Circular RUNOR 1 - 177: Regulation for the Operation of the Central Registry and Clearing of Public Debt Instruments (CRYL)

BANCO CENTRAL DE LA REPUBLICA ARGENTINA
__________________________________________________________________ COMUNICACION " A " 2426 11/04/96 __________________________________________________________________ TO FINANCIAL ENTITIES:
Ref.: Circular
RUNOR 1 - 177.
We address you and through you to all interested parties, to inform you that, in accordance with what is provided by Executive Decree No. 340/96, combined with the designation issued by the Secretariat of Finance, the CENTRAL REGISTRY AND CLEARING OF PUBLIC DEBT INSTRUMENTS ("CRYL") has been created, under the jurisdiction of this Central Bank.

Consequently, the scripless collective titles representing the PUBLIC DEBT INSTRUMENTS (IEP), whose primary placement is instructed by the Secretariat of Finance, will be deposited in custody at the Central Bank of the Argentine Republic.

The Central Registry and Clearing of Public Debt Instruments will have as its objective to enable counterparty accounts for the purpose of registering primary placement and transfers between accounts ordered by their holders.
These counterparty accounts, in which amortizations and the payment of income services will also be reflected, shall be called Registration Accounts.

REGULATION FOR THE OPERATION OF THE
CENTRAL REGISTRY AND CLEARING OF PUBLIC DEBT INSTRUMENTS "CRYL"

1. The Central Registry and Clearing of Public Debt Instruments, hereinafter referred to as "CRYL", is under the responsibility of the Central Bank of the Argentine Republic.

2. The CRYL, without thereby granting financing to the National Treasury or to any of the participants for the operations they carry out, shall be in charge of:
   2.1. The settlement and registration of the instructions it receives from the Secretariat of Finance regarding the primary placements of Public Debt Instruments "IEP", their amortization, and payment of income services.
   2.2. The registration of "FREE TRANSFER" (FT) and "FREE OF PAYMENT" (FOP) instructions under the conditions and in accordance with the procedural norms given below for each type of transfer, ordered by the holders of Registration Accounts.
   2.3. The settlement and registration of "DELIVERY VERSUS PAYMENT" (DVP) instructions, which condition the transfer between Registration Accounts to a simultaneous payment, and of "FREE OF DELIVERY AND PAYMENT" (FD&P) instructions, which consider the transfer of IEP and the payment independently, in accordance with the procedures indicated below.

3. Agents participating in self-regulated markets that do not have their own clearing systems, securities markets, and Caja de Valores S.A. are enabled to hold Registration Accounts.
   To this end, interested parties must submit a note requesting the opening of Registration Account(s).

4. Simultaneously with this enabling, for the purpose of facilitating the settlement of "DVP" and "FD&P" operations, the Central Bank will proceed to open Restricted Activity Current Accounts in the name of the holders of Registration Accounts who are not financial entities as defined by Law No. 21.526.
   The restricted activity shall consist of:
   4.1. They will not be enabled to issue checkbooks to their holders.
   4.2. They will not participate in the clearing of checks and securities in the Clearing Houses.
   4.3. They will not participate in active and passive swap operations with the Central Bank.
   Consequently, the Restricted Use Current Accounts shall be enabled to:
   a) accept credits and debits that are not related to the restrictions indicated in points 4.2. and 4.3. above. b) accept deposits in pesos and US dollars via transfer to correspondent banks of the Central Bank authorized for this purpose. c) pay and receive funds via transfers between current accounts located at the Central Bank. d) request transfer of US dollars over New York placement.

