Application of the Deposit Guarantee Insurance System. Update.

"2015 - YEAR OF THE BICENTENNIAL OF THE CONGRESS OF THE FREE PEOPLES" COMMUNICATION "A" 5816 13/10/2015 TO FINANCIAL ENTITIES:
Ref.: Circular
OPASI 2 - 482
Application of the Deposit Guarantee Insurance System. Update.

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We address you to deliver the replacement sheets that must be incorporated into the regulations on "Application of the Deposit Guarantee Insurance System," based on what is established by Executive Decree No. 1653/15 of the National Executive Power. We salute you respectfully. CENTRAL BANK OF THE ARGENTINE REPUBLIC
ANNEX
Darío C. Stefanelli Juan C. Isi
Chief Manager of Issuance and
Regulatory Applications
General Deputy Manager of Regulations

as established by the CENTRAL BANK OF THE ARGENTINE REPUBLIC.
Article 10: The resources of the DEPOSIT GUARANTEE FUND (FGD) shall be invested in:
() national public bonds, whether in national or foreign currency, in a percentage of its portfolio not exceeding the proportion of deposits in local currency in the total demand and time deposits of the financial system; and in external assets eligible for the investment of the country's international reserves. The administration of the investments of the DEPOSIT GUARANTEE FUND (FGD) shall have as its objective the preservation of capital in high-liquidity investments, with the highest possible returns conditioned on the preservation of capital, transparency, and control in its administration. The returns of the DEPOSIT GUARANTEE FUND (FGD) shall form part of the same and be reinvested under the same conditions. Monthly, DEPOSIT INSURANCE CORPORATION (SEDESA) shall inform the public of the balance of the DEPOSIT GUARANTEE FUND (FGD) and to the SUPERINTENDENCY OF FINANCIAL AND EXCHANGE ENTITIES dependent on the CENTRAL BANK OF THE ARGENTINE REPUBLIC, the composition of the investments and the balance of the aforementioned Fund.
Article 10: SEDESA may carry out the following operations with the resources of the FGD:
(bis) () a) To effect the coverage of the guarantee to depositors, within the limits and conditions established in the present and its regulatory, complementary, and clarifying norms. b) To make capital contributions, non-refundable contributions, or loans to:
(I) Financial entities that are subject to a regularization and sanitation plan and for the purpose of supporting its compliance; (II) Financial entities that acquire assets and assume the payment of deposits of another entity subject to the regime of Article 35 bis and concordant articles of the Financial Entities Law, when it is convenient to compensate for the insufficiency of said assets with respect to the total of the transferred deposits; or (III) Absorbing or acquiring financial entities in the framework of a regularization and sanitation plan. () Executive Decree No. 1653/15. () Executive Decree No. 1292/99. Version: 5th COMMUNICATION "A" 5816 Validity:
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B.C.R.A. APPLICATION OF THE DEPOSIT GUARANTEE INSURANCE SYSTEM

