Circular LISOL 1-982 CREFI 2-131: Minimum Capital of Financial Entities. Authorization and Composition of Capital of Financial Entities. Adjustments.

"Las Malvinas son argentinas"
COMUNICACIÓN “A” 7524 09/06/2022
TO FINANCIAL ENTITIES:
Ref.: Circular
LISOL 1-982,
CREFI 2-131:
Minimum Capital of Financial Entities.
Authorization and Composition of Capital of Financial Entities. Adjustments. ___________________________________________________________________________ We address you to deliver to you attached the sheets that, in replacement of those provided at the appropriate time, must be incorporated into the regulations referenced herein, based on the provisions disseminated through Communication “A” 7470. Likewise, we inform you that a normative clarification was incorporated in point 1.3 of the regulations on “Minimum Capital of Financial Entities”. Finally, we point out that on the website of this Institution www.bcra.gob.ar, by accessing “Financial System – LEGAL AND REGULATORY FRAMEWORK – Ordering and Summaries – Ordered Texts of General Regulation”, the modifications made with texts highlighted in special characters (strikethrough and bold) will be found. We salute you attentively. CENTRAL BANK OF THE ARGENTINE REPUBLIC Enrique C. Martin Darío C. Stefanelli Manager of Issuance of Regulations Principal Manager of Issuance and Regulatory Applications

ANNEX

-Index
6.5. Capital requirement for risk of positions in basic products –“commodities”–.
6.6. Capital requirement for risk of positions in options.
6.7. Calculation.
6.8. Policies and procedures for trading portfolio management.
6.9. Additional requirements to include positions in the trading portfolio.
6.10. Treatment for less liquid positions.
6.11. Responsibilities.
6.12. Internal audit.
Section 7. Minimum capital for operational risk.
7.1. Requirement.
7.2. Limit for entities belonging to groups B or C.
7.3. New entities.
Section 8. Computable net worth.
8.1. Determination.
8.2. Computable concepts.
8.3. Criteria related to computable concepts.
8.4. Deductible concepts.
8.5. Limits.
8.6. Capital contributions.
8.7. Procedure.
Section 9. Bases for compliance with regulations.
9.1. Individual basis.
9.2. Consolidated basis.
Section 10. External Credit Assessment Institutions (ECAI).
Section 11. Other provisions.
Section 12. Transitional provisions.
Correlation table.

B.C.R.A. ORDERED TEXT OF THE REGULATIONS ON “MINIMUM CAPITAL OF FINANCIAL ENTITIES” Version: 24th COMMUNICATION “A” 7524 Validity:
10/06/2022 Page 2

1.1. Requirement.
The minimum capital requirement that financial entities must have integrated will 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.
Depending on the type of entity, the following basic requirements will apply:
Banks Other financial entities
(except Cooperative Credit Unions)
-In millions of pesos 500 230
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 will be the computable net worth, which will 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 will 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 will 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-compliances reported by the entities.
The entity must fit within the requirement at the latest in the second month following that in which the non-compliance is registered, or present a regularization and sanitation plan within 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: 12th COMMUNICATION “A” 7524 Validity:
01/04/2022 Page 1

Financial entities in operation as of 1.4.22 must observe the basic capital requirement provided for in the table in point 1.2 from 31.3.24 onwards. Until that date, such entities in operation must apply the requirements arising from the following table, according to the period in question:

Period Banks Other financial entities
(except Cooperative Credit Unions)
-In millions of pesos
1.4.22 to 31.3.23 170 80
1.4.23 to 30.3.24 300 140

Financial entities in operation as of 1.4.22 that do not comply with the integration of the basic capital requirement as provided in the preceding paragraph, must submit to the Superintendence of Financial and Exchange Entities a compliance program within 20 calendar days following the close of the period in which such deficiency is registered, which must not exceed 30.6.24 to comply with the basic requirement.

B.C.R.A. MINIMUM CAPITAL OF FINANCIAL ENTITIES
Section 12. Transitional Provisions.
Version: 1st COMMUNICATION “A” 7524 Validity:
01/04/2022 Page 1

ORDERED TEXT ORIGIN OF THE PROVISIONS
OBSERVATIONS Section Point Paragraph Com. Cap./
Annex Point Paragraph
1.
1.1. “A” 2136 1. 1st 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 and 7524.
1.3. “A” 2136 2. 1st According to Com. “A” 2223 and 7524. Includes normative clarification.
1.4.1. “A” 2136 3.1.
1.4.2.1. “A” 3171 According to Com. “A” 3959.
i) “A” 2136 3.2. 2nd 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, 2nd 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. 3rd
2.4. “A” 5369 I
last “A” 5580 Includes normative clarification.
2.4.1. “A” 5369 I
2.4.2. “A” 5369 I
2.4.3. 1st “A” 5369 I
2nd “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.
1st “A” 5369 I
2nd “A” 5580 According to Com. “A” 5831, 6327 and 6639.
3rd “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”

ORDERED TEXT ORIGIN OF THE PROVISIONS
OBSERVATIONS Section Point Paragraph Com. Annex Cap. Section 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.
11.5. “A” 7018 5.
12. 1st “A” 7470 2. According to Com. “A” 7524.
2nd “A” 7470 3. According to Com. “A” 7524.

