Circular REMON 1 - 797: Monetary Regulation Operations. Central Bank Participation in Repo Markets with Application of Lebacs and Nobacs

"2005 - Year of Tribute to Antonio Berni"
BANCO CENTRAL DE LA REPUBLICA ARGENTINA
COMMUNICATION "A" 4399 05/08/2005
TO FINANCIAL ENTITIES:
Ref.: Circular
REMON 1 - 797
Monetary Regulation Operations. Participation of the Central Bank in Repo Markets with Application of Lebacs and Nobacs ______ We address you to inform you that the Central Bank will implement, starting August 8, 2005, within the operations provided for in Communication "A" 4143 and complementary communications, in addition to those provided for in the same, the following type of repo operations:

1.- The Central Bank will take passive repo operations, at the close of operations each day, with the application of Lebacs in pesos, under the following particular conditions:

1.1. The financial entity that adheres to this operation must instruct daily, until 18:00, the negotiation of a passive repo for the Central Bank for a one-day term for the balance of its current account in pesos that exceeds the amount reported by it on each date. The information to the Central Bank of this amount will be considered as an instruction for the negotiation of the repo, which will be maintained for subsequent days in case the entity does not report a new amount or its intention not to perform the operation. The settlement of the opening will be effected by debit in the current account and the crediting of the closing will proceed together with the remaining passive repo operations, starting from 16:00.

1.2. The Central Bank will determine the Lebacs to be delivered in repos, which will be credited to the CRYL account "own portfolio" of the entity, after verification of the debit of the pesos.

1.3. The rate to be applied to these repos will be that fixed by the Central Bank for passive repo operations for a one-day term.

1.4. Given the administrative burden that this operation will demand for the Central Bank, for each operation, a management commission equivalent to 33% of the earned interest will be charged to the entities, by debit in their current account.

1.5. For the remaining conditions, the general applicable regulations will apply.

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2.- The mechanism by which financial entities may issue the instruction referred to in point 1.1. will be informed via Communication "B".

3.- Entities wishing to participate in this operation must send a note according to the attached model in Annex.

We salute you very attentively.
BANCO CENTRAL DE LA REPUBLICA ARGENTINA
Luis Alberto D’ Orio Julio C. Siri
Manager of Operations with Titles and Foreign Exchange a/c Main Manager of Control and Settlement of Operations a/c

ANEXO

B.C.R.A.
Annex to
Com. “A”
4399
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To the Central Bank of the Republic Argentina:
Manager of Operations with Titles and Foreign Exchange In my capacity as (title in which representation is exercised)......of (name of the financial entity)...... I hereby declare that the financial entity I represent resolved to participate, insofar as market conditions are in our interest, in passive repo operations for that Central Bank with allocation of Lebacs in pesos, as provided in Communication "A" xxxx.

In view of the above, I declare on behalf of my represented entity to know and accept the conditions established in Communication "A" ...... of .08.05. as well as those established in Communication "A" 4143 of 21.05.2004 and complementary communications.

To this end, I agree that complementary or modifying provisions will be considered duly notified from their inclusion in the Central Bank's X-400 communication system, and that they will have effect on operations to be negotiated from the next business day or subsequent, depending on whether such inclusion has occurred before or after 16:00 hours of the day of issuance.

Likewise, I accept that any controversy resulting from the operation to which one adheres will be submitted exclusively to the Courts of the City of Buenos Aires that are part of the Federal Justice, waiving any other court, jurisdiction, or mechanism for dispute resolution that might correspond.

Finally, I request the Central Bank of the Republic Argentina on behalf of my represented entity, to proceed to credit and debit in your CRYL "own portfolio" accounts No. ...... the Lebacs resulting from the settlements of the operations negotiated, as well as to proceed to debit and credit in your current account in pesos in that Central Bank No. ......, the amounts that result as counterpart to the movements that occur in the CRYL, for identical operations negotiated, and the corresponding amounts for the management commission provided for in Communication "A" xxxx.

Signature (of official with signature registered in the Manager of Current Accounts of the BCRA):
Clarification: