Circular SINAP 1-52: National Payments System. Checks and Other Negotiable Instruments. Updated Consolidated Text

“2016 - Year of the Bicentennial of the Declaration of National Independence” COMMUNICATION “A” 6101 23/11/2016 TO FINANCIAL ENTITIES, TO ELECTRONIC COMPENSATION CHAMBERS:
Ref.: Circular
SINAP 1 - 52
National Payments System. Checks and other negotiable instruments. Updated consolidated text.

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We address you to inform you that a series of operational changes have been defined in the referenced rules based on the issuance of Communication “A” 6071 related to the electronic deposit of checks. In this regard, it is established that rejection codes R24 (duplicate transaction) and R48 (Illegible, deficient, or incomplete image) may be used by depositary entities for transactions received from their clients derived from the aforementioned operation. Likewise, the rejection cause R51 (missing legend “presented electronically for collection”) is incorporated, for use by depositary and drawee entities in the case of omission of the aforementioned legend on both sides of the document. Based on the above, the sheets that are to be replaced in the rules regarding the matter are attached. We greet you sincerely. CENTRAL BANK OF THE ARGENTINE REPUBLIC Luis Alberto D’Orio Julio César Pando Main Manager of Payment Systems and Current Accounts General Manager of Payment Means

ANNEX

3.2.7. Rejections.
3.2.7.1. Rejections by the depositary entity.
i) Definition.
These are the rejections that the depositary entity performs when it verifies, in the physical checks received, the existence of any of the defects provided for in the current legislation and regulations. ii) Operational instructions. a) Transmission of rejected checks. The depositary entity will transmit to the ECC, until the deadline hour of the rejection session, the file with the information corresponding to the checks it rejected, taking into account the rejection causes defined in the current regulations. According to the current regulations, it must transmit for the following reasons for rejection of checks and/or transactions:

• R11 “Exceeds the established endorsement limit”.
• R16 “Document is not a check”.
• R24 “Duplicate transaction” (for checks presented electronically for collection).
• R33 “Forgery of the check”.
• R36 “Alteration of the check”.
• R37 “Legal validity period expired”.
• R38 “Drawer’s signature does not match that of the person endorsing on the back”.
• R46 “Document/Design not negotiable”.
• R47 “Second presentation does not correspond”.
• R48 “Illegible, deficient, or incomplete image” (for checks
  presented electronically for collection).
• R49 “Missing receipt signature for deposit”.
• R51 “Missing legend “presented electronically for collection””.
• R83 “Irregularity in the endorsement chain”.
• R96 “Depositary entity errors”.
• R97 “Early presentation” (CPD).
  b) Processing by the Electronic Chamber.
  The ECC will receive and compensate for rejected checks, according to the times defined. c) Receipt of rejections by the drawee entity. The drawee entity will receive from the ECC the file with the information of rejections observed by the depositary entity.

NATIONAL PAYMENTS SYSTEM
B.C.R.A. CHECKS AND OTHER NEGOTIABLE INSTRUMENTS
Section 3. Operational Instructions.
Version: 4th COMMUNICATION “A” 6101
Validity:
24/11/2016

With this information, the drawee entity:

• Will reverse the debits duly made in the accounts of
  its clients, informing them accordingly.
• Will inform the BCRA of check rejections, in accordance with what is
  established in point 1.5.2.11. of the rules on “Regulation of the bank current account”.

3.2.7.2. Rejections by the drawee entity.
i) Definition.
These are the rejections that the drawee entity performs when it verifies, in the information of checks received electronically, the existence of any of the causes for rejection or return of document, or of causes for rejection of transactions, provided for in the current regulations. ii) Operational instructions. a) Transmission of rejected checks and transactions. The drawee entity will transmit to the ECC, until the deadline hour of the rejection session, the information corresponding to the checks/transactions it rejected. According to the current regulations, it must transmit for the following reasons for rejection of checks and/or transactions:

• R01 “Account seized”,
• R02 “Account closed by judicial order”,
• R03 “Non-existent account”,
• R04 “Invalid account number”,
• R06 “Formal defects”,
• R08 “Report of loss or theft of check” (order not to pay),
• R10 “Insufficient available funds”,
• R13 “Non-existent branch/destination entity”,
• R19 “Incorrect amount”,
• R21 “Preventive bankruptcy of the drawer, declared judicially”,
• R24 “Duplicate transaction”,
• R34 “Emergency situations”,

NATIONAL PAYMENTS SYSTEM
B.C.R.A. CHECKS AND OTHER NEGOTIABLE INSTRUMENTS
Section 3. Operational Instructions.
Version: 4th COMMUNICATION “A” 6101
Validity:
24/11/2016

• The verification of the existence of the rejection causes established in
  the BCRA regulations, performing the corresponding controls.
• The preparation of the rejection file, with all those checks that
  could not be debited for any of the pre-established reasons (see point 3.2.7.).

3.3.6.2. Operational instructions.
i) Receipt of the image.
The drawee entities must have the image of the check in their possession prior to the moment of compensation.

