2018 - YEAR OF THE CENTENNIAL OF UNIVERSITY REFORM

COMMUNICATION “A” 6578 01/10/2018

TO FINANCIAL INSTITUTIONS,

TO ELECTRONIC COMPENSATION CHAMBERS:

Ref.: Circular SINAP 1 - 75

OPASI 2 - 550

Checks generated by electronic means. Their regulation.

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We address you to inform that this Institution adopted the resolution which, in its pertinent part, provides:

1. Establish that, without prejudice to maintaining the existing system for the paper format of the check, electronic means may be used for its issuance, guarantee, circulation and presentation for collection. Financial institutions that operate any type of sight‑account that accepts check deposits must adopt the mechanisms – own or through third parties – that are necessary for their clients to deposit checks generated by electronic means (ECHEQ).

2. Incorporate as point 3.5. of the rules on “Regulation of the bank current account” the following:

   3.5. Checks generated by electronic means (ECHEQ).

   Where not otherwise provided and insofar as they are not incompatible with the particular provisions established for ECHEQ, the present rules shall apply, whether the check is a common check or a deferred‑payment check.

   3.5.1. Issuance, endorsement, guarantee.

   ECHEQ may be issued in favor of a determined person.

   The signing requirement shall be satisfied if any electronic method is used that indubitably ensures the expression of the drawer’s will and the integrity of the instrument, the reliability of the issuance operation and its authentication as a whole, provided that it has previously been accepted by the current‑account holder through the signing of an agreement that states the holder will not disregard orders made pursuant to such mechanism and will assume them as its own.

   ECHEQ may be endorsed and/or guaranteed electronically, provided that mechanisms fulfilling the requirements of the preceding paragraph are used.

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3.5.2. Presentation for collection.

The legitimate holder may present each ECHEQ for collection from the corresponding payment date either through an electronic accreditation order or by collecting it at a teller window. Failing that, it will remain pending until the expiry date of the term provided in article 25 of the Check Law.

3. Replace the last paragraph of point 5.1.1. of the rules on “Regulation of the bank current account” with the following:

   Exemptions from the limitations established in this point apply to endorsements that financial institutions make to obtain financing, in favor of a financial entity or a fiduciary of a financial trust, both cases covered by the Financial Entities Law, and successive transfers in favor of other subjects of the same nature, as well as when checks are deposited in Caja de Valores S.A. for trading on stock exchanges and securities markets authorized by the National Securities Commission of the Argentine Republic, in which case the endorsements must be extended with the clause “... for its trading in securities markets”. Endorsements in favor of the Central Bank of the Argentine Republic and those made on ECHEQ are also exempt from the cited limitation.

4. Incorporate as point 3.4. into the rules on “National Payment System – Operational Instructions. Checks” the following:

   3.4. Particular aspects of checks generated by electronic means (ECHEQ).

   The particular aspects of checks generated by electronic means must conform to the mechanisms established in the applicable regulations and to the definitions made on the subject within the Inter‑Bank Payment Methods Commission (CIMPRA).

   3.4.1. Functionalities.

   The mechanisms – own or through third parties – necessary for clients to deposit or collect ECHEQ at a teller window must be adopted.

   3.4.2. Clearing and settlement.

   The clearing and settlement process for ECHEQ shall be assimilated, insofar as applicable, to the process defined in these rules and shall include the definitions made in accordance with point 3.4.

   A storage system for ECHEQ must be implemented, whose function will be to record the issuances and endorsements of such instruments. This scheme may be operated and administered by the low‑value electronic clearinghouse exclusively or jointly.

   The infrastructures that manage the ECHEQ storage system, as well as those responsible for its clearing and settlement system, will be considered systemically important financial market infrastructures and, therefore, the Principles and requirements established in Communication “A” 5775 will apply to them.

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5. Establish that the provisions set out in the preceding points shall enter into force 180 calendar days from the date of dissemination of this communication.

We also inform you that we will subsequently send you the pages that, in replacement of those previously provided, must be incorporated into the rules on “National Payment System – Operational Instructions. Checks” and “Regulation of the bank current account”.

We greet you attentively.

CENTRAL BANK OF THE ARGENTINE REPUBLIC

Luis D’Orio Julio Pando

Chief Manager of Payment Systems and Current Accounts

Deputy General Manager of Payment Means