their emissions, shall be entered in the Register kept by the Superintendency for such purposes and must then enroll in a bag. For the registration of the issue must meet the requirements of the Securities Market Act as it does not contradict this Law.
The Manager shall submit the final documents as the previous article referred to as authorized by the Superintendency also accompanying the constituent documents of the security required in Article 22 of this Law, within no more than thirty working days from the notification of the authorization documents. The Superintendency Fund and settle the issue within a period not exceeding five working days from the date on which the Manager present the final documents.
A Fund began operations when seated in the Register and in a bag.

Features Issue Art. 64. In cases where the primary placement of the participation fees is made by the Manager or its mandatory, the placement price determined by the Manager will be updated daily during the subscription period of participation shares in the manner set in the respective issue. In any case, the price may not be less than the result of dividing the value of the fund assets by the total number of paid participation fees, related both to the day immediately preceding the date of calculation.
The preceding paragraph shall not apply to the placement of participation shares issued in exchange.
Art. 65. In the event that the initial assets exceed the minimum laid down in Article 61 of this Act, the deadline for the issue, subscription and payment of participation fees may not exceed three years. This period will, in the case of the first issue of participation fees from the Fund and the issue to be settled in the Register and in a bag. After this period, the capital will be reduced to the amount actually paid, subject to the provisions of Article 61 of this Law.
Art. 66. It is understood that an issue is failed, provided that having established conditions to be fulfilled within a specified period, they have not been met.
If the subscription and payment of participation fees of the issue proves failed under the terms of the issue, the respective subscription and payment will be void.
The cash contributions, incurred in participation fees issue a declared insolvent, they shall be returned to the respective holders, valorising the participation fees at not less value obtained by dividing the assets of the Fund between number of participation shares actually paid; the repayment period may not extend beyond
33

ten days of completion of the subscription period of participation shares. If the contribution made by an investor has consisted of property, having disposed of these, it will return the proceeds of sale, within the same period that the aforementioned; not been alienated, they must be returned within a maximum period of two months. The external auditor of the Fund shall deliver its opinion of the above.
During the period of placement of the participation fees and while the issue may be unsuccessful, the cash contributions that have contributed to the Fund may only be invested in securities of high liquidity and low risk or deposited in banks domiciled Salvador, the Central Bank, through technical standards, establish the criteria to be met by an instrument to be considered highly liquid and low risk.

Rules Art. 67. The Rules of each Fund Closed shall contain at least the following:
a) Expression "Closed Investment Fund" followed by a name that individualize it from any other Fund authorized by the Superintendency;
B) Term of each Fund;
C) Investment of resources, must be detailed at least, the types of assets in which they and diversification of the Fund's investments will be invested, considering the treatment of excess investment;
D) Policy liquidity of its assets;
E) Policy capital increase through issuance of participation fees;
F) Policy indebtedness;
G) Distribution Policy of profits earned by the Fund;
H) Commissions charged the Manager, indicating whether they are from the Fund or the investor, expressed as percentages or amounts;

I) Expenditure by the Fund will be clearly detailing their concepts;
J) rules regarding mandatory information to be delivered to the participants, in addition to the provisions of this Act;
K) Indication national newspaper that the publications law requires be made and they are imposed;
L) procedures to resolve disputes or conflicts between the participants in their capacity as such, or between them and the Management;


34 m) Maximum percentages of participation of shareholders;
N) Selection criteria of the external auditor and tax, if applicable;
O) Policies, in accordance with the legal provisions on the Fund's operations with related parties, management of conflicts of interest and allocation operations when various Funds are managed;
P) Policies, measures and procedures whose purpose is the proper solution of conflicts of interest between the Fund and its respective Management, such as investments and transactions with related parties, transactions between funds and transactions between the Fund and its Management;
Q) The powers, duties and responsibilities of the Supervisory Committee and if applicable, the remuneration of its members by the Fund;
R) Form and periodicity in which the Manager shall report the ownership of shares in entities in which the Fund circumstantially becomes controller;
S) Materials to correspond to the knowledge, in addition to those set forth in this Law Special Meeting of unitholders;
T) terms, conditions and deadlines in the event of making voluntary reductions and partial capital
U) Causes him the right to withdrawal;
V) Rules of management and liquidation of the Fund;
W) Confirm that features risk classification; and
x) The procedure for calculating the value of the participation fee, which will be made based on technical standards set by the Central Bank.

Offering Circular Art. 68. Closed Funds must have a prospect of placement of participation shares for each issue, which will incorporate the following:
a) General information on the Fund Management;
B) Information on the legal establishment of the Fund;
C) Risk classification of the Fund;
D) Characteristics of the issue, such as the amount, timing and placement price, number of participation shares, form of daily update during placement price
35

subscription period, conditions that are deemed to have failed a broadcast assets in which the funds provided will be invested during the subscription period and identification of the Management mandatory placement participating companies, if any;
E) description of the investment policy and investment diversification Fund, detailing the types of assets in which they invest, treatment of overinvestment, main sectors or investment projects and other background that reveal the risks and potential returns of the Fund;
F) Description of profit distribution policy of the Fund;
G) Causes him the right to retirement, if any;
H) Description of the policy on capital increases and decreases;
I) Description of the debt policy;
J) Description of fees and expenses, specifying whether they are from the Fund or the investor;
K) Summary of information that must necessarily be delivered to unitholders of the Fund;
L) audited financial information of the Fund, in the case of second emissions; and,
m) Any other information that the Manager.
The Manager shall make available to the public in their offices and in their mandatory, the placement prospectus must give it to anyone who requests it. Such prospectus will be delivered in print, electronic or magnetic media, as it is requested by the applicant.
Join
Bag Art. 69. Settled broadcast the registry, the Superintendency must report to the Manager, which would proceed to register the participation fees in a bag.
No public offering may be made of participation shares of a closed-end fund, that are not previously recorded in the Register and listed on a stock exchange authorized pursuant to the Securities Market Act. Amendments to the Fund


Art. 70. Any modifications made to the Rules of a Closed Fund, prospects placement, the subscription model contract of participation shares and the issue will require prior authorization from the Council, at the request of the Manager. Such decision shall be notified within the next fifteen days and subsequently agreed must modify the seat of the Fund
36

in the Register and issuance, if applicable. Notwithstanding the above, the amendments to the Rules shall, prior to its presentation to the Superintendency, have been approved at the Extraordinary Assembly of shareholders, in accordance with this Law.
Changes to documents referred to in preceding paragraph shall become effective fifteen days after notification of the approval of the Council period within which shall be reported directly to unitholders by the means to conclusively corroborate this management. This information shall specify the contents of each of the changes. The Central Bank will issue technical standards that allow the development of this article. Subsequent

