“2004 - Year of the Argentine Antarctica”
BANCO CENTRAL DE LA REPÚBLICA ARGENTINA
COMMUNICATION “A” 4247 26/11/2004
TO FINANCIAL ENTITIES:
Ref.: Circular
SINAP 1 - 3
Electronic Compensation Chambers -
Guarantees.
____________________________________________________________ We address you to communicate the provisions that will govern, from the first business day of the month following the issuance of this communication, regarding the establishment of guarantees in favor of Electronic Compensation Chambers. In this sense, the mechanism for the creation and use of such guarantees has been defined, as regulated by the Annex to this communication. Communications “A” 2610, “A” 2683, “A” 2721, point 2 section II of communication “A” 2741, “A” 2901, “A” 2929, and Communication “B” 7188 are hereby rendered void. We salute you very attentively. BANCO CENTRAL DE LA REPUBLICA ARGENTINA Nicolás Delle Grazie Julio C. Siri Deputy Manager of Payment Systems Manager of Payment and Operations System

ANEXO

B.C.R.A. Electronic Compensation Chambers - Guarantees.
Annex to
Com. “A”
4247
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ANEXO
High-Value Electronic Compensation Chambers (CEC-AV) and Low-Value Electronic Compensation Chambers (CEC-BV) are responsible for the settlement and compensation of the final positions of entities regulated by the Financial Entities Law and are an integral part of the National Payments System. The coverage of net debtor balances arising from their activity must be guaranteed, avoiding risks that could eventually affect the entire system. There will be a “Chambers Committee” responsible for analyzing the situation of entities that at 12:00 hours each day have a net debtor balance exceeding the net amount of the guarantee constituted in accordance with these norms and have not made a cash deposit for the difference in the CEC operating account, as well as for cases where guarantee amounts settled the previous day have not been replenished or increases in said guarantees have not been requested. The establishment of Guarantees that cover abnormalities in processes and the procedure for their eventual execution must comply with the regulations established below:

I - HIGH-VALUE CHAMBER
High-Value Electronic Compensation Chambers (CEC-AV) will accept transfer operations between entities, presentation of documents for collection, and electronic banking, up to the amount covering the guarantee constituted in their favor at the Central Bank, by mutual agreement between the parties. Insufficient guarantee will limit the financial entity's activity, without giving rise to consequences for third parties.

1. Calculation of guarantees.
   High-Value Electronic Compensation Chambers (CEC-AV) must have, for each class of currency authorized by the Central Bank, guarantees constituted by user entities, sufficient to cover the respective net debtor balances emerging from ordered and received transactions. The amount of the guarantees will be established by mutual agreement between the entities and the CEC-AV, and may never be lower than the day's net debtor compensation balance.

2. Processing of transfers
   CEC-AV will process transfers received from each entity normally as long as the net debtor balance remains below the guarantee, keeping uncovered transactions in a waiting queue.
   Entities must transfer through the MEP to the CEC-AV account at the Central Bank the funds to cover the net debtor balance, in order to increase the limit to process such operations.

3. Settlement Procedure.
   a) The C.E.C. must establish the final net debtor balance of each entity, which will be immediately reported to them. Entities must transfer within the

B.C.R.A. Electronic Compensation Chambers - Guarantees.
Annex to
Com. “A”
4247
-2- subsequent thirty minutes the corresponding amount for its coverage, crediting the C.E.C. account at the B.C.R.A. through the MEP.
The information sent to the entities will be sent by the Electronic Chambers to the Payment and Operations System Management, Current Accounts Deputy Management, through the usual communication channels. b) Between seventy-five and forty-five minutes prior to the MEP closing, the C.E.C. will proceed to liquidate the guarantees of entities that have not covered their debtor balance. c) The C.E.C. may credit up to half an hour before the M.E.P. closing, the net amounts resulting to creditor entities. If necessary, the C.E.C. may request through a note via X-400 to the address “BCRA-ADMINISTRACION M.E.P.”, the postponement of the M.E.P. closing for periods of half an hour, the cost of which will be $ 500.- for each of the first three requested; from the fourth period, this cost is fixed at $ 1.000.-. The sum corresponding to this concept will be reported by the MEP Administration, which must be credited by the C.E.C. in account No. 900 of this Central Bank on the business day following its notification. This sum may be transferred by the C.E.C. to the entities that motivated the request for time extension. Given that such decision affects accounting and data processing systems, its activation may not exceed 23:00 hours. In case the M.E.P. closing postponement is requested, the schedules established in subsections a), b) and c) above will be shifted and automatically adjusted to the new extended schedule. Guarantees registered at the time of suspension of a Financial Entity by the Central Bank, unless there is a judicial requirement, will be available to the CEC for a term of 5 business days, to complete the compensation cycle of operations entered prior to, originating in:

