Capital Markets Alert – April 2020

SMV regulates the situation of companies that are developing the activity of crowdfunding in the modality of granting loans, upon the entry into force of the regulations that regulate said activity.

Through Resolution No. 005-2020-SMV/01 (“Resolution”), the Superintendence of the Securities Market (“SMV”), following the entry into force of Title IV of Emergency Decree 013-2020 (“DU”), which is the section of the DU that regulates crowdfunding activity called in the standard as participatory financial financing (“FPF”), has authorized companies that to date are managing platforms through which this activity is carried out in the form of granting loans, to continue operating as long as the SMV does not issue the corresponding regulations, to the extent that they comply with the following:

• Send a communication to the SMV indicating their interest in continuing to carry out the FPF activity through the loan modality regulated by the DU; and,
• Describe in detail, in said communication: (i) its business model; (ii) registration data of the company; (iii) how it segregates the accounts where it manages its own resources from those where the funds of the recipients and investors are channeled; and (iv) warnings to the public about the risks associated with their investment.

The communication with the complete information must be sent until May 15 of this year, otherwise the mentioned companies will not be able to continue operating.

The Resolution provides for a transitional period, which will culminate when the SMV has issued the regulatory rules that the DU entrusts to it. During this period, only the companies that have sent the mentioned communication will be able to carry out FPF in the modality of granting loans.

The Resolution establishes that in the indicated transitional period:

• The companies authorized to continue carrying out FPF under the modality of loans must publish, on their platform that: (a) they are not authorized and supervised by the SMV, and report on the implicit risks associated with their operations, (b) the company is not responsible for the payment of the loans agreed on its platform, and (c) there is a risk of total or partial loss of the capital invested by the investors, and (d) any other information that the SMV requests to publish for prudential purposes; and,
• These companies may not use the name “Managing Companies of Participatory Financial Financing Platforms”.

It should be noted that the Resolution indicates in one of its recitals that the modality of FPF through representative securities of capital and/or debt is not included in the Resolution (that is, it could not be done under the DU yet) , to the extent that this would be restricted by the current legal framework, according to which, because they qualify as a public offering of securities, such securities should be previously registered in the Public Registry of the Securities Market of the SMV. In this line, by a communiqué issued on April 22, 2020, the SMV clarified that the reference to literal i) of article 19 of the DU included in article 7 of the Resolution must be understood as referring to literal ii) of said article, which corresponds to the FPF under the modality of loans.

It is also relevant to mention that the Resolution states in another of its recitals that, despite the entry into force of said Title IV of the DU, the provisions contained in literal i) of the Tenth and Fifteenth Supplementary Final Provisions thereof, referred to the freedom to set interest rates, commissions and expenses, and the intangibility of the bank accounts in which the funds of the recipients or investors in FPF operations are channeled, shall apply only to the FPF carried out by Managing Companies of Participatory Financial Financing Platforms duly authorized by the SMV, that is, those companies that obtain the due authorization from the SMV to act as such; when it issues the regulation and enables the respective registration procedure for said purpose, which should occur in one hundred eighty (180) days counted from April 22, 2020.

This communication has been prepared by the banking and financial area of ​​Rodrigo, Elías & Medrano Abogados.