Communication A 6639: Update of Consolidated Texts — BCRA — AR

"2019 - YEAR OF EXPORTS"
COMMUNICATION "A" 6639 25/01/2019
TO FINANCIAL ENTITIES,
TO EXCHANGE HOUSES,
TO EXCHANGE AGENCIES,
TO RECIPROCAL GUARANTEE COMPANIES,
TO COOPERATIVE CREDIT BOXES (LAW 26.173),
TO PUBLIC-CHARACTER GUARANTEE FUNDS:
Ref.: Circular
CAMEX 1 - 800
CONAU 1 - 1314
LISOL 1 - 823
OPASI 2 - 555
OPRAC 1 - 966
SECYC 1 - 6
Communication "A" 6599. Update of consolidated texts.
____________________________________________________________ We address you to send you attached the sheets that, in replacement of those previously provided, correspond to be incorporated into the regulations on “Aggregation of risk data and preparation of reports”, “Allocation of collateral assets”, “Application of the deposit guarantee insurance system”, “Credit assistance to non-financial credit providers”, “Authorities of financial entities”, “Authorization and composition of capital of financial entities”, “Minimum capitals of financial entities”, “Assignment of credit portfolios”, “Classification of debtors”, “Demand accounts opened in cooperative credit boxes”, “Savings, salary and special accounts”, “Foreign exchange and currency controls”; “Public-character guarantee funds”, “Credit management”, “Credit graduation”, “Large credit risk exposures”, “Guidelines for corporate governance in financial entities”, “Guidelines for risk management in financial entities”, “Ordering, issuance and dissemination of communications and press releases”, “Regime to facilitate the privatization of Provincial and Municipal Banks and mergers and acquisitions”, “Disciplinary regime under the Central Bank of the Argentine Republic. Laws 21.526 and 25.065 and their amendments”, “Regulation of the bank current account”, “List for immobilized assets and other concepts”, “Reciprocal guarantee companies (Art. 80 of Law 24.467)”, “Consolidated supervision” and “Minimum standards on internal controls for financial entities.” pursuant to what is provided in the resolution made known by Communication “A” 6599. Likewise, it is recalled that on this Institution's website www.bcra.gob.ar, accessing “Financial System - LEGAL AND REGULATORY FRAMEWORK - Consolidations and summaries - Consolidated texts of general regulations”, the modifications made with texts highlighted in special characters (strikethrough and bold) will be found.

-2-
We salute you attentively.
CENTRAL BANK OF THE ARGENTINE REPUBLIC
Ana M. Dentone Darío C. Stefanelli
Submanager of Emission of Regulations
Main Manager of Emission and
Regulatory Applications

ANNEX

1.3.4. Economic group: the definition provided in point 7.2. of the regulations on “Authorization and composition of capital of financial entities”.
1.4. Compliance criteria.
The financial entities covered must comply with all provisions provided in these regulations simultaneously, meaning that compliance with one set of provisions must not be to the detriment of others. However, exceptionally they may:
1.4.1. Dispense with complying with all their provisions at the same time – for example, in response to urgent or special information requests regarding new or unknown risk areas – provided that the decision-making process regarding risk management is not significantly affected, informing the Board of Directors and Senior Management of this.
Entities must have policies and processes for such exceptional cases.
Furthermore, they must be able to explain through qualitative reports and, if possible, with quantitative measures, the effect of such non-compliance on the decision-making process.
1.4.2. Exclude information from data and reports when this does not affect the financial entity's decision-making process; that is, the Board of Directors and Senior Management would not have been influenced by the omitted information nor would they have issued a different judgment had they had the correct information. This is the concept of “significance”, which entities must use to justify omissions of information.
When applying this concept, entities must take into account considerations beyond the number or size of the exposures not included, such as the type of risk involved or the changing and dynamic nature of the banking business. Additionally, they must consider the possible future effect of the excluded information on the decision-making process.
1.4.3. Resort to expert opinion in the event of incomplete data to facilitate the process of aggregating risk data and interpreting results in the risk report preparation process. This, provided that compliance with these provisions is not significantly affected.
When expert judgment is used, the process must be transparent and clearly documented to allow both independent review and review of the criteria used in the decision-making process. Version: 2nd COMMUNICATION "A" 6639 Validity:
01/01/2019
AGGREGATION OF RISK DATA
B.C.R.A. AND PREPARATION OF REPORTS
Section 1. General considerations.

CONSOLIDATED TEXT SOURCE REGULATION
Section Point Paragraph Com. Chapter Point Paragraph
OBSERVATIONS
1.1. “A” 6132
1.2. “A” 6132
1.3. “A” 6132 According to Com. “A” 6639.
1.
1.4. “A” 6132
2.1. “A” 6132
2.
2.2. “A” 6132
3.1. “A” 6132
3.2. “A” 6132
3.3. “A” 6132
3.
3.4. “A” 6132
4.1. “A” 6132
4.2. “A” 6132
4.3. “A” 6132
4.4. “A” 6132
4.
4.5. “A” 6132
5. “A” 6132
B.C.R.A.
ORIGIN OF THE PROVISIONS CONTAINED IN THE REGULATIONS ON “AGGREGATION OF RISK DATA AND PREPARATION OF REPORTS”

Within 24 business hours following the date of each operation's agreement, the borrowing entity must supply the Superintendence of Financial and Exchange Entities with, at minimum, the following data:
2.4.5.1. Type of operation performed.
2.4.5.2. Amount of the operation.
2.4.5.3. Coverage Margin.
2.4.5.4. Conditions and maturity of the operation.
2.4.5.5. Lending entity and, if they are banks from abroad, ratings and rating agencies.
2.5. For loan operations between financial entities that have collateral or assignment
of credit portfolios with responsibility for the assignor, not contemplated in point 2.4.
Provided that all conditions provided for the use of additional margins for tranches I and II referred to in point 2.3.1.4. of the regulations on “Large credit risk exposures” are met.
2.6. For obligations related to electronic clearing chambers.
2.6.1. Guaranteeable obligations.
Net debtor balance in electronic clearing chambers. Includes those constituted to cover the settlement of operations through ATM networks and/or credit, debit, and similar card systems.
2.6.2. Authorized entities.
All financial entities.
2.6.3. Affected assets.
Assets must have sufficient liquidity conditions to allow their immediate use at the time of settlement of the electronic clearing chambers, if necessary. Assets admitted for the integration of the minimum cash must be deposited in the name of the respective electronic clearing chamber, for each entity, in special accounts at the Central Bank of the Argentine Republic, in which case they may be counted for this purpose. The settlement of assets not admitted for such integration must be secured through an agreement with a bank that complies with what is provided in point 2.1.2. of the regulations on “Credit evaluations”.
2.6.4. Amounts of guarantees.
They will be agreed upon between the chambers and the financial entities.
ALLOCATION OF COLLATERAL ASSETS
B.C.R.A.
Section 2. General authorizations.
Version: 11th
COMMUNICATION "A" 6639
Validity:
01/01/2019

B.C.R.A.
ORIGIN OF THE PROVISIONS CONTAINED IN THE REGULATIONS ON “ALLOCATION OF COLLATERAL ASSETS” CONSOLIDATED TEXT SOURCE REGULATION
Section Point Paragraph Com. Annex Point Paragraph
OBSERVATIONS
1.1. “A” 2802 1.1. According to art. 28, item b), of Law
21.526.
1.2. “A” 2774 I 6. Includes interpretative clarification.
1.
1.3. “A” 2802 1.3. Incorporates criteria not made known generally
previously. According to Com.
“A” 4817, 4888, 5691, 5740 and
6327. Includes interpretative clarification.
2.1. “A” 2281 According to Com. “A” 2753.
2.1.1. “A” 2281 According to Com. “A” 2753, 2832 and
5183.
2.1.2. “A” 2281 According to Com. “A” 2753, 5671 and
5740.
2.1.3. “A” 2281 According to Com. “A” 2753, 3274 and
3558. Includes interpretative clarification.
2.2. “A” 2774 II
2.2.1. “A” 2774 II According to Com. “A” 4132, 5671,
5740, 6038 and 6074. Includes interpretative clarification.
2.2.2. “A” 2774 II According to Com. “A” 5671 and 6061.
2.2.3. “A” 2774 II According to Com. “A” 3274 and 3558.
Includes interpretative clarification.
2.3. “A” 2774 I 1., 2.,
3. and 5.
According to Com. “A” 3258.
2.3.1. “A” 2774 I 1. According to Com. “A” 3258, 4876,
5691 and 6327.
2.3.2. “A” 2774 I 1. and 2. According to Com. “A” 5671.
2.3.3. “A” 2774 I 2. According to Com. “A” 5671 and 5740.
2.3.4. “A” 2774 I 2. and 5. According to Com. “A” 3258, 5691 and
6327.
2.3.5. “A” 2774 I 3.
2.3.6. “A” 2774 I 5.
2.4. “A” 4817 7. According to Com. “A” 4888.
2.4.1. “A” 4817 7. According to Com. “A” 5671.
2.4.2. “A” 4817 7. According to Com. “A” 4831, 5671,
5740 and 6232. Includes interpretative clarification.
2.4.3. “A” 4817 7. According to Com. “A” 4831 and 4888.
2.4.4. “A” 4817 7.
2.4.5. “A” 4817 7.
2.
2.5. “A” 4972 7. According to Com. “A” 5520 and 6639.

5.2.2. Demand deposits on which interest rates higher than reference rates are agreed, and time deposits and investments that exceed 1.3 times that rate or the reference rate plus 5 percentage points – whichever is higher –.
Reference rates are periodically disseminated by the BCRA through Communications “B”, determined according to the moving average of the last five business days of passive rates, which, for fixed-term deposits up to $ 100,000 (or its equivalent in other currencies), arise from the survey conducted by the BCRA. Deposits will also be excluded when these interest rate limits are undermined by additional incentives or remuneration.
5.2.3. Deposits of financial entities in other intermediaries, including fixed-term certificates acquired through secondary negotiation.
5.2.4. Deposits made by persons directly or indirectly linked to the entity according to the guidelines defined in point 1.2.2. of the regulations on “Large credit risk exposures”.
5.2.5. Fixed-term deposits of securities, acceptances, or guarantees.
5.2.6. Immobilized balances resulting from excluded deposits and other operations.
5.3. Coverage. Amount and formalities.
5.3.1. The guarantee will cover the return of the deposited capital, interest, updates – by the Reference Stabilization Coefficient (“CER”) in deposits of Acquiring Value Units - Law 25.827 (“UVA”) and by the construction cost index for Greater Buenos Aires (“ICC”) in deposits of Housing Units - Law 27.271 (“UVI”)–, and exchange rate differences, as applicable, accrued until the date of revocation of the authorization to operate or until the date of suspension of the entity by application of article 49 of the BCRA Organic Charter, if this measure had been adopted prior to the former, without exceeding – for these concepts – $ 450,000.
That date will be considered for the determination of the CER and the ICC for fixed-term deposits in Acquiring Value Units “UVA” and Housing Units “UVI”, respectively, as well as for the determination of the “Reference exchange rate” for conversion to pesos of deposits in foreign currency, for the purpose of establishing the amount covered.
5.3.2. In accounts and fixed-term deposits constituted in the name of two or more persons, the guarantee limit will be $ 450,000, regardless of the number of titleholders, distributing proportionally the amount of the guarantee corresponding to the titleholders.
5.3.3. The total guaranteed to a specific person, by accumulation of accounts and deposits covered, as provided previously, may not exceed the limit of $ 450,000.
B.C.R.A. APPLICATION OF THE DEPOSIT GUARANTEE INSURANCE SYSTEM Version: 18th COMMUNICATION "A" 6639 Validity:
01/01/2019

B.C.R.A.
ORIGIN OF THE PROVISIONS CONTAINED IN THE REGULATIONS ON “APPLICATION OF THE DEPOSIT GUARANTEE INSURANCE SYSTEM” CONSOLIDATED TEXT SOURCE REGULATION Point Paragraph Com. Annex Point Paragraph OBSERVATIONS
1. “A” 2337 I 1. 1° and 2°
1° “A” 2337 I 2. 1° S/Dec. N°1292/96, Com. “A” 2807, 3358, 4206, 4271, 5641 and 5943.
2.
2° “A” 2337 I 2. 2° S/Dec. N°1292/96.
3. 1° “A” 2337 I 3. 1°
3.1. “A” 2337 I 3.1.
3.2. “A” 2337 I 3.2.
3.3. “A” 2337 I 3.3.
3.3.1. “A” 2337 I 3.3.1.
3.3.2. “A” 2337 I 3.3.2.
3. 2° “A” 2337 I 3. 2°
1° “A” 2337 I 4. 2° and 3° S/Com. “B” 5806 (8th paragraph), “A” 3068, 5710 and 5720.
4.
2° “A” 2337 I 4. 4°
5. “A” 2337 I 6.
5.1. 1° “A” 2337 I 6.1. 1°
5.1.1. “A” 2337 I 6.1. i)
5.1.2. “A” 5108
5.1.3. “A” 2337 I 6.1. ii)
5.1.4. “A” 2337 I 6.1. iii)
5.1.5. “A” 2337 I 6.1. iv) S/Com. “A” 5091, 5108,
5164, 5234 and 6435.
5.1.6. “A” 2482 1. 2°
5.1.7. “B” 5806 3° S/Com. “A” 2807.
5.2. “A” 2337 I 6.4. S/Com. “A” 2399.
5.2.1. “A” 2337 I 6.4.1. S/Com. “A” 2399.
5.2.2. “A” 2337 I 6.3. S/Com. “A” 2777, 3358,
5108, 5234, 5640, 5654,
5891, 6435 and 6460. Includes interpretative clarification.
5.2.3. “A” 2337 IV S/Dec. N° 540/95, art. 12,
item c).
5.2.4. “A” 2337 I 6.2. S/ Com. “A” 5520 and 6639.
5.2.5. “A” 2337 IV S/Dec. N° 540/95, art. 12,
item c).
5.2.6. “A” 2807 5.2.7.
5.3. “A” 2337 I 6. S/Dec. N°540/95.
5.3.1. “A” 2337 I 6.5. S/Com. “A” 4681, 5170,
5641, 5943 and 6125.
5.3.2. “A” 2337 I 6.7. 1° S/Dec. N°540/95 and Com. “A”
5170, 5641 and 5943.
5.3.3. “A” 2337 I 6.7. 2° S/Dec. N°540/95 and Com. “A”
5170, 5641 and 5943.
5.3.4. “A” 2337 I 6.8. S/Dec. N°540/95.
5.3.5. “A” 2337 I 6.9.

To be subjects of credit by financial entities, they must be registered in the “Register of other non-financial credit providers” and not have restricted access to financing by application of point 3.2.:
− other non-financial credit providers that are linked to the lending financial entity (according to what is provided by point 1.2.2. of the regulations on “Large credit risk exposures”), and − other non-financial credit providers that register, according to the last annual balance sheet with external audit report and certification from the corresponding professional council, a total volume of financing reached exceeding the “reference amount” referred to in Section 4. For the calculation of said “reference amount”, the sum of the following concepts will be considered:
a) The accounting balance of financing reached in said fiscal year-end without deducting unapplied collections, provisions for uncollectible risks and devaluation, provisions for financial leasing contracts, nor other accounting adjustments. b) The amount corresponding to the accounting value of financing reached that had been transferred to third parties, within the 12 months prior to said fiscal year-end. Registration will be required within 120 calendar days following the date of the fiscal year-end from which it arises that the “reference amount” cited was reached. Other non-financial credit providers may also opt to register in this registry. Registration in the corresponding registry does not entitle the non-financial credit provider to obtain any other type of preferential treatment from the BCRA than that expressly provided by these regulations.
1.3.2. Procedure.
Registration must be carried out electronically through the corresponding application included on this Institution's website www.bcra.gob.ar, attaching – in a file with format “.pdf” – the documentation provided in points 1.3.2.1. and 1.3.2.2. and integrating the information required in points 1.3.2.3. to 1.3.2.5., as detailed below:
1.3.2.1. Copy of the articles of incorporation or bylaws and all their amendments.
1.3.2.2. If it has already closed its first fiscal year, copy of the last annual balance sheet with external audit report and certification from the corresponding professional council.
CREDIT ASSISTANCE TO NON-FINANCIAL CREDIT PROVIDERS B.C.R.A.
Section 1. General conditions.
Version: 3rd
COMMUNICATION "A" 6639
Validity:
01/01/2019

B.C.R.A.
ORIGIN OF THE PROVISIONS CONTAINED IN THE REGULATIONS ON “CREDIT ASSISTANCE TO NON-FINANCIAL CREDIT PROVIDERS ” CONSOLIDATED TEXT SOURCE REGULATION Sec. Point Paragraph Com. Annex Chapter Sec. Point Paragraph OBSERVATIONS
1.1. “A” 5593 unique
1.2. “A” 5593 unique S/Com. “A” 6557 and
6591. Includes interpretative clarification.
1.3. “A” 5593 unique S/Com. “A” 6639.
1.3.1. “A” 5593 unique S/Com. “A” 6353.
1.3.2. “A” 5593 unique S/Com. “A” 6353.
1.
1.3.3. “A” 5593 unique S/Com. “A” 6353.
2.1. “A” 5593 unique
2.2. “A” 5593 unique
2.
2.3. “A” 5593 unique
1° “A” 5593 unique
3.1. “A” 5593 unique S/Com. “A” 6336.
3.2. “A” 5593 unique S/Com. “A” 6336.
3.
Last “A” 6336
4. 4.1. “A” 5593 unique S/Com. “A” 6557.
4.2. “A” 6557

Equal or greater fractions of 0.5 that might arise from the application of the cited ratios will be taken as an additional unit. The entity's internal audit body must verify that, in meetings held by the Board of Directors or Administrative Council, the number of directors or councilors present with experience complies with the provisions in the preceding paragraphs. In case of non-compliance with the requirement, it must be communicated to the SEFyC within 10 calendar days of verifying the deviation. Decisions made in meetings that do not observe this safeguard are valid, without prejudice to what is provided by article 41 of the Financial Entities Law, applying to the entity and the persons responsible for the infringement.
2.2.2. Managers.
The officials referred to in point 1.2. must demonstrate suitability and, preferably, prior experience in the financial activity.
2.2.3. Highest authority of branches of foreign financial entities.
The highest authority of branches of foreign financial entities must demonstrate suitability and prior experience in the financial activity.
2.2.4. Evaluation criteria.
Backgrounds on suitability and experience related to the financial activity will be weighted taking into account the degree of technical and professional training and the hierarchy and importance of the management developed in financial matters. The non-existence of disqualifications established by article 10° of the Financial Entities Law and those arising from other applicable legal provisions will be verified, and consideration will be given to whether the person has been convicted of money laundering and/or terrorist financing crimes and has been sanctioned with a fine by the UIF or with disqualification, suspension, prohibition, or revocation by the Central Bank of the Argentine Republic (BCRA), the National Securities Commission (CNV) and/or the National Insurance Superintendence (SSN). Information and/or sanctions communicated by foreign entities or authorities with equivalent powers will also be taken into consideration. This person may not hold executive positions nor possess direct or indirect participation – through any linked person under the terms of point 1.2.2. of the regulations on “Large credit risk exposures” – in companies that carry out gambling and betting activities. Those authorities whose appointment had been evaluated by this Institution until 27.7.17 inclusive and whose mandate is sought to be renewed are not covered by the limitation of the preceding paragraph, provided that their proportional participation has not increased compared to that recorded on that date. AUTHORITIES OF FINANCIAL ENTITIES B.C.R.A.
Section 2. General conditions.
Version: 5th
COMMUNICATION "A" 6639
Validity:
01/01/2019

CONSOLIDATED TEXT SOURCE REGULATION
Sec. Point Paragraph Com. Annex Chapter Sec. Point Paragraph OBSERVATIONS
1.1. “A” 6111

1.2. “A” 2241 I 1. 1.1.2.3
. 2° and last
According to Com. “A” 4061,
4284, 5345, 5785 and 6111.
2.1. “A” 2241 I 1. 1.1.3.
“A” 5785 annex I 5. 5.7.
According to Com. “A” 5785
(point 3.), 6111 and 6304.
Includes interpretative clarification.
2.2.1. “A” 2241 I 1. 1.1.2.2
.
According to Com. “A” 4061,
4284, 5345 and 6111.
2.2.2. “A” 2241 I 1. 1.1.2.3
. 1° According to Com. “A” 4061,
4284 and 5345.
2.2.3. “A” 2241 I 1. 1.6.
“A” 3700 annex 5.2.
5.4.
According to Com. “A” 5345 and
5785.
“A” 2241 I 1. 1.1.2. last
2.
2.2.4.
“A” 5785 annex I 5. 5.8.
According to Com. “A” 4061,
4284, 5248, 5345, 5485,
5785, 6111, 6290, 6304,
6567 and 6639. Includes interpretative clarification.
3.1.1. “A” 3700 I 1. According to Com. “A” 5785 and
6111.
3.1.2. “A” 3700 I 1. According to Com. “A” 5785 and
6304.
3.1.2.1. “A” 3700 I 1. According to Com. “A” 5785.
3.1.2.2. “A” 3700 I 1. According to Com. “A” 5248,
5485, 5785, 6111 and 6304.
3.1.2.3. “A” 3700 I 1. According to Com. “A” 5785.
3.1.2.4. “A” 3700 I 1. According to Com. “A” 5345,
5785 and 6111.
3.1.2.5. “A” 3700 I 1. According to Com. “A” 5785.
2° “A” 3700 I 1. According to Com. “A” 5785.
3° “A” 3700 I 1. According to Com. “A” 5785 and 6304.
3.
3.1.2.
4° “A” 6304 1.
B.C.R.A.
ORIGIN OF THE PROVISIONS CONTAINED IN THE REGULATIONS ON “AUTHORITIES OF FINANCIAL ENTITIES”

1.1. Classes.
1.1.1. Commercial banks.
Commercial banks are distinguished into:
1.1.1.1. First degree.
They may carry out all active, passive, and service operations, under the terms of Article 21 of the Financial Entities Law.
1.1.1.2. Second degree.
They may carry out all active, passive, and service operations that the law and regulations establish for first-degree banks, but they may only receive deposits from the country's financial sector and from banks abroad. In addition, they will be subject to the relationships provided for in the rules on "Financing of the non-financial public sector" and "Large exposures to credit risk". When they are public banks, additionally, they may receive deposits from international credit organizations and from investors who make deposits in accordance with the rules on "Term deposits and investments" for amounts not less than $ 10,000,000 (or its equivalent in other currencies) considered for each operation individually. The collection of deposits with funds from abroad will be subject to the current exchange regulations.
1.1.2. Cooperative credit unions.
Cooperative credit unions may carry out the operations provided for in the rules on "Cooperative credit unions (Law 26.173)".
1.1.3. Other classes.
The remaining classes of financial entities provided for in the Financial Entities Law – investment and mortgage banks, financial companies, savings and loan associations for housing or other real estate – may carry out the active, passive, and service operations that the legal provisions and regulations expressly authorize them to perform.