• Electronic transfers,
• Values presented for collection,
  After the deadline for executing compensations in progress at the time of the entity's suspension or revocation is met, the Central Bank will proceed to transfer the remaining balance of the Special Guarantee Account to the entity's current account.

II - LOW-VALUE CHAMBER
Low-Value Electronic Compensation Chambers (CEC-BV) will accept check compensation operations, direct debits, transfers for supplier payments, transfers between clients or third parties, salary payment transfers, electronic banking, other compensable documents, and consumption vouchers.

1. Calculation of Guarantees.
Financial Entities must permanently maintain constituted at the Central Bank, in favor of CEC-BV, guarantees for each class of currency authorized by the Central Bank that are determined monthly, in order to cover the net debtor balances resulting daily from check compensation processes, other compensable documents, direct debits, transfers for supplier payments, transfers between clients or third parties. The amount of the guarantees will be determined by CEC-BV based on the net results recorded daily by each financial entity, considering all operations, and will be valid for one calendar month. The guarantee to be constituted will be the simple arithmetic average of the five largest debtor balances of the quarter. The quarter will comprise the period from the 16th or next business day of the fourth month prior to the application month until the 15th or previous business day of the previous month. To accommodate cases of entities that do not present a minimum of five debtor balances in a quarter, the following rule will apply for the calculation:

• one fifth of the sum of the four unique daily net debtor balances, or
• one fourth of the sum of the three unique daily net debtor balances, or
• one third of the sum of the two unique daily net debtor balances, or
• half of the single daily net debtor balance, or
• in case the entity does not register daily net debtor balances during the quarter,
  50% of the last calculated guarantee, or
• in case the entity does not register net debtor balances during the period considered for the calculation of the preceding month, 25% of the last calculated guarantee.
• In no case will the guarantee be lower than 25% of the last calculated guarantee.
• In the case of a new financial entity or one that has not registered general debtor balances during the periods considered for the calculation of the three preceding months, the guarantee will be constituted as follows:
  i) during the first three calendar months of operations, whether the first is complete or partial, the guarantee must be constituted from and by the amount of the first daily net debtor balance registered, corresponding to its permanent adjustment to the larger balances that arise during the course of the month. ii) for the fourth month, even if there is no record of a complete quarter, the general regulation will apply. The Central Bank, at the request of the CEC-VB to which an entity is affiliated, may exclude from the calculation certain dates and/or certain operations of the compensation products, when extraordinary circumstances have distorted the result of daily compensation. It may also increase or decrease guarantees when circumstances making it necessary to defend the compensation system are verified. Equal measures may be dictated on a general basis. The request must be made by note addressed to the Payment and Operations System Management, Payment Systems Deputy Management, at least five business days prior to the application of the guarantee, attaching the detail of the net balance resulting from the compensation of each product, differentiated by type and class of currency, indicating which date and/or operations are requested to be excluded from the calculation. The resulting guarantee amounts must be reported to member entities, until the 20th or next business day of the month prior to its application, and to the Payment and Operations System Management of the Central Bank, through the usual communication channels, on the first business day of the month of its application. Once the monthly calculation of the guarantee amount is established, the procedure will proceed as follows:
  a. If the new guarantee amount is higher than the previous one, entities must deposit the resulting difference, until 12:00 hours of the first business day of the month to be guaranteed.
  If the aforementioned is not fulfilled, the C.E.C. will report this situation to the Payment Systems Deputy Management. b. If the new amount is lower than the already constituted guarantee, the C.E.C. must refund the resulting excess to the entities requesting it, on the first business day of the month to be guaranteed or during the month of validity of the guarantee constituted in excess.
  c. The C.E.C. may agree among themselves and with entities to establish amounts higher than the calculated guarantees, according to the procedure stated.
  There will be a Mutualized Guarantee Fund that will operate independently of the Guarantee established by this, this fund will be available for the coverage of compensations and will be constituted by a contribution of $ 15,000.- per entity operating in the system. When the Mutualized Guarantee Fund is used to enable an Abnormal Liquidation, the involved Entity must replenish it the next business day before 12:00. Otherwise, the Specialized Supervision Management (Superintendence of Financial and Exchange Entities) will dispose of the actions to be taken with the Entity that has failed to replenish. In case the fund amount is insufficient to cover the affected entities, it will not be applied to any of the entities.

