1998-01-14 | A 2653Added · Updated
Financial entities must issue and place debt annually, with the first issuance due by 12.31.97 and subsequent ones spaced at least three months apart. Entities initiating authorization procedures by 10.01.97 must conclude placement by 03.31.98 to fulfill the initial requirement. Non-compliance triggers a one percentage point increase in minimum liquidity requirements starting January following the defect, and requires a regularization plan if the defect persists for more than six consecutive months.
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BANCO CENTRAL DE LA REPUBLICA ARGENTINA __________________________________________________________________ COMUNICACION " A " 2653 14/01/98 __________________________________________________________________ TO FINANCIAL ENTITIES:
Ref.: Circular
RUNOR 1 - 256.
OPASI 2 - 184.
Composition of liabilities from financial intermediation. Mandatory debt issuance. Complementary rules and modifications.
We address you to bring to your knowledge that this Institution adopted the following resolution:
"1. Establish that, for the purposes foreseen in the resolution disseminated through Communication "A" 2494, the requirement to have carried out the first debt issuance by 12.31.97 will be considered fulfilled, with respect to financial entities that before 10.01.97 had initiated before the National Securities Commission the procedures to obtain the authorization to place negotiable obligations through the public offering regime, provided that by 03.31.98 the placement is concluded.
The non-observance of the established deadline -03.31.98- will determine the application of the rules provided in point
5. of the cited resolution with effect from January 1998.
Order that, with respect to non-compliance with the obligation
to issue and place debt by 12.31.97, the plan of regularization and sanitation referred to in point 5.2. of the resolution disseminated by Communication "A" 2494, must be presented when the placement defect persists for more than six consecutive months.
Replace points 2., 5.1. and 5.2. of the resolution disseminated
by Communication "A" 2494, with the following:
"2. Periodicity.
The debt must be issued and placed annually.
The first issuance and placement must be carried out before 12.31.97.
Subsequent issuances and placements must be carried out within each calendar year and taking into account that between each annual mandatory issuance and placement a period of no less than three months must elapse."
"5.1. Total or partial placement defects -whatever their origin-, that occur on December 31 of each year with respect to the mandatory annual issuance and placement, will determine:
5.1.1. the automatic increase of one percentage point
of the minimum liquidity requirements, except for obligations with terms greater than 365 days, starting from the month of January following.
5.1.2. the increase in the minimum capital requirement, to
whose effect the result of the expression referred to in point 1.1. of Communication "A" 2136 will be multiplied by 1.05. This will be taken into account for the determination of the minimum capital requirement whose integration becomes due on the last day of the month of February following.
These higher requirements will expire automatically the month following that in which the entity regularizes the situation, by complying with the obligation that corresponds to the current year, prior demonstration of that circumstance to the Superintendence of Financial and Exchange Entities."
"5.2. To the extent that the placement defect persists for more than three consecutive months, the entity must present a plan of regularization and sanitation in the terms of article 34 of the Law of Financial Entities. The plan will be considered fulfilled when the entity demonstrates having issued and placed debt for the totality of the requirement corresponding to the year current."
"Likewise, it will be admitted that the compliance with the requirement is verified through the issuance of shares representing the social capital of the entity carried out within the regime of public offering of securities under the conditions foreseen in point 4.1., considering for such effect the effective amount of the integration. They cannot be holders of those shares during -at least- two years counted from the integration, natural and legal persons linked to the entity, according to the definitions contained in
Annex I to Communication "A" 2140 and in point 4.2. of
Chapter I of Circular OPRAC - 1. What is established in the first paragraph of point 5.3.
In the case of controlling entities of other local financial entity/entities -by holding a share package that directly grants control-, subject to the consolidated supervision regime (Communication "A" 2227 and complementary), it will be admitted that the issuance and placement of debt be carried out exclusively by the controlling entity, considering, for the purposes of determining its minimum amount, the total of the concepts included -according to point 1.- corresponding to the controlling entity and its/their subsidiary/ies."
We salute you very attentively.
BANCO CENTRAL DE LA REPUBLICA ARGENTINA Juan Carlos Isi Alfredo A. Besio Submanager of Rules for Financial Entities Manager of Rules for Financial Entities
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Amended 1 time · last 2001-02-16
Source: Banco Central de la Republica Argentina — original document · Summary generated with machine assistance and reviewed before publication; the authoritative text is the regulator's original document. How RegAlert works
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