Board Resolution No. 107/2016: Approval of the Legal Reserve Regulation Compliant with Law No. 393

Banco Central de Bolivia
Directorio

BOARD RESOLUTION NO. 107/2016

SUBJECT: ECONOMIC POLICY ADVISORY AND FINANCIAL ENTITIES MANAGEMENT APPROVE THE LEGAL RESERVE REGULATION COMPLIANT WITH LAW NO. 393.

HAVING REVIEWED:
The Political Constitution of the State promulgated on February 7, 2009.
Law No. 1670 of October 31, 1995 of the Central Bank of Bolivia (BCB).
Law No. 393 on Financial Services, of August 21, 2013.
The BCB Statute approved by Board Resolution No. 128/2005 of October 21, 2005 and its subsequent modifications.
The Legal Reserve Regulation approved by Board Resolution No. 070/2009 of June 23, 2009 and modified according to Board Resolutions No. 130/2010 of November 23, 2010, No. 007/2011 of January 18, 2011, No. 072/2011 of June 14, 2011, No. 07/2012 of January 10, 2012, No. 042/2012 of April 10, 2012, No. 164/2013 of December 5, 2013, No. 042/2014 of April 29, 2014 and No. 059/2015 of April 28, 2015. ASFI Resolution No. 687/2013 of October 16, 2013. The Report from the Economic Policy Advisory and Financial Entities Management BCB-APEC-SIE-INF-2016-50 of June 9, 2016. The Report from the Legal Affairs Management BCB-GAL-SANO-DLBCI-INF-2016-137 of June 10, 2016.

CONSIDERING:
That the Political Constitution of the State in its article 328 provides that the BCB is empowered, in coordination with the economic policy determined by the Executive Branch, to determine and execute monetary policy.
That Law No. 1670 in its article 7 provides that the Issuing Entity may establish mandatory legal reserves for financial intermediation entities and, for this purpose, shall determine their composition, amount, calculation method, characteristics and remuneration. That in its article 37, the aforementioned legal norm establishes that the BCB is the custodian of the liquid reserves intended to cover said reserve and may delegate the custody of these deposits according to the specific regulation. That the BCB Statute in article 11 numeral 7), states that it is the faculty of the Board to establish by absolute majority of votes, mandatory legal reserves for Financial Intermediation Entities and approve their composition, amount, calculation, characteristics, forms of administration, custody and remuneration according to Regulation. That the Legal Reserve Regulation aims to establish the technical and operational conditions of mandatory compliance for financial entities that are duly authorized for their operation by the Financial System Supervision Authority, regarding the constitution and form of administration of the legal reserve. That the Economic Policy Advisory and the Financial Entities Management through Report BCB-APEC-SIE-INF-2016-50 recommend the adaptation of the Legal Reserve and Exchange Position Regulations to Law No. 393. That according to Report BCB-GAL-SANO-INF-2016-137, the Legal Affairs Management concludes that the adaptation of the Legal Reserve Regulation to Law No. 393 is considered legally appropriate insofar as it does not contravene the current legal order, being the competence of the BCB Board to consider its approval by absolute majority of votes in accordance with what is provided for in the subsection i) of article 54 of Law No. 1670 concordant with numeral 7) of article 11 of the BCB statute.

THEREFORE,
THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA RESOLVES: Article 1.- Approve the Legal Reserve Regulation compliant with Law No. 393, which, as an annex, forms part of this Resolution.
Article 2.- The Legal Reserve Regulation compliant with Law No. 393 will enter into force from June 20, 2016.
Article 3.- From the entry into force of this Resolution, Board Resolutions No. 070/2009 of June 23, 2009, No. 130/2010 of November 23, 2010, No. 007/2011 of January 18, 2011, No. 072/2011 of June 14, 2011, No. 07/2012 of January 10, 2012, No. 042/2012 of April 10, 2012, No. 164/2013 of December 5, 2013, No. 042/2014 of April 29, 2014 and No. 059/2015 of April 28, 2015 are left without effect. Article 4.- The Presidency and General Management are in charge of the execution and compliance of this Resolution.