AUTHORIZATION AND CAPITAL COMPOSITION OF FINANCIAL ENTITIES B.C.R.A.
Section 1. Classes and denominations of financial entities.
Version: 3rd. COMMUNICATION “A” 6639
Validity:
01/01/2019

2.1. Requirement of prior authorization.
To operate as a financial entity, prior authorization from the Central Bank of the Republic Argentina (BCRA) must be obtained. Those that have the character of public or mixed entities of the Nation, of the provinces, of the municipalities, or of the Autonomous City of Buenos Aires are also subject to this requirement, in which case the relevant rules will apply insofar as they are compatible with their nature.
2.2. Compliance with requirements.
The requirements established for the authorization of financial entities must be observed permanently. Non-compliance may be considered a cause for the revocation of the authorization to operate.
2.3. Basic conditions.
2.3.1. Ineligibilities.
Those who fall under the causes of ineligibility established in the applicable legal provisions may not serve as promoters and founders of financial entities. Applicants who appear in resolutions on terrorism financing communicated by the Financial Information Unit (UIF) and/or have been designated by the Security Committee of the United Nations Organization will not be authorized, without prejudice to the other measures that may be adopted in accordance with the current legislation in these matters (laws and regulatory decrees) and the related resolutions issued by the UIF.
2.3.2. Impediments.
2.3.2.1. Promoters and founders of financial entities, as well as other persons who hold 5% or more of their share capital and/or votes, may not exercise executive positions nor hold direct or indirect participation – through any related person within the meaning of point 1.2.2. of the rules on “Large exposures to credit risk” – in companies that carry out gambling and betting activities.
2.3.2.2. Promoters and founders of financial entities and those who, directly or indirectly, exercise control over them within the meaning of item a) of subsection ii) of point 1.2.2.1. of the rules on “Large exposures to credit risk”, may not have their income concentrated, directly or indirectly – through any related person adjusted to the cited rules – in more than 75% in concession and/or provision contracts with the National, provincial, municipal, and Autonomous City of Buenos Aires governments, within the scope provided for in point 1.1. of the rules on “Financing of the non-financial public sector”.

AUTHORIZATION AND CAPITAL COMPOSITION OF FINANCIAL ENTITIES B.C.R.A.
Section 2. New financial entities.
Version: 5th. COMMUNICATION “A” 6639
Validity:
01/01/2019

5.1. Modifications of share composition.
The provisions of this section cover the transfer of shares of financial entities provided for in points 5.2. to 5.4., as well as those of the legal entities that directly or indirectly control them, regardless of the reason: exercise of purchase option, subscription, inheritance, donation, syndication, or other act. Capitalization of irrevocable contributions for future capital increases is also included. General conditions:
5.1.1. The documents that instrument the respective legal acts must state that the intervening parties are aware of these rules.
5.1.2. Legal entities that are not regularly constituted at the date of signing the contract or pre-contract or of the delivery of the deposit or partial payment may not be acquirers of share packages of financial entities. In addition, in the case that such legal entities are directly or indirectly controlling the financial entities, the shares with voting rights that represent their capital must be registered.
Foreign companies must be registered with the corporate control body, as established in the General Companies Law.
5.1.3. Persons who hold executive positions or possess direct or indirect participations – through any related person within the meaning of point 1.2.2. of the rules on “Large exposures to credit risk” – in companies that carry out gambling and betting activities may not be shareholders with a participation equal to or greater than 5% of the share capital and/or votes.
For shareholders existing on 7/27/17, this limitation will apply when they increase their proportional participation in those companies compared to that recorded on that date.
5.1.4. Those who, directly or indirectly, exercise control over financial entities within the meaning of item a) of subsection ii) of point 1.2.2.1. of the rules on “Large exposures to credit risk”, may not have their income concentrated, directly or indirectly – through any related person adjusted to point 1.2.2. of the rules on “Large exposures to credit risk” – in more than 75% in concession and/or provision contracts with the National, provincial, municipal, and Autonomous City of Buenos Aires governments, within the scope provided for in point 1.1. of the rules on “Financing of the non-financial public sector”.
In all cases, the income obtained in the last calendar year or closed economic year must be considered. Indirect income will be considered in proportion to the share control held over the company that generates it, and in the case of those corresponding to related persons by personal relationship, they will be considered at 100%.

AUTHORIZATION AND CAPITAL COMPOSITION OF FINANCIAL ENTITIES B.C.R.A.
Section 5. Modifications of share composition and control structure.
Version: 4th. COMMUNICATION “A” 6639
Validity:
01/01/2019

7.1. Persons related to shareholders and authorities.
7.1.1. Additional information.
Financial entities constituted in the country must provide the SEFyC with a detail, in accordance with what is established for this purpose in the relevant information regime, of the companies or entities in the country or abroad related to shareholders who hold 5% or more of the share capital and/or of the total votes of instruments with voting rights issued by the financial entity, and of the companies or entities in the country or abroad related to directors – or equivalent authority –, including the local head in the case of branches in the country of foreign financial entities, auditors or members of the Supervisory Board, and persons who perform functions of general manager or deputy general manager – or equivalents – in the entity. These companies will be included even if they do not operate with the entity. The situation will be provided on 12/31 of each year at the latest on 1/31 of the following year. In the case of entities whose shares are included in the public offering regime, information on the companies or entities in the country or abroad related to holders of 5% or more of the share capital and/or of the total votes of instruments with voting rights issued by the entity must be provided only when it is verified that on 12/31 the participation has been maintained for a period greater than 6 months. This will apply when it concerns persons who exclusively acquire the status of shareholders through transactions carried out with the securities offered publicly and provided that the participation does not grant control or controlling influence. Changes in participations will also be reported within 30 calendar days of their occurrence when at any time during the calendar semester the transactions determine the possession of percentages greater than 5%, even if they are not reached by the end of that period. In these cases, the SEFyC may require, if it deems it justified, the submission of information on related persons. The definitions of “linkage” contained in point 1.2.2. of the rules on “Large exposures to credit risk” will apply.
7.1.2. Sources of information.
7.1.2.1. Sworn statements.
The information referred to in point 7.1.1. must be based on sworn statements whose presentation the financial entities must require from the persons indicated in said point, which must be formulated in accordance with the models inserted in point 7.1.2.4. Sworn statements must be integrated in duplicate. The original will be kept in the financial entity, while the copy will be delivered to the presenter with the receipt acknowledgment.

AUTHORIZATION AND CAPITAL COMPOSITION OF FINANCIAL ENTITIES B.C.R.A.
Section 7. Special information.
Version: 3rd. COMMUNICATION “A” 6639
Validity:
01/01/2019

7.1.2.4. Sworn statement models.
i) On the non-existence of linkage.
CENTRAL BANK OF THE
ARGENTINE REPUBLIC
SUPERINTENDENCY OF
FINANCIAL AND EXCHANGE ENTITIES
SWORN STATEMENT BY SHAREHOLDERS, MEMBERS OF THE DIRECTING AND CONTROL BODIES, AUDITORS AND MANAGERS AND DEPUTY MANAGERS OF THE FINANCIAL ENTITY ON THE NON-EXISTENCE OF LINKAGE WITH COMPANIES OR ENTITIES IN THE COUNTRY OR ABROAD ENTITY:
The undersigned (1), (2), who will integrate (1) the entity in the capacity of (3), declares under oath that the data contained herein are correct, complete, and a faithful expression of the truth and that, according to the linkage guidelines provided for in points 1.2.2.1. to 1.2.2.3. of the rules on “Large exposures to credit risk”, he/she/the firm he/she represents does not have (1) linkage with any company, bank, or other financial institution, in the country or abroad. In addition, he/she assumes the commitment to inform any modification that occurs in this regard, within five calendar days of its occurrence, by presenting a new sworn statement which will also integrate, even if no facts that imply altering the situation are verified, informing the status on 12/31 of each year. Date: Signature:
Document: Type (4) No. Country and issuing authority (5):
Invoked capacity (6):
Name of the legal entity (7):
CUIT/CUIL (1) No.:
We certify that the preceding signature matches the one registered in our books/was placed in our presence (1).
(Seal of the entity and signatures of two authorized officials) Observations:
(1) Strike out what does not apply.
(2) In the case of natural persons obliged to present this declaration, include their first and last name, even if an attorney signs on their behalf. (3) Indicate shareholder, director -or equivalent authority-, member of the Board of Directors, auditor, general manager, deputy general manager. (4) Indicate the type of document in accordance with those admitted in the rules on “Valid identification documents”. (5) Integrate only in the case of foreigners who do not have residence in the country. (6) Indicate holder, legal representative, attorney. When it is an attorney, the power granted must be broad and general and be valid on the date this declaration is signed. (7) Integrate only in cases where the signatory does so in the capacity of attorney or legal representative of a legal entity. This declaration will be integrated in duplicate, the one intervened by the financial entity will serve as proof of receipt of this declaration.

AUTHORIZATION AND CAPITAL COMPOSITION OF FINANCIAL ENTITIES B.C.R.A.
Section 7. Special information.
Version: 3rd. COMMUNICATION “A” 6639
Validity:
01/01/2019

ii) On related companies or entities.
CENTRAL BANK OF THE
ARGENTINE REPUBLIC
SUPERINTENDENCY OF
FINANCIAL AND EXCHANGE ENTITIES
SWORN STATEMENT ON COMPANIES OR ENTITIES IN THE COUNTRY OR ABROAD RELATED TO SHAREHOLDERS, MEMBERS OF THE DIRECTING AND CONTROL BODIES, AUDITORS AND MANAGERS AND DEPUTY MANAGERS OF THE FINANCIAL ENTITY ENTITY:
The undersigned (1), (2), who will integrate (1) the entity in the capacity of (3), declares under oath that the data contained herein are correct, complete, and a faithful expression of the truth and that, according to the linkage guidelines provided for in points 1.2.2.1. to 1.2.2.3. of the rules on “Large exposures to credit risk”, the companies, banks, or other financial institutions, in the country or abroad to which he/she is linked/the firm he/she represents is linked (1) are limited to those informed in the Annex that forms part of this declaration and that, therefore, no linkage exists in any other case in accordance with said regulations. In addition, he/she assumes the commitment to inform any modification that occurs in this regard, within five calendar days of its occurrence, by presenting a new sworn statement which will also integrate, even if no facts that imply altering the situation are verified, informing the status on 12/31 of each year. Date: Signature:
Document: Type (4) No. Country and issuing authority (5):
Invoked capacity (6):
Name of the legal entity (7):
CUIT/CUIL (1) No.:
We certify that the preceding signature matches the one registered in our books/was placed in our presence (1).
(Seal of the entity and signatures of two authorized officials) Observations:
(1) Strike out what does not apply.
(2) In the case of natural persons obliged to present this declaration, include their first and last name, even if an attorney signs on their behalf. (3) Indicate shareholder, director -or equivalent authority-, member of the Board of Directors, auditor, general manager, deputy general manager. (4) Indicate the type of document in accordance with those admitted in the rules on “Valid identification documents”. (5) Integrate only in the case of foreigners who do not have residence in the country. (6) Indicate holder, legal representative, attorney. When it is an attorney, the power granted must be broad and general and be valid on the date this declaration is signed. (7) Integrate only in cases where the signatory does so in the capacity of attorney or legal representative of a legal entity. This declaration must be integrated in duplicate, the one intervened by the financial entity will serve as proof of receipt of this declaration.
7.2. Consolidated financial statements.
Financial entities must require each of the shareholders in the country or abroad or, in their case, group of shareholders that control them, to prepare consolidated semi-annual financial statements of the group or economic unit they constitute, with a public accountant's report. These financial statements must be presented to the SEFyC within 120 calendar days of the conclusion of the semesters, except for the exceptions determined by the Superintendent.

AUTHORIZATION AND CAPITAL COMPOSITION OF FINANCIAL ENTITIES B.C.R.A.
Section 7. Special information.
Version: 4th. COMMUNICATION “A” 6639
Validity:
01/01/2019

The preceding information requirement is not applicable when the shareholders or group of shareholders have the character of a financial entity in the country or abroad, provided that in the country of origin there is a consolidated supervision regime. In the case of consolidated financial statements of groups from abroad, it will be required that they be audited by firms of recognized prestige. Two or more natural or legal persons will be considered to form a unit or economic group with the financial entity if they are linked to it by a relationship of control as provided for in the rules on “Large exposures to credit risk”. The definition of “control” contained in point 1.2.2.1. of the cited rule will apply.
7.3. Relatives of shareholders, authorities, and external auditor.
7.3.1. Information to be requested.
Financial entities must require the annual presentation of sworn statements on their family relationships, according to the model contained in point 7.3.4., to the following persons:
7.3.1.1. Shareholders who hold 5% or more of the share capital and/or of the total votes of the instruments with voting rights issued by the financial entity.
7.3.1.2. Directors – or equivalent authority – and the local head of branches of foreign financial entities.
7.3.1.3. Auditor or members of the Supervisory Board.
7.3.1.4. General manager and deputy general manager or equivalents.
7.3.1.5. External auditor.
7.3.2. Conservation of declarations.
The entity must keep the sworn statements for the purposes of the controls that the auditor must carry out periodically in accordance with the current regulations in this matter.
7.3.3. Non-compliance.
The falsity of the data contained in the declarations of the cited members and external auditor of the financial entity will make those who sign them subject to the sanctions provided for in Article 296 of the Penal Code.

AUTHORIZATION AND CAPITAL COMPOSITION OF FINANCIAL ENTITIES B.C.R.A.
Section 7. Special information.
Version: 3rd. COMMUNICATION “A” 6639
Validity:
01/01/2019

ORDERED TEXT ORIGIN RULE
Sec c.
Point Para. Com. Annex Ch. Sec. Point Para. OBSERVATIONS
1.1.1. “A” 2241 I 1. 2° According to Com. “A” 4368,
5107 and 5841.
1.1.1.1. “A” 2241 I 1. 2° According to Com. “A” 4368,
5107 and 5841.
1.1.1.2. “A” 2241 I 1. 2° According to Com. “A” 4368,
5107, 5841 and 6589 and
6639.
1.1.2. “A” 4712 According to Com. “A” 6129.
1.1.3. “A” 2241 I 1. 1° According to Com. “A” 6129.
1.2. “A” 2241 I 1. 1.1.4.
1.
1.3. “A” 5355 9.
2.1. 1° “A” 2241 I 1. 1°
last “A” 2241 I 1. 1.5.
According to Com. “A” 6129.
2.2. “A” 2241 I 1. last
2.3. “A” 6129
2.3.1. “A” 2241 I 1. 1.1.3. According to Com. “A” 5785.
2.3.2.1. “A” 6290 1. According to Com. “A” 6639.
2.3.2.2. “A” 6517 1. According to Com. “A” 6639.
2.3.3. “A” 2241 I 1. 1.1.2. According to Com. “A” 4061,
4284, 5248, 5345, 5485,
5785, 6129 and 6304.
1° “A” 2241 I 1. 1.6.
1.6.1.
2.3.4. 1° According to Com. “A” 6129.
last “A” 2241 I 1. 1.6.4.
2.3.5. “A” 2241 I 1. 1.1.5. According to Com. “A” 6129.
2.4. 1° “A” 2241 I 1. 1.2.1. According to Com. “A” 2940,
6129 and 6304.
2.4.1. “A” 2241 I 1. 1.2.1. According to Com. “A” 2940 and
6129.
2.4.2. “A” 2241 I 1. 1.2.2.2. According to Com. “A” 6129.
2.4.3. “A” 2241 I 1. 1.2.2.1.
2.4.4. “A” 2241 I 1. 1.2.2.3.
2.4.5. “A” 2241 I 1. 1.2.2.5. According to Com. “A” 6304.
2.4.6. “A” 2241 I 1. 1.2.2.4. 1°
1° “A” 2241 I 1. 1.2.2.4. 1°
“A” 2241 I 4. 4.2.3.2.1. 1° According to Com. “A” 4510.
2.4.7.
2° “A” 2241 I 1. 1.2.2.4. last According to Com. “A” 6129.
2.4.7.1. “A” 2241 I 1. 1.2.2.4.1. According to Com. “A” 6129.
2.4.7.2. “A” 2241 I 1. 1.2.2.4.2. According to Com. “A” 6129 and
6327.
2.4.7.3. “A” 2241 I 1. 1.2.2.4.3. According to Com. “A” 5485,
6129 and 6304.
2.4.7.4. “A” 2241 I 1. 1.2.2.4.4. According to Com. “A” 6129.
2.4.7.5. “A” 2241 I 1. 1.2.2.4.5.
2.4.7.6. “A” 6304 4.
2.
2.4.8. “A” 2241 I 1. 1.2.2.6. According to Com. “A” 5248,
5485, 5785, 6129 and
6304.
B.C.R.A.
ORIGIN OF THE PROVISIONS CONTAINED IN THE RULES ON “AUTHORIZATION AND CAPITAL COMPOSITION OF FINANCIAL ENTITIES”

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.
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.
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.
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AUTHORIZATION AND CAPITAL COMPOSITION OF FINANCIAL ENTITIES ORDERED TEXT ORIGIN RULE Sec. Point Para. Com. Annex Ch. Sec. Point Para. OBSERVATIONS
4.2.2. “A” 2241 I 3. 3.2.2. According to Com. “A” 4052 and
6129.
4.2.3. “A” 2241 I 3. 3.2.3. and
3.2.4.
4.2.4. “A” 2241 I 3. 3.2.5.
4.2.5. “A” 2241 I 3. 3.2.6.
4.2.6. “A” 2241 I 3. 3.2.7. According to Com. “A” 6129.
4.2.7. “A” 3178 2. According to Com. “A” 5345 and
6129.
4.2.8. “A” 3901 II 1.3. According to Com. “A” 6129.
4.2.9. “A” 5345 5.
4.3. 1° “A” 2241 I 3. 3.3.1. According to Com. “A” 6129.
4.3.1. “A” 2241 I 3. 3.3.1.
4.3.2. 1° “A” 2241 I 3. 3.3.1.
4.3.2.1. “A” 2241 I 3. 3.3.1.1.
4.3.2.2. “A” 2241 I 3. 3.3.1.2.
4.3.2.3. “A” 2241 I 3. 3.3.1.3.
“A” 2241 I 4. 4.2.3.2.1. 1°
4.3.2.4. “A” 2241 I 3. 3.3.1.4.
4.3.2.5. “A” 6304 4.
4.4. 1° “A” 2241 I 3. 3.4. 1° According to Com. “A” 6129.
4.4.1. “A” 2241 I 3. 3.4.1. According to Com. “A” 6129.
4.4.2. “A” 2241 I 3. 3.4.2. According to Com. “A” 6129.
4.4.3. “A” 2241 I 3. 3.4.3. According to Com. “A” 6129.
4.4.4. “A” 2241 I 3. 3.4.4.
4.4.5. “A” 2241 I 3. 3.4.5.
4.
4.5. “A” 2241 I 4. 4.2.1. According to Com. “A” 6129 and
6327.
5.1. “A” 2241 V 1. 1.1.,
1.4. and 1.5.
1° and 4° According to Com. “A” 4510,
5006, 6129 and 6304.
5.1.1. “A” 2241 V 1. 1.4.
5.1.2. “A” 2241 V 1. 1.3. According to Com. “A” 6129 and
6304.
5.1.3. “A” 6290 1. According to Com. “A” 6567 and
6639 (includes interpretative clarification).
5.1.4. “A” 6517 1. and 2. According to Com. “A” 6639.
5.1.5. “A” 5006 1. According to Com. “A” 5133 and
6517.
5.1.6. “A” 3901 II 1.3. According to Com. “A” 6129 and
6517.
5.2.1. “A” 2241 V 1. 1.1. 1° and 4° According to Com. “A” 4510,
5006 and 6129.
5.2.2.1. “A” 2241 V 1. 1.4.
5.2.2.2. “A” 2241 V 1. 1.1. 1° According to Com. “A” 4510,
5006 and 6129.
5.2.3.1. “A” 2241 V 1. 1.1. 1° According to Com. “A” 4510 and
5006.
5.
5.2.3.2. “A” 2241 V 1. 1.1. 1° According to Com. “A” 4510,
5006, 6129 and 6304.

