Circular LISOL 1 - 235. Computable Equity Liability. Deduction of Valuation Differences for Securities Holdings in Investment Accounts

1999 - "Year of Export"
BANCO CENTRAL DE LA REPÚBLICA ARGENTINA COMMUNICATION "A" 2914 05/05/99 TO FINANCIAL ENTITIES:
Ref.: Circular LISOL 1 - 235. Computable Equity Liability. Deduction of Valuation Differences for Securities Holdings in Investment Accounts

We address you to inform you that this Institution has adopted the following resolution:

• Incorporate, effective from 31.5.99, as a deductible item in the expression to determine the computable equity liability referred to in point 7.1. of Section 7. of the norms on minimum capital of financial entities, the following term:

"Dv: Excess between the book value of holdings of securities in investment accounts and their quotation value resulting from the positive result of the following expression:
[Vl - (1.20*Vm)] where
Vl: book value on the last day of each month.
Vm: market value at the close of operations on the last business day of each month."

In attachment, we send you the sheets that correspond to incorporate into the ordered text of the norms on minimum capital of financial entities, due to the provisions of the resolution transcribed above.

We greet you very attentively.
BANCO CENTRAL DE LA REPÚBLICA ARGENTINA Juan Carlos Isi Alfredo A. Besio Deputy Manager of Standards Deputy Manager of Standards for Financial Entities for Financial Entities

ANNEX: 2 sheets

MINIMUM CAPITAL OF FINANCIAL ENTITIES B.C.R.A. Section 7. Computable Equity Liability.
7.1. Determination.
The computable equity liability of financial entities, for the purposes of the regulatory norms of the prescriptions of articles 30 and 32 of the Law of Financial Entities and other provisions of the Central Bank of the Republic of Argentina that refer to that concept, will arise from the following expression:
RPC = PNb + PNc - Cd - Dv
Where
RPC: Computable Equity Liability.
PNb: Basic net equity.
PNc: Complementary net equity, not exceeding 100% of PNb. Cd: Concepts that must be deducted. Dv: Excess between the book value of holdings of securities in investment accounts and their quotation value resulting from the positive result of the following expression:
Vl - (1.20 * Vm) where
Vl: book value on the last day of each month.
Vm: market value at the close of operations on the last business day of each month.

7.2. Computable Concepts.
7.2.1. Basic Net Equity.
It comprises the following items of net equity:
7.2.1.1. Share Capital.
Version: 4th Communication “A” 2914 Validity:
31.5.99

NEW O.T. SOURCE NORM
Section
Point Paragraph
Comm. Cap./
Annex
Point Paragraph
Observations
6. 6.1.a
6.4
“A” 2461 unique I. and II.
6. 6.5. “A” 2461 unique I. and II. Modified by Comms. “A” 2736
and 2768. In point 6.5.2. inclusive interpretative clarification
6. 6.6. “A” 2461 unique III.
6. 6.7. “A” 2461 unique VI.
6. 6.8. “A” 2461 unique VII.
7. 7.1. “A” 414
LISOL-1
VI 3.1. 1st According to Comm. “A” 2279 (mod. By Comms. “A” 2321, with clarification interp., 2453 and 2914
7. 7.2.1. “A” 414
LISOL-1
VI 3.1.1. According to Comm. “A” 2223 (mod. By Comms. “A” 2227 and 2266)
7. 7.2.2. “A” 414
LISOL-1
VI 3.1.2. According to Comm. “A” 2223. Mod. By the Comm. “A” 2768
7. 7.2.3. 1st “A” 414
LISOL-1
VI 3.1.2.2
.
According to Comm. “A” 2264.
Incorporates interpretative clarification
7. 7.2.3.1.
a
7.2.3.4.
“A” 414
LISOL-1
VI 3.1.2.2
.
According to Comm. “A” 2264. In the second paragraph of point 7.2.3.3. incorporates interpretative clarification
7. 7.2.3.5. “A” 2264 2.
7. 7.2.3.6. “A” 414
LISOL-1
VI 3.1.2.2
.
According to Comm. “A” 2264
“A” 2287 3.1.y
3.3.
7. 7.2.4.1. According to Comm. “A” 2890
“A” 2287 3. Last
7. 7.2.4.2. 1st “A” 2497 1.
7. 7.2.4.2. Last “A” 2263 2.
7. 7.2.4.3. 1st and last “A” 2287 3.2.
7. 7.2.4.3. 2nd “A” 2474 Norms of procedure on
requirement and integration of minimum capital (point 3.2.7.)
7. 7.2.4.4. “A” 2264 1.