On January 17, 2019, the Central Bank of Uruguay (“BCU”) published Regulation (Circular) No. 2320/2019 on its Website, in which it modifies the Compilation of Securities Market Regulations (“RMMV”); creating a new category called Portfolio Manager and introducing new requirements for Investment Advisors and other regulated entities that intervene in the Stock Market.

Below we detail the most relevant changes:

a) The category of the Portfolio Manager is created for those Investment Advisors who choose to manage third-party investments through the use of management discretionary power of attorney granted by Clients.

b) The activity of the Investment Advisors must be limited to advising and channeling orders involving the purchase and/or sale of securities (in addition to referencing Clients as an additional activity). Investment Advisors cannot act on behalf of their clients even if they were granted a power of attorney, unless they apply before the BCU and get granted a special authorization within the category as Portfolio Manager.

c) The Investment Advisors must obtain and submit the following guarantees: (i) A deposit in the BCU of 50,000 IU (Indexed Units), equal to approximately USD 6,500, to be made before 06/30/2019. (ii) Guarantee in favor of BCU for an amount of not less than 250,000 IU (Indexed Units),(approximately USD 33,000)in order to cover operational risks. This guarantee must be established before 12/31/2019, through any of the following options:

• Pledge on deposit in UI.
• Pledge on listed national public securities.
• Pledge on bonds in favor of the BCU.

d) Investment Advisors must have submitted a Sworn Statement to the BCU before 06/30/2019 detailing whether the activities they carry out correspond to those applicable to their license.

e) The Investment Advisors must notify the BCU on the customer service days and hours.

f) Obligation to report on the opening of any additional offices within the country and / or abroad and of any modifications.

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