Circular LISOL 1-328. Minimum Liquidity Requirements. Update of the Consolidated Text

BANCO CENTRAL DE LA REPUBLICA ARGENTINA
COMUNICACION " A " 3231 I 16/02/01
TO FINANCIAL ENTITIES:
Ref.: Circular
LISOL 1 – 328
Minimum Liquidity Requirements. Update of the Consolidated Text

We address you to deliver attached the sheets that, in replacement of those previously provided, should be incorporated into the consolidated text of the reference. This update is carried out due to the provisions set forth in the resolution disseminated through Communication “A” 3229 and, complementarily, to reflect the changes that have occurred in the list of international risk rating agencies. We salute you very respectfully.

BANCO CENTRAL DE LA REPUBLICA ARGENTINA
Claudio Alejandro Gatti José Rutman
Submanager of Emission Chief Manager of Standards of Standards

ANNEX: 5 sheets

B.C.R.A.
UPDATED CONSOLIDATED TEXT OF THE NORMS ON
MINIMUM LIQUIDITY REQUIREMENTS
-IndexSection 1. Requirement.
1.1. Included Obligations.
1.2. Application Base.
1.3. Minimum Requirements.
1.4. Residual Term.
1.5. Defect in the application of foreign currency resources.
1.6. Alternative increase in requirement to debt placement.
1.7. Point increases in requirement due to liability concentration.
1.8. Transfers.
Section 2. Integration.
2.1. Admitted Concepts.
2.2. Computation.
2.3. Maximum computation limits.
2.4. Guarantees in favor of electronic clearing houses.
2.5. Guarantees for operations with canceling checks.
Section 3. Non-compliance.
3.1. Charge.
3.2. Classification programs.
3.3. Regularization and sanitation plans.
Section 4. Base for observance of the norms.
4.1. Individual base.
Section 5. Responsible parties and sanctions.
5.1. Responsible for liquidity policy.
5.2. Responsibilities.
5.3. Sanctions.
Version: 5th Communication “A” 3231 Validity:
12.02.01

MINIMUM LIQUIDITY REQUIREMENTS B.C.R.A. Section 1. Requirement.
1.7. Point increases in requirement due to liability concentration.
Establish that when an excessive concentration of liabilities (in titleholders and/or terms) is verified that implies a significant risk regarding the individual liquidity of a financial entity and/or has an impact on systemic liquidity, additional minimum liquidity requirements may be established on such liabilities of said financial entity and/or complementary measures deemed pertinent. To this end, it will be considered that this situation is configured when, among others, the existence of any of the following factors is verified:

• A high percentage of liabilities is concentrated in the same titleholder or titleholders.
• That they have a reduced residual term.
• That they represent a significant percentage with respect to their integration of minimum liquidity requirements and/or their total private deposits.
  1.8. Transfers.
  1.8.1. Admitted Margin.
  The integration of the minimum liquidity requirements of the positions in average monthly daily balances of the included obligations cannot be less than 90% of the requirement resulting from the following expression:
  EMLA (n) = EML (n) + ENI (n-1) where
  EMLA (n): adjusted minimum liquidity requirement corresponding to month “n”. EML (n): minimum liquidity requirement according to current norms corresponding to month “n”. ENI (n-1): requirement not integrated in month “n-1”.
  1.8.2. Period of utilization.
  The admitted transfer of the requirement not integrated in each month to the next position may be carried out for a maximum of six months, counted from the first month (inclusive) in which it is opted to use it according to what is provided previously or from the first immediate position subsequent to that in which the defects transferred are compensated or charge is paid on them. Version: 2nd Communication “A” 3231 Validity:
  12.02.01

MINIMUM LIQUIDITY REQUIREMENTS B.C.R.A. Section 2. Integration.
New York.
2.1.5. Account “Liquidity Requirements” opened at Deutsche Bank, New York,
in the name and order of the entity.
2.1.6. Time deposit certificates issued by banks abroad that have, at minimum, an international risk rating granted by one of the rating agencies, as detailed below:
Rating Agency Required Rating
Moody’s Investors Service Aa (long term)
Standard & Poor’s International
Ratings Ltd. AA (long term)
Fitch Ratings Ltd. AA (long term)
Entities must be holders of the right to exercise a sale option to a bank abroad that meets the requirement indicated previously, at any time during the validity of the deposit. The possibility, expressly established in the instrument or in an independent document, to cancel early -at any time- the deposit at the simple request of the holder is equivalent to being the holder of the right to exercise the sale option. The computation of this integration will be admitted for the exercise value of the option or early cancellation, from the day of agreement. The certificates and sale option contracts corresponding to the entity must be kept in custody at Deutsche Bank, New York, or at the custodian agents designated by it, observing in pertinent matters what is provided in this matter in point 2.1.11.
2.1.7. Bonds of central governments of countries members of the Organization for Economic Cooperation and Development (O.E.C.D.) that have at least one international risk rating “A” or higher granted by one of the rating agencies admitted by the norms on evaluation of financial entities.
It must be titles with usual quotation for significant amounts in exchanges or markets abroad. The computation will be carried out taking into account the value that arises for each day of the month based on the daily quotation of the titles. Version: 5th Communication “A” 3231 Validity:
16.02.01