AUTHORIZATION AND CAPITAL COMPOSITION OF FINANCIAL ENTITIES CONSOLIDATED TEXT ORIGIN OF THE RULES Sec. Point Para. Com. Annex Ch. Sec. Point Para. OBSERVATIONS
6.3. 1° “A” 2241 I
V
4.
1.
4.2.3.1.
1.1. 3°
According to Com. “A” 4510.
1° “A” 2241 I 4. 4.2.3.2.1. 1° According to Com. “A” 4510, 6129 and 6304.
“A” 2241 V 1. 1.1.2.1. 1°
3°a last
“A” 2241 I 4. 4.2.3.2.1. 2° and 3°
6.3.1.1.
“A” 2241 V 1. 1.1.2.1. last
6.3.1.2. “A” 2241 I 4. 4.2.3.2.2. According to Com. “A” 4510
and 6129.
6.3.2. “A” 2241 I 4. 4.2.3.3. According to Com. “A” 4510,
6129 and 6304.
6.3. last “A” 4510 1. and 2. According to Com. “A” 6129.
“A” 2241 I 1. 1.2.2.4.3.
“A” 2241 I 1. 1.2.2.7. 1°
“A” 2241 V 1. 1.1.2.4.
“A” 2241 V 1. 1.1.3.4.
1°
“A” 2241 V 1. 1.1.4.2.
According to Com. “A” 4510,
5485 and 5785.
“A” 2241 I 1. 1.2.2.7. last
6.4.1. last
“A” 2241 V 1. 1.1.2.4.
According to Com. “A” 4510,
5485 and 5785.
6.4.2. “A” 6129 According to Com. “A” 6304.
“A” 2241 I 1. 1.2.2.7. last
“A” 2241 I 1. 1.6.2. 1°
6.4.3.1.
“A” 2241 V 1. 1.1.2.4.
According to Com. “A” 4510,
5485 and 5785.
“A” 2241 I 1. 1.2.2.7. last
“A” 2241 I 1. 1.6.2. 1°
6.4.3.2.
“A” 2241 V 1. 1.1.2.4.
According to Com. “A” 4510,
5485 and 5785.
6.4.4. “A” 6129
6.4.5. “A” 6304 4.
6.
6.5. “A” 5792 6. S/Com. “A” 6218.
7.1.1. “A” 2241 I 1. 1.7.1. According to Com. “A” 2573,
6129, 6304 and 6639.
7.1.2.1. 1° “A” 2241 I 1. 1.7.1. 2° According to Com. “A” 2573.
last “A” 2241 I 1. 1.7.1. 5° According to Com. “A” 2573 and 6304.
7.1.2.2. 1° “A” 2241 I 1. 1.7.1. 3° According to Com. “A” 2573.
last “A” 2241 I 1. 1.7.1. 4° According to Com. “A” 2573.
7.1.2.3. “A” 2241 I 1. 1.7.1. 6° According to Com. “A” 2573.
i) “A” 2573 III According to Com. “A” 6129,
6304 and 6639.
7.
7.1.2.4. ii) “A” 2573 IV According to Com. “A” 6129,
6304 and 6639.

AUTHORIZATION AND CAPITAL COMPOSITION OF FINANCIAL ENTITIES CONSOLIDATED TEXT ORIGIN OF THE RULES Sec. Point Para. Com. Annex Ch. Sec. Point Para. OBSERVATIONS
7.2. “A” 2241 I 1. 1.7.2. According to Com. “A” 6129,
6327 and 6639.
7.3.1. “A” 2573 4. 1° and 2° According to Com. “A” 6129.
7.3.2. “A” 2573 4. 2°
7.3.3. “A” 2573 4. last
7.3.4. “A” 2573 V According to Com. “A” 6129.
7.4. “A” 2822 2.
8.1. “A” 6290 3.
8.
8.2. “A” 6517 2.

2.1. Requirement.
It will be determined by applying the following expression:
CRC = (k x 0.08 x APRc) + INC where:
CRC: capital requirement for credit risk. k: factor linked to the rating assigned to the entity according to the assessment carried out by the SEFyC, taking into account the following scale:
Assigned Rating Value of “k”
1 1
2 1.03
3 1.08
4 1.13
5 1.19
To this effect, the last rating reported for the calculation of the requirement that corresponds to integrate by the third month following that in which the notification takes place will be considered. Until communicated, the value of “k” will be equal to 1.03. APRc: risk-weighted credit assets, determined by summing the values obtained after applying the following expression:
A x p + PFB x CCF x p + no DvP + (DVP + RCD + INC(significant investments in companies)) x 12.5 where:
A: computable assets/exposures.
PFB: computable items not recorded in the balance sheet (“off-balance sheet items”).
CCF: credit conversion factor. p: risk weighter, as a decimal. no DvP: operations without delivery versus payment. Amount determined by summing the values obtained after applying to the operations included the corresponding risk weighter (p) in accordance with what is established in point 4.1. MINIMUM CAPITALS OF FINANCIAL ENTITIES B.C.R.A.
Section 2. Minimum capital for credit risk.
Version: 3rd COMMUNICATION “A” 6639
Validity:
01/01/2019

DvP: failed delivery versus payment operations (for the purposes of these rules, they include failed payment versus payment –PvP– operations). Amount determined by summing the values obtained after multiplying the current positive exposure by the applicable capital requirement established in point 4.1. RCD: requirement for counterparty credit risk in over-the-counter (“OTC”) derivative operations, determined in accordance with what is established in point 4.2. INC(significant investments in companies) increase for excesses over the following limits:

participation in the capital of each company: 15%;
total participations in the capital of companies: 60%.
The established maximum limits will be applied to the computable net worth of the financial entity on the last day prior to that which corresponds, in accordance with what is established in the rules on “Fragmentation of credit risk”. INC: increase for the following excesses:
in the relationship of immobilized assets and other concepts (Section 4. of the respective
regulation); excluding those computed for the determination of INC (significant investments in companies));
to the limits established in the rules on “Financing of the non-financial public sector”, excluding those computed for the determination of INC (significant investments in companies)
;
to the limits established in the rules on “Large exposures to credit risk” –as provided in subsection ii), point 2.1. of the rules on “Minimum capital defaults and technical ratios. Applicable criteria.”–, excluding those computed for the determination of INC (significant investments in companies)
;
to the credit grading limits (Section 3. of the respective regulation); and
for uncovered derivative positions.
In this matter, the provisions contained in Section 2. of the rules on “Minimum capital defaults and technical ratios. Applicable criteria” will apply, unless what is provided in Section 3. of those rules is applicable. The credit exposure resulting from:
i) the sum of uncovered positions by contracts to hedge price variations of commodities. Uncovered positions will be considered those sold to customers that do not correspond to the hedges acquired by the financial entity, regardless of the underlying and/or the customer; MINIMUM CAPITALS OF FINANCIAL ENTITIES B.C.R.A.
Section 2. Minimum capital for credit risk.
Version: 2nd COMMUNICATION “A” 6639
Validity:
01/01/2019

ii) the use of the credit lines expanded to which points 6.1.1.2., and 6.1.2.1., c) of the rules on “Financing of the non-financial public sector” refer (considering, if applicable, what is established in Section 9. of the cited rules regarding financial assistance granted and/or holdings of debt instruments of financial trusts or fiduciary funds referred to in point 5.1. of the rules on “Financing of the non-financial public sector” and point 3.2.4. of the cited regulation computed according to the following schedule, which will operate from when the works have begun to be used economically or the equipment generates income for the trust or fiduciary fund through tariffs, taxes, fees or other similar concepts. Computation as “INC” of the use of the expanded line (as a % of such use) From the 25 First month 50 Seventh month 100 Thirteenth month The non-financial public sector cited in these rules is that defined in Section 1. of the rules on “Financing of the non-financial public sector”.
2.2. Exclusions.
2.2.1. Guarantees granted in favor of the Central Bank of the Argentine Republic (BCRA) and for
direct obligations.
2.2.2. Concepts that must be deducted for the purposes of calculating the computable net worth.
2.2.3. Financing and guarantees, sureties and other liabilities granted by branches and
local subsidiaries of foreign financial entities, on behalf and order of their head office or their branches in other countries or of the controlling entity, provided that the following requirements are observed:
2.2.3.1. The rules of the country where the head office or controlling entity is located,
the latter defined according to the provisions in force in that jurisdiction, must cover supervision on a consolidated basis of the branches or local subsidiaries.
2.2.3.2. The entity must comply with what is provided in point 3.1. of the rules on
“Credit Assessments”, requiring for this purpose an international risk rating included in the “investment grade” category.
2.2.3.3. In the case of financing, these must be attended to by the branches or local subsidiaries only with funds coming from lines assigned to
them by the aforementioned foreign intermediaries.
If the assistance is granted in a currency different from that of the foreign resources, the local entity cannot assume the exchange rate risk. MINIMUM CAPITALS OF FINANCIAL ENTITIES B.C.R.A.
Section 2. Minimum capital for credit risk.
Version: 2nd COMMUNICATION “A” 6639
Validity:
01/01/2019

In order to determine the amount of financing included in the exposure to the non-financial public sector, with respect to national public bonds that have normal and usual quotation for significant amounts in markets of the country that apply to passive swap operations in pesos and that are funded with deposits of those public bonds, the net position criterion for bonds provided in the rules on “Financing of the non-financial public sector” will be observed. Exposures will include debt balances and contingent commitments multiplied by the corresponding credit conversion factor (CCF).
2.5.3. A central counterparty entity (“CCP”) is understood to be the clearing house that intervenes between the parties to a financial contract negotiated
in one or more markets, acting as buyer for every seller and as seller for every buyer, thereby guaranteeing the future execution of the contracts in question. The CCP becomes the counterparty in the negotiations of market participants through novation, or through an open offer system or using another scheme with legal force. For the purposes of determining the treatment to be dispensed to the exposure to a CCP, what is provided in point 4.3.3. or 4.3.4., as applicable, will apply.
2.5.4. For the purposes of recognizing the coverage of credit risk, what is provided in Section 5.
2.5.5. Risk weighters will be applied per operation. If it is understood that an exposure could be subject to different specific risk weighters, the highest one will be applied.
2.5.6. The treatment granted to the exposure to the non-financial public sector will not apply to operations with counterparties to which the BCRA has granted the treatment provided for non-financial private sector persons. In these cases, they must be considered as exposures to non-financial private sector companies.
2.5.7. In the case where the client enters into default with more than ninety days overdue in at least one of its operations with the entity, the entire exposure of the client in the financial entity will be subject to the weighter corresponding to loans with more than 90 days overdue.
2.5.8. Credits incorporated by portfolio purchases will have the same treatment as credits originated by the entity itself, to the extent that the corresponding conditions are met.
2.5.9. Exposures denominated in foreign currency but whose service collection is made in pesos –“dollar linked”– will be computed as those denominated in national currency.
2.5.10. For the purposes of verifying the maximum 30% ratio provided in point
2.6.7.1., the installments of all financing of the financial entity that have periodic amortization must be taken into account, without considering the installments of credits from other entities. MINIMUM CAPITALS OF FINANCIAL ENTITIES B.C.R.A.
Section 2. Minimum capital for credit risk.
Version: 3rd COMMUNICATION “A” 6639
Validity:
01/01/2019

B.C.R.A.
ORIGIN OF THE PROVISIONS CONTAINED IN THE RULES ON “MINIMUM CAPITALS OF FINANCIAL ENTITIES” CONSOLIDATED TEXT ORIGIN OF THE RULES
Section Point Paragraph Com.
Ch./
Annex
Point Paragraph
OBSERVATIONS
1.1. “A” 2136 1. 1° According to Com. “A” 2859, 3558, 5272,
5369, 5580 and 5867.
1.2. “A” 2241
CREFI-2
I 1.3.1. According to Com. “A” 4368, 4771, 5168, 5351, 5355, 5983 and 6260.
1.3. “A” 2136 2. 1° According to Com. “A” 2223.
1.4.1. “A” 2136 3.1.
“A” 3171 According to Com. “A” 3959. i) “A” 2136 3.2. 2° According to Com. “A” 3959. ii) “A” 2136 3.2.4. According to Com. “A” 2241, 4771 and 6275. 1.4.2.1. iii) “A” 414 LISOL-1 VI 6.1. 1.
1.4.2.2. “A” 3171 According to Com. “A” 3959.
2.1. “A” 2136 1. According to Com. “A” 2541, 2736, 2938,
3039, 3307, 3959, 4598, 4702,
4741, 4742, 4961, 4996, 5180, 5369
(Annex I), 5580, 5867, 6128, 6260,
6327, 6639 and “B” 9745.
2.2.1. “A” 2136 I According to Com. “A” 2541 (annex, criteria, d, 2nd paragraph).
2.2.2. “A” 2287 5. According to Com. “A” 5369 (Annex I).
2.2.3. “A” 2412 According to Com. “A” 3959, 5369 (Annex
I), 5671 and 5740.
2.3. “A” 2740 I 3.4. According to Com. “A” 5369 (Annex I).
2.3.1. “A” 2768 2. According to Com. “A” 2948, 3911, 3925,
3959, 4180, 5369 (Annex I), 5831 and
“B” 9074.
2.3.2. “A” 2227 unique 5.2.2. 3°
2.4. “A” 5369 I
last “A” 5580 Includes interpretative clarification.
2.4.1. “A” 5369 I
2.4.2. “A” 5369 I
2.4.3. 1° “A” 5369 I
2° “A” 5580 According to Com. “A” 5831.
2.4.4. “A” 5369 I According to Com. “A” 5831, 6489, 6531 and
6586.
2.5.1. “A” 2136 1.1. According to Com. “A” 5369 (Annex I) and
6260.
1° “A” 5369 I
2.5.2. 2° “A” 5580 According to Com. “A” 5831, 6327 and 6639.
3° “A” 5580
2.5.3. “A” 5369 I According to Com. “A” 5821.
2.
2.5.4. “A” 5369 I According to Com. “A” 5580.

2.2.2.4. Clause in which it is specifically stated that for the execution of the
operation there is no financing –direct or indirect– to the buyer by the assigning entity.
2.2.2.5. Form of entry of funds into the assigning entity.
Likewise, the assigning entity must declare under oath the non-existence of linkage –in the terms established in point 1.2.2. of the rules on “Large exposures to credit risk”– with the acquirers, accompanied by a report with the opinion of its external auditor. When it concerns the cession, only without liability and to acquirers other than financial entities, financial trusts or foreign banks –that comply with what is provided in point 3.1. of the rules on “Credit Assessments”, requiring for this purpose an international risk rating “investment grade”–, of portfolios formed with clients classified in categories 3, 4, 5 or 6 in any of the last six months, according to the rules of “Debtor Classification”, prior authorization from the SEFyC must be requested, for which purpose the entities must supply as a minimum the elements mentioned above. Once conformity is obtained, a copy of the relevant contract must be sent within 10 calendar days from the date of execution.
2.2.3. Ratings 4 and 5.
The general conditions provided in point 2.1.
In addition, in the case of acquirers other than financial entities, financial trusts or foreign banks –that comply with what is provided in point 3.1. of the rules on “Credit Assessments”, requiring for this purpose an international risk rating “investment grade”–, they must have prior authorization from the SEFyC, for which purpose the entities must supply as a minimum the elements mentioned in point 2.2.2. Once conformity is obtained, a copy of the relevant contract must be sent within 10 calendar days from the date of execution. When it concerns an operation that will be carried out in a habitual manner, prior authorization may be requested on a general basis, subject to the concurrent fulfillment of the following requirements:
i) Inform the aforementioned elements of each transaction within 48 business hours of execution. ii) Minimum amount of each transaction: $ 1,000,000, in cash value. iii) Other specific conditions established by the SEFyC. CREDIT PORTFOLIO CESSION B.C.R.A.
Section 2. Requirements.
Version: 5th COMMUNICATION “A” 6639
Validity:
01/01/2019

CONSOLIDATED TEXT
ORIGIN OF THE RULES
Section Point Paragraph Com. Annex Point Paragraph
OBSERVATIONS
1.1. “A” 3337 According to Com. “A” 6327.
1.2. “A” 3337
1.3. 1° “B” 6234 3° According to Com. “A” 3337 and “B” 9074.
2° “A” 3337
1.4. “A” 3337
1.
1.5. “A” 6303
2.1.1. “A” 2156 1° According to Com. “A” 3337.
2.1.2. “A” 2634 a) According to Com. “A” 3337.
2.1.3.1. 1° “A” 2634 d) According to Com. “A” 3337.
2° “A” 3337
1° “A” 2634 d) According to Com. “A” 3274, 3337, 3558 and 4259.
2.1.3.2.
2° “A” 3337
2.1.4. “A” 3337 According to Com. “A” 6327.
2.1.5.1. “A” 2156 4. According to Com. “A” 3337.
2.1.5.2. “A” 2703
“B” 6330
3.

a)
According to Com. “A” 3145 and 3337.
2.1.6. “A” 3337 According to Com. “A” 5671, 5740 and
6232.
2.2. “A” 3337
2.2.1. “A” 3337
2.2.2. “A” 3337
“A” 2634
”A” 3145 a) and b) last
According to Com. “A” 3337, 5671,
5740, 6232 and 6639.
2.2.2.1. “A” 2634 c.1) According to Com. “A” 3337.
2.2.2.2. “A” 3337
2.2.2.3. “A” 3337
2.2.2.4. “B” 6330 2.2. According to Com. “A” 3337.
2.2.2.5. “A” 3337
3° “A” 2634 c.5) According to Com. “B” 6330, “A” 3337 and 5520.
4° “A” 3337 According to Com. “A” 5671, 5740 and 6232.
2.2.2.
5° “B” 6330 2°
1° “A” 3337
2° “A” 2634
“A” 3145 a) and b) last
According to Com. “A” 3337, 5671,
5740 and 6232. Includes interpretative clarification.
3° “B” 6330 2°
4° “A” 3337
2.2.3.
5° “A” 3337 According to Com. “A” 6232.
2.2. Penultimate and
last
“A” 3337
2.
2.3. “A” 2634 f) According to Com. “A” 3337.
B.C.R.A.
ORIGIN OF THE PROVISIONS CONTAINED IN THE RULES ON “CESSION OF CREDIT PORTFOLIOS”

With respect to credits that are assigned to tranches I and II of the additional margins provided in the rules on “Large exposures to credit risk”, the borrower must obligate themselves to ensure that the aforementioned debtor files for the credits included in said tranches are available to the granting financial entity, in the event of a request from the Superintendence of Financial and Currency Entities.
3.4.2. Content.
The file will gather all the elements of judgment that will be taken into account to carry out the assessments and classifications and will record the reviews carried out and the classification assigned. When it is not necessary to evaluate the debtor's repayment capacity because the debt is covered by preferred guarantees “A”, as provided in point 4.4., it will not be mandatory to include the cash flow, financial statements nor any other information necessary to carry out that analysis in the client file. For the purposes of updating the client file, it will be admitted that the assigned classification remains in separate sheets, provided that the adopted procedure –which must be described in the “Classification and Provisioning Procedures Manual”– allows for the precise identification of the classification assigned to each client from the sheet to the file and vice versa. Such file must contain information about credit margins, disaggregated –if applicable– by type or line, in accordance with point 1.1.3.2., subsection ii) of the rules on “Credit Management”. Financial entities must communicate to debtors the negative changes in the classification assigned to them, which is optional when the debt balance is lower than the amount established in point 2. “Debtors Included” of Section 3. “Debtors of the financial system” –Procedure Rules– of the Monthly Accounting Information Regime. Negative changes in classification must be reported to debtors who are classified in situations 3, 4 or 5, with the exception of delinquent debtors from former entities in liquidation (situation 6) and debtors in judicial or extrajudicial collection management (the latter, to the extent that they have postal or reliable notifications regarding the start of collection management). Such information must be sent to the included debtors within 45 days of the reclassification being carried out through any of the following means:
a) together with the printed summary sent to the debtor with the movements of any of the accounts linked to the financing granted to them, b) together with the monthly account summary corresponding to credit cards, DEBTOR CLASSIFICATION B.C.R.A.
Section 3. Classification task.
Version: 10th COMMUNICATION “A” 6639
Validity:
01/01/2019

6.1. Basic information.
The review of the commercial portfolio will be practiced based on updated financial information (financial or accounting statements –as applicable– and complementary information, investment projects, etc.) that clients must provide upon request by the entities, applying parameters valid for each sector and considering other circumstances of the economic activity.
6.2. Classification criterion.
The basic evaluation criterion is the debtor's repayment capacity based on the estimated financial flow and, only secondarily, based on the liquidation of the client's assets, given that the granting of financing must respond to their true credit needs and be carried out under amortization conditions consistent with the real possibilities of repayment that their activity and fund generation allow. In that analysis, emphasis will be placed on measuring the degree of exposure registered in foreign currency based on their indebtedness and income generation in that currency, as well as with respect to those incomes and expenses that are linked to the evolution of the Reference Stabilization Coefficient. Regarding clients with financing in foreign currency, regardless of the source of resources applied, emphasis must be placed on analyzing whether the client has sufficient payment capacity to cover maturities even in the face of significant variations in the exchange rate. To this end, at least two scenarios must be considered in which significant variations in the exchange rate of different magnitudes are contemplated within a term of up to one year. In the case of clients residing abroad, the criteria defined in Section 2. of the rules on “Guidelines for risk management in financial entities” related to “country risk” must also be taken into account. Among other aspects, the following must be considered regarding the country of residence –of the debtor and their guarantor–: i) the economic situation; ii) the size and structure of external debt in relation to the economy; iii) the implicit weaknesses in the country's current account and iv) the evaluation of the country's financial history. In the case of financial entities, the analysis must take into account the liquidity of the debtor intermediary and the quality of its portfolio.
6.3. Minimum periodicity of classification.
The review must be carried out at least with the periodicity indicated below, leaving a record of this in the file of the analyzed client:
DEBTOR CLASSIFICATION
B.C.R.A.
Section 6. Classification of commercial portfolio debtors.
Version: 10th COMMUNICATION “A” 6639
Validity:
01/01/2019

6.3.1. During each calendar quarter, with respect to individually considered clients whose financings, at any point, are equivalent to 5% or more of the computed equity or of the financial trust's assets of the month prior to the end of said period, depending on whether they are entities or financial trusts, respectively. For these purposes, the group of connected counterparties shall be treated as a single client.