2. Settlement Procedure.
1. Electronic Compensation Chambers will establish at the first hour of each day the net balances per entity of the products presented for compensation (Direct Debits and Checks). The information must be sent daily to the Current Accounts and Payment Systems Deputy Managements of the Central Bank.
2. If the net debtor balance is greater than the constituted guarantee, the entity must increase it to its extent before 12:00 of the settlement day, by transfer to the credit of the Chamber's operating account, as an advance payment of the compensation.
3. If the aforementioned is not fulfilled, an abnormal liquidation case will occur, the procedures for which are detailed in point 3.
4. With all entities' positions covered by the constituted guarantees or deposits in the CEC-BV operating account, processes will continue normally.
5. Entities will transmit to CEC-BV the files of retail transfers (supplier payments and between clients or third parties).
6. CEC-BV will make a new comparison of debtor balances against the constituted guarantees, including the final positions of Direct Debit and Retail Transfers positions, along with the balances resulting from the check presentation process, the sum of which will be compared against the guarantee constituted by each entity plus the payments that have been verified so far.
7. If from the controls performed no entities with a debtor balance greater than the guarantee balance plus the payments they could have made are verified, the process will continue normally until completing the check rejection session.
8. If from the controls performed entities with a debtor balance greater than the guarantee balance, plus the payments they could have made, are verified, the CEC will request the corresponding coverage; if not fulfilled, the procedure will proceed according to the abnormal liquidation procedures detailed in point 3.
9. All entities must cancel their debtor balances before 30 minutes before the MEP closing, by transfers processed through the System.
If the entity does not pay, or pays partially its debtor balance, the CEC-VB will proceed to dispose of the necessary guarantee by instruction to the Current Accounts Deputy Management. The liquidation of the guarantee will be carried out immediately after receiving the aforementioned instruction.
10. The net creditor balance by class of currency, resulting from considering the products checks and other compensable documents, retail transfers, and direct debits, will finally be credited to the entities by the C.E.C. through MEP transfer to the credit of their accounts at the BCRA, according to the class of currency involved, after receiving the total net debtor balances.
11. If new debtor balances arise from the “rejected checks” session and one or more entities do not have balances in the CEC operating account and/or sufficient guarantees; CEC-VB may request the Chambers Committee to apply the Mutualized Guarantee Fund. This operation will only be carried out if the total Mutualized Guarantee Fund is sufficient to cover the entire registered deficiency. This resource cannot be used individually when there are deficiencies that in total exceed it.
12. In case it is necessary to keep the MEP open for reasons specific to each CEC-VB, these may request it through a note via X-400 to the address “BCRA-ADMINISTRACION M.E.P.”. Given that such decision affects accounting and data processing systems, its activation may not exceed 23:00. The system will remain open for periods of half an hour, the cost of which will be $ 500.- for each of the first three requested; from the fourth period, this cost is fixed at $ 1.000.-. The corresponding sum, which will be calculated and reported to CEC-VB by the Current Accounts Deputy Management, must be credited in account No. 900 of this Central Bank on the business day following its notification. This sum may be transferred by CEC-VB to the entities that motivated the request for time extension.
13. Taking into account the different circumstances that may affect daily settlement, entities must have authorized personnel to cover net debtor balances of compensation until the daily operation has ended. If there is a situation of lack of coverage of debtor balance by any entity, such personnel must remain, prior to notification by CEC-VB, until the same way informs the total closure of the day's operations.