c) To enter into a put option contract in favor of the acquiring entity with financial entities that acquire assets and assume the payment of deposits of another entity subject to the regime of Article 35 bis and concordant articles of the Financial Entities Law, regarding all or part of the transferred assets. The operation provided for in this subsection may be carried out through the establishment of a trust into which the assets of an entity subject to the regime of article 35 bis of the cited law enter, and in which SEDESA, in its capacity as administrator of the FGD, acquires beneficiary rights over the proceeds of the sale or liquidation of the trust assets. d) To acquire deposits of suspended banks under Article 49 of the Organic Charter of the CENTRAL BANK OF THE ARGENTINE REPUBLIC (Law 24.144) up to the amounts of the guarantee provided in Article 13 of the present Decree, subrogating into the rights of the depositors. e) To take or receive loans or carry out any other credit operations with the FGD, in its capacity as administrator thereof, for an amount not exceeding the total of the normal monthly and additional contributions of the financial entities referred to in article 6°, both in cash and through the assumption of the commitment to contribute according to what is provided in article 6°, during a period of TWO (2) years counted from the moment the loan or credit operation is entered into. For the purpose of determining the total contributions during the aforementioned TWO (2) year period, the amount of the monthly contributions of each entity at the time of incurring the loan or entering into the credit operation shall be computed. f) To carry out, maintain, or finance swap programs with banks abroad that aim to contribute to the stability of the Financial System, with the prior consent of the CENTRAL BANK OF THE ARGENTINE REPUBLIC and charged to the FGD. The application of the alternatives provided for in the preceding subsections b), c), and d) as well as the operations referred to in the preceding subsection e) shall be decided exclusively by a Governing Committee, whose decisions shall be binding on SEDESA. Such Committee shall be composed of a representative of the CENTRAL BANK OF THE ARGENTINE REPUBLIC and a number of board members to be determined in the Trust Contract between a minimum of FOUR (4) and a maximum of SEVEN (7) representatives of the financial entities contributing to the FGD. The representative of the CENTRAL BANK OF THE ARGENTINE REPUBLIC shall serve as President, and shall have the right of veto but not of vote. The board members shall have the right to vote in proportion to the contributions they make to the FGD by the entities they represent and according to what is provided in the Trust Contract. The Governing Committee must decide on the application of any of the alternatives provided for in the preceding subsections b), c), and d) when, according to the estimates that can be made at the time the
decision must be taken, its adoption implies a direct cost to the FGD lower than that which would result to the FGD if the authorization to operate were revoked for the affected entity and the payment to depositors provided for in the preceding subsection a) had to be fulfilled, for which the financial situation of the affected entity and the probable recovery of SEDESA's disbursements by subrogation must be taken into account. Exceptionally and in the event that it is estimated that the revocation of the authorization to operate of the affected entity could endanger the stability of other financial entities or of the financial system as a whole, the application of any of the alternatives provided for in the preceding subsections b), c), and d) may be admitted even if it implied a direct cost to the FGD greater than that resulting from the alternative provided for in subsection a), provided that in no case may it exceed the total amount of guaranteed deposits imposed on the affected financial entity. Everything related to the Governing Committee shall be provided for in the trust contract entered into by the CENTRAL BANK OF THE ARGENTINE REPUBLIC AND DEPOSIT INSURANCE CORPORATION.
Article 11: The coverage offered by the system shall cover deposits in PESOS and in foreign currency constituted in participating entities in the form of checking accounts, savings accounts, time deposits, or other modalities determined by the CENTRAL BANK OF THE ARGENTINE REPUBLIC, which meet the requirements established in the present decree and those established by the Application Authority.
Article 12: The following are not covered by the guarantee system:
a) Deposits of financial entities in other intermediaries, including time deposit certificates acquired through secondary negotiation. b) Deposits made by persons directly or indirectly linked to the entity according to the guidelines established or to be established in the future by the CENTRAL BANK OF THE ARGENTINE REPUBLIC. c) Time deposit certificates of securities, acceptances, or guarantees. d) Deposits constituted after 1.7.95, on which an interest rate higher by two percentage points annually than the passive interest rate for equivalent terms of the NATIONAL BANK OF ARGENTINA corresponding to the day prior to the imposition has been agreed. The CENTRAL BANK OF THE ARGENTINE REPUBLIC may modify the reference rate established in this subsection, communicating it FIVE (5) business days in advance. e) Other deposits that the Application Authority excludes in the future. B.C.R.A. APPLICATION OF THE DEPOSIT GUARANTEE INSURANCE SYSTEM Version: 5th COMMUNICATION "A" 5816 Validity:
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APPLICATION OF THE DEPOSIT GUARANTEE INSURANCE SYSTEM ORDERED TEXT SOURCE NORMA Point Paragraph. Com. Annex Point Paragraph OBSERVATIONS
6. "A" 2337 I 7. S/Com. "A" 2399, 3270,
4874, 5170, 5641 and 5659.
Includes interpretative clarification. Dec. N°1292/96.
7. 1° "A" 2337 II 1. S/Com. "A" 2561.
7.1. "A" 2337 II 1. S/Com. "A" 2561, 4040, 5369
and 5417.
7.2. "A" 2337 II 2. S/Com. "A" 2561.
8. "A" 2807 II and III
8.1. "A" 2807 II S/Law 25.089.
8.2. "A" 2807 III S/Dec. N°1292/99 and N°
1653/15. S/Com. "A" 4206 and
5816.
9. "A" 5710 2.