Circular LISOL 1-1054: Minimum Capital of Financial Entities. Adjustments.

"AÑO DE LA DEFENSA DE LA VIDA, LA LIBERTAD Y LA PROPIEDAD" COMUNICACIÓN “A” 8028 23/05/2024 TO FINANCIAL ENTITIES:
Ref.: Circular
LISOL 1-1054:
Minimum Capital of Financial Entities.
Adjustments.
___________________________________________________________________________ We address you to inform you that this Institution has adopted the resolution that, in its pertinent part, establishes:

“1. Establish, with effect from 1/6/24, that the basic minimum capital requirement that financial entities must observe, in accordance with what is contemplated in points 1.1. and 1.2. of the regulations on “Minimum Capital of Financial Entities”, shall be the following:
Banks Remaining entities
(except Cooperative Credit Unions)

• In millions of pesos 5,000 2,500

2. Establish that entities in operation as of 1/6/24 must observe the basic capital requirement – according to the corresponding category – provided in the table of point 1. of this communication starting from 1/1/25. From 1/6/24 until 31/12/24, such entities in operation must apply the requirements arising from the following table:
   Period Banks Remaining entities
   (except Cooperative Credit Unions)

• In millions of pesos 1/6/24 to 31/12/24 1,500 700

3. Establish that financial entities in operation as of 1/6/24 that do not comply with the integration of the basic capital requirement as provided in point 2. of this communication and/or the basic capital requirement from 1/1/25 according to their Business Plan, projections, and capital self-assessment report must submit to the Superintendence of Financial and Exchange Entities a compliance program within the 20 calendar days following the registration or projection of non-compliance, respectively, which must not exceed a 6-month period to comply with the basic requirement.”

Regarding this, we provide you with the sheets that, in replacement of those previously provided, must be incorporated into the referenced regulations. In this sense, it is recalled that on this Institution’s website www.bcra.gob.ar, accessing “Financial System - LEGAL AND REGULATORY FRAMEWORK - Regulations and summaries - Consolidated texts of general regulations”, the modifications made with text highlighted in special characters (strikethrough and bold) can be found.”

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We salute you attentively.
BANCO CENTRAL DE LA REPUBLICA ARGENTINA
Enrique C. Martin Darío C. Stefanelli
Manager of Emission Manager of Norms
Principal Manager of Emission and
Normative Applications

ANNEX

1.1. Requirement.
The minimum capital requirement that financial entities must have integrated shall be equivalent to the highest value resulting from the comparison between the basic requirement and the sum of those determined by credit risk, market risk – requirement for daily positions of included assets – and operational risk.

1.2. Basic Requirement.
According to the class of entity, the following basic requirements shall apply:
Banks Remaining entities
(except Cooperative Credit Unions)

• In millions of pesos 5,000 2,500

Financial companies that carry out foreign trade operations directly must observe the requirements established for banks.

1.3. Integration.
For the purpose of determining compliance with the minimum capital requirement, the integration to be considered shall be the computable patrimonial responsibility, which shall be determined based on the balances of admitted items recorded on the last day of the month under report. In the case of the minimum capital requirement for market risk, the integration shall be determined daily in accordance with what is established in point 6.7.1.

1.4. Non-compliance.
Non-compliance with the required minimum capital shall give rise to the following consequences:

1.4.1. New entities.
Revocation of the authorization to operate if the required minimum capital is not integrated within 60 calendar days of its granting.

1.4.2. Entities in operation.

1.4.2.1. Non-compliance reported by entities.
The entity must comply with the requirement by the second month following that in which the non-compliance is registered, or submit a regularization and soundness plan within the 30 calendar days following the last day of the month to which the non-compliance corresponds.

B.C.R.A. MINIMUM CAPITAL OF FINANCIAL ENTITIES
Section 1. Minimum Capital.
Version: 13a. COMMUNICATION “A” 8028 Validity:
01/06/2024 Page 1

Financial entities in operation as of 1.6.24 must observe the basic capital requirement provided in the table of point 1.2. – according to the corresponding category – starting from 1.1.25. From 1.6.24 until 31.12.24, such entities in operation must apply the requirements arising from the following table:
Period Banks Remaining entities
(except Cooperative Credit Unions)

• In millions of pesos 1.6.24 to 31.12.24 1,500 700

Financial entities in operation as of 1.6.24 that do not comply with the integration of the basic capital requirement as provided in the preceding paragraph and/or the basic capital requirement from 1.1.25 according to their Business Plan, projections, and capital self-assessment report must submit to the Superintendence of Financial and Exchange Entities a compliance program within the 20 calendar days following the registration or projection of non-compliance, respectively, which must not exceed a 6-month period to comply with the basic requirement.