5. Each CRYL participant will have Registration Accounts based on who are the holders of the registered IEP:
   5.1. Own Portfolio: The number corresponding to this Registration Account will be formed by the Current Account number (5 digits) followed by "01", totaling 7 digits, and will be enabled for all Agents participating in the CRYL.
   5.2. Custody Portfolio: The number corresponding to this Registration Account will be formed by the Current Account number followed by "02", and will be enabled for Banking Entities and Financial Companies to globally register their clients' holdings.
   Additionally, banking entities that meet the requirements established by Communication "A" 2237 of 25.08.94 may request the opening of special currency accounts associated with special Registration Accounts, in their name, for the purpose of individually registering the transactions of their custodied clients, independently of the set operating in the "02" Registration Account. For these special cases, a limited quantity of account sets will be enabled, as allowed by the operational possibilities of the systems in activity. The main numbering of each pair of accounts will be the same, with the addition of "99" for the Registration Account. Both special accounts, whose holder will always be the bank and will be used exclusively to record movements of individual custodied clients, will be moved through any of the instruments processed in the CRYL. In the case of special currency accounts, transfers instructed via formula 4090 will also be accepted, in accordance with the instructions that will be given to each applicant at the time of opening. Entities must have an express declaration from their custodied clients, whose holdings are registered both in the global "02" account and in the individual ones, indicating that their IEP are registered with the custodian entity and are not transferred to Caja de Valores S.A., under the terms of Law 20.643 - Art. 33 and PEN Decree 659/74 - Art. 14. The balances registered and the movements carried out by custodian entities in their global Registration Accounts ending in "02" and special accounts for individual use, must be consistent with the analytical registrations in the sub-accounts opened for each client who maintains their holdings with the entity, according to the corresponding supporting documentation. The analytical records must be kept by species and client. At least quarterly, the custodian financial entity must send each client an account summary in which, at a minimum, the movements and balances by species registered in the period under report are recorded.
   5.3. Transitional Portfolio: This is a bridge account of transitional use, which has the objective of receiving IEP from clients who are deposited in Caja de Valores S.A. and must be settled by the Agent through any of the instruments enabled by the CRYL, or to temporarily receive IEP for clients, for the settlement of the same instruments, destined for Caja de Valores S.A.
   The number corresponding to this Registration Account will be formed by the Current Account number followed by "03" and will be enabled for all Agents not included in point 5.2., including these banking entities, when their clients have not expressly opted to maintain their IEP holdings under the custody of the same.
   5.4. Institutionalized Depositories: The number corresponding to this Registration Account will be formed by the Current Account numbers followed by "04", and will be enabled for general use by the Securities Markets and Caja de Valores S.A.

Registration Accounts opened in the name of the same agent will function independently. The transfer of IEP between Accounts of the same Agent must be carried out through the presentation of FT instructions.

6. Registration accounts will show:
   6.1. In Residual Nominal Values (RNV), the movements and balances by species of Public Debt Instruments.
   6.2. In pesos and foreign currency, the credits for payment of amortization and income, and simultaneously, the debits indicating the automatic transfer of said concepts to the Current Account of the holder of the Registration Account.
   The payment of amortization and income services will be made at the opening of the operations, being available in Current Accounts prior to the settlement of Primary Placements and the remaining instructions.

7. Transfers between Agents will adhere to the MODALITIES DELIVERY VERSUS PAYMENT (DVP Model), FREE OF DELIVERY AND PAYMENT (FD&P Model), FREE OF PAYMENT (FOP Model), and FREE TRANSFER (FT Model), according to the specifications detailed below.
   As a general rule, all forms must be presented completely integrated, with clear text without erasures or amendments, and signed in accordance with the specifications in the Signatures Register for fund availability of entities at this Central Bank.
   Bilateral transactions must be settled, at a minimum, within 24 hours, and unilateral transactions in all cases will be settled on the date of presentation.
   Bilateral instructions to be settled at 48 and 72 hours will be received by the CRYL until 12:00 hours on the day following the agreement and from 14:00 hours on the same day, participants will be informed about instructions that did not pass the matching control (prematching). When it comes to instructions to be settled at 24 hours, they must be presented until 16:00 hours and the result of the matching control (prematching) will be informed from 17:30. Bilateral instructions must indicate whether it is a Market Operation or a Custody Operation. It will only be appropriate to inform "Operation Class: Custody" when the bilateral instruction does not correspond to the settlement of a market operation and at least one of the intervening Agents reports a Registration Account ending in "02" or a Registration Account for individual use of custodied clients. In case of non-compliance due to insufficient balance in Current Account or Registration Account, it will be reported to the Securities Commission and the Market in which they act, with the relevant specifications, for the purposes they deem appropriate. Notwithstanding being an instruction "Operation Class: Custody" and moving the countervalue in currency in the special Current Account opened in the name of the Agent for special use of the Custodied, the corresponding tariffs, including those originating from non-compliance, will be debited in the Official Current Account of the Banking Entity Agent. The presentation of printed forms by the holders of Registration Accounts is authorized, provided they respect the "A4" size and the distribution of the contained information. Bilateral models may be divided by Registration Account into two prints, one instruction informing purchases or deposits and another informing sales or deliveries. In these cases, the header of the model must be repeated.

