Colombian Financial Superintendence (CFS)
The CFS has made decisions that allow that financial institutions grant new conditions for their loans, such as grace periods, increased terms, among others. This redefinition applies to commercial credits, microcredits, consumer, and mortgage loans, without limitation on the number of obligations. In order to develop the above, the CFS has issued the following regulations to ease the effects of the health emergency:
Resolution 0368 of 2020: Establishes measures during the Economic, Social and Ecological Emergency to avoid contact between people, with the following precisions:
- The CFS will only attend the supervised entities and the public through the following virtual and telephone channels until the declaration of emergency ceases to be in force: i. E-mail (firstname.lastname@example.org) for general consults; II. E-mail for notifications (email@example.com); iii. E-mail for jurisdictional functions (firstname.lastname@example.org); iv. Virtual locker of the supervised entities (SIRI); v. Telephone contact center in Bogotá ((57 1) 3078042) and in Colombia (018000 120 100); and vi. the Chat page.
- Notifications and communications of administrative acts will be by email. The procedures initiated after this resolution must include an email, to which a copy of the administrative act and the information of any appeals will be sent. The notification will be effective from the date and time that the administrator agrees and certifies it.
- All requests will be resolved within 30 days of receipt, except for requests for documents and information (20 days); and consultations on matters in charge of the CFS (35 days).
- The resumption of terms of all administrative proceedings from 2 April 2020 is ordered, except for the disciplinary proceedings and the disciplinary proceedings of the Office of Disciplinary Control.
- During the emergency, formal hearings or related activities may be suspended, rescheduled or postponed by reasoned decision with prior evaluation and justification.
- The competent officials may suspend terms partially or totally in some procedures according to the justification of each specific case.
- The procedural terms will resume in the jurisdictional processes of the CFS from April 13, 2020, including those that are brought forward virtually. However, by reasoned order, the Deputy Superintendent may suspend any of the processes or actions that are carried out.
- All scheduled hearings will be held through Microsoft Teams. If any of the parties does not have technological means, they must inform the situation to the abovementioned email no later than 3 days before the hearing is held in order to eschedule it. Likewise, 1 day before the hearing, an officer will establish communication with the parties for the corresponding instructions.
- If the hearing cannot be held for technological or other reasons, it will be rescheduled.
- The consultation of physical files may not be carried out during the emergency. If a document is necessary, the requesting party, 3 days in advance, must contact the Delegation of Jurisdictional Functions by e-mail or the telephone numbers previously mentioned, indicating the file number; identification of where the document provided by the counterparty is located; and any other identification data required.
External Circular 014: Guidelines to credit establishments about the minimum characteristics of the policies institutions must adopt on support plans for debtors of the financial system that are affected in their ability to pay, as a consequence of the coronavirus crisis. For example, the interest rate can’t be increased and must not contemplate the collection of interest over interest. In the case of consumer loans (other than credit cards and revolving), housing and microcredit, the term can be adjusted in such a way that the value of the client’s fee does not increase.
External Circular 013: Guidelines about the request, approval and payment of partial layoffs through digital and / or remote channels provided by the Pension Funds Insurers (PFI), who must publish on their website the channels available for such procedures.; by these they should have suitable verification mechanisms on the identity of the applicant and the employer. The procedure must be the normal one established in art. 3 of Dec. 488 of 2020, through the digital channels enabled. On the other hand, the PFIs must send to the CFS a weekly report of the requests, which must contain: i. Application date; ii. Worker’s identification number; iii. Company name or name of the employer along with identification number; iv. Amount requested; v. Decrease in income reported by the employer; vi. Answer; vii. Date of answer.
External Circular 012: Transitory guidelines about the collection or processing of biometric data using physical, electronic fingerprints or any other mechanism that allows the spread of COVID-19 through indirect contact. The CFS asks entities to promote the use of digital channels to carry out the greatest number of transactions in order to reduce the use of these devices, whenever the service demanded by the consumer allows it.
External Circular 011: Collective investment fund management companies are authorized to invest in units of the investment funds that they manage up to a value equivalent to 15% of the value of the fund, maintaining the investment for at least 120 days. The stock and shares market are also authorized to carry out the activities of the negotiation tables in remote places or from home, provided security measures are adapted.
Resolution 305 of March 17, 2020: Suspended the terms of all the administrative actions that are being carried out in this entity between March 17, 2020 and April 8 of the same year.
External Circular 009: The requirement to carry out technical appraisals of the guarantees is suspended.
External Circular 008 (Promotes the use of digital channels to provide services): Strengthens operational risk management in supervised entities in order to guarantee the adequate provision of the service in a highly digital environment.
External Circular 007 (Credit measures): The changes to the initial conditions the credits can contemplate grace periods according to the analysis of each entity, during which time the debtor’s rating as of February 29, 2020 must be maintained.
Resolution 001 of March 16, 2020: The Delegate Superintendent for Jurisdictional Functions of the CFS suspended until April 8, 2020 the procedural terms of the aforementioned office and ordered measures on ongoing procedures.
Ministry of Finance and Public Credit (MFPC):
External Circular 11A: Grants an extension to send the information due by hospitals, therefore, the term that expires on March 31, 2020, is extended until one month after the end of the mandatory period of confinement, date until which the obligated entities will be able to present the required information without having any negative consequence.