B.C.R.A. MINIMUM CAPITAL OF FINANCIAL ENTITIES
Section 12. Transitional Provisions.
Version: 2a. COMMUNICATION “A” 8028 Validity:
01/06/2024 Page 1

CONSOLIDATED TEXT SOURCE REGULATION
OBSERVATIONS Section Point Paragraph Com. Cap./
Annex Point Paragraph
1.
1.1. “A” 2136 1. 1° According to Com. “A” 2859, 3558,
5272, 5369, 5580 and 5867.
1.2. “A” 2241
CREFI-2
I 1.3.1. According to Com. “A” 4368, 4771,
5168, 5351, 5355, 5983, 6260,
7470, 7524 and 8028.
1.3. “A” 2136 2. 1° According to Com. “A” 2223 and 7524. Includes regulatory clarification.
1.4.1. “A” 2136 3.1.
1.4.2.1. “A” 3171 According to Com. “A” 3959.
i) “A” 2136 3.2. 2° According to Com. “A” 3959. ii) “A” 2136 3.2.4. According to Com. “A” 2241, 4771 and 6275. iii) “A” 414 LISOL-1 VI 6.1.
1.4.2.2. “A” 3171 According to Com. “A” 3959.
2.
2.1. “A” 2136 1. According to Com. “A” 2541, 2736,
2938, 3039, 3307, 3959, 4598,
4702, 4741, 4742, 4961, 4996,
5180, 5369 (Annex I), 5580, 5867,
6128, 6260, 6327, 6639, 6663,
6690, 7311 and “B” 9745.
2.2.1. “A” 2136 I According to Com. “A” 2541 (annex,
criteria, d, 2° paragraph).
2.2.2. “A” 2287 5. According to Com. “A” 5369 (Annex I).
2.2.3. “A” 2412 According to Com. “A” 3959, 5369
(Annex I), 5671 and 5740.
2.3. “A” 2740 I 3.4. According to Com. “A” 5369 (Annex I).
2.3.1. “A” 2768 2. According to Com. “A” 2948, 3911,
3925, 3959, 4180, 5369 (Annex I),
5831, 6851, 7443 and “B” 9074.
2.3.2. “A” 2227 unique 5.2.2. 3°
2.4. “A” 5369 I
last “A” 5580 Includes regulatory clarification.
2.4.1. “A” 5369 I
2.4.2. “A” 5369 I
2.4.3. 1° “A” 5369 I
2° “A” 5580 According to Com. “A” 5831.
2.4.4. “A” 5369 I According to Com. “A” 5831, 6489, 6531
and 6586.
2.5.1. “A” 2136 1.1. According to Com. “A” 5369 (Annex I) and
6260.
2.5.2.
1° “A” 5369 I
2° “A” 5580 According to Com. “A” 5831, 6327 and 6639.
3° “A” 5580
2.5.3. “A” 5369 I According to Com. “A” 5821.
2.5.4. “A” 5369 I According to Com. “A” 5580.
B.C.R.A. ORIGIN OF THE PROVISIONS CONTAINED IN THE REGULATIONS ON “MINIMUM CAPITAL OF FINANCIAL ENTITIES”

CONSOLIDATED TEXT SOURCE REGULATION
OBSERVATIONS Section Point Paragraph Com. Cap./
Annex Point Paragraph
11.
11.1. “A” 3985 According to Com. “A” 4172.
11.2. “A” 3985 According to Com. “A” 4172.
11.3. “A” 5369 8. According to Com. “A” 5580.
11.4. “A” 6938 12. According to Com. “A” 7007 and 7928.
11.5. “A” 7018 5.
11.6. “A” 7545 1.
12. 1° “A” 7470 2. According to Com. “A” 7524 and 8028.
2° “A” 7470 3. According to Com. “A” 7524 and 8028.