CONSOLIDATED TEXT ORIGIN NORM
Section Point Paragraph Com. Annex Point Paragraph Observations

1. 1.4.1.4. “A” 3126
2. 1.4.2. “A” 2422 Only 2. 2nd According to Com. “A” 2511. Modifies applicable criterion.
3. 1.4.3. “A” 2422 Only 2. 4th and 5th According to Com. “A” 2648. Modifies applicable criterion.
4. 1.5. “A” 2422 Only 2. last According to Com. “A” 2569. Includes interpretative clarification
5. 1.6. 1st “A” 2494 5.1.1. 1st
   5.1.2.
   According to Com. “A” 2653. Modified by Com. “A” 2886 and “A” 2931.
6. 1.6. 2nd “A” 2494 5.1. last According to Com. “A” 2653.
7. 1.6. last “A” 2494 5.3.
8. 1.7. “A” 3229
9. 1.8. “A” 2833 1. Includes clarification.
10. 2.1.1. “A” 2422 Only 3.1.1. According to Com. “A” 2663.
11. 2.1.1.1. “A” 2380 3.
12. 2.1.1.2. “B” 6374
    “B” 6378
13. 2.1.2. “A” 2422 Only 3.1.4. According to Com. “A” 2663.
14. 2.1.3. “A” 2817 2. According to Com. “A” 3112
    “A” 2422 Only 3.1.12. According to Com. “A” 2705.
    “A” 2695
    “B” 6324
15. 2.1.4.
    “B” 6342
16. 2.1.5. “A” 2422 Only 3.1.2. According to Com. “A” 2663.
17. 2.1.6. “A” 2422 Only 3.1.10. According to Com. “A” 2648 and “A”
    3231
18. 2.1.7. “A” 2422 Only 3.1.3. According to Com. “A” 2663.
19. 2.1.8. “A” 2422 Only 3.1.8. According to Com. “A” 2648.
20. 2.1.9. “A” 2422 Only 3.1.11. According to Com. “A” 2648 and 2705.
21. 2.1.10. “A” 2422 Only 3.1.9. According to Com. “A” 2648.
22. 2.1.11. “A” 2422 Only 3.1.5. According to Com. “A” 2663 and 2648.
23. 2.1.12. “A” 2422 Only 3.1.7. According to Com. “A” 2648.
24. 2.2. “A” 2422 Only 3. 1st and 2nd According to Com. “A” 2663, 2833,
    2915 and 3195.
25. 2.3. “A” 2422 Only 3.2. According to Com. “A” 2705.
    except ii) “A” 2817 3.
26. 2.4. “A” 2610 I I.1. 3rd
27. 2.5. “A” 3216 According to Com. “A” 3201, point
    5.1. of the annex to the regulation
28. 3.1.1. “A” 2422 Only 5. According to Com. “A” 2490, modified by Com. “A” 2833
    and 2915.
29. 3.1.2. “A” 2422 Only 5. According to Com. “A” 2490.
30. 3.1.3. “A” 2422 Only 5. According to Com. “A” 2490 and “A”
32. 3.1.4. “A” 2422 Only 5. According to Com. “A” 2490.
    “B” 5159
33. 3.2. “A” 2895 According to Com. “A” 2991.
34. 3.3. “A” 2833 2. According to Com. “A” 2895.

CONSOLIDATED TEXT ORIGIN NORM
Sec. Point Paragraph Com. Annex Point Paragraph Observations
4. 4.1. Explicit criterion.
5. “A” 2422 only 6. According to Com. “A” 2490, with
interpretative clarification.
6. 6.1. “A” 2422 only 3.3. According to Com. “A” 2705 and
2694.
6. 6.2. “A” 2422 only 8.
6. 6.3. “A” 2422 only 9. According to Com. “A” 2648 and “A”
3112.
7. 7.1. “A” 2951 According to Com. “A” 3203.