6.3.2. During each calendar semester, with respect to individually considered clients whose financings, summed up, amount at any point between 1% –or the equivalent to the reference amount established in point 3.7., whichever is lower– and less than 5% of the computed equity or of the financial trust's assets of the month prior to the end of said period, depending on whether they are entities or financial trusts, respectively. For these purposes, the group of connected counterparties shall be treated as a single client.

At the close of the first calendar semester, the review must have reached no less than 50% of the total amount of the included commercial portfolio, counting the clients referred to in point 6.3.1., so that, if necessary to reach that value, it will be completed with the review of clients whose included financings are less than 1% of said computed equity or of the financial trust's assets, or the equivalent to the reference amount established in point 3.7., following a decreasing order based on their magnitude.

6.3.3. During the fiscal year, in other cases, so that by its end the review must have reached the entirety of the included commercial portfolio.

6.4. Mandatory reconsideration of classification.

In addition to the minimum periodicity exposed previously, the classification must be analyzed –leaving documented evidence of the decision adopted in the client's file– and, if necessary, modified whenever any of the following circumstances occur:

6.4.1. Modification of any of the objective classification criteria arising from these rules (delinquency term, legal status of the client or their debts, compliance with refinancing and requests for refinancing of obligations).

6.4.2. Negative modification of the client's classification in the "Central of Debtors of the Financial System", lowering it to a grade inferior to that of the entity, by at least one other financial entity or financial trust whose claims represent at least 10% of the total reported by all creditors.

6.4.3. Notification of the final determination by the Superintendency of Financial and Exchange Entities of the adjustment of provisions, as provided in the matter as a consequence of inspection tasks.

CLASIFICATION OF DEBTORS
B.C.R.A.
Section 6. Classification of debtors of the commercial portfolio.
Version: 8th. COMMUNICATION “A” 6639
Validity:
01/01/2019

6.4.4. When there is a discrepancy of more than one level between the classification given by the financial entity and those given by at least two other entities or financial trusts in categories inferior to that assigned by it, whose claims together represent at least 20% and are less than 40% of the total reported by all creditors, according to the last information available in the "Central of Debtors of the Financial System".

The reevaluation must be immediate when it concerns clients whose included financings equal or exceed 1% of the computed equity of the entity or of the financial trust's assets, of the month prior to the presentation of any of the mentioned circumstances or the equivalent to the reference amount established in point 3.7., whichever is lower, and within three months for the other included clients.

6.5. Classification levels.

Each client, and the entirety of their included financings, will be included in one of the following six categories, which are defined taking into account the conditions detailed in each case.

Clients who do not register credit assistance from the entity and who subsequently receive financings from it that do not exceed the amount resulting from applying to the debt balance registered in the financial system, according to the last information available in the "Central of Debtors" at the date of its granting, the percentage established in point 2.2.5. of the rules on "Minimum Provisions for Uncollectible Risk" corresponding to the worst classification assigned, may be classified by the entity taking into account only the analysis of the projected cash flow. The assistances thus granted will not be considered for the purposes referred to in point 6.6.

In order to verify the compliance with obligations without resorting to new direct or indirect financing or to refinancings, additional facilities granted with respect to the current agreed margins will not be considered refinancings, provided that the new credit support implies new disbursements of funds and does not exceed 10% of the quota assigned at the time of the last credit evaluation of the client, insofar as these are consistent with the normal course of business and there is capacity to meet the rest of the financial obligations, nor the new financings and the refinancings associated with a greater investment derived from the expansion of activities, and always that it can be demonstrated that the projected cash flow will allow meeting all their obligations.

Nor will refinancings granted to agricultural producers when this results from the application of provisions linked to the Agricultural Emergency Law be considered within this concept, without prejudice to which, for classification purposes, the projected cash flow at the moment when the declared emergency expires must be taken into account. The treatment dispensed within that framework cannot imply an improvement in the classification assigned to the client based on their individual, pre-existing situation to the emergency, nor its application extend beyond the validity fixed for it.

CLASIFICATION OF DEBTORS
B.C.R.A.
Section 6. Classification of debtors of the commercial portfolio.
Version: 8th. COMMUNICATION “A” 6639
Validity:
01/01/2019

6.5.1. In normal situation.

The client's cash flow analysis demonstrates that they are capable of adequately meeting all their financial commitments.

Among the indicators that can reflect this situation, it stands out that the client:

6.5.1.1. presents a liquid financial situation, with a low level and adequate debt structure in relation to their earning capacity, and shows a high capacity to pay debts (capital and interest) under the agreed conditions generating funds -measured through flow analysis- to an acceptable degree. The cash flow is not susceptible to significant variations in the face of important modifications in the behavior of variables both own and linked to their activity sector.

In the analysis to be carried out, the eventual incidence that the situation of the other members of the group of connected counterparties to which they belong may have on their payment capacity must be taken into account, if applicable.

6.5.1.2. regularly complies with the payment of their obligations, even if they incur delays of up to 31 days, it being understood that this happens when the client cancels the obligations without resorting to new direct or indirect financing from the entity.

6.5.1.3. has qualified and honest management, very professional and technical, with adequate internal control systems.

6.5.1.4. has an adequate information system that allows knowing the financial and economic situation of the company permanently. The information is consistent and up to date. When financings have preferred guarantees "B", according to the rules applicable in that matter, the entity may require that information with the frequency that allows it to carry out the evaluation of the debtor observing the minimum periodicity established in point 6.3.

6.5.1.5. belongs to a sector of economic activity or business branch that registers an acceptable future trend, considering, among other aspects, demand and an adequate relationship between profit and income.

6.5.1.6. is competitive in their activity.

6.5.2. With special monitoring.

6.5.2.1. In observation.

The client's cash flow analysis demonstrates that, at the time of carrying it out, they can meet all their financial commitments.

However, there are possible situations that, if not controlled or corrected in a timely manner, could compromise the client's future payment capacity.

Among the indicators that can reflect this situation, it stands out that the client:

i) presents a good financial and profitability situation, with moderate debt and adequate cash flow for the payment of debts by capital and interest. The cash flow tends to weaken to face payments because it is extremely sensitive to the variation of one or two variables, over which there is a significant degree of uncertainty, being especially susceptible to changes in circumstances linked to the sector.

ii) incurs delays of up to 90 days in the payment of their obligations. It will be understood that the client makes the payment of their obligations when they do not resort to new direct or indirect financing from the entity.

iii) has qualified and honest management.

iv) has an adequate information system that allows knowing the financial and economic situation of the client regularly. The information is consistent. When financings have preferred guarantees "B", according to the rules applicable in that matter, the entity may require that information with the frequency that allows it to carry out the evaluation of the debtor observing the minimum periodicity established in point 6.3.

v) belongs to a sector of economic activity or business branch whose future trend presents questionable aspects, possibility of income decrease, increase in competition or structural costs.

vi) maintains payment agreements resulting from judicial or extrajudicial homologated concordats (including homologated extrajudicial preventive agreements) to expire or private arrangements concerted jointly with financial creditor entities when at least 15% of the amount involved in the cited agreement has been cancelled.

In order to determine the amount of the cancellation, it will be admitted to count 50% of the additional guarantees to those originally offered, constituted on assets not linked to the debtor's exploitation -with the exception of mortgages on rural real estate which, therefore, will be computable-, observing the coverage margins established in the rules on "Guarantees".

The agreement with the financial entity must be concerted within 90 or 180 days counted from the date on which the delinquency in the payment of obligations was verified, depending on whether it is necessary to reach agreements with up to two entities or with more than two, respectively.

If the agreement has not been reached within the established period, the debtor must be reclassified into the inferior category that corresponds, according to the indicators established for each level.

Debtors who have cancelled the entirety of the accrued interest may be classified in "normal situation" if they also observe the other conditions provided for that category.

Debtors who have not cancelled at least the accrued interest within 180 days of the refinancing being concerted, must be reclassified into the "high risk of insolvency" category.

For the purposes provided in the last two preceding paragraphs and even if the mentioned percentages of debt have been cancelled, debtors who have received additional credit under the terms referred to in point 2.2.5. of Section 2. of the rules on "Minimum Provisions for Uncollectible Risk", and insofar as said additional financing has not been cancelled, must remain in this category for at least 180 days, counted from the date on which additional credit was granted or from when the refinancing agreement was celebrated, whichever is more recent. This, unless by application of other guidelines it corresponds to categorize them in the inferior level.

Debtors who incur delays of more than 31 days with respect to the conditions agreed in the refinanced obligations, must be recategorized into the immediate inferior level "with problems".

CLASIFICATION OF DEBTORS
B.C.R.A.
Section 6. Classification of debtors of the commercial portfolio.
Version: 7th. COMMUNICATION “A” 6639
Validity:
01/01/2019

6.5.3. With problems.

The client's cash flow analysis demonstrates that they have problems to normally meet all their financial commitments and that, if not corrected, those problems may result in a loss for the financial entity.

Among the indicators that can reflect this situation, it stands out that the client:

6.5.3.1. presents an illiquid financial situation and a cash flow level that does not allow them to meet the payment of the entirety of the capital and interest of the debts, being able to cover only the latter. Scarce earning capacity.

The projection of the cash flow shows a progressive deterioration and high sensitivity to minor and foreseeable modifications of own variables or of the environment, further weakening their payment possibilities.

CLASIFICATION OF DEBTORS
B.C.R.A.
Section 6. Classification of debtors of the commercial portfolio.
Version: 7th. COMMUNICATION “A” 6639
Validity:
01/01/2019

6.5.4. With high risk of insolvency.

The client's cash flow analysis demonstrates that it is highly improbable that they can meet all their financial commitments.

Among the indicators that can reflect this situation, it stands out that the client:

6.5.4.1. presents an illiquid financial situation and a very high level of debt, with negative results in the exploitation and obligation to sell assets of importance for the activity developed and that are materially of significant magnitude. The cash flow is manifestly insufficient, not reaching to cover the payment of interest, and it is feasible to presume that they will also have difficulties to comply with eventual refinancing agreements.

6.5.4.2. incurs delays of up to one year. For this purpose, the counting of the periods will not be interrupted by the granting of renewals when the effective cancellation of the matured obligations has not previously occurred, that is, without resorting to direct or indirect financing from the entity.

6.5.4.3. has incompetent and/or dishonest management. Discontrol is observed in internal systems.

6.5.4.4. has an inadequate information system, which prevents knowing with exactness the real financial and economic situation of the company. The information presented is not reliable because it does not have the adequate supporting documentation. In general, the information is not consistent and is not up to date.

6.5.4.5. has refinancings of the owed capital and accrued interest linked to an insufficient capacity for their payment, with the granting of haircuts or with reduction in the agreed interest rates -unless this derives from market conditions- or when it has been necessary to receive goods in payment of part of the obligations. Nevertheless, the debtor whose debts have been refinanced with the granting of capital haircuts may be recategorized directly into superior levels ("with problems", "in observation") by the application of the methodology established in point 2.2.7. of the rules on "Minimum Provisions for Uncollectible Risk", provided that the other conditions provided in the corresponding categories are also observed.

When at least the payment has been complied with, without incurring delays superior to 31 days of 10% of the refinanced obligations and the entirety of the accrued interest, with plus the accumulated percentage that might correspond if the refinancing had been granted having found the debtor in the inferior category, they may be reclassified into the immediate superior level if, in addition, the other conditions provided in said level are observed.

CLASIFICATION OF DEBTORS
B.C.R.A.
Section 6. Classification of debtors of the commercial portfolio.
Version: 7th. COMMUNICATION “A” 6639
Validity:
01/01/2019

Among the indicators that can reflect this situation, it stands out that the client:

6.5.5.1. presents a bad financial situation with suspension of payments, bankruptcy decreed or request for their own bankruptcy, with obligation to sell at a loss assets of importance for the activity developed and that are materially of significant magnitude. The cash flow does not reach to cover production costs.

6.5.5.2. incurs delays superior to one year, has refinancing of capital and its interest and financing of exploitation losses. For this purpose, the counting of the periods will not be interrupted by the granting of renewals when the effective cancellation of the matured obligations has not previously occurred, that is, without resorting to direct or indirect financing from the entity.

When at least the payment has been complied with, without incurring delays superior to 31 days of 15% of the refinanced obligations and the entirety of the accrued interest, the debtor may be reclassified into the immediate superior level if, in addition, the other conditions provided in said level are observed.

The debtor who, being classified in this category, has refinanced their debt -even if they have cancelled the percentage established in the preceding paragraph- and received additional credit under the terms referred to in point 2.2.5. of the rules on "Minimum Provisions for Uncollectible Risk", and insofar as said additional financing has not been cancelled, must remain in this category for at least 180 days counted from the date on which additional credit was granted or from when the refinancing agreement was celebrated, whichever is more recent.

6.5.5.3. has incompetent and/or dishonest management and/or capable of performing fraudulent acts. There is practically no internal control.

6.5.5.4. has an inadequate information system, which prevents knowing with exactness the real financial and economic situation of the company. The information presented is not reliable because it does not have the adequate supporting documentation. In general, the information is not consistent and is not up to date.

6.5.5.5. belongs to a sector of economic activity or business branch in extinction, with serious structural problems or that are requiring a generalized restructuring.

6.5.5.6. is located in the lowest portion within their sector, not being in conditions to compete and with obsolete, non-profitable technology.

CLASIFICATION OF DEBTORS
B.C.R.A.
Section 6. Classification of debtors of the commercial portfolio.
Version: 8th. COMMUNICATION “A” 6639
Validity:
01/01/2019

CLASIFICATION OF DEBTORS
CONSOLIDATED TEXT ORIGIN NORM
Sec. Point Para. Com. Annex Point Para.
OBSERVATIONS
3.3. last "A" 2216 I 2. 2nd
1st "A" 2216 I 7. 1st According to Com. “A” 5093.
“A” 2287 3. last
2nd "A" 2216 I 6. 2nd
3rd "A" 2216 I I.d. 3rd
3.4.1.
4th "A" 4972 1. According to Com. “A” 5520 and 6639.
3.4.2. "A" 467 3rd
“A” 2216 I 7.
According to Com. “B” 5644, “A” 2287,
2573, 2932, 4545, 4738, 4781,
5093, 5311, 5470, 5557 and 5998.
3.4.3. "A" 2563 I II.
“A” 2586 unique II.
According to Com. “A” 2677 and 5998. It explicitates criterion.
1st "A" 2216 I 7. 1st
2nd "A" 2216 7. last
3rd "A" 2216 I 7. 2nd According to Com. “A” 2223 (point 1.). last "A" 2563 I II. According to Com. “A” 2677.
3.4.4.
“A” 2586 unique II. According to Com. “A” 2677.
3.4.5. Incorporates criterion not given to general knowledge previously. According to Com. “A” 6068.
3.5. "A" 2216 I 3. 1st
3.5.1. "A" 2216 I 3. 1st
1st "A" 2216 I 3. 1st
2nd "A" 2216 I 3. 2nd According to Com. “A” 4972 (point 1.), 5311 and 5998.
3rd "A" 2216 I 3. 3rd According to Com. “A” 2223 (point 1.).
3.5.2. last "A" 2216 I 3. last
3.5.3. Incorporates criterion not given to general knowledge previously.
1st "A" 2373 8. and 3. Includes interpretative clarification.
2nd "A" 2373 8.
3.6. last "B" 5902 3. Includes interpretative clarification.
3.
3.7. "A" 5998 1. According to Com. “A” 6528.
4.1. "A" 2216 I 1. 1st
4.2. "A" 2216 I 1. 2nd
4.3.1. "A" 2216 I 1. 3rd According to Com. “A” 2932 (point 3.).
4.3.2. "A" 2216 I 1. last
4.4. "A" 2932 4.
4.5. "A" 2932 4.
4.
4.6. "A" 3314 8. According to Com. “A” 4529 and 6558.
5.1. "A" 2216 I 6. 1st
5.
5.1.1. 1st "A" 2216 I I. 1st According to Com. “A” 2410.

CLASIFICACIÓN DE DEUDORES
CONSOLIDATED TEXT ORIGIN STANDARD
Sec. Point Para. Com. Annex Point Para.
OBSERVATIONS
“A” 2216 I I. 1°
“A” 2216 I I. 2°
5.1.1.1.
“A” 2216 I II. 4°
According to Com. “A” 2410, 4310 (point 1.),
4975, 5311, 5637, 5998 and 6558.
1° “A” 2216 I 6. last According to Com. “A” 2358, 4310 (point 1.), 4975, 5311, 5637, 5998 and 6558.
2° “A” 2216 I I. 1° According to Com. “A” 2410.
5.1.1.2. last “A” 2216 I 6. last According to Com. “A” 2358.
5.1.2.1. “A” 2216 I 6. 1°
5.1.2.2. “A” 2216 I 6. 1°
5.1.2.3. “A” 4891 6. According to Com. “A” 4975, 5637, 5998 and 6221.
5.
5.1.2.4. “A” 2216 I II. 3° According to Com. “A” 2358, 4310 (point 1.),
4975, 5311, 5637, 5998 and 6558.
6.1. “A” 2216 I I. last According to Com. “A” 6327.
1° “A” 2216 I I.a. 1°
2° “A” 3918 According to Com. “A” 3987.
3° “A” 4453 According to Com. “A” 4577 and 5398.
4° “A” 5398
6.2.
5° Incorporates criteria not previously disclosed generally.
6.3. “A” 2216 I I.a. 2°
6.3.1. “A” 2216 I I.a. 2°, i) According to Com. “A” 2223 (point 1.) and 3339.
6.3.2. “A” 2216 I I.a. 2°, ii) According to Com. “A” 2223 (point 1.), 3339,
4972 (point 10.), 5311, 5998 and 6639.
6.3.3. “A” 2216 I I.a. 2°, iii)
6.4. 1° “A” 2216 I I.b. 1° According to Com. “A” 3339.
6.4.1. “A” 2216 I I.b. 1°, i) According to Com. “A” 3339.
6.4.2. “A” 2216 I I.b. 1°, ii) According to Com. “A” 3339.
6.4.3. "A" 2893 4.
6.4.4. “A” 3339 unique
6.4. last “A” 2216 I I.b. last According to Com. “A” 2223 (point 1.), 3339,
4972 (point 10.), 5311 and 5998.
1° “A” 2216 I I.d. 1° According to Com. “A” 2440.
2° “A” 4060 10.
3° “A” 2216 I I.d. last According to Com. “A” 3339 and 4972 (point 10.).
6.5. last “A” 2216 I I.d. last Includes interpretative clarification.
6.5.1. “A” 2216 I I.d.1. According to Com. “A” 2932 (point 16.), 3339 and
5671.
6.5.1.1. “A” 2216 I I.d.1.a) According to Com. “A” 3955 and 6639.
6.5.1.2. “A” 2216 I I.d.1.b) According to Com. “A” 3339.
6.5.1.3. “A” 2216 I I.d.1.c)
6.5.1.4. “A” 2216 I I.d.1.d) According to Com. “A” 2932 (point 5.).
6.5.1.5. “A” 2216 I I.d.1.e)
6.5.1.6. “A” 2216 I I.d.1.f) According to Com. “A” 3339.
6.5.2. “A” 2216 I I.d.2. According to Com. “A” 3339.
“A” 2216 I I.d.2. 1°, 2° and 3°
According to Com. “A” 3339. i) “A” 2216 I I.d.2.a) According to Com. “A” 3339 and 3955. ii) “A” 2216 I.d.2.b) According to Com. “A” 3339 and 6639. 6. 6.5.2.1. iii) “A” 2216 I I.d.2.c) According to Com. “A” 3339.