Emissions Art. 71. In the same Fund may be more than one issue. Subsequent to the first emissions must be agreed at the Extraordinary Assembly of members and the same legal requirements for registration and registration of the first issue must be observed, as appropriate, adding certification relevant resolution of the Assembly of shareholders.
Art. 72.- To determine the placement price of the following emissions to the first, should be given to unitholders comprehensive and reasoned information about the assessment criteria of the participation fees, supported by at least two expert reports independent knowledge of the area; reports should be available to participants five days before the Assembly to be adopted by the characteristics of the respective issue. Experts' fees will be paid by the Fund.
Unitholders will be entitled to a period of preferential option to subscribe for shares share capital increase of the Fund that they should be offered at least once, in proportion to the participation shares they hold. This right is essentially waivable and transferable.
In the event that the Manager or its mandatory emissions placed, the placement price during the subscription period of the participation fees will be updated daily in the manner stated in the respective issue. In any case, outside the preferential option period, the price may not be less than that determined for the period of respective preferred option, or the result of dividing the daily value of the fund assets by the number of participation fees paid, corresponding both the day immediately preceding the date of calculation.
I indicated in the preceding paragraph regarding the placement price shall not be taken into account for placements made in the stock market, to the extent that has been established under the conditions of the issue. The agreement of the meeting of unitholders on a capital increase may not establish a term exceeding three years, from the date of the agreement thereof for the issue, subscription and payment of fees respective participation. After this period without having heard the capital increase, this will be reduced to the amount actually paid, subject to the provisions of Article 61 of this Law.
Art. 73. Each time a preferential subscription offer is made participation fees, the Manager shall make available to owners of participation shares entitled to attend the preferential subscription certificates signed by the Manager that demonstrate that circumstance. this
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be right for those participants registered in the respective register five working days prior to that in which the preferential offer starts.
The owners of participation shares entitled to subscribe them or assignees thereof, stated in writing to the Manager its intention to subscribe shares of participation in a maximum of thirty days from the date of publication of the notice to the following paragraph. If nothing say within that period it shall be deemed to waive that right.
Placement conditions of participation shares of a Fund shall be published in the newspaper mentioned in the Rules of the respective Fund through a prominent notice, according to technical regulations established by the Central Bank.

Art. 74. For subsequent releases, Article 66 of this Law concerning the treatment of failed emissions shall apply, except as regards the calculation for the return of cash contributions.
If the subscription and payment of participation fees to be withdrawn by the issue be unsuccessful, the Management proceed to liquidate the investments made with the proceeds from that placement.
Carried out liquidation for cash contributions, the value obtained must be returned to each of the participants, considering the percentage it represents the number of shares subscribed and paid share for each of them, in relation to the number total participation fees actually paid in money from the failed broadcast. This value can not be less than the result of dividing the resources obtained in the failed placement among the total number of participation shares actually paid in money that issue.

Benefit Sharing Art 75.- closed funds distributed net income received during the year, according to the distribution policy expressly stated in its rules of procedure.
Shall mean perceived net profit, the amount resulting from subtracting the sum of profits, interest, profits, dividends and capital gains actually received, total losses and expenses accrued during the period.
If the Fund hath accumulated losses, the perceived net benefits are first allocated to absorb them. Moreover, in case there are losses in a year, they will be absorbed with retained earnings, if any. Decreases Capital

Art. 76. Closed Funds may make voluntary and partial reductions of their capital, to the extent that the Internal Regulations of the Fund provides for it, in the manner, conditions and terms that are brought there. In addition, the regulation should contain minimum information to qualify for capital reduction, payment dates and methodology for calculating the return value of the participation fees.
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These decreases may be made only for the purposes indicated below:
a) To restore its membership during the term of the Fund their share in the reduction of capital; This notwithstanding, they may increase equally their right to restitution of the value of the participation fees when others do not exercise; and
b) To restore the outgoing participants the value of their participation quotas, if, choose to retire when participating in Assembly is agreed to extend the term of the Fund or altered or deleted provisions granting that right . In this case, the Internal Regulations of the Fund shall consider the causes which may exercise the right of withdrawal.
The Manager shall publish a notice in the newspaper that the Internal Regulation and submit a communication to unitholders by the relevant means to conclusively corroborate this management, within two working days following that in which it was taken the deadline for the exercise agreed Extraordinary Meeting of shareholders, indicating the decrease in capital or the agreement that originated the right of withdrawal, and the date of payment of the value of their participation fees
Notwithstanding the provisions of paragraph a) of this article, the Manager, with the prior report of the Supervisory Committee, shall call a Special Meeting of shareholders to adopt the agreement failing to put the decrease in the capital.
Without prejudice to the provisions of this article, you can reduce the capital to absorb losses incurred on the Fund's operations prior agreement adopted in Extraordinary Meeting of shareholders.

Monitoring Committee Art. Closed 77.- Each Fund will have an Audit Committee composed of three members shall be chosen by the Ordinary Assembly and will last one year in office, they will be paid by the Fund and may be reappointed, as determined in the rules of procedure. These members shall not be persons related to the Fund Management and at least one must have the quality of participant. Committee members will continue to meet current monitoring their duties until new take possession. The decisions of the Supervisory Committee shall be taken by majority.
If members of the Supervisory Committee Monitoring Committees integrate other funds or are directors or managers of another Manager, must inform the Superintendency.

The Manager shall provide members of the Supervisory Committee, upon request, full and documented information, at any time, everything related to the Fund's operations.
The Audit Committee shall meet at least twice a year, to receive the report of the Management on the activities of the Fund and the reports of the external auditors and tax, if applicable.
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The Supervisory Committee shall be informed prior to the Management convene an Extraordinary Meeting, in order to review the matters dealt with in the Assembly. Poised
Fund in the Register, the Management Committee shall appoint a provisional Surveillance, which shall remain in office until the first meeting of unitholders, in which members of the Supervisory Committee will be elected.

Requirements and Powers Art. 78. The members of the Supervisory Committee shall be of recognized integrity and have at least five years of proven experience in financial and administrative matters or according to the investment regime of the respective Fund.
The Audit Committee shall have the responsibility to act solely in the best interests of unitholders, for which it will monitor the Management operations carried out with Fund resources, and its powers as follows:
a) Check the Manager complies with the Iterno Fund Regulation and report thereon to the Ordinary Meeting of shareholders.
B) Verify that the information for unitholders sufficient, accurate and timely.
C) Monitoring investments, capital increases or decreases and any other operation of the Fund are conducted in accordance with this Law, technical regulations established by the Central Bank and the rules of procedure of the Fund. If most of the members of the Supervisory Committee determines that the Manager has acted in contravention of those provisions, it must request the Manager to convene an Extraordinary Meeting of shareholders, which will report the situation. The call will be held in a period not exceeding five working days from the date of the agreement.
D) propose to the Ordinary and Extraordinary Meeting of shareholders the appointment of external auditors as required by law, to propose the tax auditor of the Fund.
E) To submit an annual report on its management to the Ordinary Meeting of shareholders.
F) The others established this Act and the Rules of Procedure.
For the purposes specified in subparagraphs a), b) and c) of this article, the Supervisory Committee may review the records, books and all documentation relating to the Fund. The Supervisory Committee shall immediately make known to the Superintendency that agency identifies any breach of these issues.
The members of the Supervisory Committee are required to perform their duties diligently and keep business confidentiality regarding the Fund and may take advantage of the information they obtain because of their position and that has not been disclosed by the Management.
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The Central Bank will issue technical standards for the development of this article.