La Paz, June 14, 2016

(Signatures: Marcelo Zabalaga Estrada, Sergio Velarde Vera, Ronald Polo Rivero, Abraham Pérez Alandia, Luis Baudoin Olea)

ANNEX

LEGAL RESERVE REGULATION FOR FINANCIAL INTERMEDIATION ENTITIES

TITLE I
GENERAL PROVISIONS

Article 1 (Scope of Application).
All Financial Intermediation Entities, authorized for their operation by the Financial System Supervision Authority, are subject to the provisions of this Regulation.
State Financial Intermediation Entities or with majority state participation (Development Bank, Public Bank and Public Development Financial Entity) will be subject to the provisions of this Regulation provided that they capture resources from the public in the Plurinational State of Bolivia. Branches abroad authorized for their operation by the Financial System Supervision Authority, which capture resources in the Plurinational State of Bolivia, must constitute legal reserve under the terms of this Regulation when they are exempt from reserve in the country where they operate. When abroad they are subject to a reserve requirement lower than that of this Regulation, they must constitute reserve in the amount and modality that allows covering the difference, which will be determined by the Board of Directors of the Central Bank of Bolivia.

Article 2 (Terms and Abbreviations).
For the purposes of this Regulation, the following terms and abbreviations are used:
BCB: Central Bank of Bolivia.
ASFI: Financial System Supervision Authority
COMA: Open Market Operations Committee of the BCB.
BDP: Development Bank
DPF: Time Deposits.
UFV: Housing Development Unit.
MN: National currency.
ME: Foreign currency.
MNUFV: National currency with value maintenance with respect to the UFV.
MVDOL: National currency with value maintenance with respect to the US dollar.

Legal Reserve: It is the proportion of deposits of natural and legal persons that Financial Intermediation Entities must maintain as a reserve, at the BCB or through the BCB.
Required Legal Reserve: Amount that Financial Intermediation Entities must deposit in the BCB or in Financial Intermediation Entities authorized for legal reserve purposes.
Constituted Legal Reserve: Amount deposited by Financial Intermediation Entities in the BCB or in Financial Intermediation Entities authorized for legal reserve purposes.
Legal Reserve in Cash: Legal reserve required and constituted in cash by Financial Intermediation Entities, which will be maintained in deposit in the accounts enabled for this effect.
Legal Reserve in Titles: Legal reserve required and constituted in cash by Financial Intermediation Entities, to be invested by the BCB or the Delegated Administrators of the RAL-MN, RAL-MNUFV, RAL-ME and RAL-MVDOL Funds in titles, securities or authorized instruments. RAL Fund: The Liquid Asset Requirement Fund is a closed investment fund constituted solely by the resources contributed by Financial Intermediation Entities through legal reserve in titles. Each Financial Intermediation Entity will have its contribution to the RAL Fund registered individually. The RAL Fund is constituted by the following denominations: National Currency (RAL-MN Fund), National currency with value maintenance with respect to the UFV (RAL-MNUFV Fund), Foreign Currency (RAL-ME Fund) and National currency with value maintenance with respect to the US dollar (RAL-MVDOL Fund). Delegated Administrator of the RAL-MN Fund: Corresponds to the BCB or to the Financial Intermediation Entity that acts as Delegated Administrator in the administration of the RAL-MN Fund. When it concerns a Financial Intermediation Entity other than the BCB, it will be selected based on competitive mechanisms and conditions approved by the BCB Board by express resolution. Delegated Administrator of the RAL-MNUFV Fund: Corresponds to the BCB or to the Financial Intermediation Entity that acts as Delegated Administrator in the administration of the RAL-MNUFV Fund. When it concerns a Financial Intermediation Entity other than the BCB, it will be selected based on competitive mechanisms and conditions approved by the BCB Board by express resolution. Delegated Administrator of the RAL-ME Fund: Is the foreign financial institution that acts as Delegated Administrator in the administration of the RAL-ME Fund, selected based on competitive mechanisms and conditions approved by the BCB Board by express resolution. Delegated Administrator of the RAL-MVDOL Fund: Is the foreign financial institution that acts as Delegated Administrator in the administration of the RAL-MVDOL Fund, selected based on competitive mechanisms and conditions approved by the BCB Board by express resolution. Legal Reserve Requirement Period: Period of 14 consecutive days, determined by the ASFI for the purposes of calculating the required legal reserve. Legal Reserve Constitution Period: Period of 14 consecutive days, lagged by 8 days with respect to the legal reserve requirement period. Obligations Subject to Reserve (OSE): Are the liabilities denominated in MN, MNUFV, MVDOL and ME, detailed in articles 3 and 4 of this Regulation. Short-term liabilities with the exterior mentioned in article 6 of this Regulation are excluded from the scope of this definition. Obligations in ME and MVDOL Subject to Additional Reserve (OSEA-ME-MVDOL): Are the liabilities denominated in ME and MVDOL, detailed in articles 3 and 4 of this Regulation. For calculation purposes, the BCB will express these balances in US dollars at the BCB's purchase exchange
rate. These obligations exclude short-term liabilities with the exterior, contracted exclusively for foreign trade operations with exact matching between asset and liability for each operation. Additional Reserve Base (ARB): Corresponds to the difference between the OSEA-ME-MVDOL and a percentage of the OSEA-ME-MVDOL of the base date according to the following schedule:

