Portfolio: Is the acquisition by a non-resident investor of any of the following assets:

• Securities registered in the National Registry of Securities and Issuers (RNVE in Spanish) per Decree 2555 of 2010.

• Instruments listed in foreign securities trading systems covered by Part 2, Book 15, Title 6, Chapters 1 and 2 of Decree 2555 of 2010 and other regulations amending or regulating it.

• Securities issued by foreign institutions and registered in the RNVE referred to in Decree 4804 of 2010 and other rules that modify or replace it.

• Collective Investment Funds referred to in Part 3 of Decree 2555 of 2010.

• Programs for Negotiable Securities Representative Deposit Certificates (ADRs / GDRs / GDNs, among others).

Find the regulatory source in item b of article 2.17.2.2.1.2 of Decree 1068 of 2015 (only in Spanish) and chapter 7, item 7.2.2 of External Regulatory Circular DCIP-83 of 2021 (only available in Spanish) of Banco de la República.

To make portfolio investments, foreign portfolio investors with resources in their local currencies (U.S. dollars, euros, etc.) must convert these currencies into Colombian pesos for the fulfillment of operations, as these can only be done in local currency.

As a general rule, foreign exchange (FX) operations are instructed by the foreign portfolio investor to their portfolio manager (securities custodian, trust company or local broker). Considering that trust companies/custodians are not FX market intermediaries (IMC in Spanish) due to their status as trust companies, investors must obtain foreign currency through IMCs. Foreign portfolio investors may negotiate the currencies directly with an IMC of their choice different from the one recommended by their portfolio manager and depending on the rate, they shall carry out operations with one or the other.

Once the conversion of currencies to Colombian pesos (COP) has been done by the IMC in the FX trading and registration system, the amount in COP is credited to the investor’s bank account marked for Clearing and Settlement.

In terms of FX obligations, the foreign portfolio investor is obliged to submit the FX declaration in accordance with the rules established by the Board of Directors of the Central Bank. The portfolio manager (attorney-in-fact) will be in charge of all filings related to the FX declaration as well as of delivering all the information required to the IMC at the investor's own risk.

In the FX declaration, the description of the transaction must be specified. In the case of foreign portfolio investment, this corresponds to the transaction classified as "Foreign capital investments in the country" under the category "Foreign portfolio capital investment."

Foreign portfolio investors who carry out FX transactions must comply with the following obligations through their portfolio manager in Colombia (local broker, trust company or investment management company) acting as proxy or legal representative: i) provide truthful, accurate and complete information regarding the minimum data required of the FX transactions channeled through the FX market (FX declaration); and ii) retain documents evidencing the amount, characteristics, and other conditions of the transaction, as well as the origin or destination of the foreign currency, as applicable, for a period equivalent to that of the statute of limitations applicable to sanctions for violations of the FX regime.

As the compliance of the FX transaction may take place up to two days (T+2) for equity transactions and the same day (T+0) for fixed income, the monetization or conversion to COP may take place afterwards.