Assemblies of Shareholders Art. 79. In closed-end funds, the participants will meet in Ordinary and Extraordinary Assemblies.
Ordinary Assemblies will be held once a year, within five months after the closing date of each year to decide on the characteristics of these Assemblies materials.
Extraordinary Assemblies may be held at any time, as required by the needs of the Fund, to rule on any matter that the Act or the Rules of the Fund allocated to the knowledge of these assemblies and provided that such materials are indicated in the announcement.
Shall be the responsibility of the Manager or the person chairing the Assembly, where it has not been represented, up a record of what happened and agreed during the session, which must be signed by at least two participants chosen at the beginning of the Assembly for this purpose and shall be based on the Book of respective Acts.
If for any reason he is unable to settle the minutes of an Assembly in the respective book, the development of the session will be disclosed in the protocol of a notary.
The Central Bank will issue technical standards on the formalities which must contain the Book of Acts referred to this article.

Ordinary Assembly Art. 80.- The powers of the Regular Meeting of shareholders, the following:

A) elect annually to members of the Supervisory Committee, set their diets in the case of being paid according to the Rules, to approve their expenses and receive its annual report and the corresponding settlement of their expenses;
B) To approve the annual financial statements of the Fund;
C) To approve the expenditure related to the management and administration of the Fund to be submitted by the Manager.
D) To appoint the external auditor and his deputy, as well as the tax auditor if applicable and fix their remuneration.
For a), b) and c) of this article, the Assembly may require adjustments it deems appropriate.
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Extraordinary Assembly Art. 81.- The powers of the Extraordinary Meeting of shareholders, the following:
a) approve the amendments proposed by the Management, the Audit Committee or the Internal Regulation unitholders of the Fund;
B) To approve the transfer of the administration of the Fund to another management;
C) Agreeing the early liquidation of the Fund, appoint the liquidator, fixing their remuneration and powers in accordance with the regulations in this Act and approve the final at the end of the liquidation expenses;
D) To approve the merger with other funds;
E) To approve the capital increase of the Fund through new issues of participation fees and the characteristics and conditions of these, setting the amount to be issued, the time and placement price;
F) Agreeing capital decreases;
G) take cognizance of any situation that may affect the interests of the unitholders;
H) Any other matters pursuant to this Act and the Rules of the Fund, corresponding to their knowledge;
For the cases mentioned in subparagraphs b) and c) may be established in the Internal Regulation to the Management compensation for the damage caused to it by a preset amount or percentage, when replacement or settlement have not come from causes attributable to it. Calls

Art. 82.- The Ordinary and Extraordinary Assemblies shall be convened by the Manager.
The Manager shall convene extraordinary meeting whenever in his judgment, the Fund's interests warrant, requested by the Supervisory Committee, the Superintendent or holders representing at least ten percent of participation shares issued and paid.
Without prejudice to the provisions of the preceding paragraphs, the Superintendent or Supervisory Committee may convene directly to ordinary meetings or extraordinary of shareholders, as applicable.
The Assemblies convened under the request of shareholders, the Supervisory Committee or the Superintendency, must be held within a maximum period of thirty days from the date of the respective request.
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Notwithstanding this article, the convening of an Ordinary or Extraordinary General Assembly will not be necessary, if being found meeting participants or representatives of all levels of participation in which is divided the assets of the Fund , may agree to settle in Assembly and approve it unanimously agenda.
Art. 83. The Assemblies on first and second call may be held on the same date at least two hours apart; They will be announced in the same notice, which will be published once in the national newspaper specified in the Internal Regulations of the Fund. The publication must be made no later than ten days before the holding of the assembly, within which will not count the day of publication of the notice or the holding of the Assembly.
The publication will indicate the name of the Manager and the Fund's name; the date, time and venue; the nature of the Assembly which convenes; the necessary quorum; the agenda; as well as the name and position of those who signed the call.
In addition, the call will be sent to each participant with a minimum of ten days after the date of holding the Assembly, which may be made by personal delivery, or by any other means which the participant designated in writing and allow to acknowledge receipt, in any case must contain the agenda to develop. Participants who register on the register after the call, will be notified of this at the time of registration. Participants in the Assemblies

Art. 84.- only may participate in the Assembly, who are registered in the register of participants or their representatives. Each share is entitled to one vote. Proxies must be granted by letter notarized signature. Quorum


Art. 85.- Ordinary Assemblies will be constituted on first call with the attendance of shareholders representing half plus one of the paid participation fees; and in second call, whatever the number of participation shares present or represented. Agreements will be adopted, in both cases, by half plus one of the shares present or represented participation.
The Extraordinary Assemblies will be constituted on first call with the attendance of shareholders representing three quarters of the participation fees paid; and on second call, with participants representing half plus one of the participation fees paid. The resolutions are adopted by three-quarters of the participation fees paid in the case of the first call and three-quarters of the participation shares present or represented in the case of the second call. Third Call

Art. 86. In the event that the Extraordinary Assembly was unable to be held due to lack of quorum at the time of the call, a new call will be made under the provisions of this section, which may not be announced simultaneously with the first and second call . In addition, you must
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express the fact of being third call and that, consequently, the Assembly is valid whatever the number of participation shares present or represented. Agreements will be adopted by half plus one of the shares present or represented participation. COMMON PROVISIONS SECTION D


Custody Art. 87.- The securities in which the Managers invest the resources where appropriate funds according to their nature, must be in the custody of an entity authorized under the Securities Market Act.
The Manager shall enter into contracts with deposit and custody entities that will provide this service, which shall contain provisions ensuring the safety and fluidity of escrow service. To comply with this provision, the Central Bank will issue technical standards regarding the information to be forwarded to the Superintendent by the company providing the service of custody.

Risk Classification Art. 88. Each fund must have at least one classification that reflects the risks of the active members of the Fund and the operations carried out and the quality of management of the Manager. This must be performed by an authorized rating agency risk in accordance with the Securities Market Act and must take the first, prior to the submission of the application for registration of the Fund. The Central Bank will issue technical standards for minimum legal and financial aspects that rating agencies should consider in their reports and the frequency with which the aforementioned classifications of the Funds will be updated.

Impossibility to attach Art. 89.- The assets in which a Fund invests may not be embargoed or subject to any precautionary or preventive by creditors of the Manager or the unitholders measure.

Value of the Heritage Art Fund. 90. The value of the fund assets is calculated by subtracting the value of its assets, its liabilities. Accounting

Art. 91.- The Central Bank, based on international standards and generally accepted accounting principles, establish how they should be accounting for the funds, so to establish their actual financial and tax situation and that takes the effects | || 44

under Article 209 of the Tax Code. Such accounts must be independent accounting of the Manager. Publication of Financial Statements

Art. 92. Each Manager shall be published in the national newspaper established in the Internal Regulations of the Fund, the financial statements of each of the Funds it manages, to June 30 and December 31 of each year; the latter, they must be accompanied by the opinion of the external auditor, expressing in them the number of participation shares and unit value. Said publication shall be made within a maximum period of sixty days from the dates indicated.
Notwithstanding the provisions of the above provisions and information for the media to Article 34 of this Law refers, participants will have access to full information on the financial statements and the Fund's investments in offices the Management and mandatory societies.
The Central Bank will issue technical standards to determine the minimum content of the information to be published.


