Last Friday, February 10, the transition period established by Decree 151 of 2021 terminated and the disclosure of information by issuers together with the new deadlines and contents entered into force. It introduces a new and more comprehensive list of relevant information and the precision of criteria to determine its disclosure. Likewise, issuers must consider the new contents and deadlines for the transmission of their quarterly and year-end periodic reports provided by Circular 012 of May 2022, and the inclusion of the ESG criteria introduced by Circular 031 of December 2021.

• End of transition period.

Decree 151 modified the list of events to be disclosed by issuers to the market, on matters such as: (i) commercial situation and operations of the issuer; (ii) financial situation, including crisis situations of the issuer and its affiliates; (iii) matters related to accounting and financial information of the issuer; (iv) corporate governance; (v) legal situation and (vi) the issuance and trading of securities.

This list establishes objective and subjective criteria regarding the information that could be considered relevant. Nonetheless the rule continues to be that this list is merely enunciative and not limitative, and it is the issuer who must make a subjective analysis to determine whether the situations surrounding the issuer should or should not be disclosed insofar they should be considered by an investor in making its investment or disposal decision.

Although the possibility of requesting the SFC for authorization not to disclose relevant information in certain cases was preserved, Decree 151 introduces a new concept of confidentiality in the context of M&A transactions, not requiring disclosing material information provided that it has been disclosed to persons who have a legal or contractual duty of confidentiality with the issuer.

Finally, Decree 151 of 2021 removed the obligation of the controlling entity to disclose relevant information through the issuer. However, disclosure of this information could become necessary based on the application of the subjective criterion.

• New classification of issuers, contents and deadlines for periodic reports.

External Circular 012 of 2022 of the SFC, which ruled the aforementioned Decree 151, classified issuers into different groups; each of them have implications on the materiality of the information that must be disclosed periodically, the deadline for doing so and the minimum content that the quarterly and year-end periodic reports must have:

1. Group A: issuers that are part of the MSCI Colcap, securitization companies and all those that meet at least 2 of the following criteria as of December 31 of the immediately preceding year: i) have assets in excess of 3.8 million SMLMV (COP$4.4. billions), ii) have annual revenues equal to or greater than 1.9 million SMLMV (COP$2.2. billions) or iii) have a payroll equal to or greater than 1,000 workers. This category also includes national territorial public entities, international public entities and foreign governments.
2. Group B: trusts, collective investment funds, private equity funds, securitization schemes and exchange traded funds.
3. Group C: all those issuers that do not fulfill the characteristics of groups A, B and D.
4. Group D: Issuers under temporary registration and issuers of pension bonds.

The previous disclosure rules only had the transmission of interim financial statements as the standard disclosure. The reforms of Decree 151 introduced new content to the periodic disclosure requirement for issuers on a quarterly and year-end basis:

1. Periodic year-end report must contain at least: (i) general operating matters, (ii) stock market and financial performance, (iii) ESG practices of the issuer, (iv) analysis of corporate governance, and (v) any other material information.
   
   This report must be submitted by Group A, Group C and Group D issuers within 15 business days following the ordinary shareholders' meeting or the meeting of the body acting on its capacity.
   
   Group B issuers must file within 90 calendar days after the fiscal year-end.
   
   For all groups, the closing date of the information is the date of the issuer's fiscal year-end.
2. Quarterly periodic report: Is intended to reveal its financial situation and any additional information resulting from material variations in the risks to which the issuer is exposed and/or in the practices and processes in relation to the issuer's ESG, social and corporate governance criteria. If there are no material changes, this must be expressly mentioned.
   
   As for its frequency, this report must be submitted by the issuers of all groups within 45 calendar days following the last calendar day of the quarter being reported.

• Increased ESG disclosure standards.

Issuers as of 2024, including investment funds registered in the RNVE, must disclose in their periodic reports a chapter on the implementation of policies, strategies and measurements under ESG criteria.

Nonetheless, an initial requirement was established for this year 2023, and until last Friday February 10 issuers had the opportunity to report the manner in which they intend to obtain the necessary information to be able to submit these reports as of next year. That is to say, a description of the plans and mechanisms they will use to obtain the information that will allow them to follow the compliance with their investment policies and ESG measurement methodologies among their assets and intervening agents.

In the event that issuers consider that no social, environmental or climate issue is material information or that the situations covered do not apply to them, they must in any case send a communication to the SFC indicating briefly why the above does not apply to them.

From next year forward, when the obligation to send ESG reports as part of the issuers' periodic and quarterly reports becomes mandatory, they must contain a detailed explanation of the sustainability and responsible investment practices implemented by the professional manager and/or the management company. The implementation plan must be sent to the SFC through the respective management companies, including the following:

1. A description of the ESG issues included in their investment policy, disclosing how they are implemented and how it responds to the portfolio's objectives and risk management.
2. Disclose whether the fund has a label related to ESG issues or whether the fund's ESG issues are used on its marketing or fund raising.
3. Report whether the fund has a classification system or taxonomy in the definition of eligible activities and assets in the portfolio of investments or projects.