Amendments to the Stock Market

Regulatory Law, N° 7732

by Worker’s Act N° 7983

 Article 81.
Amendment of Law N° 7732. Articles 8 and 171 of the Stock Market Regulatory Law,
N° 7732, of December 17, 1997, are hereby amended. Their texts shall be read as follows:

“Article 8.
Functions of the Superintendent. The Superintendent shall have the following functions:

a) To undertake the judicial and out-of-Court representation of the Central Bank of

Costa Rica, acting on its behalf and at its expense, in the performance of the duties
of his office, having the authority as granted under a universal power of attorney
without restrictions as to the amounts involved. The Superintendent can delegate
his/her authority upon intendants and other officials of the Superintendency, in
accordance with the provisions issued by the National Council.

b) To submit to the consideration of the National Council the drafts of the regulations
to be issued by the Superintendency, in accordance with this law, as well as the
reports and rulings that this Council may require to perform its duties.

c) To submit to the National Council a biannual report on the evolution of the stock
market and the situation of the entities under supervision.

d) To impose upon the entities under supervision the cautionary measures and the
sanctions foreseen in Title IX of this Law, with the exception of those to be
imposed by the National Council.

e) To enforce the regulations and resolutions of the National Council.

f) To exercise the powers vested in him/her as the administrative head of the

Superintendency and exhaust administrative proceedings concerning personnel
matters. In the case of internal auditing personnel, the Superintendent shall consult
the internal auditor.

g) To approve the by-laws and regulations of stock exchanges, clearing and

settlement firms, depositories of securities and risk rating companies. The
Superintendent can suspend these regulations on a temporary basis, or amend or

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 revoke them when necessary to protect the investing public or free competition, in
accordance with the general and objective criteria defined by the regulations issued
by the National Council.

h) To authorize the capital reductions and increases of stock exchanges, depositories

of securities, investment companies, clearing and settlement firms and other legal
entities under supervision, with the exception of those entities under the
supervision of the General Superintendency of Financial Entities, the issuers and
the brokerage firms. The authorization to reduce and increase the capital of the
brokerage firms shall be granted by stock exchanges, which shall require
compliance with the capital requirements established for brokerage firms, through
regulations, by the National Council.

i) To establish the standards concerning the type and size of the letters on
certificates, and the place, on the document, to place the legend described in the
second paragraph of Article 13 of this Law.

j) To take all actions necessary for the effective fulfillment of the functions of
regulation, supervision and control of the Superintendency, as provided by this
Law.

k) To authorize the operation of the entities under supervision as well as the public
offering, and inform the National Council about such actions.

l) To require from the parties under supervision all information as may be reasonably
necessary, under the conditions and with the frequency determined through
regulations by the National Council, to adequately comply with its stock market
supervisory functions. For this purpose, it can order auditing visits, without prior
notice, to the parties under supervision. The Superintendency can conduct auditing
visits to the issuers in order to clarify audit information. However, when issuers
place securities for sale, the Superintendency can inspect the placement records of
the issuers and issue rules on keeping them.

m) To require information from the parties under supervision with regard to the
shareholdings of their shareholders, the members of their Boards of Directors and
their employees, until reaching the identification of the individuals ultimately
holding those shares, and make it public starting from the percentage established
through regulations by the National Council.

n) To require, by means of a reasoned resolution, information from the parties under

supervision, their shareholders, directors, officials and advisers, concerning the
investments they made directly or indirectly in securities of other entities related to
stock markets, as needed to perform their supervisory duties and protect investors
from any conflicts of interest that may arise between and among the stock market
participants.

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o) To require the parties under supervision to provide the information required to the
investing public in order to comply with the purposes of this Law.

p) To provide to the public the most ample information on the parties under
supervision and the stock market situation, except for the information concerning
the individual operations of the parties under control that is not relevant to the
investing public, as determined through regulations by the National Council.

q) To see to free competition at stock markets and report the existence of

monopolistic practices to the Commission for Promotion of Competition.

r) To request to the National Council the suspension, intervention and revocation of

the authorization for operation of the entities under supervision and the suspension
or revocation of the authorization for public offering.”