CLASIFICACIÓN DE DEUDORES
CONSOLIDATED TEXT ORIGIN STANDARD
Sec. Point Para. Com. Annex Point Para.
OBSERVATIONS iv) “A” 2216 I I.d.2.d) According to Com. “A” 2932 (point 5.) and 3339. v) “A” 2216 I I.d.2.e) According to Com. “A” 3339. vi) “A” 2216 I I.d.2.f) According to Com. “A” 2427, 2947 (point 1.), 3339, 4060 (point 7.) and 4972 (point 10.). vii) “A” 2947 2. According to Com. “A” 3339, 4060 (point 7.), 4972 (point 10.), 5311, 5671 and 5998. viii) “A” 4467 According to Com. “A” 4972 (point 10.). 6.5.2.1. last “A” 2947 2. According to Com. “A” 3339.
6.5.2.2. “A” 3339 unique According to Com. “A” 4060 (point 9.) and
4972 (point 10.).
6.5.3. 1° “A” 2216 I I.d.3. 1°
6.5.3.1. “A” 2216 I I.d.3.a) According to Com. “A” 3339, 3955 and
6639.
6.5.3.2. “A” 2216 I I.d.3.b) According to Com. “A” 3339.
6.5.3.3. “A” 2216 I I.d.3.c)
6.5.3.4. “A” 2216 I I.d.3.d)
6.5.3.5. “A” 2216 I I.d.3.e) According to Com. “A” 3339, 4060 (point
8.) and 4972 (point 10.).
6.5.3.6. “A” 2216 I I.d.3.f) According to Com. “A” 2427, 2947 (point
1.), 3339, 4060 (point 7.) and 4972
(point 10.).
6.5.3.7. “A” 2216 I I.d.3.g) According to Com. “A” 3339.
6.5.3.8. “A” 2216 I I.d.3.h) According to Com. “A” 3339.
6.5.3.9. “A” 2216 I I.d.3.i)
6.5.3.10. “A” 2947 2. According to Com. “A” 3339, 4060 (point
7.), 4972 (point 10.), 5311, 5671 and
5998.
6.5.3.11. “A” 3339 unique
6.5.3.12. “A” 4467
6.5.4. 1° “A” 2216 I I.d.4. 1°
6.5.4.1. “A” 2216 I I.d.4.a) According to Com. “A” 3955 and 6639.
6.5.4.2. “A” 2216 I I.d.4.b) According to Com. “A” 3339.
6.5.4.3. “A” 2216 I I.d.4.c) According to Com. “A” 3339.
6.5.4.4. “A” 2216 I I.d.4.d)
6.5.4.5. “A” 2216 I I.d.4.e) According to Com. “A” 3339, 4060 (point
8.), 4467 and 4972 (point 10.).
6.5.4.6. “A” 2216 I I.d.4.f) According to Com. “A” 3339 and 4975.
6.5.4.7. “A” 2216 I I.d.4.g) According to Com. “A” 2414, 4210 (point
2.), 4972 (point 10.) and 4975.
6.5.4.8. “A” 2216 I I.d.4.h)
6.5.4.9. “A” 2216 I I.d.4.i)
6.5.4.10. “A” 2216 I I.d.4.j) According to Com. “A” 3339.
6.5.5. “A” 2216 I I.d.5. According to Com. “A” 2440.
6.5.5.1. “A” 2216 I I.d.5. According to Com. “A” 2440, 3955 and
6639.
6.5.5.2. “A” 2216 I I.d.5. According to Com. “A” 2440, 3339, 4060
(point 8.) and 4972 (point 10.).
6.5.5.3. “A” 2216 I I.d.5. According to Com. “A” 2440 and 3339.
6.
6.5.5.4. “A” 2216 I I.d.5. According to Com. “A” 2440.

6.5.5.5. “A” 2216 I I.d.5. According to Com. “A” 2440.

1.1. Procedures manual.
Cooperative credit unions that opt to provide this service must specify in a procedures manual the conditions they will observe for the opening, operation and closing of demand accounts with the use of compensable bills of exchange, which must be based on objective criteria, and may not establish preferential guidelines for persons or companies linked, for which the provisions of point 1.2.2. of the regulations on “Large exposures to credit risk” shall be taken into account. Procedures corresponding to situations of operational discontinuity in which customer due diligence could not be applied, as required by point 1.1.1. of the regulations on “Prevention of money laundering, terrorist financing and other illicit activities”, must be detailed. Such manual must be approved by the Board of Directors of the cooperative credit union, prior to the view of the Audit Committee, a circumstance that must be recorded in the respective minutes. This procedure will also be used for any future modification of the manual and for any exception to the general criteria, along with the grounds for those decisions.
1.2. Account servicing.
Demand accounts must have the use of bills of exchange. Accounts will operate in accordance with the provisions of this regulation, within the framework of Article 100 bis –Chapter XIII, Article 1° of Decree-Law 5965/63– (text according to Article 3° of Law 26.173).
1.3. Identification of holders of demand accounts and persons authorized to operate on them.
1.3.1. Natural persons (holders, each of the persons to whose order the account will remain, and legal representative, authorities and authorized persons to use the account in the case of legal entities).
1.3.1.1. Full names.
1.3.1.2. Date and place of birth.
1.3.1.3. Marital status.
1.3.1.4. Profession, trade, industry, commerce, etc., constituting their main activity,
determining the branch or specialty to which they are dedicated.
1.3.1.5. Real and special addresses, the latter being mandatory in
the Argentine Republic, which will be considered for all legal and regulatory effects derived from the operation of the account, including those arising from the bill of exchange. In the event that there is more than one holder, only one special address will be established. DEMAND ACCOUNTS OPENED IN COOPERATIVE CREDIT UNIONS B.C.R.A.
Section 1. Operation.
Version: 5a. COMMUNICATION “A” 6639
Validity:
01/01/2019

financial entity may have no cost”– and allow it to withdraw from its use without cost any. The financial entity issuing the debit card may not charge its customers any additional commission to that informed by these devices. Financial entities may not have any type of participation or linkage –in this last case, according to the provisions of point 1.2.2. of the regulations on “Large exposures to credit risk”– with non-financial companies that operate and/or administer these automated teller machines. In cases where non-financial companies operate their own automated teller machines and designate a financial entity as administrator, the following aspects must be met:
10.8.1. The administrative financial entity must:
− Represent said company before the electronic compensation chamber that corresponds.
− Assume responsibility for compliance by the non-financial company of the obligations established to interact with the automated teller machine network.
10.8.2. The administrative companies of automated teller machine networks, and the participating financial entities as appropriate, will be responsible for arranging the necessary means, complying with the “Principles for Financial Market Infrastructures” (Communication “A” 5775 and complementary), so that the non-financial company can participate in said networks on equal terms with respect to the rest of the participating financial entities.
10.9. Opening of accounts remotely.
10.9.1. When cooperative credit unions admit remote opening of accounts through electronic and/or communication means, they must meet the following requirements:
10.9.1.1. Ensure that such means allow them to fully comply with the
regulations on the prevention of money laundering and terrorist financing –especially regarding the identification and knowledge of the customer–, as well as the remaining provisions that are applicable.
10.9.1.2. The procedures, technologies and controls used for the remote opening of
the aforementioned accounts must ensure compliance with the provisions on electronic channels and those related to the preservation, integrity, authenticity and confidentiality of the information and documents used, for the purpose of protecting them against alteration or destruction, as well as improper access or use.
10.9.1.3. In the case of accounts in the name of legal entities, the following must be met:
DEMAND ACCOUNTS OPENED IN COOPERATIVE CREDIT UNIONS B.C.R.A.
Section 10. General provisions.
Version: 8a. COMMUNICATION “A” 6639
Validity:
01/01/2019

CONSOLIDATED TEXT ORIGIN STANDARD
Sec. Point Para. Com. Annex Sec. Point Para.
OBSERVATIONS
1.1. “A” 4713 Unique 1. 1.1. S/Com. “A” 5520, 5612 and 6639.
1.2. “A” 4713 Unique 1. 1.2.
1.3. “A” 4713 Unique 1. 1.3. S/Com. “A” 5387, 5728 and 6273.
1.4. “A” 4713 Unique 1. 1.4.
1.5. “A” 4713 Unique 1. 1.5.
1.5.2.1. “A” 4713 Unique 1. 1.5.
1.5.2.2. “A” 4713 Unique 1. 1.5.
1.5.2.3. “A” 4713 Unique 1. 1.5. S/Com. “A” 4971 (pt. 9.), 5000,
5022, 5161 and 6462.
1.5.2.4. “A” 4713 Unique 1. 1.5.
1.5.2.5. “A” 4713 Unique 1. 1.5.
1.5.2.6. “A” 4713 Unique 1. 1.5.
1.5.2.7. “A” 4713 Unique 1. 1.5.
1.5.2.8. “A” 4713 Unique 1. 1.5.
1.5.2.9. “A” 4713 Unique 1. 1.5. S/Com. “A” 5482.
1.5.2.10. “A” 4713 Unique 1. 1.5.
1.5.2.11. “A” 4713 Unique 1. 1.5.
1.5.2.12. “A” 4713 Unique 1. 1.5.
1.5.2.13. “A” 4713 Unique 1. 1.5.
1.5.2.14. “A” 4713 Unique 1. 1.5.
1.5.3. “A” 4713 Unique 1. 1.5. S/Com. “A” 5461, 5482 and 5928 (pt.
8.).
1.
1.5.4. “A” 4713 Unique 1. 1.5. S/Com. “A” 5482.
2.1. “A” 4713 Unique 2. 2.1. S/Com. “A” 4936, 4971 and 5000.
2.2. “A” 4713 Unique 2. 2.2.
2.3. “A” 4713 Unique 2. 2.3. S/Com. “A” 5068, 6148 and 6419.
2.
2.4. “A” 4713 Unique 2. 2.4.
3. 3.1. “A” 4713 Unique 3. 3.1.
3.2. “A” 4713 Unique 3. 3.2. S/Com. “A” 6071.
4.1. “A” 4713 Unique 4. 4.1. S/Com. “A” 4755, 4849, 4971,
5000, 5025, 5263, 5508, 5869 and
6422.
4.
4.2. “A” 4713 Unique 4. 4.2.
5.1. “A” 4713 Unique 5. 5.1. S/Com. “A” 6071 and 6112. Includes
interpretative clarification.
5.2. “A” 4713 Unique 5. 5.2.
5.
5.3. “A” 4713 Unique 5. 5.3.
6.1. “A” 4713 Unique 6. 6.1. S/Com. “A” 4971 (pt. 13.).
6.2. “A” 4713 Unique 6. 6.2.
6.
6.3. “A” 4713 Unique 6. 6.3. S/Com. “A” 4971 (pt. 13.) and 5000.
7.1. “A” 4713 Unique 7. 7.1. S/Com. “A” 4971 (pt. 14.) and 5000.
7.2. “A” 4713 Unique 7. 7.2. S/Com. “A” 4971 (pt. 15.) and 5000.
7.3. “A” 4713 Unique 7. 7.3. S/Com. “A” 4971 (pt. 14.).
7.4. “A” 4713 Unique 7. 7.4.
7.5. “A” 4713 Unique 7. 7.5.
7.6. “A” 4713 Unique 7. 7.6.
7.
7.7. “A” 4713 Unique 7. 7.7. S/Com. “A” 4971 (pt. 14.) and 5000.
B.C.R.A.
ORIGIN OF THE PROVISIONS CONTAINED IN THE REGULATIONS ON “DEMAND ACCOUNTS OPENED IN COOPERATIVE CREDIT UNIONS”

DEMAND ACCOUNTS OPENED IN COOPERATIVE CREDIT UNIONS CONSOLIDATED TEXT ORIGIN STANDARD Sec. Point Para Com. Annex Sec. Point Para OBSERVATIONS
7. 7.8. “A” 4713 Unique 7. 7.8.
7.9. “A” 4713 Unique 7. 7.9.
8.1. “A” 4713 Unique 8. 8.1.
8.2. “A” 4713 Unique 8. 8.2.
8.2.1. “A” 4713 Unique 8. 8.2. S/Com. “A” 6042 and 6448.
8.2.2. “A” 4713 Unique 8. 8.2.
8.3. “A” 4713 Unique 8. 8.3.
8.
8.4. “A” 4713 Unique 8. 8.4.
9. 9.1. “A” 4713 Unique 9. 9.1.
9.2. “A” 4713 Unique 9. 9.2.
10.1. “A” 4713 Unique 10. 10.1. S/Com. “A” 6419.
10.2. “A” 4713 Unique 10. 10.3.
10.3. “A” 4713 Unique 10. 10.4.
10.4. “A” 4713 Unique 10. 10.5. S/Com. “A” 5388.
10.5. “A” 4713 Unique 10. 10.6.
10.6. 1° “A” 5212
10.6.1. “A” 5127 3. S/Com. “B” 9961 and “A” 5164, 5212,
5473, 5718 and 5927 (pt. 3.).
10.6.2. “A” 5212 S/Com. “A” 5718.
10.7. “A” 5588
10.7.1. “A” 5588
10.7.2. “A” 5588
10.8. “A” 5928 10. S/Com. “A” 6236, 6483 and 6639.
10.
10.9. “A” 6273

4.6.2. Notice to holders.
The application of commissions on immobilized balances will be admitted only to the extent that entities communicate this previously to the holders and it is not about amounts derived from an employment relationship and/or social security benefits, referring to its amount and the date of validity, which cannot be less than 60 calendario days from the communication. In the case of account closure by the holder's decision, the entity must not observe the minimum period previously indicated.
4.7. Discriminatory acts.
Entities must adopt the necessary precautions to prevent discriminatory acts against their clientele, for which they must observe the provisions of the regulations on “Protection of financial service users”.
4.8. Closure of non-operational accounts.
Account closure may proceed in the event that no movements –deposits or withdrawals made by the holder(s)– or no balance is registered, in both cases for 730 calendar days. Commissions, for any concept, will only be admitted up to the occurrence of the account balance, and under no circumstances may they accrue or generate balances debtor derived from such situation. Account closure must be communicated in advance to its holders by note sent by certified postal item or, in case, by summary or statement corresponding to this product or other products that the client has in the entity, taking into account for this the provisions of the regulations on “Communication by electronic means for the care of the environment”. In the notice to be issued, a period of not less than 30 calendar days must be granted for the client to choose to maintain the account, before proceeding to its closure. These provisions will be applicable to the operations contemplated in this regulation, except that they have a specific treatment to proceed to their closure or their opening has been ordered by the Judiciary.
4.9. Procedures manual.
Financial entities will specify in a procedures manual, which must be available to the clientele, the conditions they will observe for the opening, operation and closing of savings accounts and the special current account for legal entities, which must be based on objective criteria, and may not establish preferential guidelines for persons or companies linked, in which aspect the provisions of point
1.2.2. of the regulations on “Large exposures to credit risk” will be taken into account.
SAVINGS DEPOSITS, SALARY ACCOUNTS AND SPECIALS B.C.R.A.
Section 4. General provisions.
Version: 11a. COMMUNICATION “A” 6639
Validity:
01/01/2019

The information on affected clients must be submitted to the Federal Administration of Public Revenues, according to the regime established by that Administration. The scope and definitions regarding affected subjects, accounts and data to be supplied, as well as due diligence procedures, must be understood in accordance with the terms of the document “Standard for Automatic Exchange of Financial Account Information—Common Reporting Standard” approved by the OECD.
4.14. Operations on domestic automated teller machines not operated by financial entities.
Financial entities offering demand accounts must allow their customers to perform operations through automated teller machines installed in the country and operated by non-financial companies. These devices must inform the customer in advance of the admitted operations and the price of their use –clarifying that this price will be the same regardless of the quantity and type of transactions to be performed and stating the legend “This operation in a financial entity may have no cost”– and allow them to withdraw from its use without cost any. The financial entity issuing the debit card may not charge its customers any additional commission to that informed by these devices. Financial entities may not have any type of participation or linkage –in this last case, according to the provisions of point 1.2.2. of the regulations on “Large exposures to credit risk”– with non-financial companies that operate and/or administer these automated teller machines. In cases where non-financial companies operate their own automated teller machines and designate a financial entity as administrator, the following must be met:
4.14.1. The administrative financial entity must:
− Represent said company before the electronic compensation chamber that corresponds.
− Assume responsibility for compliance by the non-financial company of the obligations established to interact with the automated teller machine network.
4.14.2. The administrative companies of automated teller machine networks, and the participating financial entities as appropriate, will be responsible for arranging the necessary means, complying with the “Principles for Financial Market Infrastructures” (Communication “A” 5775 and complementary), so that the non-financial company can participate in said networks on equal terms with respect to the rest of the participating financial entities.
SAVINGS DEPOSITS, SALARY ACCOUNTS AND SPECIALS B.C.R.A.
Section 4. General provisions.
Version: 14a. COMMUNICATION “A” 6639
Validity:
01/01/2019

SAVINGS DEPOSITS, SALARY ACCOUNTS AND SPECIALS CONSOLIDATED TEXT ORIGIN STANDARD Sec. Point Para Com. Annex Cap. Sec. Point Para. OBSERVATIONS
4.5. “A” 1199 I 5.1.
4.5.1. “A” 1199 I 5.1.1.
4.5.3. “A” 1199 I 5.1.3. S/Com. “A” 5990.
4.6.1. “A” 1199 I 5.2.1. S/Com. “A” 3042.
4.6.2. “A” 1199 I 5.2.2.
S/Com. “A” 3042, 4809,
5482, 6042 and 6448.
4.7. “B” 6572 S/Com. “A” 5388.
4.8. “A” 4809 6. S/Com. “A” 5986 and 6249.
4.9. “A” 4809 7.
S/Com. “A” 5164, 5520,
5612 and 6639.
4.10. 1° “A” 5212
4.10.1. “A” 5127 3.
S/Com. “B” 9961, “A”
5164, 5212, 5473, 5718,
5778 and 5927.
4.10.2. “A” 5212 S/Com. “A” 5718.
4.10.3. “A” 5137 S/Com. “A” 5164 and 5990.
4.11. “A” 5482 S/Com. “A” 5928.
4.12. “A” 5482
4.13. “A” 5588
4.13.1. “A” 5588
4.13.2. “A” 5588
4.14.
“A” 5928
10.
S/Com. “A” 6236, 6483 and
6639.
4.15. “B” 11269
4.16. “A” 6059 S/Com. “A” 6273.
4.
4.17. “A” 6448 2.
5.1. “A” 1199 I 4.2.6.
S/Com. “B” 9516 and 10025,
“A” 5410 and 5565.
5.2. “B” 10567
5.
5.3. “A” 6341

4.6. Group or economic group.
Two or more natural or legal persons will be considered to form a group of connected counterparties if the provisions of point 1.2.1. of the regulations on “Large exposures to credit risk” are met.
4.7. General foreign exchange position.
It will comprise the total of the entity's liquid external assets, net of the debtor balances of correspondent accounts originating in foreign exchange market operations. Also included will be purchases and sales contracted in the foreign exchange market and that are pending settlement. Liquid external assets of the entity will be considered, among others: currencies and banknotes in foreign currency, availability in gold coin or good delivery bars, creditor balances of correspondent accounts (including transfers in favor of third parties without settlement contracted), other demand deposits in foreign financial entities, investments in external public securities and time deposit certificates. Direct investments abroad, third-party external assets in custody, forward sales and purchases of foreign currencies or securities, deposits in the BCRA in foreign currency in accounts in the name of the entity and other local assets in foreign currency will not be part of the GEP. FOREIGN EXCHANGE AND CHANGES B.C.R.A.
Section 4. Definitions.
Version: 2a. COMMUNICATION “A” 6639
Validity:
01/01/2019

B.C.R.A.
ORIGIN OF THE PROVISIONS CONTAINED IN THE REGULATIONS ON “FOREIGN EXCHANGE AND CHANGES” CONSOLIDATED TEXT ORIGIN STANDARD
Section Point Para. Com.
Cap./
Annex
Point Para.
OBSERVATIONS
1.1. “A” 6244 I 1.1.
1.2. “A” 6244 I 1.2. According to Com. “A” 6436.
1.3. “A” 6244 I 1.3.
1.4. “A” 6244 I 1.4.
1.5. “A” 6244 I 1.6.
1.6. “A” 6244 I 1.7.
1.
1.7. “A” 6244 I 1.8.
2.1. “A” 6244 I 2.1. According to Com. “A” 6363 and 6436.
2.2. “A” 6244 I 2.2. According to Com. “A” 6401.
2.3. “A” 6244 I 2.3.
2.4. “A” 6244 I 2.4. According to Com. “A” 6378 and 6419.
2.5. “A” 6244 I 2.5.
2.6. “A” 6244 I 2.6. According to Com. “A” 6363.
2.7. “A” 6244 I 2.7.
2.8. “A” 6244 I 2.8. According to Com. “A” 6363.
2.
2.9. “A” 6244 I 2.9.
3.1. “A” 6244 I 3.1. According to Com. “A” 6378.
3.2. “A” 6244 I 3.2.
3.3. “A” 6244 I 3.3.
3.4. “A” 6244 I 3.4. According to Com. “A” 6363.
3.5. “A” 6244 I 3.5.
3.6. “A” 6244 I 3.6.
3.7. “A” 6244 I 3.7. According to Com. “A” 6436.
3.8. “A” 6244 I 3.8. According to Com. “A” 6363.
3.
3.9. “A” 6244 I 3.9.
4.1. “A” 6244 I 4.1.
4.2. “A” 6244 I 4.2.
4.3. “A” 6244 I 4.3.
4.4. “A” 6244 I 4.4.
4.5. “A” 6244 I 4.5.
4.6. “A” 6244 I 4.6. According to Com. “A” 6639.
4.
4.7. “A” 6244 I 4.7.
Includes interpretative clarification.
According to Com. “A” 6312.