2.8. Initiation of activities.
2.8.1. Concept.
It is considered that a financial entity begins to operate on the day it starts providing its services to the public in the premises authorized for that purpose.

2.8.2. Deadline.
The initiation of activities of the entity must take place within a period of one year, counted from the date of the authorization granted. Upon expiration of that period without the authorization having occurred, the authorization to establish the entity will become void, and the proceedings will be archived without further procedure.

2.9. Conditions of the authorizations.
The authorizations granted will also be subject to compliance, within the period set for the start of their activities, with the following conditions:

2.9.1. Constitution of the company.
The constitutive act of the company must be celebrated within 30 calendar days from the date of the authorization granted.

2.9.2. Integration of minimum capital.
The minimum capital requirement established in the regulations on “Minimum Capital of Financial Entities” for the corresponding class of financial entity must be met. The minimum capital must be subscribed and integrated on the following occasions:

2.9.2.1. Upon the celebration of the constitutive act of the company, it must be fully subscribed and shareholders must integrate in cash no less than 25% of their respective subscriptions.

2.9.2.2. Within 60 calendar days following the date of the authorization granted, shareholders must integrate the rest of their respective subscriptions.
To initiate their activities, the entity must have integrated in cash the total of the minimum capital required at that time.

2.9.3. Other conditions.
With a notice of no less than 30 calendar days prior to the date scheduled for the initiation of activities, the following requirements must be met:

B.C.R.A. AUTHORIZATION AND COMPOSITION OF CAPITAL OF FINANCIAL ENTITIES
Section 2. New financial entities.
Version: 4th COMMUNICATION “A” 7524 Validity:
10/06/2022 Page 6

AUTHORIZATION AND COMPOSITION OF CAPITAL OF FINANCIAL ENTITIES ORDERED TEXT ORIGIN OF THE PROVISIONS OBSERVATIONS Sec. Point Par. Com. Annex Cap. Sec. Point Par. 2.
2.4.8.2. “A” 2241 I 1. 1.2.2.6. According to Com. “A” 5248,
5485, 5785, 6129 and
6304.
2.4.8.3. “A” 2241 I 1. 1.2.2.6. According to Com. “A” 5248,
5485, 5785, 6129 and
6304.
2.4.8.4. “A” 2241 I 1. 1.2.2.7. 1st According to Com. “A” 5485.
2.4.8.5. “A” 6290 1. According to Com. “A” 6304.
2.4.9. 1st “A” 2241 I 1. 1.2.2.8.
2.4.10. “A” 2241 I 1. 1.2.2.10. According to Com. “A” 6304.
2.4.11. “A” 2241 I 1. 1.6. 1st
“A” 2241 I 1. 1.6.2. 1st
2.4.11.1. “A” 2241 I 1. 1.6.2.1.
2.4.11.2. “A” 2241 I 1. 1.6.2.2. According to Com. “A” 6129.
2.4.11.3. “A” 2241 I 1. 1.6.2.3. According to Com. “A” 6129.
2.4.11.4. “A” 2241 I 1. 1.6.2.4.
2.4.11.5. “A” 2241 I 1. 1.6.2.5. According to Com. “A” 6129.
2.4.12. “A” 2241 I 1. 1.1.1. According to Com. “A” 5006 and
5133 and 6129.
2.5. “A” 2241 I 1. 1.2.1. According to Com. “A” 2940 and
7020.
2.6. “A” 2241 I 1. 1.1.1. 1st and 2nd
2.7. “A” 2241 I 1. 1.4.3. 1st According to Com. “A” 2940,
4368 and 7020.
2.8.1. “A” 2241 I 1. 1.4.3. last According to Com. “A” 2940,
4368.
2.8.2. “A” 2241 I 1. 1.4.3. 1st According to Com. “A” 2940,
4368 (pt. 4.) and 6129.
2.9. 1st “A” 2241 I 1. 1.4.1.
2.9.1. “A” 2241 I 1. 1.3.1. 1st According to Com. “A” 4368.
2.9.2. “A” 2241 I 1. 1.3.1. According to Com. “A” 4368 and
6129, 7470 and 7524.
2.9.3. “A” 2241 I 1. 1.4.1. According to Com. “A” 6129.
“A” 2241 I 1. 1.4.1.6.
2.9.3.1. “A” 2241 I 1. 1.4.1.1. According to Com. “A” 6129.
2.9.3.2. “A” 2241 I 1. 1.4.1.2. According to Com. “A” 6129 and
6304.
2.9.3.3. “A” 2241 I 1. 1.4.3. and
1.4.1.6.
According to Com. “A” 4368 and
6129.
2.9.3.4. “A” 2241 I 1. 1.4.1.3. According to Com. “A” 6129.
2.9.3.5. “A” 2241 I 1. 1.4.1.4.
2.9.3.6. “A” 2241 I 1. 1.6.3.
2.9.3.7. “A” 2241 I 1. 1.4.1.5.
2.9.3.8. “A” 4557 I 1. 1.4.1.8. According to Com. “A” 4649.
2.9.4. 1st “A” 2241 I 1. 1.3.2.
2.9.4.1. “A” 2241 I 1. 1.3.2.
2.9.4.2. 1st “A” 2241 I 1. 1.3.2.
last “A” 2241 I 1. 1.3.3.
2.9.5. “A” 2241 I 1. 1.4.1.6.