7.1. INSTRUCTIONS PARTICIPATING IN THE CLEARING AND SETTLEMENT PROCESS.
7.1.1. "DELIVERY VERSUS PAYMENT" TRANSFERS (DVP Model).
"DELIVERY VERSUS PAYMENT" (DVP Model) transfers will be fulfilled if there is sufficient balance in the Current Account and in the Registration Account. In case one or both accounts do not have sufficient balance, the instruction, both in currency and in IEP, will not be fulfilled. Unfulfilled instructions will be included by the CRYL in subsequent settlements, until the last one of the next business day. The account accepting the debit will be affected until the last settlement of the next business day, unless there is an order from its holder, via a note with sufficient signature addressed to the CRYL, withdrawing the instruction from the settlement processes. "DVP" instructions are bilateral, so they must be issued by the holders of both Registration Accounts and Current Accounts involved, through the integration of the form attached as ANNEX "A". Primary Placements are exempt from this requirement, which will only be reported by the Secretariat of Finance.

7.1.2. "FREE OF DELIVERY AND PAYMENT" TRANSFERS (FD&P Model).
"FREE OF DELIVERY AND PAYMENT" (FD&P Model) transfers will be fulfilled on the settlement date, if there is sufficient balance in the Current Account and in the Registration Account. In case the balance of both accounts or any of them turns out to be insufficient, the instruction will not be fulfilled or will be fulfilled for the part that accepts the debit. The unfulfilled instruction (currency or IEP, or both accounts) will be included by the CRYL in subsequent settlements, until the last one of the next business day, unless there is an order from the holder of the account that accepted the debit, via a note with sufficient signature addressed to the CRYL, withdrawing the pending settlement instruction from the counterparty. "FD&P" instructions are bilateral, so they must be issued by the holders of both Registration Accounts and Current Accounts involved, through the integration of the form attached as ANNEX "A".

7.1.3. "FREE OF PAYMENT" TRANSFERS (FOP Model).
The "FOP" instruction instructs only transfers of IEP, independent of its countervalue in currency.
They will be fulfilled if there is sufficient balance to accept the debit in the Registration Account of the ordering holder. If insufficient balance is verified at the time of settlement, the instruction will be included by the CRYL in subsequent settlements, until the last one of the next business day, unless there is an order from the holder of the account to be credited, via a note with sufficient signature addressed to the CRYL, withdrawing the instruction from the settlement processes. "FOP" instructions are bilateral, so they must be issued by the holders of the buyer and seller Registration Accounts, through the presentation of the form attached as ANNEX "B".

7.1.4. "FREE BILATERAL" TRANSFERS (FT - Bilateral Model).
The "FT - Bilateral" instruction instructs only transfers of IEP.
They will be fulfilled if there is sufficient balance to accept the debit in the Registration Account of the ordering holder. If insufficient balance is verified at the time of settlement, the instruction will be included by the CRYL in subsequent settlements, until the last one of the next business day, unless there is an order from the holder of the account to be credited, via a note with sufficient signature addressed to the CRYL, withdrawing the instruction from the settlement processes. "FT - Bilateral" instructions must be issued by the holders of the receiving and cedent Registration Accounts, through the presentation of the form attached as ANNEX "B".

7.1.5. MATCHING CONTROL AND SETTLEMENT OF "DELIVERY VERSUS PAYMENT" (DVP Model), "FREE OF DELIVERY AND PAYMENT" (FD&P Model), "FREE OF PAYMENT" (FOP Model), and "FREE BILATERAL" (FT - Bilateral Model) TRANSFERS.
7.1.5.1. Matching Control (Prematching).
It will be carried out through the total confrontation of the information received from both parties. For this purpose, unique records will be constructed formed by the following data, which must be totally coincident:

• Presentation Model.
• Agreement Date (DVP; FD&P and FOP) or Presentation Date (FT-Bilateral).
• Settlement Date.
• Number of Seller or Cedent Registration Account.
• Number of Buyer or Receptor Registration Account.
• Operation Class (Market or Custody).
• Code of the involved species.
• Quantity of Residual Nominal Values.
• Amount of the countervalue in currency (Except for FOP and FT - Bilateral instructions)
  If errors are detected in the matching control, the observed instructions will be replaced by the party or parties that committed the error. For this purpose, a replacement instruction (ANNEX "A" or "B" - Replacement Option) must be presented, completely integrated, maintaining the same agreement and settlement date as the original, until 16:00 hours on the day the lack of coincidence is reported. Replacements of instructions observed in the second daily matching control, which will be the first for instructions settled at 24 hours, will be received until 17:30 hours and if the lack of coincidence persists, corrections of instructions settled the next day will be received until 19:00 hours. If the lack of coincidence persists, the instruction will not be presented in the settlement processes to be carried out on the next business day. If insistence on maintaining the instruction continues, it must be presented again by both parties for another settlement date.