Requirement Period	Percentage of OSEA-ME-MVDOL
Start Date	End Date	of the Base Date
05/03/2012	18/03/2012	100.0%
02/04/2012	15/04/2012	92.5%
06/08/2012	19/08/2012	85.0%
10/12/2012	23/12/2012	77.5%
04/03/2013	17/03/2013	70.0%
05/08/2013	18/08/2013	62.5%
09/12/2013	22/12/2013	55.0%
03/03/2014	16/03/2014	47.5%
04/08/2014	17/08/2014	40.0%
08/12/2014	21/12/2014	32.5%
13/04/2015	26/04/2015	25.0%
03/08/2015	16/08/2015	17.5%
07/12/2015	20/12/2015	10.0%
11/04/2016	24/04/2016	2.5%
01/08/2016	14/08/2016	0.0%

TITLE II
LEGAL RESERVE ON DEMAND LIABILITIES, SAVINGS ACCOUNTS, DPF AND OTHER OBLIGATIONS

Article 3 (Demand, savings and time liabilities subject to legal reserve). Financial Intermediation Entities included in article 1 of this Regulation must constitute legal reserve in cash and titles on the liabilities registered in the accounts detailed below:

Liabilities with the public and with state-participated companies on demand

• Current account deposits
• Inactive current accounts
• Demand deposits
• Certified checks
• Remittances and transfers payable
• Collections for reimbursement
• Matured securities
• Fiduciary deposits in current account
• Fiduciary demand deposits

Liabilities with the public and with state-participated companies for savings accounts

• Savings account deposits
• Savings account deposits closed due to inactivity
• Liabilities with participants in savings plans
• Fiduciary deposits in savings account

Liabilities with the public and with state-participated companies at fixed term

• Fixed-term obligations
• Fixed-term obligations with account notation

Liabilities with the public and with state-participated companies restricted

• Closed current accounts
• Savings account deposits affected as collateral
• Term deposits affected as collateral
• Restricted fixed-term deposits with account notation

Other payables

• Manager's checks

Liabilities with banks and financing entities

• Current account deposits of domestic financial entities subject to reserve
• Other demand liabilities with domestic financial entities subject to reserve
• Demand financing from foreign entities
• Head office and branches on demand
• Foreign banks and correspondents on demand
• Savings account deposits of domestic financial entities subject to reserve
• Fixed-term deposits of domestic financial entities subject to reserve
• Fixed-term deposits of domestic financial entities with account notation subject to reserve
• Interbank operations
• Short-term financing from foreign entities freely available
• Short-term financing from foreign entities for foreign trade operations
• Head office and branches short-term freely available
• Head office and branches short-term for foreign trade operations

Other liabilities with the public, with state-participated companies and with banks and financing entities:

• Judicial deposits
• Third-party funds for Bolsin operations
• Third-party funds for stock market operations
• Funds to be delivered to third parties by the placement of securities
• Mobile wallet payment account
• Prepaid card account
• Other demand liabilities with the public
• Judicial withholdings
• Prepaid letters of credit guarantee deposits
• Other guarantee deposits
• Other restricted liabilities with the public
• Liabilities with banks and other financial entities subject to restricted legal reserve
• Advance collections from credit card clients

Article 4 (Application of reserve for DPF). The legal reserve requirements for DPF, according to terms and denominations, are established in the following table:

LEGAL RESERVE FOR DPF ACCORDING TO MATURITY TERM AND DENOMINATION*

Original Term on DPF	NATIONAL CURRENCY AND MNUFV	FOREIGN CURRENCY AND MVDOL
	Reserve in Titles	Reserve in Cash	Reserve in Titles	Reserve in Cash
From 30 to 60 days	Reserves	Reserves	Reserves	Reserves
Greater than 60 days up to 360 days	Reserves	Reserves	Reserves	Reserves
Greater than 360 days up to 720 days	No reserve	No reserve	Reserves	No reserve
Greater than 720 days	No reserve	No reserve	No reserve	No reserve

*Only time deposits of 30 days or more are considered DPF.

