Circular OPRAC-1/508 and LISOL-1/360: Normative Treatment of Provincial Obligation Cancellation Letters (LECOP) and Treasury Letters for Cancellation of Obligations of the Province of Buenos Aires (Patacon)

BANCO CENTRAL DE LA REPUBLICA ARGENTINA

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COMMUNICATION "A" 3354 I 05/11/01

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To FINANCIAL ENTITIES:

Ref.: Circular OPRAC –1–508. LISOL -1-360
Provincial Obligation Cancellation Letters (LECOP) and Treasury Letters for Cancellation of Obligations of the Province of Buenos Aires (Patacon). Normative Treatment.

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

"1. Establish that the holding of Provincial Obligation Cancellation Letters (LECOP), issued in accordance with Decree 1004/01, shall be excluded from the provisions regarding limitations in matters of financing to the non-financial public sector.

2. Provide that the sum of holdings of Provincial Obligation Cancellation Letters (LECOP) and Treasury Letters for Cancellation of Obligations of the Province of Buenos Aires denominated "Patacon" shall not exceed 2.5% of computable equity responsibility.

Furthermore, as established in point 2 of the resolution disseminated through Communication "A" 3325, holdings of Patcons shall be imputed within the credit assistance margin established for operations with clients (point 3.2 of Annex II to Communication "A" 2140) corresponding to the Province of Buenos Aires. Holdings of LECOP will only observe the limit referred to in the first paragraph of this point, with no other effect in credit matters.

3. Establish that financial entities may receive LECOP -in the proportions and conditions they determine- as payment for personal loans, mortgages for housing, and pawn loans (for the acquisition of automobiles) -therefore not reaching the outstanding balance for credit cards-, always verifying that the holder of the obligation is an active or passive agent of the provincial states participating in the distribution operation of these titles and that they are original holders thereof.

4. Remind financial entities that, except in the cases foreseen in the preceding point 3, they may only receive the LECOP titles on account and order of third parties in demand custody accounts, therefore they shall not integrate the asset nor the liability of the statement of financial position of the entities."

We greet you very respectfully.

BANCO CENTRAL DE LA REPUBLICA ARGENTINA

Alfredo A. Besio José Rutman
Manager of Emission Principal Manager of of Norms Norms and Authorizations