For the purposes established previously, balances available in bank accounts, instruments that have normal and habitual quotation for significant amounts in domestic markets, shares of common investment funds, and instruments (including amortizations or coupons) whose maturity occurs in the following month must be calculated as of the last business day of each month.

2.2.2. Custody.
Investments must be held in custody at one of the banks authorized to perform this function regarding the investments of the Sustainability Guarantee Fund (FGS) of the Argentine Integrated Pension System or at financial entities that are financial agents of the jurisdictions controlling the public guarantee fund. In the latter case, to the extent that such jurisdiction explicitly guarantees the liabilities of the financial entity.

2.3. Individual Limit.
The total guarantees granted to each client may not exceed 5% of the available risk fund at the time of granting, calculated in accordance with point 2.1. or the equivalent to 3.3 times the reference amount established in point 2.9. –whichever is lower–. This latter amount will be the equivalent to 2.4 times the amount established in point 2.9. until the first special external audit report and the information regime –as provided in point 2.7.– are presented, in which compliance with the established conditions is verified.

The aforementioned amounts will not apply when guarantees operate on debt instrument issuances from companies that are offered to the market through the legal public offering regime.

For the purpose of determining the individual limit, groups of connected counterparties must be considered as a single client.

2.4. Prohibition.
Guarantees may not be agreed upon with contributors or members linked to the public guarantee fund, for which purpose the provisions of point 1.2.2. of the rules on “Large exposures to credit risk” shall be taken into account.

2.5. Liens.
The assets of the available risk fund may not be pledged or encumbered with real rights.

PUBLIC GUARANTEE FUNDS

B.C.R.A.
Section 2. Requirements.
Version: 8th. COMMUNICATION “A” 6639
Validity:
01/01/2019

TEXT ORDERED ORIGIN STANDARD
Section Point Paragraph Com. Chap. Point Paragraph
OBSERVATIONS
1.1. “A” 5275 According to Com. “A” 6183 and 6437.

1.2. “A” 5275 According to Com. “A” 6327 and 6437.
1.3. “A” 5275
2.1. “A” 5275
2.1.1. “A” 5275 According to Com. “A” 6383.
2.1.2. “A” 5275 According to Com. “A” 6383.
2.1.3. “A” 5275
2.1.4. “A” 5275 According to Com. “A” 6383 and 6437.
2.2. “A” 5275 According to Com. “A” 6327.
2.3. “A” 5275 According to Com. “A” 5637, 5998,
6383, 6437 and 6639.
2.4. “A” 5275 According to Com. “A” 5520 and 6639.
2.5. “A” 5275
2.6. “A” 5275
2.7. “A” 5275 According to Com. “A” 5998, 6383 and
6437.
2.8. “A” 5275 According to Com. “A” 6398.
2.
2.9. “A” 5998 1. According to Com. “A” 6528.

B.C.R.A.
ORIGIN OF THE PROVISIONS CONTAINED IN THE RULES ON “PUBLIC GUARANTEE FUNDS”

1.1. Client file.
1.1.1. Definition of client.
The client shall be considered the economic unit receiving the funds or holder of a guarantee –contingent liability for the entity– that, in turn, must be the one to apply or benefit from them, regardless of the legal figure adopted to instrument the operation.

Residents in the country, from the public and private sectors, financial and non-financial, and residents abroad shall be included as clients.

Cases where financial assistance is granted on behalf and order of the parent house are excluded.

1.1.2. Opening.
The entity must maintain a file for each debtor in its portfolio, as well as for each of its correspondents, in accordance with the provisions of the rules on “Correspondent accounts”.

In cases of credits assigned in favor of the entity without liability for the assignor –economic unit receiving the funds–, the file of the signer, drawer, debtor, co-debtor, or acceptor of the respective instruments, constituted consequently as principal and direct payers, to whom the claims have been attributed, must be opened.

The opening of the file is not mandatory in cases of debtors for public services or credit cards, whose credits are assigned by debtors in preventive bankruptcy.

With respect to credits assigned to tranches I and II of the additional margins provided in the rules on “Large exposures to credit risk”, the borrower must obligate itself that the aforementioned files of the debtors for the credits included in said tranches be available to the lending financial entity, in the event of a request by the Superintendence of Financial and Exchange Entities.

1.1.3. Content.
1.1.3.1. General concept.
The file must contain all elements that enable the correct identification of the debtor and the pertinent evaluations regarding the patrimony, income and expense flow, business profitability or profitability of the project to be financed.

Credit policies must comply with the provisions of point 2.6. of the rules on “Protection of users of financial services”.

Furthermore, regarding identity documents, the provisions of Section 4. of the rules on “Valid identification documents” must be observed.

CREDIT MANAGEMENT

B.C.R.A.
Section 1. Requirements for the granting of financings.
Version: 8th. COMMUNICATION “A” 6639
Validity:
01/01/2019

When it is the policy of the financial entity to discriminate the global margin and/or the effectively granted –by type or loan line–, this information must be recorded in the credit file of each client, which must be located at the place of account registration or the head office, in accordance with the pertinent rules.

The policy that each entity adopts to define the credit margins it assigns to each client must be approved by its Board of Directors or equivalent authority.

i) In the case of correspondents, the file must contain the information and other elements of judgment that allow knowing their identification, qualification, credit margins, and any other data linked to that relationship, in accordance with the provisions of the rules on “Correspondent accounts”.

ii) In the case of loans to natural persons with first-degree mortgage guarantee on a home or with first-degree pledge guarantee on automobiles or light utility vehicles 0 km for personal, commercial, or rental use, the credit folders, legal, and administrative folders shall be attached to the debtor's file when the guidelines provided in the respective origination and administration manuals are observed.

iii) When the financial entity has contracted a life insurance on outstanding balance for its clients who are users of financial services, the file must contain the identification of the policy contracted for this purpose.

iv) In the case of credit titles assigned in favor of the entity without liability for the assignor, it must integrate the file with the data that allow the identification of the subject obliged to pay –drawer, endorser, acceptor, or guarantor of the title– and may assign it the credit margin through specific evaluation methods, as provided in subsection b) of point 1.1.3.3., provided that the assigned instruments come from sales operations or service provision corresponding to the activity of the assignor and regarding the subject obliged to pay the following is met:

it is not a natural or legal person linked to the entity according to point 1.2.2. of the rules on “Large exposures to credit risk”;
it does not register debt in the “Central of debtors of the financial system” with a classification other than “in normal situation”; and
it does not register in the “Central of rejected checks” rejections of checks for lack of sufficient available funds credited in account and/or authorization to draw in overdraft that, in the last 24 months, had not been cancelled within 90 calendar days from the occurrence of said rejection.

The entity must also integrate the file of the subject obliged to pay with the evidence of the verification of the conditions provided in this point.

CREDIT MANAGEMENT

B.C.R.A.
Section 1. Requirements for the granting of financings.
Version: 16th. COMMUNICATION “A” 6639
Validity:
01/01/2019

The sworn declaration must be made in the terms of the models contained in point 1.3.8., as applicable. This declaration shall be integrated in duplicate, one copy of which will be delivered to the presenter with the receipt confirmation by the entity.

Financial entities are obliged to supply to the applicants for assistance the necessary information in a timely manner for the correct integration of the data contained in said declaration.

1.3.2. Clients included.
Non-financial private sector clients, whose debt in the lending entity (for all concepts) plus the amount of the financing requested, at the time of granting this, exceeds 2.5% of the NCR of the entity of the last day of the month prior to the one corresponding or the equivalent to the reference amount established in point 1.10., whichever is lower.

1.3.3. Scope.
For these purposes, exposures included within the scope established in the rules on “Large exposures to credit risk” will be considered.

Regarding linkage, the definitions contained in point 1.2.2. of the rules on “Large exposures to credit risk” apply.

1.3.4. Conditioning of assistance.
The granting of assistance is subject to the applicant presenting the sworn declaration.

1.3.5. Update.
The sworn declaration must be updated within five calendar days following the date on which the facts determining the modification of the declared situation occur.

Debtors in bankruptcy or with an extrajudicial preventive agreement requested or under judicial management for a period of up to 540 days counted from the opening of the bankruptcy, request for preventive agreement, or start of judicial collection proceedings, as applicable, are exempt from this update, provided that there is a report from the creditor financial entity's lawyer on the reasonableness of the recovery of the credits included.

This is without prejudice to the fact that they are debts that meet all the conditions provided by point 2.2.3.2. of the rules on “Minimum provisions for uncollectible risk”.

CREDIT MANAGEMENT

B.C.R.A.
Section 1. Requirements for the granting of financings.
Version: 11th. COMMUNICATION “A” 6639
Validity:
01/01/2019

1.3.6. Assignment of rights or credit titles without liability for the assignor.
The obligation to present the sworn declaration on whether they have or do not have the character of linked to the entity falls on both the signer or drawer of the documents and the direct beneficiary of the assistance.

When the signer or drawer of the documents is not a client of the financial entity, it will not be mandatory to require the presentation of the sworn declaration referred to in the preceding paragraph. Instead, the financial entity must verify in its records their status as linked or not to the entity –recording this in the file that must be opened for this purpose– in accordance with the provisions of point 1.2.2. of the rules on “Large exposures to credit risk”.

1.3.7. Exceptions.
Obligors for facilities derived from occasional lags in operations of forward, spot to be settled, and stock exchange forward and collateral are exempt from presenting the sworn declaration, in which the financial entity has already effected the payment (or delivered the agreed counterparty) and is pending the delivery of the agreed counterparty (or the agreed cash payment has not been received).

CREDIT MANAGEMENT

B.C.R.A.
Section 1. Requirements for the granting of financings.
Version: 11th. COMMUNICATION “A” 6639
Validity:
01/01/2019

1.3.8. Models of sworn declarations.
1.3.8.1. Linked client.

CENTRAL BANK OF THE ARGENTINE REPUBLIC

SWORN DECLARATION ON THE CONDITION
OF THE DEBTOR REGARDING THE LINKAGE RULES
ESTABLISHED BY THE B.C.R.A.

LINKED CLIENT

ENTITY:

The undersigned (1), (2), declares under oath that the data recorded in this document are correct, complete, and a faithful expression of the truth and that he/she/the firm he/she represents is (1) reached (1) by the linkage guidelines provided in points 1.2.2.1. to 1.2.2.3. of the rules on “Large exposures to credit risk”.

Furthermore, he/she assumes the commitment to inform any modification that occurs in this regard, within five calendar days of its occurrence, by presenting a new sworn declaration.

Date: Signature:
Document: Type (3) No. Country and Issuing Authority (4):
Invoked Character (5):
Name of the legal entity (6):
CUIT/CUIL (1) No.:

We certify that the signature preceding agrees with the one registered in our books/was placed in our presence (1).

(Seal of the entity and signatures of two authorized officials)

Observations:
(1) Strike out what does not apply.
(2) Integrate with the first and last name of the client, in the case of natural persons, even if an attorney signs on their behalf. (3) Indicate type of identity document, in accordance with the rules on “Valid identification documents”. (4) Integrate only in the case of foreigners who do not have residence in the country. (5) Indicate holder, legal representative, attorney. When it is an attorney, the power granted must be broad and general and be valid on the date this declaration is signed. (6) Integrate only in cases where the signer acts as an attorney or legal representative of a legal entity.

This declaration must be integrated in duplicate, the one intervened by the financial entity will serve for the borrower as proof of receipt of this declaration.

On the back, transcribe points 1.2.2.1. to 1.2.2.3. of the rules on “Large exposures to credit risk” and article 41 of the Financial Entities Law.

CREDIT MANAGEMENT

B.C.R.A.
Section 1. Requirements for the granting of financings.
Version: 13th. COMMUNICATION “A” 6639
Validity:
01/01/2019

1.3.8.2. Non-linked client.

CENTRAL BANK OF THE ARGENTINE REPUBLIC

SWORN DECLARATION ON THE CONDITION
OF THE DEBTOR REGARDING THE LINKAGE RULES
ESTABLISHED BY THE B.C.R.A.

NON-LINKED CLIENT

ENTITY:

The undersigned (1), (2), declares under oath that the data recorded in this document are correct, complete, and a faithful expression of the truth and that he/she/the firm he/she represents is not (1) reached (1) by the linkage guidelines provided in points 1.2.2.1. to 1.2.2.3. of the rules on “Large exposures to credit risk”.

Likewise, he/she declares that he/she knows that, in case of falsity of the content of this presentation, the applicable sanction will be the one corresponding in accordance with the rules on “Disciplinary regime of the Central Bank of the Argentine Republic, Laws 21.526 and 25.065 and their amendments”, without prejudice to the sanctions provided in article 296 of the Penal Code.

Furthermore, he/she assumes the commitment to inform any modification that occurs in this regard, within five calendar days of its occurrence, by presenting a new sworn declaration.

Date: Signature:
Document: Type (3) No. Country and Issuing Authority (4):
Invoked Character (5):
Name of the legal entity (6):
CUIT/CUIL (1) No.:

We certify that the signature preceding agrees with the one registered in our books/was placed in our presence (1).

(Seal of the entity and signatures of two authorized officials)

This declaration must be integrated in duplicate, the one intervened by the financial entity will serve for the borrower as proof of receipt of this declaration.

On the back, transcribe points 1.2.2.1. to 1.2.2.3. of the rules on “Large exposures to credit risk” and article 41 of the Financial Entities Law.

CREDIT MANAGEMENT

B.C.R.A.
Section 1. Requirements for the granting of financings.
Version: 8th. COMMUNICATION “A” 6639
Validity:
01/01/2019

1.3.9. Non-compliance.
Non-compliance with the presentation of the first declaration or subsequent updates will determine the following treatment:

i) The debtor will be considered as linked to the entity and, therefore, the entirety of the assistance granted will be subject to the limits applicable to clients of such character according to the rules on “Large exposures to credit risk”.

ii) The entirety of the debt registered by the borrower must be classified as “uncollectible by technical provision” in relation to the provisions on “Classification of debtors”.

The application of the established treatment must be carried out from the date of granting the assistance, when it is the first declaration or, in the case of subsequent updates, from 1.12. When it is sworn declarations presented out of term, these provisions must be observed until the day or the month prior to the date on which the client makes the pertinent presentation, depending on whether it is the credit assistance limits or the classification of the debtor in the “uncollectible by technical provision” category, respectively.

1.3.10. Falsity of the declaration.
When the SEFyC determines falsity in the presented sworn declaration, which leads to the entity not informing the debtor as a linked client, without prejudice to the application of the treatment established in point 1.3.9., the debtor and the entity –jointly and severally– will be subject to the fine in accordance with the provisions of the rules on “Disciplinary regime of the Central Bank of the Argentine Republic, Laws 21.526 and 25.065 and their amendments”.

1.4. Significant financings.
1.4.1. Financings included.
Financings, regardless of their modality –except inter-financial operations– that exceed 2.5% of the NCR of the financial entity registered on the last day of the second month prior to that in which the granting of credit support is decided.

The group of connected counterparties –defined in the rules on “Large exposures to credit risk”– must be considered as a single client.

CREDIT MANAGEMENT

B.C.R.A.
Section 1. Requirements for the granting of financings.
Version: 6th. COMMUNICATION “A” 6639
Validity:
01/01/2019

1.6. Effectuation of credits in deposit accounts.
Disbursements for financings exceeding $ 50,000 must be effected by crediting them to deposit accounts, as provided in Section 3. of the rules on “Prevention of money laundering, terrorist financing and other illicit activities”.

1.7. Operations on behalf and order of the parent house.
Excluded from the scope of the provisions of this section are clients who only receive financings and guarantees, sureties, and other responsibilities granted by branches and local subsidiaries of foreign financial entities, on behalf and order of their parent house or its branches in other countries or of the controlling entity, provided that the following requirements are observed:

1.7.1. The rules of the country where the parent house or controlling entity is located, the latter defined according to the provisions in force in that jurisdiction, must cover supervision on a consolidated basis of the branches or local subsidiaries.

1.7.2. The entity must comply with what is provided in point 3.1. of the rules on “Credit evaluations”, requiring for this purpose an international risk rating included in the “investment grade” category.

1.7.3. In the case of financings, these must be attended by the local branches or subsidiaries only with funds coming from lines assigned to them by the aforementioned intermediaries abroad.

If the assistance is granted in a currency different from that of the foreign resources, the local entity may not assume the exchange risk between pesos or US dollars and currencies other than them or between the latter when they are not equal.

1.7.4. In the case of guarantees granted locally, there must be counter-guarantees extended by the parent house or its branches in other countries or by the foreign controlling entity, whose effectuation operates in an unrestricted manner upon simple request of the local branch or subsidiary and in an immediate manner to its eventual execution by the beneficiary.

Furthermore, the aforementioned operations are not covered by the rules on “Minimum capital of financial entities”, “Classification of debtors”, “Large exposures to credit risk”, and “Financing of the non-financial public sector”.

CREDIT MANAGEMENT

B.C.R.A.
Section 1. Requirements for the granting of financings.
Version: 6th. COMMUNICATION “A” 6639
Validity:
01/01/2019

4.1. Conditions.
Loans between financial entities must be contracted for fixed terms and cannot be cancelled before their maturity.
Loan operations between financial entities instrumented with the guarantee of "Guaranteed Loans" -issued under Decree 1387/01-, National Public Bonds not considered for operations with this Institution, and admitted according to the information supplied in the Electronic Operations System (SIOPEL) - Wheel "VELI" of the Electronic Open Market (MAE) and monetary regulation instruments of the Central Bank - shall have a minimum term of 7 calendar days. Loan operations with guarantee or assignment of credit portfolios to the financial entity with liability for the assignor must comply with all conditions provided for the use of additional margins of tranches I and II referred to in point 2.3.1.4. of the regulations on "Large credit risk exposures".

4.2. Application of Value Added Tax.
For the purposes of applying the Value Added Tax (Decree No. 295/95), the mention of other "Loans between Financial Entities" covered by the exemption established by article 6, subsection j, point 17, section 1, of the law creating that tax, includes the financing that such intermediaries contract with each other, regardless of their modality or term, including all portfolio assignments, with or without liability for the assignor.