External Audit Art. 93. The Manager shall appoint the external auditor of a Fund prior to submitting the application for registration of the Fund.
The external auditor of the Fund must be registered with the Superintendency and meet the minimum audit requirements, as indicated in the Securities Market Act.
The Superintendent, through a reasoned resolution may require additional external audits by the Fund when necessary to clarify or investigate any fact or operation. Moving a

Art Fund. 94. Taken the agreement to transfer management of a fund, in the case or the dissolution of the Management, the Supervisory Committee, for the case of closed-end funds or the Manager, in the case of open-end funds, you must inform the Superintendency, attaching certifications transfer agreements and certifications of the agreements of acceptance of the acquirer Manager. In addition, the Supervisory Committee or the Manager, as applicable, the transfer must communicate via a prominent notice published in the newspaper established in the Internal Regulations of the Fund. Likewise, the Superintendent shall communicate the transfer to the Tax Administration.
The transfer of a Fund as an equity unit can only be made in favor of another Manager governed by this Act and shall include all assets, rights and obligations that constitute the assets and liabilities of each Fund as well as warranties, guarantees or bails.
The transfer of funds shall be made within thirty days of the notification to the Superintendency given, which may extend the Council, only thirty additional days.
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If within the prescribed period, the Funds have not been transferred to the acquirer Management, shall be liquidated in accordance with the provisions of Arts. 103 et seq of this Act.
The acquirer Manager will happen automatically to the previous one in their rights and obligations, including tax, after completing the transfer of the Fund and the respective registration entry have changed as to change your administrator. In carrying out the modification in the Register, the acquirer Manager will have one hundred eighty days to make necessary to comply with the provisions of this Act adaptations. The transfer of the Fund must be certified by its external auditor.
The Central Bank will issue the respective technical standards for the development of this article. Fusion

Art Fund. 95. The Council, at the request of Management, may authorize the merger of funds. For the application of this Article, the Central Bank will issue technical standards that establish the procedure for requesting authorization for merger to the Superintendency and the documents that accompany the request, including merger agreements, changes to internal regulations and model contracts subscription of participation fees; and the information that should be available to the participants before and after the merger, considering the changes to the investment policies of the respective Funds and the method of calculating the exchange ratio to be used for the conversion of shares. To grant such authorization, the solvency of the Tax Administration of the respective Funds, under the terms provided in the Tax Laws for such cases must be submitted.
CHAPTER II INVESTMENT SCHEME

Investment Object of Art. 96.- The investments made with resources of the Funds will sole purpose of obtaining an adequate return, depending on the level of risk and liquidity requirements defined in the investment policy contained in the respective Rules of Procedure. Any other object that is intended to give such investments shall be deemed contrary to the interests of shareholders and constitute a breach of the obligations of the Manager.
Investments Funds conducted they should be valued at market price.
In the event that the assets to value are real, they must be valued by experts registered with the Superintendency or other entities whose records it recognizes, using the valúos to practice, methods of recognized technical value approved by it.
The Central Bank will issue technical standards that allow the development of this article.
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Investment Art. 97. The resources of Open Funds Closed Funds and without prejudice to the amounts maintained in cash in current account deposits, savings or term, must be invested in:

A) Securities issued or guaranteed by the State of El Salvador or autonomous institutions of El Salvador;
B) Bonds and other securities issued or guaranteed by local banks;
C) Representative values ​​of individual investor participation in a collective credit of Salvadoran companies or securities representing the equity interest of Salvadoran society;
D) participation fee Open or Closed Funds regulated under this Act;
E) securities issued in a securitization process, according to the Salvadoran regulation;
F) Repurchase public offering values ​​defined in the Internal Regulations of the Fund;
G) Securities issued or guaranteed by foreign states, central banks or foreign banks or international organizations; stocks and bonds issued by foreign companies; securities issued in a securitization process abroad and participation fees of foreign investment funds; and
h) Other public offering that values ​​technical standards authorized by the Central Bank, considering whether it is an Open Fund or Closed Fund.
The investments referred to by the previous paragraphs, they should be performed in a Salvadoran Stock Exchange, except those made in installments participation of local Open and foreign funds. They may also stop trading in securities issued by the State of El Salvador and the Central Bank.
Closed funds, in addition to the stated above, may invest in properties located in El Salvador that generate income coming from lease or sale. If as part of the development of real estate acquired by a Fund is required construction or remodeling, they may only be carried out by third parties, observing the procedures and safeguards that technical standards set by the Central Bank. To invest in real estate at the time of purchase, it should be borne in sight solvency of the Tax Administration of the owner thereof. Also, closed-end 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 the investment in specific business projects to develop in the medium and long term.
Open-end funds and closed-end funds without prejudice to the above, may also acquire shares in the primary market.
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In the case of open-end funds, at least twenty percent of its resources should be kept in cash, bank deposits and securities that meet the liquidity requirements through technical standards established by the Central Bank, considering the secondary market for the instruments. In cases where market conditions so require, the Council reasoned resolution may temporarily change the above percentage.
In addition, the resources of open-end funds and closed-end funds, may be made in organized markets in El Salvador or abroad, operations that have the sole purpose of hedging the Fund's investments.
Where appropriate, securities and other assets in which the Fund will invest shall be issued or transferred with the clause: "For the Investment Fund" followed by the name of it and preceded by the name of the Manager that administered. The same provision applies when these resources are deposited in the current account, savings account or term.
The Central Bank will issue technical standards for the development of this article.
Investment and Debt
Art. 98.- The Central Bank through technical standards set limits for investments with Fund resources can be made, regarding, among other assets of these, assets of the issuer, issuer, corporate group or conglomerate, considering for such effect if it is open-end funds or closed-end funds.
The limits established regarding the Funds investments made in stocks, bonds and other securities when they are in relation of the assets of the issuer; as well as limits on investments made in installments participation of an investment fund or securities of a Securitization Fund shall also apply to the sum of the investments held by all managed by the same Management Funds.

They are excluded from these limits current accounts or savings funds used for their operation as well as securities issued or guaranteed by the State of El Salvador and closed-end funds that invest in companies whose shares are not traded on the stock exchange and that its purpose is the investment in specific to be developed in the medium and long term business projects.
Except for Funds investing in companies whose shares are not traded on the stock exchange and that its purpose is the investment in specific to be developed in the medium and long term business projects, the Funds may not have the direct or indirect control an issuer, an investment fund or a Securitization Fund. It means that control exists when an investment fund to ensure the majority of votes at the general meetings of shareholders and elect a majority of the Directors in the case of Corporations, or secure the majority of votes in the Assembly and appoint administrators or legal representatives or most of them, in other independent companies or assets.
In the case of item g) of Article 97, the investments made by open-end funds and closed-end funds shall not be greater than the percentage in relation to the assets of each Fund, established by the Central Bank through technical standards.
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The Central Bank through technical standards, also set the borrowing limits of open-end funds and closed-end funds in relation to its assets. The Fund's assets may be taxed only to guarantee the payment of it's own obligations. Debts acquired by a Fund may only be charged against their assets.

