The General Superintendency of Financial Institutions (SUGEF) published May 14th the SUGEF agreement 22-18 in the Official Gazette. This agreement establishes criteria to evaluate the suitability of the members that are part of management bodies or senior management positions in financial institutions. The criteria applies to public commercial banks; banks created by special laws; private banks; non-bank financial companies; cooperative savings and credit organizations; mutual savings and loans; exchange houses; and the Savings and Loan Fund of the National Association of Educators.

These regulations, which come into force last Tuesday May 15th, will be based on the following issues:

• Honesty, integrity and reputation: those who have committed a crime and convicted for that action, punished personally, penalized for their role in an organization or have pending bankruptcy petitions of an institution where they played a key role, may not occupy this type of positions.

• Experience: which will be evaluated on the basis of their activity in relevant areas for financial activity, specifically in similar positions of entities in the sector, with related academic training and complementary preparation in local or foreign institutions.

• Composition of the structure: at the time of the election of a new member, the diversity of knowledge, experience and qualifications must be guaranteed in order to achieve an adequate balance in the management body.

In addition, financial institutions must keep a record of the people designated at these high responsibility levels. The record must include the affidavit of each of the members, their credit history and the result of the evaluation contemplated in the Corporate Governance Regulations (according to the three points mentioned above). The evaluation policy must identify weaknesses, have mechanisms to solve them and comply with training programs within a certain period of time. Finally, this process’ audit must ensure its effective implementation.