CREDIT MANAGEMENT
B.C.R.A.
Section 4. Inter-financial loans.
Version: 7th. COMMUNICATION “A” 6639
Validity:
01/01/2019

ORDERED TEXT ORIGIN OF THE RULES
Sec. Point Para. Com. Annex Cap. Sec. Point Para.
OBSERVATIONS
1.1.1. “A” 3051
1.1.2. “A” 2729 3. 3.4.1. S/Com. “A” 2950, 4972
(point 2.), 5093, 5520 and
6639.
1° “A” 49 I. 3.1. S/Com. “A” 5387.
2° “A” 5482
3° “A” 5387 S/Com. “A” 5728.
4° “A” 2729 3. 3.4.2. 2° S/Com. “A” 2950 and 6327.
5° “A” 2729 3. 3.4.2. 8° S/Com. “A” 2950 and 3051.
6° “A” 4972 2.
1.1.3.1.
7° “A” 3051 i) “A” 2729 3. 3.4.2. 3° S/Com. “A” 2950 and 3051. ii) “A” 2729 3. 3.4.2. 4° and 5° S/Com. “A” 2950, 5093 and 6558. iii) “A” 2729 3. 3.4.2. 7° S/Com. “A” 2950. iv) “A” 2729 3. 3.4.3. S/Com. “A” 2950. v) “A” 5482 S/Com. “A” 6091. 1.1.3.2. vi) “A” 6558 1. S/Com. “A” 6639. a) “A” 3142 1. S/Com. “A” 3182, 4325 (point 3.), 4556, 4559, 4891, 4972, 5557, 5995 and 6221. 1.1.3.3. b) “A” 4325 3. S/Com. “A” 4559, 4572, 4637, 4891, 4972, 5557, 5637, 5998, 6221 and 6558. a) “A” 4891 2. S/Com. “A” 5226, 5533, 5884 and 6221. 1.1.3.4. b) “A” 4891 2. S/Com. “A” 5700 and 6327.
1.1.4. “A” 2729 3. 3.4.4. S/Com. “A” 2950.
1.1.5. “A” 2729 3. 3.4.5. S/Com. “A” 2950 and 6068.
1.2.1. “A” 3051
1.2.1.1. “B” 5464
1.2.1.2. “B” 5464
1.2.2. “B” 5464 Ult. S/Com. “A” 6167.
1.2.3. “B” 5664 S/Com. “A” 3051.
1.2.4. “C” 18820 S/Com. “B” 8833 and 9063.
1.2.5. “C” 18820 S/Com. “B” 9063.
1° “A” 2573 1. 1° S/Com. “A” 3051.
2° “A” 2573 1. 5°
1.3.1.
3° “A” 2573 1. 6°
1.3.2. “A” 2573 1. 2° S/Com. “A” 3051, 4522,
5557 and 5998.
1.3.3. 1° “A” 2573 1. 3° S/Com. “A” 3051 and 6639.
2° “A” 2573 1. 4° S/Com. “A” 6639.
1.3.4. “A” 2573 1. 7°
1° “A” 2573 1. 8° S/Com. “A” 6329.
2° “A” 4972 2. S/Com. “A” 6329.
1.
1.3.5.
3° “A” 4972 2. S/Com. “A” 6329.
B.C.R.A.
ORIGIN OF THE PROVISIONS CONTAINED IN
THE REGULATIONS ON “CREDIT MANAGEMENT”

CREDIT MANAGEMENT
ORDERED TEXT ORIGIN OF THE RULES
Sec. Point Para. Com. Annex Cap. Sec. Point Para.
OBSERVATIONS
1.3.6. “A” 3051 S/Com. “A” 6558 and 6639.
1.3.7. “A” 3051
1.3.8.1. “A” 2573 I S/Com. “A” 5520, 6334 and
6639.
1.3.8.2. “A” 2573 II S/Com. “A” 5520, 6167,
6334 and 6639. i) “A” 2573 1. 9° S/Com. “A” 6639. ii) “A” 2573 1. 10° 1.3.9.
Ult. “A” 2573 1. 11°
1.3.10. “A” 2573 1. 12° S/Com. “A” 6167.
1.4.1. 1° “A” 2373 3. 1°
2° “B” 5902 9. S/Com. “A” 6639.
1.4.2. “A” 2373
“B” 5902
3.
2.
1° and 2°
1° “A” 2373 3. 3° S/Com. “A” 3051.
2° “A” 3051
3° “B” 5902 6.
1.4.3.
4° “A” 3051
1° “B” 5902 1. 1° and 2°
2° “B” 5902 1. 2°
1.4.4.
3° “B” 5902 1. 3°
1.4.5. “B” 5902 1. 4°
1.4.6.1. “A” 2989 5. 5.1.
1.4.6.2. “A” 2989 5. 5.2.1.5.
1.4.7. “A” 2373 3. 4°, 5° and
6°
S/Com. “A” 6167.
1.5. 1° “A” 2102 1.
2° “A” 2102 2.
1.6. “A” 2814 3. 3.1. S/Com. “A” 3051 and 5223.
1.7. “A” 2412 S/Com. “A” 5671, 5740 and
6639.
1.8.1. “A” 2308 S/Com. “A” 3918 and 4559.
1.8.2. “A” 2177 3.
1.9. “A” 5593 6.
1.
1.10. “A” 5998 1. S/ Com. “A” 6528.
2.1. “A” 49 I 3.2.1. 1°
2.2. 1° “A” 49 I 3.2.1. 2°
2° “A” 2729 7. 7.2.1. 2° S/Com. “B” 9074.
2.
2.3. “A” 476 4.
3.1. “A” 1465 I 2.
3.2.1. “A” 1465 I 2. S/Com. “A” 2275 (point
2.3.).
3.2.2. “A” 2275 2.3.
3.2.3. “A” 2275 2.1.
3.
3.3. “A” 1465 I 2.2. S/Com. “A” 2275.
4.1. “A” 431 S/Com. “A” 4817, 4876,
4972 (point 2.), 5520 and
6639.
4.
4.2. “A” 2322

1.1. Applicable criteria.
The criteria established in the regulations on:
-“Large credit risk exposures”, with the exception of that referred to the treatment of connected counterparty groups and -“Financing to the non-financial public sector”. It will not be necessary to observe the regulations on credit grading with respect to obligors with respect to preferred guarantees “A” received, as long as they are not clients of the entity and the entity therefore does not have their credit file. CREDIT GRADUATION B.C.R.A.
Section 1. Imputation of financing.
Version: 3rd. COMMUNICATION “A” 6639
Validity:
01/01/2019

2.1. Concepts included.
The maximum limits established in this matter are applicable to the concepts covered by Section 6. of the regulations on “Financing to the non-financial public sector” and to the exposures covered by the regulations on “Large credit risk exposures”, as applicable.

2.2. Exclusions.
2.2.1. Exposures foreseen in points 1.3.1. to 1.3.3. of the regulations on “Large credit risk exposures”.
2.2.2. Credit assistance destined for the execution of investment projects.
This exclusion comprises exclusively typical investment projects, in which entities, considering their size and specialty, must carry out studies regarding their technical viability, without the patrimonial liability of the applicants necessarily constituting a determining factor for granting credit for that purpose.
2.2.3. Mortgage credits for own and permanent housing to end users, which have been granted observing a sufficient margin of guarantee against an adequate appraisal of the encumbered assets and weighing the payment capacity from the regular income of the borrowers, so that the initial affectation does not exceed 30% of the debtor's and/or, in their case, co-debtors' perceptions.
2.2.4. Personal and family loans granted based on the payment possibilities of the services by users derived from their regular income, when those installments do not exceed, at the time of the agreements, 30% of the debtor's and/or, in their case, co-debtors' perceptions.
2.2.5. Seasonal credits, provided that, added to the assistance granted by other concepts, they do not exceed the maximum limits fixed on an annual average and are destined to meet extraordinary cyclical needs, whose duration is not superior to one year.
CREDIT GRADUATION
B.C.R.A.
Section 2. Financing included.
Version: 4th. COMMUNICATION “A” 6639
Validity:
01/01/2019

viii) Productive activities through the use of “warrants”. ix) Commercial operations covered with credit insurance.
2.2.8.2. Coverage margin.
Preferred guarantees will be calculated by the coverage margin provided by the regulations on “Guarantees”.
2.2.9. Credits verified with debtors in bankruptcy proceedings that, from their refinancing through a creditors' meeting agreement, exceed the maximum limits established, provided that the following conditions are observed:
2.2.9.1. The granting of assistance should not have constituted, in origin, excesses to these caps.
2.2.9.2. No new assistance shall be granted.
2.2.9.3. Debtors must be duly classified.
2.2.10. Loans (net of produced amortizations) to natural or legal persons or connected counterparty groups not linked, which together for each client, do not exceed the equivalent to the reference amount established in point 2.3.
If the assistance exceeds that amount, the entire financing granted to the client is subject to the maximum limits on credit graduation. This franchise is independent of the other exclusions and applies without prejudice to compliance with current regulations on credit policy and administration, as well as those regarding the adoption of guarantee precautions.
2.2.11. Credits that have guarantees extended by reciprocal guarantee companies or by public guarantee funds registered in the Records authorized by the Central Bank of the Argentine Republic (BCRA).
2.2.12. Loans to other local financial entities.
2.2.13. Financing granted to the non-financial public sector considering for these purposes the definition of point 1.1. of the regulations on “Financing to the non-financial public sector”, except those foreseen in points 1.2.1. and 3.2.6. of that order.
2.2.14. Commitments to provide funds assumed in loan syndication operations, until they manifest in debt balances in the so-called “managing bank” or in the eventual case that in that later stage the latter assumes the obligation to guarantee to the other participating institutions the reimbursement of the funds they contribute for the required financing.
CREDIT GRADUATION
B.C.R.A.
Section 2. Financing included.
Version: 8th. COMMUNICATION “A” 6639
Validity:
01/01/2019

4.1. Applicable criteria.
The criteria established in the regulations on “Large credit risk exposures” and “Financing to the non-financial public sector” shall be applied, as applicable. CREDIT GRADUATION B.C.R.A.
Section 4. Calculation of financing.
Version: 3rd. COMMUNICATION “A” 6639
Validity:
01/01/2019

5.1.2. Clients who do not keep accounting.
The net worth according to asset declarations will be considered.
5.2. Computable patrimonial liability.
5.2.1. Determination.
5.2.1.1. Deductions.
From the considered patrimonial liability, assets that are not linked to the activity for which the assistance is required must be deducted, including their participations in the capital of the lending financial entity.
5.2.1.2. Irrevocable capital contributions.
Irrevocable capital contributions may be calculated provided that the increase in social capital derived from them is concretized within a reasonable term.
5.2.2. Connected counterparty groups.
In the case of connected counterparty groups, only the patrimonial liability of the company managing the credit assistance shall be calculated.
5.2.3. Local branches of foreign companies.
Only the capital assigned to the local branch and affected to its activity shall be calculated, excluding therefore the net worth corresponding to the head office and its other branches. CREDIT GRADUATION B.C.R.A.
Section 5. Computable patrimonial liability of the client.
Version: 2nd. COMMUNICATION “A” 6639
Validity:
01/01/2019

6.1. Calculation of excesses of the complementary margin.
An excess will be considered the total financing granted with imputation to the complementary margin when they do not have the required authorizations or they do not appear in the corresponding minutes books.
6.2. Effects.
Excesses to the maximum fixed limits will determine the application of the treatment established in points 6.3. and 6.4., as applicable. The application of that treatment, in no case, may imply the superposition of an increase in the minimum capital requirement for credit risk when, with respect to the same client, excesses to the maximum limits established in the regulations on “Large credit risk exposures” and “Financing to the non-financial public sector” are also verified. In these situations, the greater increase in the requirement resulting from considering these relationships separately must be observed.
6.3. Defaults reported by entities.
6.3.1. Information entered in term.
They will originate an increase in the minimum capital requirement for credit risk by an amount equivalent to 100% of the excess to the relationship, from the month in which the defaults are registered and while they remain. The calculation of the deviation will be carried out based on the monthly average of daily excesses.
6.3.2. Information entered out of term.
They will originate an increase in the minimum capital requirement for credit risk by an amount equivalent to 100% of the excess to the relationship, from the month in which the information is entered, while the default persists, and additionally, once regularized, for a number of months equal to the number of periods during which the unreported excess was verified by the entity. The calculation of the deviation will be carried out considering the greatest amount of excess recorded in the periods comprising the information entered out of term and in the following ones, as long as the default persists and even if the information of the following periods is entered in time and form. Such calculation will be carried out considering the greatest daily amount of excess, with respect to the clients who originated it, recorded in such periods. CREDIT GRADUATION B.C.R.A.
Section 6. Defaults.
Version: 5th. COMMUNICATION “A” 6639
Validity:
01/01/2019

ORDERED TEXT ORIGIN OF THE RULES
Section Point Paragraph Com. Annex Point Paragraph
OBSERVATIONS
1° “A” 467 unique 2. According to Com. “A” 5520 and 6639.
“A” 467 unique 6.1. last
1. 1.1.
2° “A” 3002 Incorporates interpretative clarification.
2.1. “A” 467 unique 2. According to Com. “A” 5520 and 6639.
2.2.1. “A” 467 unique 4.1. According to Com. “A” 5520 and 6639.
2.2.2. 1° “A” 467 unique 3.1.
last “A” 490 unique 2.
2.2.3. “A” 467 unique 3.2. According to Com. “A” 6221.
2.2.4. “A” 467 unique 3.3. According to Com. “A” 6221.
2.2.5. “A” 467 unique 4.2.
2.2.6. 1° “A” 467 unique 4.3.
last “A” 490 unique 4. and 5.
2.2.7. “A” 467 unique 4.4.
2.2.8. “A” 467 unique 4.5. According to Com. “A” 2054, 5419 and
6558.
2.2.8.1. viii “A” 467 unique 4.5.8. According to Com. “A” 2074.
ix “A” 6558 5.
2.2.9. “A” 467 unique 4.6. According to Com. “A” 2054.
2.2.10. “A” 467 unique 4.7. According to Com. “A” 2098, “B”
5477, “A” 4310 (point 3.),
4975, 5311, 5637, 5998, 6558 and 6639.
2.2.11. “A” 467 unique 4.8.
“A” 2410 7.
According to Com. “A” 2410, 3307,
4093 (penultimate paragraph), 4465 and 5275.
2.2.12. “B” 5902 10. last According to Com. “A” 5013.
2.2.13. “B” 5902 10. last According to Com. “A” 5013, 5154 and
5368.
2.2.14. “B” 5902 10. last According to Com. “A” 5013.
2.2.15. “A” 4891 5. According to Com. “A” 5998.
2.
2.3. “A” 5998 1. According to Com. “A” 6528.
3.1.1. “A” 467 unique 1. 1° According to Com. “A” 2373.
3.1.2.1. “A” 467 unique 1. 2° According to Com. “A” 2373, 5949 and
6467.
1° to 6° “A” 467 unique 1. 2° According to Com. “A” 2373 and “B”
5902. Includes interpretative clarification.
7° “B” 5902 10. 1°
3.1.2.2. last “A” 3002 Incorporates interpretative clarification.
3.2.1. “A” 467 unique 1. 3° According to Com. “A” 2373, modified by Com. “A” 2960.
Incorporates interpretative criterion.
3.2.2. “A” 2206 2. According to Com. “A” 3183 and 6304.
3.2.2.1. “A” 2206 2. According to Com. “A” 3086 and 3183.
3.
3.2.2.2. “A” 2056 1. According to Com. “A” 3086 and 4093
(penultimate paragraph).
B.C.R.A.
ORIGIN OF THE PROVISIONS CONTAINED IN THE REGULATIONS ON “CREDIT GRADUATION”

CREDIT GRADUATION
ORDERED TEXT ORIGIN OF THE RULES
Section Point Para. Com. Annex Point Para.
OBSERVATIONS
3.2.2.3. “A” 2384 1. 1° and 2° According to Com. “A” 3086 and 4093.
3.
3.3. “A” 2156 5.
4. 4.1. “A” 467 unique 5. According to Com. “A” 5520 and 6639.
5.1.1. except
“A” 467 unique 6.1. 1° According to Com. “A” 6327.
5.1.1.1.i) 2° “B” 1460 2°
5.1.1.2. “A” 490 unique 9. According to Com. “A” 6327.
5.1.2. “A” 467 unique 6.1. 1°
5.2.1.1. “A” 467 unique 6.1. last
“A” 2373 2.
5.2.1.2. “A” 490 unique 8.
5.2.2. “A” 467 unique 6.1. last According to Com. “A” 6639.
5.2.3. “A” 3002 Incorporates interpretative criterion.
5.2.4. “B” 5902 7.
5.
5.2.5. “A” 4725 5.
6.1. “A” 3002 6.1.1. 2°
1° “A” 3161 1. and 2. According to Com. “A” 3171, 4093 (penultimate paragraph) and 6639.
6.2.
2° “A” 2019 6. According to Com. “A” 3161, 3171 and 5520.
6.3.1. “A” 3161 1. According to Com. “A” 4093 (penultimate paragraph).
6.3.2. “A” 3161 1. According to Com. “A” 3171 (pt. 2.) and
4093 (penultimate paragraph).
6.3.3. “A” 3161 1. According to Com. “A” 4093 (penultimate paragraph).
6.4. “A” 3161 1. According to Com. “A” 4093 (penultimate paragraph).
6.4.1. “A” 3161 1. According to Com. “A” 4093 (penultimate paragraph).
6.4.2. “A” 3161 1. According to Com. “A” 4093 (penultimate paragraph).
6.4.3. “A” 3161 1. According to Com. “A” 3171 (pt. 3.) and
4093.
6.5. “A” 2019 5. last
6.5.1. “A” 2019 5. last According to Com. “A” 5983.
6.5.2. “A” 3161 1. According to Com. “A” 3171 (pt. 4.) and
4093 (penultimate paragraph).
6.6. “A” 3161 1. According to Com. “A” 6327.
6.
6.7. “A” 3183 1. According to Com. “A” 4093 (pt. 5.).
Includes interpretative criterion.
7.1. “A” 2227 unique 5.1.
and 5.2.1. last
According to Com. “A” 2649.
7.2.1. “A” 2227 unique 5.1.4. According to Com. “A” 2649.
“A” 2227 unique 5.2.2.
7.
7.2.2. “B” 5902 5. According to Com. “A” 6023 and 6505.
Includes interpretative clarification.
8.1. “A” 467 unique 1. last According to Com. “A” 2373.
8. 8.2. “A” 467 3°
8.3. “A” 490 unique 17.

3.2.4. “Traditional” off-balance sheet commitments of the investment portfolio.
Off-balance sheet items must be converted into equivalent credit risk exposures through the use of credit conversion factors (CCF) provided in point 2.7. of the regulations on “Minimum capital of financial entities”, with a minimum limit of 10%.
3.3. Credit Risk Coverage (CRC).
The CRC techniques admissible for calculating exposures to risk are those that satisfy the minimum requirements and admission criteria established in Section 5. of the regulations on “Minimum capital of financial entities” for the recognition of coverage provided by assets, personal guarantees, and credit derivatives. To calculate the exposure to risk, financial entities may only use CRC techniques that they have used to calculate the capital requirement, provided that they also meet the conditions for their recognition as provided in these provisions.
3.3.1. Treatment of maturity mismatch.
Coverages with maturity mismatch will only be recognized when the original term of the coverage is equal to or greater than one year and its residual term is not less than three months. The adjustment of the credit protection for the purposes of calculating exposures to risk will be determined by the method provided in point 5.4. of the cited regulations.
3.3.2. Recognition of CRC techniques.
Financial entities must reduce the value of the exposure vis-à-vis the initial counterparty by the amount of the admissible CRC technique recognized for the purposes of the capital requirement. The recognized amount will be:
3.3.2.1. the protected part in the case of personal guarantees (excluding those granted by the non-financial public sector) and credit derivatives –that are not counter-guaranteed with deposited funds–;
3.3.2.2. the protected part by the market value of assets admitted as guarantee, when the entity uses the simple or substituting weight approach for the purpose of the capital requirement;
3.3.2.3. the value of the asset admitted as guarantee calculated for the purposes of calculating the credit risk exposure of the counterparty for OTC derivatives and any other financial instrument subject to such risk;
3.3.2.4. the value of the asset admitted as guarantee adjusted after applying the haircuts of point 5.2.3.2. of the regulations on “Minimum capital of financial entities”, when the entity applies the comprehensive approach.
LARGE CREDIT RISK EXPOSURES B.C.R.A.
Section 3. Calculation of exposure values.
Version: 2nd. COMMUNICATION “A” 6639
Validity:
26/1/2019

“LARGE CREDIT RISK EXPOSURES”
ORDERED TEXT ORIGIN OF THE RULES
Sec. Point Para. Com. Annex Cap. Sec. Point Para.
OBSERVATIONS
2.5.2.2. “A” 2140 II 3.4. According to Com. “A” 5472,
5496, 5671, 5740 and
6599. Includes interpretative
clarification.
2.5.3.1. “A” 2140 II 2.1. According to Com. “A” 5472 and
6599. i) “A” 2140 II 2.2. 1° According to Com. “A” 5472 and 6599. ii), 1° “A” 2140 II 2.2. 1° According to Com. “A” 5472 and 6599. 2.5.3.2. ii), 2° “A” 2252 3. 1°
2.6. “A” 2140 I 5. According to Com. “A” 5472 and
6599.
2.6.1. “A” 2140 I 5. According to Com. “A” 5472 and
5671 and 6599.
2.6.2. “A” 3901 II 1.1. According to Com. “A” 6599.
2.7. “A” 5193 According to Com. “A” 5472.
2.8.1. “A” 6599 According to Com. “A” 6620.
2.
2.8.2. “A” 6599
3.1. “A” 6599 According to Com. “A” 6620.
3.2. “A” 6599
3.3. “A” 6599 According to Com. “A” 6639
(includes normative interpretation).
3.
3.4. “A” 6599
4.1. “A” 6599
4.2. “A” 6599
4.3. “A” 6599
4.
4.4. “A” 6599
5.1. “A” 49
OPRAC-1
I 4.4.1. Includes interpretative clarifications. According to Com. “A” 5472.
5.2. “A” 49
OPRAC-1
I 4.4.2.
5.3.1. “A” 2573 1. According to Com. “A” 3051
(Annex, point 1.4.1.).
5.
5.3.2. “A” 5472
6.1. “A” 2649 1. According to Com. “A” 6599.
1° “A” 2227 unique 5.1.2.,
5.1.3.,
5.2.1. and
5.2.2.
According to Com. “A” 2649
(point 1.) and 6599.
6.
6.2.
2° “A” 6599

1.4. Senior Management.
Senior Management, among other aspects, will be responsible for:
1.4.1. Implementing the strategies and policies approved by the Board of Directors.
1.4.2. Developing processes that identify, evaluate, monitor, control, and mitigate the risks incurred by the entity.
1.4.3. Implementing appropriate internal control systems and monitoring their effectiveness, reporting periodically to the Board of Directors on the compliance with objectives.
1.5. General considerations.
Whenever these regulations mention the Shareholders' Meeting or the Board of Directors, it must be understood as these organs or the authorities performing similar functions, regardless of the designation used by the financial entities. When reference is made to Senior Management, it is understood as the General Management and those managers who have decision-making power and depend directly on it or on the President of the Board of Directors, among whose responsibilities are those contemplated in point 1.4. Likewise, in the context of these regulations, the word “shares” must be understood as any instrument representing capital. Furthermore, when these regulations mention the term “economic group,” the definition contained in the regulations on “Authorization and composition of capital of financial entities” must be taken into account, while for the case of the word “subsidiaries,” what is provided in the regulations on “Consolidated supervision” must be considered. On the other hand, as indicated in point 1.1., the elaboration and implementation of a corporate governance code that takes into account the good practices contemplated in these guidelines must be carried out in the context of the pertinent current legal provisions. GUIDELINES FOR CORPORATE GOVERNANCE B.C.R.A. IN FINANCIAL ENTITIES
Section 1. General concepts.
Version: 2nd. COMMUNICATION “A” 6639
Validity:
01/01/2019

2.1.10. Supervise the entity’s Senior Management, exercising its authority to obtain sufficient information in a timely manner to allow for the evaluation of their performance.
2.1.11. Meet regularly with Senior Management to review policies, establish communication channels, and monitor compliance with corporate objectives.
2.1.12. Meet regularly with internal auditors to review the results arising from the monitoring of internal control.
2.1.13. Promote the proper functioning of the financial entity, understand the regulatory framework, and ensure an effective relationship with supervisors.
2.1.14. Exercise due diligence in the hiring process and monitoring of the work of external auditors, prior to the opinion of the Audit Committee.
2.1.15. Ensure that Senior Management carries out appropriate and consistent follow-up on the implementation of its policies.
2.1.16. Approve, monitor, and review the design and functioning within the entity of the compensation system for all personnel and, where applicable, the economic incentive system for personnel, in accordance with current legal provisions, ensuring that they are implemented as planned.
2.1.17. Become aware of the corporate governance policy of its subsidiaries.