Investment Policy Art. 99.- The investment policy defined in the Rules of each Fund shall indicate the minimum and maximum investment in each of the asset types referred to in Article 97 of this Law, considering for these purposes among others, following:
a) issuer or guarantor of the instruments, individually and with respect to the financial conglomerate or business group to which it belongs;
B) Category of risk classification of debt instruments;
C) Origin, domestic or foreign, of assets; and
d) Concentration by industry or economic sector issuers.
In the event that the investment policy including real estate, should be added minimum and maximum limits on geographical concentration thereof, the concentration of tenants, if any and concentration on a single property, for the definition of these limits must be fulfilled with the provisions of Article 96 of this Law.
When closed-end funds invest in companies whose shares are not traded on the stock exchange and that its purpose is investment in business projects to develop in the medium and long term, should clearly express in its investment policy. The same treatment will be given in the case of property, specifying the nature and destination of the same.
In any case, the ceilings set by the Central Bank in technical standards issued for such purpose must be observed.

Investment Ban Art.- 100.- invest the resources of the Funds in any form, in securities issued by the Investment Managers regulated by this Act overinvestment
and || Indebtedness is prohibited. | Art. 101.- When excesses limits investment or debt that according to Article 98 established by the Central Bank or who are established in the respective internal regulations of the Funds, as a result of market fluctuations or other cause is earned justified , the Manager shall notify the Superintendent. In cases where excesses do not obey these reasons, liable for breach be subject to administrative sanctions respective.
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If the Fund shall receive payment in goods or rights whose investment does not meet the provisions of this Act or the respective internal regulations for cause, the Manager shall inform the Superintendent situation.
The Central Bank will issue technical standards that allow the development of this Article considering inter alia: notifications, regularization and where appropriate valuation and sale of assets. Valuation

Investment Securities Art. 102. In the process of valuation of investments in securities made by the Funds should be considered:

A) In the case of financial instruments of domestic issuers, prices provide a specialized securities valuation agent. When you can not get the information from the aforementioned source, the Managers may define a methodology for the assessment of that instrument; and
b) In the case of financial instruments of foreign issuers, prices provide a specialized valuation of securities or a system of international securities or financial information recognized by the Superintendency agent. When you can not get the information from the above sources, the Managers may define a methodology for assessment of the instrument.
The Manager shall submit to the Superintendency methodologies referred to in this article at the time of registration of the Fund.
The Central Bank will develop technical standards to facilitate the application of this article.
CHAPTER III SETTLEMENT FUNDS Liquidation

Art. 103. A Fund may not be declared bankrupt, but only enter into liquidation, by showing any of the following causes:
a) When the Fund does not comply with the provisions of Articles 51 and 61 of this Act;
B) When so provide unitholders in a Closed Fund, in a resolution adopted at the Extraordinary Assembly; and
c) When the effect of the revocation of the operating authority of the Manager and the consequent cancellation of his entry in the register, it has not transferred the management of the Fund to another Manager.
In the case of item b), the Supervisory Committee shall notify the Superintendent within three working days following the conclusion of the Special Meeting of unitholders, attaching the
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certification agreement liquidation of the Fund and the appointment of the liquidator adopted at such meeting. Lack of communication to the Superintendency will lead to the Supervisory Committee responsibility for damages caused by them to unitholders.
When a Fund into liquidation, the Superintendency must notify the Tax Administration so that it simultaneously with the liquidation of the Fund applicable to inspection thereof, in order to determine priority way the tax debt.
Settlement costs, including the fees of the liquidator of the Fund shall be paid from the assets in it. In the case of item c), liquidation expenses may be claimed to the Manager by the liquidator of the Fund.
During the liquidation process, the Fund will continue under the supervision of the Superintendency.
Where the liquidator be not the Manager, from the date the liquidator takes office, the Management will be inhibited from every faculty of administration and disposition of assets of the Fund.
Regimes administration and custody continue to apply to the Fund's assets subject to them, until they are cleared. The liquidation of a Fund does not imply the automatic termination of the contracts of administration or custody, without prejudice to the right of the liquidator to end them.

Open Funds Settlement Art. 104.- The settlement of an Open Fund it will be made by its Manager. In the event that the Fund incurs some of the grounds for dissolution and liquidation regulated by this Act or when the Superintendent so determines, based on technical information, it must ask a judge with jurisdiction in commercial matters the appointment of a liquidator proposing three candidates for this purpose.
When the causes are presented in the previous article refers to, and no communication on the liquidation of the Fund is received by the Superintendency, this act ex officio to safeguard the interests of unitholders, for which the Superintendent shall apply with urgent qualifier to a judge with jurisdiction in commercial matters the appointment of the liquidator, from a list proposed by the Superintendent.
Where appropriate the judge to appoint the liquidator, shall appoint within the time limit of sixteen working hours of receiving the request while this does not happen, the Council shall appoint a delegate in order to preserve the assets of the Fund, establishing him their functions and fees in the corresponding appointment. The latter by the Fund.

Once appointed the liquidator, the period within which the liquidation must be carried out for an Open Fund may not exceed one year. Notwithstanding the foregoing, this period may be extended only once by the time authorized by the Council if settlement had been in charge of the Manager, or in his case, the judge had appointed liquidator.
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Closed Funds Settlement Art. 105. The liquidation of closed-end funds will be practiced by a liquidator appointed Extraordinary Meeting of shareholders, which may be the Manager, as long as it has not committed any of the grounds for dissolution and liquidation regulated by this Act.
should the grounds submitted referred to in Article 103 of this Act and is not received in the Superintendency any communication on the liquidation of the Fund, this act ex officio to safeguard the interests of unitholders, for which the Superintendent shall qualifier urgent request with a court with jurisdiction in commercial matters the appointment of a liquidator from a list proposed by the Superintendent.
Where appropriate the judge to appoint the liquidator, shall appoint within the time limit of sixteen working hours of receiving the request while this does not happen, the Council shall appoint a delegate in order to preserve the assets of the Fund, establishing him their duties and fees in the corresponding appointment. The latter by the Fund.
Once appointed the liquidator, the period within which the liquidation must be carried out for a closed fund will be agreed at Special Meeting of unitholders and may in no case exceed five years. Powers of the Liquidator

Art. 106.- The liquidator of a Fund shall have the following powers:
a) Finalize operations have been outstanding;
B) To collect what is owed to the Fund and pay its obligations, priority must pay the tax debt;
C) Sell the Fund's assets;
D) Practice the final balance of the liquidation, in the case of closed-end funds, shall be subject to discussion and approval of the shareholders at the Extraordinary Assembly convened by it for this purpose;
E) forward to the Superintendency the final balance and it published only once in the national newspaper pointing the Internal Regulations of the Fund.
F) Liquidate unitholders in proportion to their participation fees; and
g) To grant writing liquidation, referring to the Superintendency certified copy of the testimony of it.
In the case of closed-end funds, the Assembly of shareholders may establish other powers to the liquidator, provided they do not contradict the established in this article and which are necessary to carry out the liquidation.
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The liquidator shall submit to the Superintendency all the information requested. It is strictly forbidden to start new operations liquidator.
For all tax purposes, the liquidators of the Investment Funds shall be deemed jointly liable as representatives thereof; and prior to making any kind of action that quality must prove to the tax authorities by the document containing his election as such and express acceptance of office.
Failure to comply with the provisions of this article shall incur the liquidator in civil and criminal liability that might arise.
Art. 107. The liquidation of a Fund will be held according to the rules of administration and liquidation established in the Rules of each Fund. Once the respective liquidation process is completed, you must cancel your entry in the Register and its emissions, if applicable.
Appointed liquidator, the Manager must give all goods, records and documents of the Fund; such delivery shall be recorded in a detailed inventory to be signed by both parties. If the Manager fails to take this installment, you must do the delegate appointed according to Art. 104 and 105 of this Act or by a delegate appointed by the Council expressly for this purpose.
When the Manager is responsible for the liquidation practice, you must be started up this inventory.
The liquidation of a Fund must be audited by a firm of external auditors registered with the Superintendency. TITLE IV


TAXATION CHAPTER ONE

Art. 108.- Investment Funds Open and Closed are excluded from the quality of taxpayers Tax Transfer of Personal Property and Provision of Services, payment of tax to income and any other kinds of taxes, fees and special taxes of a fiscal nature. However, the Real Estate Investment Funds Closed shall be considered taxpayers for purposes of the Tax Act Transfer of Movable Property and Provision of Services.
Property transfers for closed-end funds in respect of contributions and acquisitions Closed Investment Funds Real Estate made, shall be exempt from tax on real estate transfer. The return of the contributed property made by the Fund, the issue has been declared insolvent, shall be deemed exempt from Transfer Tax Real Estate, provided such transfer is in favor of the shareholder that contributed.
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transfers assets to form an investment fund, whether movable or immovable, shall also be exempt from any rate assignments, endorsements, registrations and marginalization.
Notwithstanding the provisions of this Article, the Manager will be required to submit to the Directorate General of Internal Revenue, the declaration of income tax by exercise or tax period of each investment fund it manages.
During the five years following the establishment of the first investment fund, unitholders natural persons shall be exempt from payment of income tax by income, revenues or profits from their participation shares in Investment Funds Open and Closed . Upon expiration of the previous term, such income or gains shall be treated to paragraph 5) of Article 4 of the Law on Income Tax and other applicable laws concerns.
All income, revenue or profit from the participation quotas in investment funds open or closed, obtained by legal persons shall be subject to the tax treatment set out in the Law of Income Tax. In cases where the funds received by the legal person, arising from investments in securities exempt from paying income tax, that income, revenue or profit shall also be exempt. Gains or capital losses obtained will be declared by the participant in the exercise or imposition period of its implementation in accordance with the provisions of the aforementioned Act.
The income tax will be applied at the time that the Management make any payment to the participant or when it rescue their participation quotas.
The Manager will control a monthly amount paid by each participant and the sum of the value of shares held by each unitholder participation in the same period. At the end of the fiscal year the Management calculated the actually paid to each participant.
The Manager, depending on the nature of each investment fund it manages, shall keep a detailed record of the following:
a) Name and nature of the Investment Fund;
B) Name and nature of the unitholders;
C) Detail of earnings, revenues or profit and loss that make up the value of the participation shares of the Fund from investments made by the Fund;
D) type of contribution, if cash or in kind and amount of the contribution;
E) value of the participation shares of the Fund;
F) participation fee for each participant;
G) amount of the deductions made in respect of taxes on income; and
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h) Other data by type of transaction are relevant, in accordance with the technical standards for this purpose must issue the Central Bank.
Art. 109. Issuers of securities, brokerage houses, trusts, funds or investment securitization pay interest, arrears, dividends and other income Investment funds regulated in accordance with the provisions of this Act, shall not apply withholding income tax.
Art. 110. The above provisions regulated in the tax system will not apply to investments in shares of participation of foreign investment funds, for which the treatment set out in tax laws will be observed. However, the Management will be required to keep a detailed registration under section 108 of this title, as applicable to the marketing of shares of foreign investment funds TITLE V


OF CHAPTER ONE FOREIGN INVESTMENT FUNDS

Art. 111.- may be marketed participation fees of foreign investment funds, or equivalent, in accordance with the provisions of this Title.
Marketing shall mean foreign investment funds: promotion, placement and also the purchase or sale of participation shares of investment funds authorized in other countries.
Fees participation of foreign investment funds may only be marketed in El Salvador, when previously have been registered with the Superintendency. Marketing quota share of foreign investment funds registered not be deemed illegal collection and given treatment provisions of the Law on the Securities Market for raising funds from the public without authorization.
Any persons or entities who have knowledge of any violation of the provisions of the preceding paragraph shall submit corresponding to the Superintendent or the Attorney General's Office complaint, for the deduction of responsibilities to any place in the field of their respective competence. They will also be obliged to report the directors, managers, accountants and internal and external auditors of entities that violate the provisions of the preceding paragraph.
The Central Bank through technical standards 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 nationals of the country of incorporation of the aforementioned funds .
The Superintendency is the entity responsible for overseeing the marketing in the country, quotas participation of foreign investment funds and not be under the supervision of the manager or administrator who manages overseas, or the very bottom.
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Authorization and Registration Art. 112. The Managers formed in accordance with this Act wishing to market share quotas of foreign investment funds must obtain authorization from the Superintendency and apply for registration of shares in the Stock Market Public Registry.
Registration fees participation of foreign investment funds may only be requested by Gestoras constituted under this Act.
Conditions for registration of the participation quotas of an investment fund abroad.
Art. 113. For registration of the participation fees of a Foreign Investment Fund is authorized, the Manager shall check the following conditions:
a) that the investment fund be authorized and supervised by a regulatory body of a country that has similar or superior supervisory and regulatory requirements regarding those of El Salvador;
B) the investment fund information is available on international stock systems or financial information recognized by the Superintendency;
C) the investment fund have a minimum term of one year operation with a current risk rating issued by classification societies internationally recognized risk; and
d) In the case of Closed Investment Funds Foreign, their shares are listed on organized securities markets that have similar or higher supervisory and regulatory requirements regarding those of El Salvador.
The risk ratings awarded abroad Investment Funds, will be valid in El Salvador provided they have been granted by sorters foreign risk, recognized by the Securities Commission of the United States of America, called the Securities and Exchange Commission (SEC) or which have been granted by foreign risk rating companies that are registered with the regulatory agency securities market of their country of origin.
In addition to the conditions described above, the Fund shall submit relevant aspects of foreign investment fund such as: name, date of authorization, country of origin, and term investment regime, attaching the Rules of Procedure and the prospectus, all as appropriate to the characteristics of each fund.