7.1.5.2. Settlement Process.
First, a preliminary multilateral clearing will be carried out to obtain consolidated amounts (debits minus credits), for the set of "DELIVERY VERSUS PAYMENT" (DVP Model), "FREE OF DELIVERY AND PAYMENT" (FD&P Model), "FREE OF PAYMENT" (FOP Model), and "FREE BILATERAL TRANSFER" (FT - Bilateral Model) instructions, enabled to be settled on the date having passed the matching control (prematching). These amounts will be approximated to the balances registered by each Agent in the Current Account and in each species in the Registration Account, as appropriate. If all instructed movements are accepted, they will be accounted for analytically. Non-acceptance of debits in Current and/or Registration Accounts due to insufficient balance will result in instructions that, in the opinion of the CRYL, cause the least "cascade" effect being temporarily withdrawn from the clearing, making the greatest efforts to have "DVP" instructions and those unfulfilled in previous processes withdrawn last. With the instructions that remain, a second preliminary clearing will be carried out to know the secondary effects from the withdrawal of instructions. Instructions observed due to insufficient balance in Current and/or Registration Accounts in the first preliminary clearing and instructions that might be affected by the first step of the "cascade" effect in the second preliminary clearing, will be reported to interested parties so they adopt the measures they deem appropriate to cover the accounts whose insufficient balance causes the rejections. This information will be supplied to interested entities from 9:00 hours and until 12:00 hours, transfers "Conformed" (FT-Conformed Model) of IEP and currency operations (Form. 4090, cash deposit in Current Account, active swap operations for the Central Bank, etc.) aimed at credits for accounts with insufficient balance will be received and processed. From then on, the consolidated amounts are approximated again and if accepted in their entirety, the accounting entry of the received instructions at the analytical level will proceed. Otherwise, instructions that, in the opinion of the CRYL, produce the least "cascade" effect, in terms of the quantity of instructions that can be reached, will be rejected, making the greatest efforts to have "DVP" instructions and those unfulfilled in previous processes withdrawn last. During the clearing procedure, Current and Registration accounts will be affected by debits in process of execution. The accepted part of DVP operations that could not be fulfilled will remain affected in the same account until the instruction is settled, withdrawn, or its definitive rejection proceeds. Accepted instructions will be available at the close of daily settlement. Instructions that are not accepted and that maintain validity because they have not been withdrawn by the holders of the affected accounts, will be processed again at 15:30 hours, based on the balances available in Current and Registration
Accounts at that time. Transfers that were not accepted at maturity will be presented in the settlement process at 12:00 hours on the next business day. If they maintain their unfulfilled condition, they will be incorporated into subsequent processes. Instructions not accepted at 15:30 hours on the day following their maturity will be definitively rejected. Instructions unfulfilled on the maturity date and those maintaining this situation at 15:30 hours on the next business day, will be reported to the National Securities Commission and the Self-Regulated Entity that is interested. Primary placements against Current Account balance or deposit of US dollars in foreign accounts, will be settled at the times established in the issuance conditions, independent of the state of the instruction settlement process of the date. In all cases, the primary placement will be credited in the "01" Registration Account of the Agent, who must present the next business day after the award, the corresponding transfers (FT Models) for the Registration Accounts that correspond. These transfers will form part of the primary placement.

7.2. INSTRUCTIONS REGISTERED OUTSIDE THE DAILY COMPENSATION PROCESS.
The "FREE TRANSFERS" (FT Model) instructions direct movements of IEP between Registration Accounts and will be registered outside the daily compensation process, except when they have the "Conformed" characteristic and are intended to cover insufficient balances in Registration Accounts to allow for such compensation.

7.2.1. CONFORMED FREE TRANSFER (FT-Conformada Model)
It is an instruction (ANEXO "C" form) of unit use that will be received by the CRYL during the hours of 13:00 to 18:30, and, after verifying the signatures of the holders and confirming the balance of the cedent Registration Account, it will be settled at the moment of presentation. Rejections due to incorrect signatures and/or insufficient balance in the Registration Account, as well as the confirmation of the instructed transfer, will be communicated at the moment of receipt of the instruction to the person presenting it. The confirmation or rejection will be formalized by delivering to the presenter a photocopy of the paper form enabled for this purpose, with the corresponding record by the CRYL authorities. Presentations of FT-Conformado intended to cover insufficient balances in Registration Accounts to enable the settlement of bilateral instructions, will be processed during the hours of 10:00 to 12:00.

