Circular RUNOR 1 - 131. Custody of securities representing investments of pension and retirement funds

BANCO CENTRAL DE LA REPUBLICA ARGENTINA
__________________________________________________________________ COMUNICACION " A " 2235 18/08/94 __________________________________________________________________ TO FINANCIAL ENTITIES:
Ref.: Circular
RUNOR 1 - 131.
Custody of securities representing the investments of pension and retirement funds

We address you to inform you that the Superintendence of Pension and Retirement Fund Administrators and the Central Bank have jointly adopted the resolution transcribed below:

"- To clarify, regarding the joint resolution of the Superintendence of Pension and Retirement Fund Administrators and the Central Bank disseminated by Communication "A" 2230, the following aspects:

• section a)
  1. In the case of entities that are branches of foreign banks, the equity of the parent company will be considered, under the terms defined by the supervisory authority for the purpose of meeting the capital requirement, provided that it is subject to a consolidated supervision regime and that its rating reaches the minimum level established.
  2. The bond or guarantee must back globally all operations of the guaranteed entity up to the amount necessary to reach the minimum requirement.
  3. At least two ratings granted by any of the international agencies included in the list in point 2. of Communication "A" 2229 will be required.
  4. The determination of the requirement and verification of its compliance will be carried out based on the balances at the close of each month.
• section b)
  1. The securities pledged as collateral must be deposited in a special account opened for this purpose at Caja de Valores S.A. in the name of the entity and at the order of the Central Bank.

2. The determination of the amount to be invested in securities must be carried out based on the balances at the close of each month and deposited in the aforementioned account within the next 72 business hours, informing the Superintendence of Financial and Foreign Exchange Entities within the same term.
3. This requirement is independent of that established in section a), and therefore additional to what is provided there.

• section c)
  When it concerns branches of foreign entities or entities constituted in the country that are subsidiaries of foreign banks, subject to a consolidated supervision regime, ratings issued with respect to the parent company or controlling entity by at least two of the international agencies whose list is detailed in point 2. of Communication "A" 2229 will be admitted.
• section e)
  The requirement of "delivery versus payment" is excluded from observance for primary subscription operations of securities issued by the Nation that the administrators carry out directly or through entities authorized to act as custodians.
• section k)
  Regarding foreign banks, at least two ratings granted by any of the international agencies included in the list in point 2. of Communication "A" 2229 will be required.
  In all cases where the rating of foreign banks is required, it may be understood that it refers to the entity as such or to its debt instruments that do not have guarantees affecting the bank's assets. Entities wishing to assume the function of custodians of the securities representing the investments of pension and retirement funds must demonstrate to the Superintendence of Financial and Foreign Exchange Entities that they meet the required standards, informing them by note with a five business day advance prior to accepting a designation as custodian. Furthermore, they will have the same term to update the information on the requirements established in the case of any modification of the last information provided."

We greet you very attentively.
BANCO CENTRAL DE LA REPUBLICA ARGENTINA
Alfredo A. Besio Miguel A. Kiguel
Manager of Standards for General Manager
Financial Entities Area of Economics and Finance