For Investment Funds that do not have risk classification not be required in their country of origin, must meet other requirements through technical standards established by the Central Bank, in relation to the investment fund and its manager. Investment respect to these standards consider inter alia: years of operation, significant number of participants and size in relation to its assets; regarding their manager: summary of your experience, risk rating if any, years of constitution and amounts administered, among others.
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When referring to regulatory requirements and supervision over similar or superior to those of El Salvador is made in this Act, these requirements will be established by the Central Bank through technical standards.
Instruments or information that because of this article or of this Act must be filed with the Superintendent or delivered to shareholders must be recorded in Castilian language. When you come from abroad in languages ​​other than Castilian must be accompanied by a translation in accordance with the law and international treaties or conventions. The Central Bank regulations determined by technical instruments or information that must comply with this requirement.
Marketing Fees Participation Funds Open Investment Foreign
Art. 114. For a Manager can market participation fees of a Foreign Investment Fund Open the Superintendent shall provide the following information:
a) contract or document stating the foreign express permission of the manager or administrator of the Fund for the Management to exercise the marketing in the country; form and means for custody, settlement and redemption of the participation fees of the Investment Fund, which is informed about the payment agent for the collection of participation fees and payment to investors; and
b) That the Management stating that account at all times with the human and technological resources to provide local investors with the necessary information about the quotas of foreign investment funds to market, which shall be provided with the same frequency and time when they are available to investors in the country of origin of the Fund.
Verified above and completely received the information referred to in Article 113 of this Act and this article and corrected the observations that the Superintendency has made, the Council will decide on the approval of the Management and marketer of participation fees and the application for registration of such shares within a period not exceeding eight working days.
The Manager maintains its own records for control of the participation fees.
Marketing Participation Fees Foreign Investment Funds Closed and Negotiation
Art. 115. For a Manager can market participation fees of an Investment Fund Closed Abroad, must prove at any time before the Superintendency the following:
a) there is an agreement between a company specializing in the storage and safekeeping of Salvadoran foreign securities and to provide security and custody and immobilization of the quotas under negotiation. In addition, the agreement in the form of settlement of such transactions will be established; and
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b) that has the human and technological resources necessary to provide local investors with the necessary information about the quotas of investment funds to market.
Verified above and completely received the information referred to in Article 113 of this Act and corrected the observations that the Superintendency has made, the Council will decide on the approval of the Management and marketer of participation fees and on the application for registration thereof within a period not exceeding eight working days. The participation fees of an Investment Fund Closed abroad must enroll in Salvadoran Stock Exchange, after being registered with the Superintendency.
Fees Investment Funds that are traded on a foreign organized market values ​​and are representative stock index or fixed income will be considered participation shares of Closed Investment Funds Foreigners and observe the provisions of this Title shall apply to these last ones.
Society for Marketing Mandatory Participation Fees foreign investment funds

Art. 116. The commercialization of the participation quotas of open investment funds Foreigners may be made by the Management, through brokerage houses or legal persons authorized by the Council in accordance with the requirements established by technical standards the Central Bank. For these purposes, the Manager shall sign contracts with the companies mandate referred to in this clause, expressly empowering them for marketing.
Managers must take an updated legal persons who have given mandate registration. The register shall contain the general data of the mandatory and be available to the Superintendency.
The Management and mandatory must display in their offices to the public the following legend: "Investments in shares of participation of foreign investment funds are not bank deposits and are not guaranteed Institute Deposit Guarantee". They must also explain to the potential investor the characteristics of this form of investment, indicating that the initial investment contribution may increase or decrease depending on the valuation of the participation shares of the Fund.
Fees participation of foreign investment funds, acquired by investors must be registered in their name, can not I be the name of the distributor.
Investor Risk Profile
Art. 117.- marketing quota foreign investment funds should consider the risk profile of the potential investor and its investment needs; in any case, not be compatible with the selected profile Fund, the marketer should show acceptance and knowledge of the investor of this condition.
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Technical Standards Art. 118. The Central Bank will issue technical standards that allow the development of this title. TITLE VI CHAPTER


UNICO VIOLATIONS AND PENALTIES

Precautionary Measures Art. 119. Where the Superintendent becomes aware of willful or negligent actions of the Management affecting the Fund, the Council, by reasoned resolution, may issue precautionary measures that safeguard the interests of unitholders, such as naming a delegate to preserve the Fund's assets, assigning its functions; order the execution of the guarantee; require increases in the amount of the guarantee according to the situation observed; suspend the stock transaction fees for participation; suspend receipt of new contributions, redemptions, distribution of benefits and reduction of capital of a Fund. The measures which this article refers to shall remain in effect while the causes that gave rise to its application were not remedied, may be adopted without prejudice to the processing of an administrative procedure.
When the precautionary measures referred to in this Article shall be decretaren outside an administrative procedure, it should be promoted within ten working days of the measure had been issued.

Offenses and Penalties Art. 120. Persons who violate the provisions of this Act shall incur administrative sanctions, without prejudice to the civil responsibility for damages that may apply or criminal, whether it be the conduct criminalized.
The Superintendency for the imposition of sanctions in the preceding paragraph refers to, apply the provisions of the Law on Supervision and Regulation of Financial System.
Art. 121. Persons acting as Fund Manager or Investment Fund Manager or use the term in its name, denomination or trade name, without having previously been authorized in accordance with this Act, shall be punished by a fine of up five hundred urban minimum wages in the commercial sector, following the procedure established in the Law on Supervision and Regulation of Financial System.
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TITLE VII GENERAL PROVISIONS, TRANSITIONAL AND EFFECTIVE
GENERAL PROVISIONS CHAPTER I


Technical Standards Art. 122. The Central Bank in relation to this Act shall render technical standards which empowers the Law of Supervision and Regulation of Financial System.

Art Publications. 123.- The Superintendent may require the Manager reasoned resolution to publish any data, record or information referred to the Funds it manages, whose public knowledge necessary, within the same resolution indicated.

The Superintendent may publish any other information deemed relevant to promote market transparency.

Rights Monitoring Art. 124. The Management contribute to the cost of public monitoring service provided by the Superintendency with zero point seventy-five percent of the total annual income of the immediately preceding year. Rights monitoring will learn in accordance with the provisions of the Law on Supervision and Regulation of Financial System. CHAPTER II

LIQUIDATION OF PORTFOLIO MANAGEMENT OPERATIONS
Art. 125. From the entry into force of this Act, the brokerage houses that are authorized to perform portfolio management operations under the terms established in Article 113-A of the Securities Market Act, and whether they are or not paying the service, can not enter into new contracts for the provision thereof or manage new portfolios regulated in that article, or operate portfolios that have been previously authorized and that they are inactive. In addition, the Superintendency may not authorize brokerage houses for portfolio management operations referred to this subsection. In that case, notwithstanding the provisions of Article 113-B of the Law on the Securities Market, if the limits specified in paragraphs j), n), o), p) and q) of Article 113-A of that law are breached as a result of the process of liquidation of portfolios that the House of Brokers administered to that date, it shall immediately notify the Superintendency.
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later than sixty days after the entry into force of this Act, the Houses Brokers shall send to the Superintendent a plan for the liquidation of the portfolio as of that date given. The deadline to complete the liquidation of portfolios may not exceed two years from the effective date of this Act.
Without prejudice to the provisions of the preceding paragraphs, one year after the effective date of this Act, the Homes stockbrokers may not receive new funds to be admitted to the portfolios managed.
Art. 126. For each portfolio, Houses Brokers shall open a bank account in your name, authorized by the Superintendency for passive Bank operations in the country, indicating the name of the portfolio to the corresponding account, specifying that about resource management and that are not part of the assets of the House of Brokers. The aforementioned will be attachable by creditors of these resources. Houses Brokers must report at least quarterly to the Superintendence, the movements of these accounts.
Art. 127.- brokerage houses must notify investors about the beginning of the process of liquidation of the portfolio as of that date given. Such notification must be made personally and through two publications successively in two national newspapers, in which at least should indicate the obligation of the House Stockbrokers concerned, to proceed to liquidate portfolios that at that time give the name of portfolios liquidated, the name, corporate name for investors and the period within which they may complain to the House Stockbrokers that the amounts of money involved They are corresponding to them. The foregoing shall apply to the portfolios of the date of entry into force of this Law mechanism are located inactive.