3. Abnormal Liquidation Procedure.
If an Entity has a debtor balance greater than the guarantees and until 12:00 hours has not covered the difference, CEC-BV will notify the Payment and Operations System Management, which may convene the Chambers Committee, who will evaluate the steps to follow. For the determination of these steps, the following guidelines will be taken into consideration:
a. The debtor Entity will be requested to reliably inform of the rejections to be made in the different products for normal reasons. b. In the case that the reported rejections, without prejudice to subsequent verifications decided by the Chambers Committee, reduce the debtor balance to make it compatible with the constituted guarantee and any deposits made by the Entity, the CEC will proceed to continue with the normal liquidation process.
c. If at 14:00 hours the debtor Entity registers a debtor balance higher than the balance constituted in guarantee, CEC-BV may dispose of the temporary suspension of the processes for determining balances of the Direct Debit product, informing participating entities that abnormal liquidation has entered.
d. If at the close of the retail transfers product the troubled entity covered the debtor balance, the execution of the Direct Debit and Retail Transfers processes (normal processing) will be disposed of. e. If at the close of the retail transfers product the troubled entity did not cover the debtor balance of the mentioned products, the suspension of the final liquidation of Direct Debits and Transfers will be maintained. f. If at 18:30 hours the troubled entity did not cover the net balance resulting from the compensation of the Direct Debit, Transfers, and presented Checks products, minus the reported rejections, and the resulting amount is lower than the mutualized guarantee, the Chambers Committee may dispose of its use to enable the continuity of operations. g. Documents rejected in advance during the abnormal liquidation process must be physically presented in the session of rejected checks and other compensable documents. The causes “by force majeure” and “by lack of funds of the drawn entity” can only be applied against the total rejection of a class of currency. h. The mutualized guarantee fund can only be used under the conditions indicated in point 1 and replenished as provided therein.
i. If the debtor balance exceeds the total of the mutualized guarantee fund, CEC-BV will proceed to reject all operations presented against the involved entity, recalculating the positions and reporting them for cancellation through the regular procedure provided. Entities must cancel the new positions within thirty minutes of being notified of their new balance. The Entity that originates a situation of abnormal liquidation due to lack of coverage of the debtor balance will be excluded from the compensation of the following day.

B.C.R.A. Electronic Clearing Houses - Guarantees

Annex to the

Comm. “A”

4247

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4. Settlement scheme for balances of Automated Teller Machines, Purchase and Credit Card Systems and Consumer Vouchers

The operating scheme foreseen for the settlement of balances of transactions between entities associated with automated teller machine networks (the Network), purchase and credit card systems (Cards) and/or Consumer Vouchers (Tickets), through the CEC‑BV, shall be adjusted as set out below.

1) Guarantees

Entities associated with ATM networks, purchase and credit card systems and/or consumer vouchers shall establish guarantees for each currency class that is settled, to cover net debtor balances arising from transactions in that Network, Card or Ticket.

This guarantee shall be equivalent to the simple average of the five maximum net debtor balances of the last quarter, taking into account that the month change for establishing the quarter to be considered may be made up to the fifteenth of each month.

Cards, Networks and/or Tickets may agree with their adhered Entities to set amounts higher or lower than that limit, considering particular conditions of their operations, and must communicate such exceptions to the CEC‑BV.

The Card / Network / Ticket will require the Entities that must increase their guarantee, the corresponding coverage, which must be effected by the first business day of the month in which it will become effective.

The CEC‑BV will inform, with the frequency required by each Card / Network / Ticket, the balances of the guarantee accounts of their member entities. It shall be the exclusive responsibility of the Card / Network / Ticket to obtain compliance with the deposit in the Guarantee Account by each of its adhered Entities.

If the new calculation is lower than the guarantee constituted, the Entity may request from the Card / Network / Ticket and, in turn, from the CEC‑BV the refund of the excess amount deposited. The CEC‑BV will request that refund from the B.C.R.A. via a note sent through the usual communication channels.