7.2.2. FREE TRANSFER (FT Model).
It is an instruction (ANEXO "D" form) of unilateral and multiple use that must be issued by the holder of the cedent account. In the case of credits for Registration Accounts with termination "02" (Third-party Holdings), it will be the obligation of the orderer to inform the holder of the receiving account of the final beneficiary of the transfer, according to the methodology agreed upon by the holders, except when it concerns movements between accounts of the same holder. "FT" instructions will be received during the hours of 13:00 to 18:30 and will be settled at the close of daily operations. Rejections due to incorrect signature will be informed as they are verified, with signatories able to overcome the situation at the CRYL headquarters until 19:30 hours. Rejections due to insufficient balance will be informed at the first hour of the next business day.

7.3. TRANSFERS WITH THE CAJA DE VALORES S.A.

7.3.1. TRANSFERS FOR ACCOUNTS REGISTERED AT THE CAJA DE VALORES S.A. (FT-Conformada Model)
Presentations of FT-Conformada transfers (ANEXO "C") for the credit of accounts/clients registered at the Caja de Valores S.A. will be received during the hours of 13:00 to 17:30 and will be taken in firm, crediting the Registration Account of said Box, provided there is no rejection on its part. To this effect, two copies certified by the CRYL of the instructions entered will be sent to said Box, receiving one of them with its acceptance or rejection. The instruction to be delivered to the Caja de Valores S.A. will be the same one presented by the orderer of the transfer, so there will be no responsibilities for the CRYL regarding errors in the mention of the account/client number to be credited.

7.3.2. INSTRUCTIONS FROM THE CAJA DE VALORES S.A. FOR THE CREDIT OF ACCOUNTS REGISTERED AT THE CRYL (FT-Conformada Model).
Transfers for the credit of Registration Accounts registered at the CRYL must be instructed using the FT-Conformada format (ANEXO "C") and will be received during the hours of 13:00 to 18:30. If the number of the destination Registration Account is accepted, it will be taken in firm by debiting the Registration Account of said Box.

8. INFORMATION REGIME.
   The CRYL will deliver to the holders of the Registration Accounts:
   8.1. Daily, a detail of what was registered on the previous business day, by account and species, according to the format attached as ANEXO "E".
   8.2. Monthly, a detail of what was registered during the entire month, according to the format attached as ANEXO "F".
   8.3. Additionally, Agents may request other types of information at a charge.

9. FEES.
   The fees that will be charged for this operation are the following:

Concept	Amount	Parties
1. Transfer Models FT - Bilateral and FOP	3.-	2 parties
2. Transfer Model FT	3.-	Orderer
3. FT-Conformada Transfers (CRYL Accounts)	5.-	"
4. FT-Conformada Transfers (Caja de Valores Accounts)	7.-	"
5. DVP and FD&P Model Transfers	10.-	2 parties
6. Non-compliance Models DVP; FOP and FT-Bilateral
- First non-compliance 12:00 hs. of day T+3	100.-	Non-complier
- Second non-compliance 15:30 hs. of day T+3	100.-	"
- Third non-compliance 12:00 hs. of day T+4	150.-	"
- Fourth non-compliance 15:30 hs. of day T+4	150.-	"
7. Non-compliance Model FD&P
- First, second and third non-compliance	10.- each	Non-complier
- Fourth non-compliance	470.-	"
8. Non-compliance Model FT-Conformada	10.-
9. Non-compliance Model FT	5.-
10. General Maintenance of Registration Accounts (From this fee, the corresponding Transfers made during the current month will be deducted)	Monthly 1.000.-
11. Maintenance of Special Registration Accounts in Currency and IEP for custody transactions - The pair	100.-
12. Additional request for account statements - The sheet	0,20
13. Settlement of primary placement without charge.
14. Settlement of amortization and income without charge.
15. Custody of holdings without charge.

10. The presentation of instructions must be made at the CRYL premises, located at the Open Market Management, Central Building, 3rd Floor, Office 304. The opening of Current Accounts with restricted activity and special accounts for use of custodies must be requested at the Current Accounts and Securities Compensation Management.

We salute you very attentively.
Raúl O. Planes Hector O. Biondo
Open Market Manager General Submanager of Operations

The indicated annexes can be picked up at the General Secretariat - Entrance Desk of this Central Bank.