For the negotiation stage of foreign portfolio investment operations, it should be noted that only local broker dealers are authorized to trade equity securities. In the case of fixed-income securities, trading may be carried out by local broker dealers as well as trust companies acting in their capacity as administrators of fiduciary mandates. Securities custodians, when acting as trustees, may have access to equity markets provided that they are connected to a Securities Trading and Registration System. Accordingly, in order to operate in the Colombian market, their participation must be channeled through one of the aforementioned entities.

Based on the framework described above, once the investment objective has been defined, the foreign portfolio investor submits a purchase or sale order either through its International Broker or directly to its trust company or local broker dealer, where a direct contractual relationship exists.

When the instruction is received through an International Broker, it is forwarded to a local broker dealer (via the Securities Trading and Registration System's chat, an order-routing system, or through any verifiable means) so that the transaction may be executed in the fixed-income or equity markets.

The local broker dealer that executed the purchase or sale of the securities as instructed and, once the transaction has been completed, shall inform the International Broker and/or foreign portfolio investor of the transaction details, including the security traded, the nominal amount or number of securities, the settlement date or date of compliance, and the total consideration payable. This amount includes the brokerage commission plus Value-added Tax (IVA in Spanish) (currently 19%), which may apply to commissions charged by local intermediaries, subject to the applicable tax rules for carrying out the operation.

Likewise, the intermediation fees charged by the International Broker when it participates in the operation are included, and intermediation fees and commissions may be subject to Colombian tax rules, including withholding tax and IVA, depending on the nature of the service and the tax residence of the service provider, and payments to foreign intermediaries may be subject to withholding tax in Colombia, depending on their characterization and applicable tax rules.

However, if the attachment is made directly to a trust company through the trust vehicle, the foreign portfolio investor may instruct the trust company to execute the orders through a local broker dealer or it may directly instruct a local broker dealer to carry out the transactions and the securities to reach the trust. The trust company can directly operate the securities available in the trading systems to which it has access (fixed income), if applicable.

The foreign portfolio investor remains the taxpayer for Colombian tax purposes, and tax obligations arising from the investment are fulfilled through its attorney-in-fact. For tax purposes, the identification of the foreign portfolio investor as the ultimate beneficial owner of the investment is required. Foreign portfolio investments must comply with applicable foreign exchange reporting and registration obligations in Colombia.