“Article 171.
Functions of the National Council for Supervision of the Financial System. The
National Council for Supervision of the Financial System shall have the following
functions:

a) To appoint and remove the General Superintendent of Financial Entities, the

General Superintendent of Securities and the Superintendent of Retirement Funds,
as well as the respective intendants, auditors and the internal subauditor of the
Superintendency of Financial Entities.

b) To approve the provisions concerning the authorization, regulation, supervision,

control and surveillance which, in accordance with the law, have to be enforced by
the General Superintendency of Financial Entities, the General Superintendency of
Securities and the Superintendency of Retirement Funds. No requirements that
unduly restrict the access of the economic agents to the financial market, limit free
competition, or include discriminatory conditions, can be established.

c) To order the suspension of operations and the intervention of the parties regulated
by the Superintendencies, as well as to decree their intervention and request their
liquidation before the appropriate authorities.

d) To suspend or revoke the authorization granted to the parties regulated by the

various Superintendencies, or the authorization for public offering, whenever the
respective entity fails to comply with the legal requirements or the regulations
issued by the National Council, or when the continuity of the authorization may
affect the interests of savers, investors or affiliates, or the market integrity.

e) To approve the rules applicable to the procedures, requirements and terms for the
merger or transformation of financial entities.

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f) To approve the rules concerning the organization, transfer, registration and
operation of financial groups, in accordance with the Structural Law of the Central
Bank of Costa Rica.

g) To hear and solve the appeals filed against the resolutions entered by the
Superintendencies. The resolutions entered by the Council exhaust administrative
proceedings.

h) To hear the appeals filed against the resolutions entered by stock exchanges
concerning the authorization of brokerage firms and the imposition of sanctions to
brokerage firms and stock brokers, under the Stock Market Regulatory Law. Any
person with a lawful interest shall be entitled to appeal.

i) To regulate the exchange of information that can take place between and among
the various Superintendencies for the strict performance of their discretionary
supervisory duties. The Superintendency receiving information in virtue of this
subsection shall have the same confidentiality obligations to which the initial
receiver of said information is subject.

j) To approve the general rules of organization of the Superintendencies and internal

auditors.

k) To approve the annual operating plan, the budgets, their modifications and the
budgetary liquidation of the Supertendencies within the global limit fixed by the
Board of Directors of the Central Bank of Costa Rica, and submit them to the
Office of the Comptroller General of the Republic for final approval thereof.

l) To approve the annual report of each Superintendent as well as the annual reports
that Superintendents shall submit on the performance of the parties supervised by
the respective Superintendency.

m) To designate at the appropriate time and for the terms it may deem convenient
consultative committees composed of representatives of the entities under
supervision, the investors or other economic sectors, to examine specific subjects
and issue non-binding recommendations.

n) To approve rules defining which individuals or legal entities related by ownership

or management with the parties under supervision shall be considered as part of
the same economic interest group, for the purpose of ensuring an adequate
diversification of portfolios and solving and avoiding conflicts of interest.

o) To approve the provisions concerning accounting and auditing standards, in

accordance with generally accepted accounting principles, as well as the frequency
and diffusion of the external audits to which the entities under supervision shall be
subject. In case of conflict, these provisions shall prevail over those issued by the
Professional Association of Public Accountants of Costa Rica.

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 p) To approve the provisions concerning the periodicity, the scope, the procedures
and the publication of the reports submitted by the external auditors of the entities
under supervision, in order to achieve as much reliability as possible from these
audits.

q) To approve the provisions applicable to the internal auditors of the entities

supervised by the Superintendencies, in order that they may duly perform the
duties characteristic of their activity, and see that such entities comply with the
legal provisions.

r) To approve the provisions that guarantee the supervision and the safeguard of the
financial soundness of the retirement systems of the Judicial Branch and any
others created by law or collective bargaining agreements.

s) To solve any conflicts of competence that may arise between and among
Superintendencies.

t) To exercise any other powers vested in it by the respective laws over the parties
supervised by the General Superintendency of Financial Entities, the General
Superintendency of Securities and the Superintendency of Retirement Funds.

The National Council can delegate the knowledge of specific matters to commissions
composed of some of its members, in accordance with the rules established by it.”

 Article 82
Authentic interpretation of Article 190. Article 190 of the Stock Market Regulatory
Law, N° 7732, of December 17, 1997, is authentically interpreted in the sense that the
provisions therein contained shall be applied to all the acts and contracts to be registered
in the National Registry to which this article refers, regardless of the reasons that
originated them.

 Article 90
Derogates Article 5 of the Stock Market Regulatory Law, N° 7732, of December 17, 1997