2) Settlement Procedure

a) Every day, at the time to be determined, the CEC‑BV shall receive the net debtor and creditor balances of all involved operations, while the Networks, Cards and/or Tickets shall inform those same balances to their adhered entities.

b) All entities shall pay the debtor balances within the established schedules, by transfers processed through the MEP to the account that the CEC‑BV determines for payment of such operations, using Payment Instructions to identify the ATM network, card system or consumer voucher to be covered.

Because a single account may receive payments for more than one Card / Network / Ticket, the Payment Instruction is the only means to identify them; therefore the payment instructions defined for each type of transfer must be respected.

c) The CEC‑BV shall control whether the debtor balance of any entity exceeds the amount of the guarantee constituted.

d) If, within the defined schedule between each CEC‑BV and the Card / Network and/or Ticket, any debtor entity has not deposited the total sum in the designated account, the CEC‑BV will inform the Card / Network / Ticket about the situation and await instructions.

e) The Card / Network / Ticket shall instruct the CEC‑BV on the steps to follow, considering the following options:

• Settle the guarantee of the debtor Entity.
• Indicate coverage of the uncovered balance by another Entity.
• Replace the presented settlement, with the new one recording balances equal to or less than the amount deposited by the entities.

f) If none of the previously foreseen situations has been satisfactorily verified and, 30 minutes before the MEP closing, a debtor balance remains that prevents settlement, the CEC‑BV shall return the amounts deposited up to that moment by the entities, by crediting the respective sums to the accounts they hold in the same B.C.R.A., without performing any settlement.

g) Once all debtor balances have been covered, the CEC‑BV shall transfer the funds to the entities that present a creditor balance, debiting its account in the B.C.R.A. and crediting each entity's account in the same B.C.R.A. At the same time, it will return to the entities the amounts deposited in excess.

It shall be the exclusive responsibility of the Card / Network / Ticket to order the entity whose guarantee has been partially or totally used to effect a settlement, to replenish it, as well as to request increases in that guarantee account.

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III – COMMITTEE OF CAMERAS

The Committee of Cameras, which shall be convened by the Central Bank at the request of the Payment System and Operations Management, when the situation to be addressed warrants the possibility of removing an entity from compensations on a given date, shall adjust its management to the guidelines detailed below:

1. Mission

1.1 Analyze the situation of entities that, from 12:00 each day, record a net debtor compensation balance exceeding the amount of the guarantee constituted, and have not transferred or deposited in cash to the CECBV operational account the corresponding amount, as well as when any entity has not replenished guarantees settled due to non‑payment or failure to increase them following guarantee recalculations.

1.2 Record in the minutes the rejection of debtor balances arising from retail transfers and direct debits, when they have been used to achieve settlement of check compensation and other compensable documents.

1.3 Formalize the total exclusion of financial entities from the operations handled by the CEC, subject to adjustment to these rules and procedures.

1.4 Notify the person acting on behalf of the excluded Financial Entity of the resolution.

1.5 Order the use of the Mutual Guarantee Fund with adjustment to these rules.

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2. Composition

The Committee of Cameras shall be composed of the following representatives:

2.1 One principal and one alternate representative for each high‑value and low‑value CEC.

2.2 Three principal representatives and three alternates – at the Management level – for the CENTRAL BANK, representing the Specialized Supervision Management, the Payment System and Operations Management and the Credit Management of the Central Bank.

3. Secretariat

The Secretariat shall be under the Executive Secretary of the CIMPRA, who will prepare and keep the original minutes of the resolutions of the Committee of Cameras, and must endorse the copies issued for use by the representatives.

4. Conduct of the Committee of Cameras meeting

4.1 The Committee Secretary, at the request of the representatives of the Payment System and Operations Management, shall summon all representatives provided for in point 2. He shall also summon a representative of the entity, for the purpose of notifying him at the close of the meeting of the decisions adopted.

If the entirety of its members is present, the meeting shall start at the scheduled time. Otherwise, it shall start after 15 minutes with the participation of the members present, provided that at least two representatives of the Central Bank and the affected CEC are present.