Article 5 (Legal reserve rates).
The legal reserve rates on the liabilities detailed in article 3 of this Regulation are as follows:

In MN and MNUFV:
Cash
Six percent (6%) for cash reserve.
Titles
Six percent (6%) for title reserve.

In ME and MVDOL:
Thirteen point five percent (13.5%) for cash reserve.
Eight percent (8%) for title reserve

Financial Intermediation Entities must constitute the legal reserve in cash, equivalent to a rate of one hundred percent (100%), on the accounts included in "Other Liabilities with the public, with state-participated companies and with banks and financing entities" indicated in article 3 of this Regulation.

Article 6 (Deductions and exemptions from reserve). Short-term liabilities with the exterior, contracted exclusively for foreign trade operations with exact matching between asset and liability for each operation, will be exempt from the requirement to constitute legal reserve.

Article 7 (Registration).
Financial Intermediation Entities must register in the BCB, in detail, the DPF referred to in article 4 of this Regulation. Likewise, they must inform the BCB about the redemptions of the same made in a term shorter than the original.

Article 8 (Obligations between Financial Intermediation Entities). Deposits of one Financial Intermediation Entity in other Financial Intermediation Entities will be subject to the legal reserve rules established in articles 3 and 4 of this Regulation, in case reserve had not been constituted previously.

TITLE III
ADDITIONAL RESERVE IN TITLES IN FOREIGN CURRENCY FOR DEPOSITS IN ME AND MVDOL

Article 9 (Additional reserve rates).
Financial Intermediation Entities included in article 1 of this Regulation must constitute an additional reserve in titles in ME and MVDOL applying a rate of 45% to the Additional Reserve Base (ARB).
The additional reserve requirement will be calculated as the average of daily additional reserve balances.

Article 10 (Base date).
The date mentioned in article 2 of this Regulation and used for the application of the additional reserve established in article 10 of this regulation is September 30, 2008.
For Financial Intermediation Entities that obtain their operating license from the ASFI after the date mentioned in the previous paragraph, the base date for the calculation of the additional reserve must be the last day of the month in which they begin their operations as an entity with an operating license.

TITLE IV
CONSTITUTION OF LEGAL RESERVE IN CASH AND IN TITLES

Article 11 (Legal Reserve Accounts in Cash). Multiple Banks, SME Banks, the Development Bank, the Public Bank and the Public Development Financial Entity will maintain in the BCB a single account called "current and reserve account" in each of the four denominations (MN, MNUFV, MVDOL and ME). Housing Financial Entities, Savings and Credit Cooperatives, Development Financial Institutions and Communal Financial Entities authorized by the ASFI will maintain in the BCB a single account called "reserve account" in each of the four denominations (MN, MNUFV, MVDOL and ME) and on which checks cannot be drawn. For cash withdrawal from this account at BCB counters, the procedures established by the Issuing Entity will be followed. Multiple Banks, SME Banks, the Development Bank, the Public Bank and the Public Development Financial Entity must constitute the reserve in cash in the current and reserve account and Housing Financial Entities, Savings and Credit Cooperatives, Development Financial Institutions and Communal Financial Entities must do so in the reserve account. These accounts will not be subject to any type of judicial seizure or retention by third parties. The legal reserve in cash must be constituted: (i) in national currency, for deposits in the same currency, (ii) in national currency at the equivalent value in UFV, for deposits in MNUFV and (iii) in US dollars, for deposits in ME and MVDOL.

Article 12 (Compensation between Titles and Cash). Excesses of cash reserve can compensate for deficiencies of legal reserve in titles. Excesses of legal reserve in titles cannot compensate for deficiencies of legal reserve in cash.

Article 13 (Calculation of Legal Reserve). All Financial Intermediation Entities of the country included in article 1 of this Regulation will maintain daily a legal reserve of their liabilities with the public, deposited in the accounts enabled for this effect. The required legal reserve will include: i) the reserve requirements of articles 3 and 4 of this Regulation, calculated as the average of the OSE that each Financial Intermediation Entity maintains at the end of the day in the legal reserve requirement period and ii) the additional legal reserve requirement established in article 9 of this Regulation. The constituted reserve will be calculated as the average of the daily balances credited in the respective accounts, in the legal reserve constitution period.