3.3.7. Rejections by the drawee entity.
3.3.7.1. Definition.
These are the rejections that the drawee entity performs when it verifies in the electronic information and/or in the image, the existence of any of the causes for rejection provided for in the current regulations.

3.3.7.2. Causes.
In addition to the rejection causes established in point 3.2.7.2., they may use those detailed below:

• R11 “Exceeds the established endorsement limit”,
• R16 “Document is not a check”,
• R38 “Drawer’s signature does not match that of the person endorsing on the back”,
• R46 “Design not negotiable”,
• R48 “Illegible, deficient, or incomplete image”,
• R49 “Missing receipt signature for deposit”,
• R51 “Missing legend “presented electronically for collection””,
• R82 “Missing image”,
• R83 “Irregularity in the endorsement chain”,
• R94 “Incorrect postal code”,
• R97 “Early Presentation” (CPD).

3.3.7.3. Operational instructions.
The electronic compensation of rejections will be carried out in accordance with the operation previously described in the electronic compensation of checks in general.

NATIONAL PAYMENTS SYSTEM
B.C.R.A. CHECKS AND OTHER NEGOTIABLE INSTRUMENTS
Section 3. Operational Instructions.
Version: 3rd COMMUNICATION “A” 6101
Validity:
24/11/2016

Code Description Explanation
R38 Signature mismatch This code will be used when the drawer’s signature does not match that of the person endorsing on the back. R44 Stolen document This code will be used for values stolen or lost from checkbooks not delivered to clients. R46 Design not negotiable This code will be used for checks presented to the ECC with designs according to Comm. “A” 2902 or earlier. R81 Force majeure This code will be used by banks when there are force majeure causes at the time of presenting the check that prevent its payment. In the case of truncation, this code will be used for the rejection of the corresponding transaction. R83 Irregularity in the endorsement chain This code will be used when an irregularity is verified in the endorsement chain of the check due to: endorsements do not succeed each other, missing first endorsement, order check with more than one endorsement. R97 Early presentation date (CPD) This code will be used in case the depositary bank presents for payment a CPD with a maturity date later than the presentation. The following table contains the reasons for rejection of transactions presented for compensation:
Code Description Explanation
R03 Non-existent account This code will be used by the drawee entity in case the account on which the transaction falls cannot be identified. R04 Invalid account number This code will be used by the drawee entity in case the account on which the transaction falls has a format error. R09 Local holiday This code will be used by the chambers to reject movements presented from places with a local holiday. R11 Containing endorsements that exceed the established limit This code will be used in the case that checks contain endorsements that exceed the limit established in point 5.1.1. of the rules on “Regulation of the bank current account”, with the established exceptions. R13 Branch/destination entity non-existent This code will be used by the drawee entity when it is impossible to identify the entities to which transactions are sent or from which they are received. R17 Format error This code will be used by the ECCs to reflect format errors. It applies to errors in mandatory, fixed, or specific types of fields (numeric or alphanumeric). R18 Incorrect compensation date This code will be used by the chambers when the compensation date does not coincide with the deadlines defined for each product. R19 Incorrect amount This code will be used by the drawee entity when the amount of a rejection does not coincide with the amount of the original transaction. R24 Duplicate transaction This code will be used by the depositary and drawee entities when they receive duplicate transactions.

NATIONAL PAYMENTS SYSTEM
B.C.R.A. CHECKS AND OTHER NEGOTIABLE INSTRUMENTS
Section 7. Record Design.
Version: 5th COMMUNICATION “A” 6101 Validity: 24/11/2016 Page 17

Code Description Explanation
R25 Error in additional record This code will be used by the ECCs when there is a problem with the additional records, for example when an additional record is missing when it is mandatory, when the presence of the additional record is indicated and it does not exist, etc. R26 Error by mandatory field This code will be used by the ECCs when a mandatory field is blank or with invalid characters. R27 Error in record counter This error will be used by the ECCs when there is a problem in the sequence of the record counter. R31 Chamber rewind (Unwinding) This code will be used by the ECCs when documents must be rejected due to the need to process the chamber, given that a bank did not cover the debtor position. For the case of truncation, this code will be used for the rejection of the corresponding transaction. R34 Emergency situations This code will be used by the drawee entity when rejecting documents due to the occurrence of all those situations of external origin to the financial entities and with grave effects such as: Flood, tornado, route cuts, etc. R35 Lack of conformity This code will be used by the drawee entity when there is a lack of conformity in the receipt of checkbooks. R39 Amount does not match the record by the drawee bank This code will be used by the drawee entity in the case of truncated CPDs registered. R47 Second presentation does not correspond This code will be used by the drawee entity in the case of a rejected check that does not correspond to a second presentation. R48 Illegible, deficient, or incomplete image This code will be used by the drawee entity when the received images, corresponding to checks with amounts above the established limit, present deficiencies that make it impossible to perform the required controls. Likewise, it may be used by the depositary entity for checks presented electronically for collection. R49 Missing receipt signature This code will be used by the entities in the absence of the depositary client’s signature. R51 Missing legend “presented electronically for collection” This code will be used by the depositary and drawee entities when they receive images of checks presented electronically for collection without the specific legend for deposit of checks by electronic means. R75 Date error This code will be used by the ECCs when there are format errors in the date. R76 Error in field 11 Batch header This code will be used by the ECCs when there is an error in the origin code. R77 Error in field 4 Individual record This code will be used by the ECCs when in field 4 (Reserved) of the Individual record contains a value different from “0” (zero). R78 Error field 5 Individual record This code will be used by the ECCs when there is a format error in the account number. R79 Error in field 7 Individual record This code will be used by the drawee entity and by the chambers when this field contains a format error or by the Banks when the reported check number is incorrect. R80 Error field 3 of the
Additional record This code will be used by the ECCs when the information included in this field has been standardized and does not agree with the necessary data or by the chambers when no information is included in this field.