4.2 The meeting shall be coordinated by the representative of the Payment System and Operations Management.

4.3 The Current Accounts Sub‑management shall report the detected non‑compliance, while the affected CEC‑BV shall report the balances broken down by operation and the rejections of anticipated compensable documents, while the CEC‑AV shall report the positions of documents received for collection and the guarantees pending application at the start of the Meeting.

Having found that the non‑compliance situation was not resolved, the Chamber Exclusion Act for that day shall be prepared, to be signed by all present representatives. Immediately thereafter the Secretary shall notify the excluded Financial Entity’s representative of the resolution, or record his absence.

5. Effects of chamber exclusion

5.1 The excluded entity shall be credited with the check and other compensable document presentations made on the previous business day and settled on the date.

5.2 The excluded entity shall reject all checks and compensable documents presented against it by the remaining entities.

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5.3 From the date of exclusion, the presentations of the excluded entity in the check session and other compensable documents shall no longer be accepted. On the next business day, if the excluded entity does not regularize its situation before 12:00, the CEC‑BV shall automatically reject the presentations made by the other entities against it.

IV – EXCLUSION OF CAMERAS

Entities that are excluded from any of the compensation processes handled by the CEC‑BV, or that apply guarantees to cover debtor balances both in the CEC‑BV and in the CEC‑AV, shall be informed by the Payment System and Operations Management – Payments Systems Sub‑management – to the Superintendency of Financial and Currency Entities, for the purposes of its competence.

The entities shall be removed from the processes handled by the CEC‑BV by application of the regulations set out in the preceding chapters, or by instruction of the Superintendency of Financial and Currency Entities, which may affect the processes handled by the CEC‑BV and CEC‑AV.

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V – GUARANTEE AVAILABILITY

1. Operations in National Currency and Foreign Currency

The Electronic Clearing Houses (CEC) shall request from the Current Accounts Sub‑management, for each adhered entity, the opening of special guarantee accounts in the various currency classes in which compensations authorized by the Central Bank are carried out, whose operation shall be adjusted to the guidelines indicated below, in order to keep the constituted guarantees available for immediate application:

a) Ownership

• To cover the compensation of checks, other compensable documents, direct debits, and retail transfers: the accounts shall be designated “Abbreviated CEC name / Adhered entity name”.
• To cover the compensation of Automated Teller Machine Networks: the accounts shall be designated “Abbreviated CEC name / Network name / Adhered entity name”.
• To cover the compensation of Purchase and Credit Cards: the accounts shall be designated “Abbreviated CEC name / Card name / Adhered entity name”.
• To cover the compensation of Consumer Vouchers: the accounts shall be designated “Abbreviated CEC name / Voucher name / Adhered entity name”.

b) Balance availability: No checkbooks shall be enabled.

They shall be available via transfer to the entity’s current account or to the CEC’s. Account debits shall be ordered solely by the CEC, via X‑400 message addressed to: “BCRA‑GARANTIAS”.

c) Source of credits
The crediting of funds into the special guarantee accounts shall have no limitation or conditioning.

d) Destination of debits
Only debits whose destination is the CEC’s operational current account, by application of the guarantee, or the adhered entity’s current account, by reimbursement of excess constituted guarantee, shall be processed.

e) Institutional application of balances
The special guarantee accounts shall qualify for inclusion in the Minimum Cash, in accordance with the communications issued or to be issued subsequently by this Central Bank.

2. General Considerations

The Central Bank shall inform, through the issuance of a “B” Communication, the operating schedule of the Electronic Payment Medium (MEP). The activation of extraordinary schedules responding to special reasons or force majeure shall be communicated through the usual communication channels.

With the provisions of this communication, the constitution of guarantees with public securities is rendered ineffective.

Guarantees registered at the moment of suspension of a Financial Entity by the Central Bank, unless a judicial requirement intervenes, shall be made available to the CECs to complete the compensation cycle of operations entered previously, originating in:

• Electronic transfers,
• Direct debits,
• Checks and other compensable documents,
• Securities presented for collection,
• Debtor balances arising from the compensating activity.

Having fulfilled the above, the CEC shall transfer the remaining balance of the Special Guarantee Account to the entity’s current account.