Circular LISOL 1 - 622 CONAU 1 - 1089: Minimum Capital of Financial Entities. Distribution of Results. Modifications

COMMUNICATION “A” 5694 08/01/2015
TO FINANCIAL ENTITIES:
Ref.: Circular
LISOL 1 - 622
CONAU 1 - 1089
Minimum Capital of Financial Entities. Distribution of Results. Modifications.

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We address you to inform you that this Institution adopted the following resolution, which is transcribed below in its pertinent part:

“1. Incorporate, with effect from 1.1.16, following point 1.2. of the rules on “Minimum Capital of Financial Entities”, the following:
“1.X. Additional requirement for locally systemically important financial entities (D-SIBs).
Financial entities classified as locally systemically important by the Central Bank of the Republic of Argentina, shall observe an additional capital requirement equivalent to 1% of risk-weighted assets (RWA), determined in accordance with what is established in point 8.5.”

2. Incorporate as the last paragraph in point 1.3. of the rules on “Minimum Capital of Financial Entities” the following:
   “Financial entities classified as locally systemically important (D-SIBs) shall integrate the additional capital requirement exclusively with Common Equity Tier 1 (CET1) capital.”

3. Establish that minimum capital defects that derive exclusively from the introduction of the preceding additional capital requirement will not place the entity in question under point 1.5. Non-compliance with the rules on “Minimum Capital of Financial Entities”, with the exception of what is provided in subsection iii) of point 1.5.2.1.

4. Provide that, for the purposes of implementing what is established in point 1. of this communication, entities shall apply to that additional requirement the corresponding coefficient according to the following schedule:

January/March April/June July/September October/December 2016 0.075 0.15 0.225 0.3 2017 0.375 0.45 0.525 0.6 2018 0.675 0.75 0.825 0.9 From January 2019 1

5. Provide that, from 8.1.15 and for the purposes of verifying the solvency referred to in point 2.2. of the rules on “Distribution of Results”, the additional capital requirement referred to in point 1. of this communication shall be computed, and the gradual implementation schedule provided for in point 4. of this communication shall not apply.”

The sheets to be replaced in the referenced regulations will be disseminated in due course.
We greet you attentively.
CENTRAL BANK OF THE REPUBLIC OF ARGENTINA
Matías A. Gutiérrez Girault Jorge L. Rodríguez Manager of Issuance of Norms General Manager