Release No. 12: The Ministry made the decision to resume the auctions of Class B Public Debt Titles (Treasury Debt – TES) as of this week and in its usual calendar: Short-Term TES, as of Tuesday March 31, Long-Term TES in Real Value Units (UVR) as of Wednesday 1st April and Long-Term TES in Pesos from Wednesday April 15. An additional award may be made in auctions for up to 30% of the amount initially called in the first round, as long as the ratio indicator of the amount offered versus the amount called is equal to or greater than 2, regardless of its denomination. The General Direction of Public Credit and National Treasury will maintain until further notice the quota to carry out simultaneous and/or passive simultaneous operations for up to an amount of $3.5 billion, which represents more than 50% of the average daily volume of this market in transactional platforms.
Decree 492 of 2020: Establishes that the resources for the strengthening of the National Guarantee Fund (NGF) and the reduction and use of the capital of the entities (Grupo Bicentenario SAS; Findeter; National Savings Fund; Fund for the Financing of the Agricultural Sector; Urrá SA ESP and Central de Inversiones SA) will only support guarantees focused on sectors, products or segments established by the Minister of finance and Public Credit, to give access to credits directed to people and companies or enterprises who have suffered adverse effects on its economic activity due to the events suffered on the occasion of the Economic, Social and Ecological Emergency declared through Decree 417 of 2020. On the other hand, the commissions for the guarantee service granted by the National Guarantee Fund (NGF) in facing the adverse consequences of COVID-19, will be excluded from VAT. Therefore, the withholding tax that has as a source a VAT charge, will be 4% for the payment in the corresponding account to the commissions that the NGF grants for the service of guarantees focused on facing the consequences of the pandemic, among other things.
Decree 473 of 2020: Which modifies Decree 1068 of 2015 to establish specific dispositions regarding treasury loans (short term corporate loans) for public entities during an economic, social and ecological emergency. Additionally, the decree allows public entities to enter into new credit lines. Finally, it establishes that, during an emergency state, entities might request to the Ministry of Finance to suspend all plans for contributions to the Contingency Fund for up to two months.
Decree 468 of 2020: By which the Territorial Development Financing Company (in Spanish, FINDETER) and Colombian Bank of Foreign Commerce S.A. (in Spanish, BANCOLDEX) are authorized to carry out new direct credit operations and / or unions with entities of public international law.
Decree 444 de 2020: by which the Emergency Mitigation Fund (EMF) was created in order to meet the needs of resources for health care, adverse effects generated to productive activity and the need for the economy to continue providing conditions that maintain employment and growth.
- EMF resources will come from the following sources: Savings and Stabilization Fund; Territorial Pension Fund; Resources Allocated in the General Budget of the Nation; and others determined by Colombia´s Government.
- EMF resources may be used to carry out temporary liquidity support operations to the financial sector through temporary transfer of securities, term deposits, among others.
- Colombia may celebrate a contract with the Reserve Fund for the Stabilization of the Mortgage Portfolio to carry out and / or execute the temporary transfer of securities. (This can only be done to ward off the crisis or prevent the extension of the effects of the decree that establishes the economic, social and ecological emergency).
- To guarantee continuity in the operation of companies that provides services of national interest and that are seriously affected by the emergency, charged to EFM resources, the government can invest in capital and / or debt instruments issued by private, public or mixed companies, including shares with special conditions of participation, dividends and / or repurchase, among others.
Colombian Central Bank (Bank of the Republic)
The Board of Directors adopted the following measures to strengthen liquidity in dollars:
- On March 30, 2020, a new auction of dollar swaps (FX swaps) will be held for US $400 million, in which the Colombian Central Bank sells dollars in cash and buys them in the future (in 60 days). The amounts not awarded in the auction on any given day will be auctioned on the next until the quota is exhausted or until the remaining amount is less than US $25 million. This measure provides temporary liquidity in dollars to a broad group of financial entities, in order to alleviate possible external financing restrictions and pressures on the exchange market.
- The exchange hedging mechanism will be expanded through a new auction of financial compliance forward operations (Non-Delivery Forwards – NDF) for US $1 billion in 30 days. This new auction will be held on March 30, 2020.
The Board of Directors authorized:
- Access to severance funds through their administrators at auctions for the purchase of private securities and at repos with private securities.
- Access to the National Savings Fund to participate in repos auctions with public and private titles.
- The call for new auctions for the sale of dollars in the future for US $1 billion and swaps for US $400 million.
- The Board also reduced the interest rate by half a percentage point to 3.75% to contribute to the future recovery of domestic demand. Once the functioning of the markets is normalized.
Ministry of de Commerce, Industry and Tourism (MCIT)
The Minister of Commerce, Industry and Tourism in a press release established “As a measure to prevent the effects of COVID-19 in the country’s economy, we have designed, together with iNNpulsa, a preferential credit solution initiative that financially supports the entrepreneurs. Said proposal considers two products: the iNNpulsa-Bancóldex-National Guarantee Fund, which grants a reduction in the interest rate to beneficiaries by at least 2%; and the iNNpulsa-Banco Agrario line of credit for entrepreneurs with less than eight years of turnover, who will be granted loans for working capital of up to $ 70 million. In this way, we support startups that require resources and help companies get ahead during this contingency”.
Solidarity Economy Superintendency (SES)
External Circular 13: Establishes the need to evaluate the need and relevance of providing savings and credit services to its associates personally at the offices of any solidarity organization. Furthermore, this superintendency must be immediately informed of the measures adopted by the Employees Funds or unions to ensure continuity in the provision of financial services, if they can be provided in digital ways. Also, the Employee Funds must establish specific days and hours of attention, avoid the concentration of workers and associates in confined spaces and inform all associates of the measures that will be adopted to provide services in personal.
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