Article 14 (Report of Liabilities Subject to Legal Reserve). Financial Intermediation Entities must report daily all their liabilities subject to legal reserve, by denomination and by type of deposit through the financial information system and in accordance with what is established by ASFI norms. The report will correspond to the liabilities subject to legal reserve of the previous business day. Cash deposits in the BCB or its correspondents will be subject to the schedules established by the BCB.

Article 15 (No Compensation by Currencies). The legal reserve in cash must be constituted in the denomination in which the deposits were captured. Compensations between denominations for the legal reserve in cash will not be allowed. The legal reserve in titles must be constituted in accordance with what is established in article 20 of this Regulation. On the reserve constituted in MNUFV and MVDOL, the BCB will recognize in favor of Financial Intermediation Entities the differential by variation of the UFV for MNUFV and by variation of the exchange rate for MVDOL only up to the limit of the required legal reserve in cash.

Article 16 (Sanctions for Early Withdrawals of DPF). Time deposits that maintain any exemption of reserve, under what is established in this Regulation, cannot be redeemed early. This prohibition is excepted for time deposits in ME and MVDOL that, being exempt from constituting legal reserve, are redeemed with the sole and exclusive purpose of converting them into MN deposits. When the issuing entity acquires its own time deposit certificates, they must be cancelled and withdrawn from the accounts, communicating said withdrawal to the BCB in a term no greater than 48 hours after it occurs.

Article 17 (Custody Funds).
Financial Intermediation Entities may maintain up to 50% of their legal reserve requirement in cash in National Currency (MN) and UFV Units (MNUFV) in Custody Funds in any location. Any excess maintained by Financial Intermediation Entities above this percentage will not be recognized for reserve purposes. Financial Intermediation Entities must maintain 40% of their legal reserve requirement in cash in Foreign Currency (ME) and US Dollars (MVDOL) in Custody Funds in any location. Any excess maintained by Financial Intermediation Entities above this percentage will not be recognized for reserve purposes. The overall deficiency in Custody Funds in Foreign Currency and US Dollars cannot be offset by reserve excesses in Central Bank of Bolivia (BCB) accounts or reserve in securities.

Article 18 (Cash Movements of Funds at the BCB). The BCB will charge the commission fixed in the Table of Commissions and Other Income, established by its Board of Directors, for cash movements of entry or exit of funds to Financial Intermediation Entities.

Article 19 (Deposits in Other Currencies). For deposits captured in currencies other than the Bolivian and the US dollar, the legal reserve must be constituted in its equivalent in US dollars, at the daily reference buy exchange rate issued by the BCB.

Article 20 (Constitution of Legal Reserve in Securities). The legal reserve in securities must be constituted: (i) in National Currency (MN), for deposits in the same currency, (ii) in MN at the equivalent value in UFV, for deposits in UFV Units (MNUFV) and (iii) in US dollars, for deposits in Foreign Currency (ME) and US Dollars (MVDOL).

Article 21 (Transfers to and from the Legal Reserve in Securities). Every seven days, the BCB will transfer from the cash legal reserve of each Financial Intermediation Entity, the amounts necessary to effect the corresponding transfers to the legal reserve in securities, and vice versa. The movement in reserve accounts will be made automatically based on the reserve and deposit reports sent by Financial Intermediation Entities to the BCB.

TITLE V
OF THE LIQUID ASSET REQUIREMENT FUND (FONDO RAL)

Article 22 (Constitution and Investment of the RAL Fund). The RAL Fund will be constituted by the resources transferred every seven days from the legal reserve in securities, in accordance with the preceding Article 21.
It will have the following composition:
(i) RAL Fund-MN: national sovereign fixed-income and public offering securities, denominated in National Currency (MN) and, subsidiarily, in cash; (ii) RAL Fund-MNUFV: national sovereign fixed-income and public offering securities, denominated in National Currency (MN) or UFV and, subsidiarily, in cash; (iii) RAL Fund-ME: sovereign securities, values, cash, denominated in Foreign Currency (ME) in accordance with investment guidelines approved by the BCB Board of Directors. (iv) RAL Fund-MVDOL: sovereign securities, values, cash, denominated in Foreign Currency (ME) in accordance with investment guidelines approved by the BCB Board of Directors.

Article 23 (Rights and Responsibilities).
Participating Financial Intermediation Entities will be beneficiaries of all rights of the RAL Fund, distributed in proportion to their contributions in accordance with the norms established in this Regulation and according to the Financial Services Contract to instrument the Legal Reserve Regulation. Losses arising from the administration of the RAL Fund will be distributed in proportion to the contributions made by each of the Financial Intermediation Entities. Under no circumstances will the BCB assume any responsibility or risk, nor will it guarantee the results of the RAL Fund. In the case of the RAL Fund-ME and RAL Fund MVDOL, the BCB will not assume any responsibility for the quality of their administration.