The sums of money belonging to investors and not be claimed within the period established for that purpose by the brokerage houses shall be deposited them in a bank account in sight, hired exclusively for such effects on a bank authorized to perform passive operations by the Superintendency. Houses Brokers may make debits on that bank account, with the sole purpose of providing investors, balances at that date were due, to the extent that they arise to claim them. In case of death of one of the investors, those sums of money must be delivered to recipients that appear forth in the contracts. If no beneficiary designation or having died these, the amounts of money will be given to the heirs of investors. Houses Brokers may charge a single fee in order to cover any costs generated by the management of that bank account. In this concept, the Houses Brokers may deduct up to zero point five per cent per annum on the amount that corresponds to each investor at the time of delivery, making the deduction when they, their beneficiaries or their heirs, present themselves removing resources.
Made the deposit referred to in the preceding paragraph and after verification by the Superintendency that funds have been properly deposited, the Houses of brokers are not required to keep alive the guarantee of good portfolio management, or additional capital which regulates Securities Market Law for brokerage houses authorized to manage portfolio.


61 Art. 128. Notwithstanding the provisions of the preceding article, having duly performed the notification referred to the aforementioned legal provision and that the period for investors are filed to withdraw sums that corresponded to them and not hicieren, the House Stockbrokers concerned, may agree with another house Stockbrokers or any other entity regulated by the Superintendency whose turn is compatible with this type of function, the transfer of the powers of administration related bank account in the preceding article; faculty which in any case must be understood as referring to the realization of debits on the account for the sole purpose of giving investors the amounts of money allocated to them in as they arise to withdrawing them. In any case, prior to this, the House Stockbrokers concerned, it shall notify through two successive publications in two newspapers of national circulation, investors that have not been submitted to remove quantities money that at that time they correspond, the circumstances indicated above, stating the name, corporate name thereof and the corporate name of the entity that henceforth be responsible for delivering to each of them, the sums of money reference. Done this, the brokerage houses must take the necessary steps so that the bank account in the preceding article refers to be the name of the entity that henceforth be responsible for delivering the reference amounts of money.
The transfer of administrative powers in the preceding paragraph refers shall be made by execution of an instrument between the entities involved.
Art. 129. After ten years from the date that has been notified to investors about the beginning of the process of liquidating portfolios, so that they proceed to claim the amounts of money that corresponded to them and these beneficiaries or heirs fail to do so, his right to claim shall be prescribed and shall pass to the State the sums of unclaimed money, for which the corresponding entity, without further ado, it shall enterarlas immediately to the Directorate General of Treasury the Ministry of Finance, within the first three months after the end of that period, must inform the Superintendency.
Art. 130. During the liquidation process, the opinion of the external auditors of the brokerage houses and the entities involved must make mention of the settlement process each portfolio, indicating compliance with these legal provisions as it may be applicable.

Art. 131. During the liquidation process, the brokerage houses and the entities involved must provide equal treatment to investors.
Art. 132. The provisions of this Chapter shall apply in the liquidation of portfolios that the entry into force of this Act mechanism are located inactive.
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CHAPTER III TRANSITIONAL PROVISIONS AND EFFECTIVE
Deadline for Rulemaking
Art. 133.- The Central Bank will have a term of up to one hundred eighty days from the effective date of this Act, to develop technical standards that are indispensable for the establishment of the Management and the start of operation of the Funds.
Applications under this Act receives the Superintendency will be resolved until approved standards referred to in the preceding paragraph.
Update Capital, Warranty and Other
Art. 134. The first update of the capital of incorporation of the Management, the minimum initial margin and minimum assets of the Funds referred to in Arts. 19, 22, 51 and 61 of this Act, be held in the month of January in the year two thousand and seventeen and shall take as a basis the change in the index of consumer prices from the effective date of this Act until December 31 of year two thousand and sixteen.
Art. 135. Foreign securities that are of the same nature of the quotas of Investment Funds referred to in the last paragraph of Article 115 of this Act, and the entry into force of this Decree, are authorized or registered in the Superintendency and registered on a stock exchange, may continue to be traded on the Salvadoran market values ​​with the requirements under which they were authorized or registered; in this case, the Superintendency of office shall transfer his seat to the Registry of participation shares of Closed Investment Funds Foreign contained in Article 6 of the Securities Market Law.

EFFECTIVE Art. 136. This Act shall come into force eight days after its publication in the Official Journal.
GIVEN IN THE BLUE ROOM OF THE LEGISLATIVE PALACE: San Salvador, on the twenty day of August in the year two thousand and fourteen.
OTHON Sigfrido Reyes Morales, president.
LUIS VALDEZ ENRIQUE ALBERTO SOTO, GUILLERMO ANTONIO NAVARRETE GALLEGOS, FIRST VICE. SECOND VICE PRESIDENT.


63 MERINO JOSE FRANCISCO LOPEZ, MENDOZA PEÑA LORENA GUADALUPE, THIRD VICE. FOURTH VICE.
CARLOS ARMANDO REYES RAMOS, FIFTH VICE.
GUILLERMO FRANCISCO MATA BENNETT, MENJIVAR VICENTE MANUEL ESQUIVEL, first secretary. Second Secretary.
SALGADO SANDRA MARLENE GARCIA, JOSE RAFAEL MACHUCA Zelaya, Third Secretary. Fourth secretary.
IRMA VASQUEZ PALACIOS LOURDES, ERNESTO ANTONIO ANGULO MILE, QUINTA Secretariat. SIXTH SECRETARY. JOSE FRANCISCO
ZABLAH SAFIE, ORANTES SERAFIN JOSE RODRIGUEZ, seventh Secretary. EIGHTH SECRETARY.
PRESIDENTIAL HOUSE: San Salvador, on the tenth day of September in the year two thousand and fourteen.
Published, Salvador Sanchez Ceren,
President of the Republic.
Tharsis Solomon Lopez Guzman Minister of Economy.
Juan Ramon Carlos Enrique Cáceres Chávez Minister of Finance.
Tomo OJ No. 173 No. 404 Date: 19 September 2014
FN / Adar 16/10/2014
LEGISLATIVE INDEX