NATIONAL PAYMENTS SYSTEM
B.C.R.A. CHECKS AND OTHER NEGOTIABLE INSTRUMENTS
Section 7. Record Design.
Version: 4th COMMUNICATION “A” 6101 Validity:
24/11/2016

B.C.R.A.
ORIGIN OF THE PROVISIONS CONTAINED IN
THE RULES ON “NATIONAL PAYMENTS SYSTEM
CHECKS AND OTHER NEGOTIABLE INSTRUMENTS”
CONSOLIDATED TEXT ORIGIN RULE
Sec. Point Para. Comm. Annex Chap. Sec. Point Para.
OBSERVATIONS
1. 1.1 “A” 2559 Checks on Comm. ”A” 4281 and 5053.
2.1. “A” 2559 “ S/Comm. ”A” 4281 and 5053.
2.2. “A” 2559 “ S/Comm. ”A” 4281, 5053 and
“B” 10988.
2.3. “A” 2559 “ 2.3.1. S/Comm. ”A” 4281 and 5053.
2.
2.4. “A” 2559 “ S/Comm. ”A” 4281 and 5053.
3.1. “A” 2559 ii 3.1.2.2. S/Comm. “A” 2795, 4281,
4410, 5053 and “B” 10988.
“A” 2559 “ 3.1.3. S/Comm. “A” 2795, 4281,
4410 and 5053.
“A” 2559 “ 3.1.4. S/Comm. “A” 2795, 4281,
4410, 5053 and “B” 10735.
3.2. “A” 2559 “ 3.2.7 S/Comm. ”A” 4281 and 5053.
3.2. “A” 2559 “ ii 3.2.7.1. S/Comm. ”A” 4281, 5053 and
6101.
3.2. “A” 2559 “ 3.2.7.2. S/Comm. ”A” 4281 and 5053.
“A” 2559 “ 3.2.8. S/Comm. ”A” 4281, 5053 and
“B” 10988.
3.3. “A” 2559 “ 3.3.7. S/Comm. ”A” 4281 and 5053.
3.
3.3. “A” 2559 “ 3.3.7.2. S/Comm. ”A” 4281, 5053 and
6101.
4.1 “A” 2559 “ S/Comm. ”A” 4281 and 5053.
4. 4.2. “A” 2559 “ S/Comm. “A” 5053.
4.3. “A” 2559 “ S/Comm. ”A” 4281 and 5053.
5.1. “A” 2559 “ S/Comm. “A” 5053.
5.
5.2. “A” 2559 “ S/Comm. “A” 5053.
6.1. “A” 2559 “ S/Comm. “A” 5053.
6.
6.2. “A” 2559 “ S/Comm. “A” 5053.
7.1. “A” 2559 “ S/Comm. “A” 5053.
7.2. “A” 2559 “ S/Comm. “A” 2723 and 5053.
7.3. “A” 2559 “ S/Comm. “A” 2795, 2857 and
5053.
7.4. “A” 2559 “ S/Comm. “A” 2819, 4281,
4410, 5053, 6101 and “B”
10735.
7.5. “A” 2559 “ S/Comm. ”A” 4281 and 5053.
7.6. “A” 2559 “ S/Comm. ”A” 4281 and 5053.
7.7. “A” 2559 “ S/Comm. ”A” 4281 and 5053.
7.8. “A” 2559 “ S/Comm. ”A” 4281 and 5053.
7.9. “A” 2559 “ S/Comm. ”A” 4281 and 5053.
7.10. “A” 2559 “ S/Comm. “A” 5053 and “B”
10988.
7.11. “A” 2559 “ S/Comm. ”A” 4281 and 5053.
7.12. “A” 2559 “ S/Comm. ”A” 4281 and 5053.
7.
7.13. “A” 2559 S/Comm. “A” 5053.

NATIONAL PAYMENTS SYSTEM. CHECKS AND OTHER NEGOTIABLE INSTRUMENTS CONSOLIDATED TEXT ORIGIN RULE Sec. Point Para. Comm. Annex Chap. Sec. Point Para. OBSERVATIONS
8.1. “A” 4596 1.
8.2. “A” 4596 2.
8.3. “A” 4596 3.
8.4. “A” 4596 4.
8.5. “A” 4596 5.
8.6. “A” 4596 6.
8.7. “A” 4596 7.
8.8. “A” 4596
8.9. “A” 4596
8.
8.10. “A” 4596 only