Article 24 (Administration of the Fund).
The RAL Fund-MN and RAL Fund-MNUFV will be administered by the Financial Entities Management of the BCB, or by one or more Delegated Administrators expressly contracted by the BCB for this purpose, in accordance with contracts signed with Financial Intermediation Entities and within the operational guidelines determined by the COMA. The administration of the RAL Fund-ME and RAL Fund-MVDOL will be entrusted to one or more specialized entities in Delegated Administration, of recognized technical capacity and international solvency, in accordance with the norms approved by the BCB Board of Directors. The commissions that Delegated Administrators charge for the administration of the RAL Funds-MN, RAL Fund-MNUFV, RAL Fund-ME and RAL Fund-MVDOL will be charged to the resources of the Funds themselves. The BCB Board of Directors will incorporate in the Table of Commissions and Other Income, the commissions that the BCB will charge for the administration of the RAL Funds-MN, RAL Fund-MNUFV, RAL Fund-ME and RAL Fund-MVDOL.

Article 25 (Exemption of Commission for Transfers to the RAL Fund). Operations of transfer of funds between the accounts that Financial Intermediation Entities maintain at the BCB and the RAL Fund will not be subject to any commission.

Article 26 (Liquidity Loans with Guarantee of the RAL Fund). The resources invested by each participant in the RAL Funds will serve as collateral for the liquidity credits they request from the BCB, under the following conditions:
First tranche: The Financial Intermediation Entity may access for a term not greater than seven days an amount equivalent of up to 40% of the Financial Intermediation Entity's share in the RAL Fund, in freely available resources, required through request to the BCB by the means it determines. Second tranche: The Financial Intermediation Entity may access an amount equivalent of up to 30% additional in freely available resources for a term not greater than seven days, prior to written or electronic request to the BCB, justifying the reasons motivating this requirement. No Financial Intermediation Entity may use the second tranche for more than seven consecutive days or ten discontinuous days during two consecutive reserve periods. Upon maturity of the loans granted in both the first and second tranche, the BCB will automatically debit the amount lent, its interest and related surcharges, from the current account and reserve account or the reserve account, as appropriate, that Financial Intermediation Entities maintain at the BCB. In case of insufficient funds in the corresponding account, the title contributions of the RAL Fund will be liquidated up to the amount of capital and interest that the entity owes to the BCB. When the total required by the financial intermediation system does not exceed 7.5% of the RAL Fund-ME and RAL Fund-MVDOL, the BCB will use its own resources to pay the requirements for freely available resources. If the requirement exceeds said percentage, the BCB may obtain these resources from the RAL Fund or other sources as determined by the BCB Board of Directors.

Article 27 (Interest Rates of Liquidity Loans). The COMA will determine the interest rates that will be applied to liquidity credits with guarantee of the RAL Fund in the first and second tranche.

Article 28 (Internal RAL Fund-ME).
When a percentage higher than the limit of 7.5% defined in Article 26 of this Regulation is observed, the BCB Board of Directors through express resolution, may authorize that a part of the legal reserve in securities for deposits in Foreign Currency (ME) and US Dollars (MVDOL) can be temporarily invested in a new fund in the country, called Internal RAL Fund-ME. This fund may be constituted with resources representing up to seventy percent (70%) of the RAL Fund-ME and RAL Fund-MVDOL. The Internal RAL Fund-ME will be administered by the BCB. The investment guidelines and conditions of the resources of the Internal RAL Fund-ME will be determined by the BCB Board of Directors through express resolution.

Article 29 (Non-Participation in the RAL Fund). In the event that any Financial Intermediation Entity decides not to participate in the RAL Fund, under the terms mentioned in Article 22 and following of this Regulation, the balance corresponding to its legal reserve in securities will be deposited in an account called "Restricted legal reserve securities account" at the BCB, without earning yields or costs for the aforementioned entity and the resources of this account cannot be used as collateral for operations of the Financial Intermediation Entity at the BCB. This account will be subject to all the conditions of requirement and constitution of reserve stipulated for the legal reserve in securities.

Article 30 (Dissolution).
The RAL Fund can only be dissolved by the BCB Board of Directors through express Resolution.
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