2.2. Independence.
It is considered good practice that the number of members and the composition of the Board of Directors are such as to allow for the exercise of independent judgment in decision-making with respect to the viewpoint of the administration areas and inappropriate external interests. Independence and objectivity can be strengthened through the inclusion of independent and qualified directors aimed at preventing conflicts of interest or the adoption of decisions contrary to the best interest of the institution. To this end, they will monitor the integrity of financial and non-financial information, transactions with related parties –in the terms established in point 1.2.2. of the rules on “Large exposures to credit risk”– and the appointment and compensation of key executives. In the case of entities in which Board members also perform executive functions, the entity will adopt the necessary measures to minimize the risks that such a situation might generate. For the purposes of these provisions, a member of the Board of Directors of the financial entity is understood not to meet the condition of independence when any of the following situations occur:

GUIDELINES FOR CORPORATE GOVERNANCE
B.C.R.A. IN FINANCIAL ENTITIES
Section 2. Board of Directors.
Version: 3rd. COMMUNICATION “A” 6639
Validity:
01/01/2019

2.2.1. there is a link by control relationship according to the guidelines established in point 1.2.2.1. of the rules on “Large exposures to credit risk”.
2.2.2. performs executive functions or has performed them during the three years prior to the day following the last day on which they effectively held such position. In the case of public financial entities, this period will be one year.
2.2.3. is the spouse or relative up to the second degree of consanguinity or first degree of affinity of those who are in the condition of the preceding points.

2.3. Strategic objectives and organizational values.
In adjustment to the corporate purpose established by the Shareholders’ Meeting, it is considered good practice that the Board of Directors approves and supervises the strategic objectives and corporate values, communicating them to the entire organization. To this effect, the Board of Directors:
2.3.1. Will establish strategic objectives and a code of ethics that meets the professional conduct standards of the financial entity and will be responsible for ensuring that these objectives and standards are widely disseminated within the entity.
The code will contain professional standards and corporate values –codes of conduct and rules inherent to social responsibility, both internal and external– for the Board of Directors, for Senior Management, and for all personnel. It is especially important that these standards cover aspects related to the regulation of acts in competition (acts involving competing with the entity), the prevention of corruption and other illegal or unethical practices, carried out in the capacity of the function performed in the entity or on one’s own account.
2.3.2. Will ensure that Senior Management implements procedures to promote professional conduct and that prevent and/or limit the existence of activities or situations that could negatively affect the quality of corporate governance, such as:
2.3.2.1. Conflicts of interest between the financial entity, the Board of Directors, Senior Management, and the economic group to which the entity belongs.
2.3.2.2. Operating with its directors and administrators and with companies or persons linked to them –in the terms provided in point 1.2.2. of the rules on “Large exposures to credit risk”–, under more favorable conditions than those ordinarily agreed upon with its clientele.

2.4. Responsibilities.
The Board of Directors will establish and enforce clear lines of responsibility throughout the organization.
To this end, it is considered good practice that the Board of Directors:
2.4.1. Specifies its powers and responsibilities and clearly defines and approves those of Senior Management.

GUIDELINES FOR CORPORATE GOVERNANCE
B.C.R.A. IN FINANCIAL ENTITIES
Section 2. Board of Directors.
Version: 3rd. COMMUNICATION “A” 6639
Validity:
01/01/2019

B.C.R.A.
ORIGIN OF THE PROVISIONS CONTAINED IN THE RULES ON “GUIDELINES FOR CORPORATE GOVERNANCE IN FINANCIAL ENTITIES”

ORDERED TEXT	ORIGIN RULE
Section	Point
1.1.	“A” 5201
1.2.	“A” 5201
1.3.	“A” 5201
1.4.	“A” 5201

| 1.5. | “A” 5201 | According to Com. “A” 6639.
2.1. | “A” 5201
2.2. | “A” 5201 | According to Com. “A” 5520 and 6639.
2.2.1. | “A” 5201 | According to Com. “A” 5520 and 6639.
2.3. | “A” 5201
2.3.2.2. | “A” 5201 | According to Com. “A” 5520 and 6639.
| 2.4. | “A” 5201
3.1. | “A” 5201
| 3.2. | “A” 5201
4.1. | “A” 5201
| 4.2. | “A” 5201 | According to Com. “A” 5218.
5.1. | “A” 5201 | According to Com. “A” 6327.
| 5.2. | “A” 5201
6.1. | “A” 5201 | According to Com. “A” 5542.
| 6.2. | “A” 5201 | According to Com. “A” 5542.
7.1. | “A” 5201 | According to Com. “A” 6327.
| 7.2. | “A” 5201
7.3. | “A” 5201

ix) Consider the conjunctural aspects of the country’s economy –and, where applicable, of the foreign country– and the resulting changes in the composition and quality of the credit portfolio; x) Be viable in the long term and through economic cycles; xi) Be effectively communicated –along with credit risk policies– to all areas of the organization directly or indirectly involved; and xii) Be evaluated and updated periodically.

2.1.3.2. Policies.
Credit policies, executed through various processes by the corresponding management areas, are guidelines or directives that guide the decisions of entities with the objective of implementing the strategy for credit risk. Policies must:
i) Define target markets, desired portfolio composition, interest rates, and other lending conditions, limits, etc.; ii) Be clearly defined; iii) Be consistent with prudent practices and applicable regulation; iv) Be suitable for the nature and complexity of the entity’s operations; v) Be designed and implemented taking into consideration internal and external circumstances affecting the entity –market position, area or geographic scope of operations, personnel capacity, etc.–; vi) Ensure adequate diversification of the credit portfolio; vii) Seek a review of credits on an individual and/or by credit lines or segment basis, depending on the size of the exposure and type of debtor; viii) Establish limits at the debtor level, connected counterparty group, and related counterparties, industries or economic sectors, geographic regions, countries, and specific products; ix) Be disseminated to the areas of the organization directly or indirectly involved and implemented through appropriate processes –on a consolidated and individual level–, followed, and periodically reviewed; and

GUIDELINES FOR RISK MANAGEMENT
B.C.R.A. IN FINANCIAL ENTITIES
Section 2. Credit Risk Management.
Version: 3rd. COMMUNICATION “A” 6639
Validity:
01/01/2019

a) Clearly identify the market to which it is directed and guarantee an adequate level of knowledge of the debtor or counterparty, the purpose and structure of the operation, and its probability of repayment; b) Define the credit taker’s profile, as well as the types, amounts, and terms and conditions of credit. To this effect, entities must:
i) Achieve sufficient knowledge of the client prior to lending, establishing strict policies to avoid dealing with persons or companies involved in fraudulent activities. They must also have processes to detect groups of connected counterparties that should be considered as a single client and to aggregate exposures to risk with the same debtor or counterparty across different business lines; ii) Prior to their participation in syndicated loans and other types of credit consortia, carry out an independent due diligence procedure, seeking their own analysis of credit risk and a review of the terms of the operation. iii) Base their credit decisions fundamentally on the debtor’s default risk and only secondarily on the debtor’s equity or the operation’s risk mitigators. Default risk depends on the debtor’s capacity and willingness to repay, and to evaluate it comprehensively, the entity must have sufficient information; iv) Consider and document at the time of lending, depending on the type of credit exposure –mortgage loans, credit cards, etc.– and the nature of the credit relationship –commercial, commercial assimilated to consumption, or consumption or housing–, the following elements:

The purpose or destination of the credit and its source of repayment;
The terms and conditions of the credit;
The current risk profile of the debtor or counterparty and its risk mitigators, evaluating their integrity, effectiveness, enforceability, and sensitivity to the evolution of the economy and the market;
The historical and current behavior of the debtor in fulfilling its obligations;
The debtor’s current and future payment capacity, according to projected cash flows under various scenarios; and

GUIDELINES FOR RISK MANAGEMENT
B.C.R.A. IN FINANCIAL ENTITIES
Section 2. Credit Risk Management.
Version: 3rd. COMMUNICATION “A” 6639
Validity:
01/01/2019

Credit applications must be carefully analyzed by qualified credit analysts who possess experience commensurate with the significance and complexity of the operation and who use the necessary support tools to perform the task. Approval must be carried out according to written guidelines approved by the relevant management level. Entities may create specialist groups to analyze and approve credits related to types of facilities, industrial sectors, or geographic zones of significant importance. There must also be a clear audit trail documenting compliance with the approval process and identifying the persons and/or committees involved in the lending. The credit review function must verify if the respective files are complete, if the established approval process was followed, and if all necessary documentation was obtained.

2.3.1.2. Limits.
Entities must establish credit assistance limits –considering the results of stress tests– at the debtor level and the connected counterparty group and related counterparties, and monitor exposures against these limits. Entities must have procedures to make monitoring more frequent and adopt corresponding measures in case exposures approach the established limits. These limits, which are necessary in all business lines, must:
i) Consider different types of exposures, regardless of their accounting registration form. ii) Avoid concentrations by activity, economic sectors, geographic regions, products, etc. iii) Contribute to having a properly diversified credit portfolio. iv) Be proportional to the debtor’s risk taking into account the existence of guarantees, possibly based on their credit classification, with higher limits for those with lower risk.

2.3.1.3. Credit assistance to persons or companies linked to the entity.
Credit assistance to persons or companies linked to the entity should only be authorized exceptionally and subject to strict limits.

GUIDELINES FOR RISK MANAGEMENT
B.C.R.A. IN FINANCIAL ENTITIES
Section 2. Credit Risk Management.
Version: 4th. COMMUNICATION “A” 6639
Validity:
01/01/2019

Concentrations in credit portfolios are a potential source of problems and occur when entities are highly exposed, directly or indirectly, to a significant number of exposures with similar characteristics –with a counterparty; a group of connected counterparties; an industrial or economic sector; a geographic region; a specific credit facility; or with some risk mitigator–. In cases where solid credits are granted that generate concentration in the portfolio, the entity must implement mechanisms to reduce or mitigate these concentrations, which may include allocating more capital to address potential unexpected losses derived from these concentrations or other methods that prove appropriate. To manage concentrations, entities may opt for different mechanisms –such as the sale of loans, credit derivatives, securitizations, and other structured products– which involve the assumption of risks that must also be identified and managed, requiring adequate policies, processes, and controls to manage them.

iii) Internal rating system.
Based on the nature, significance, and complexity of their activities, entities must develop and use an internal rating system to manage credit risk. Internal risk ratings are an important tool for monitoring credit risk. These ratings must facilitate the identification and measurement of risk derived from all credit exposures and must be integrated into the entity’s general analysis of credit risk and capital sufficiency. A well-structured internal risk rating system classifies debtors and –if applicable, due to business characteristics– their credits into several categories and allows for the evaluation of their credit risk, as well as that of the entire portfolio. The rating system must offer ratings for all debtors and counterparties –not only those with problems– on an individual or by credit lines or segments basis, depending on the size of the exposure and the type of debtor or counterparty. These systems must allow for the timely identification of troubled credits and risk concentrations and serve to properly determine provisions and, eventually, capital for credit risk; they can also be used to determine active rates and measure the risk-adjusted profitability of operations or clients. When developing these systems, entities must decide whether to rate the debtor’s risk, the transaction’s risk, or both. The internal rating system must:

GUIDELINES FOR RISK MANAGEMENT
B.C.R.A. IN FINANCIAL ENTITIES
Section 2. Credit Risk Management.
Version: 3rd. COMMUNICATION “A” 6639
Validity:
01/01/2019

The limit monitoring system must include the quantification of maximum exposure or potential future exposure (PFE) for a confidence level chosen by the entity, both at the portfolio level and at the counterparty level. High or concentrated exposures must be taken into account, for example, by connected counterparty groups, by industry, by markets, and by investment strategies.

2.4.6.2. Have:
i) A rigorous and routine stress testing program to complement the counterparty credit risk analysis, based on the entity’s daily risk measurement model results. When these tests reveal special vulnerability, appropriate risk management strategies must be explicitly considered, which may require, for example, hedging such risks or reducing exposures. ii) A routine process to ensure compliance with a set of internal policies, controls, and procedures for the functioning of the counterparty credit risk management system. This system must be well documented, for example through a risk management manual in which the basic principles of the system are described and the empirical techniques used to quantify counterparty credit risk are explained.

2.4.6.3. Regularly conduct an independent examination of the counterparty credit risk management system through an internal audit process, which includes the units performing operations, regardless of whether they are registered in the investment or trading portfolio, as well as the independent unit responsible for its control.

2.4.6.4. Comprehensively review the management process of this risk at regular intervals, preferably with a minimum frequency of one year, which must include, at least:
i) The adequacy of the system documentation and processes for counterparty credit risk management; ii) The organization of the collateral asset management unit; iii) The organization of the counterparty credit risk control unit; iv) The integration of counterparty credit risk measurement into daily risk management; v) The process for approving the models and valuation systems of the risks used by operators –“front-office”– and recording and control personnel – “back-office”–; vi) The validation of significant changes in the measurement process of this risk; vii) The scope of counterparty credit risks captured by the measurement model;

GUIDELINES FOR RISK MANAGEMENT
B.C.R.A. IN FINANCIAL ENTITIES
Section 2. Credit Risk Management.
Version: 3rd. COMMUNICATION “A” 6639
Validity:
01/01/2019

ORDERED TEXT	ORIGIN RULE
Section	Point
1.1.	“A” 5203
1.2.	“A” 5203
1.3.	“A” 5398
1.3.2.	“A” 5398
1.3.2.1.	“A” 6397
1.3.2.2.	“A” 6459
1.3.2.3.	“A” 6459
1.3.3.	“A” 6459
1.4.	“A” 5203

| 1.5. | “A” 5203 | According to Com. “A” 5398.
2.1. | “A” 5203 | According to Com. “A” 5398 and 6639.
2.2. | “A” 5203 | According to Com. “A” 5398.
2.3. | “A” 5203 | According to Com. “A” 5398, 6327 and 6639.
2.4. | “A” 5398
2.4.1. | “A” 5398
2.4.2. | “A” 5398
2.4.3. | “A” 5398
2.4.4. | “A” 5821 | 5.
2.4.5. | “A” 5398 | According to Com. “A” 5821.
2.4.6. | “A” 5398 | According to Com. “A” 6639.
2.5. | “A” 5398 | According to Com. “A” 5831.
2.6. | “A” 5398 | According to Com. “A” 6327.
| 2.7. | “A” 5203 | According to Com. “A” 5398.
3.1. | “A” 5203 | According to Com. “A” 6107.
3.2. | “A” 5203 | According to Com. “A” 5398.
3.3. | “A” 5203 | According to Com. “A” 5398 and 6107.
| 3.4. | “A” 5203
4.1. | “A” 5203 | According to Com. “A” 5398.
4.2. | “A” 5203
4.3. | “A” 5203 | According to Com. “A” 5398.
| 4.4. | “A” 5203 | According to Com. “A” 5398.
5.1. | “A” 5203 | According to Com. “A” 5398 and 6397.
5.2. | “A” 5203 | According to Com. “A” 5398 and 6397.
5.3. | “A” 5203 | According to Com. “A” 5398 and 6397.
5.4. | “A” 6397 | 1.
5.4.2. 2° | “A” 6397 | 1. | According to Com. “A” 6475 and 6534.
5.4.2.3. ii) | “A” 6397 | 1. | According to Com. “A” 6475 and 6534.
5.5. | “A” 6397 | 1.
5.6. | “A” 6397 | 1.
| 5.7. | “A” 5203 | According to Com. “A” 6397.
1° | “A” 4793 | According to Com. “A” 5203 and 5398.
| 6.1.1. | “A” 4793 | According to Com. “A” 5203 and 5398.
6.1.2. | “A” 4793 | According to Com. “A” 5203 and 5398.
B.C.R.A.
ORIGIN OF THE PROVISIONS CONTAINED IN THE RULES ON “GUIDELINES FOR RISK MANAGEMENT IN FINANCIAL ENTITIES”

In the reference to Communications “A”, mention is made of the thematic grouping to which the provision being disclosed belongs, and two numbers are listed below; the first refers to the version and the second informs the number of modifications that version has undergone.

1.2. Ordered texts.
To facilitate the tracking of rules referred to specific topics, ordered texts were created, structured in a manual format, divided into sections, and with a correlation table detailing the communications that originated and modified them. The aforementioned texts may comprise regulations from different groupings. For example, the rules on “Cooperative credit unions (Law 26.173)” –which regulate these entities– comprise provisions from the CREFI, LISOL, OPRAC, OPASI, REMON, and RUNOR groupings. In turn, several ordered texts of rules may be included in the same grouping. For example, within the LISOL grouping, rules on the following are included:

Allocation of collateral assets.
Minimum capital of financial entities.
Assignment of credit portfolios.
Debtor classification.
Guarantees.
Credit graduation.
Minimum capital defaults and technical relationships. Applicable criteria.
Large exposures to credit risk.
Financing of the non-financial public sector.
Minimum provisions for uncollectible risk.
Ratio for immobilized assets and other concepts.
Consolidated supervision.

1.3. Communications.
Communications are the means through which rules are disseminated. Their different types are:
1.3.1. Communications “A”: deal with topics inherent to normative aspects of a permanent nature or that, due to conjunctural circumstances, justify their framework. If they disclose a new ordered text or modify it, the replaced sheets will be attached as an annex.
1.3.2. Communications “B”: refer to normative aspects of a regulatory, interpretive, transitional, or circumstantial nature.

ORDERING, ISSUANCE, AND DISSEMINATION OF COMMUNICATIONS AND B.C.R.A. PRESS RELEASES
Section 1. Basic guidelines for ordering.
Version: 4th. COMMUNICATION “A” 6639
Validity:
01/01/2019
Page

B.C.R.A.
ORIGIN OF THE PROVISIONS CONTAINED IN THE RULES ON "ORDINANCE, ISSUANCE AND DISCLOSURE OF COMMUNICATIONS AND PRESS RELEASES"

ORDERED TEXT ORIGIN OF THE RULE
Section Point Paragraph Com Annex Point Paragraph
OBSERVATIONS
1.1. “A” 1 4.1. According to Com. “A” 4751 and 6034.
1.2. “A” 4751 According to Com. “A” 6034, 6327 and
6639.
1.3. “A” 1 I 1.3. According to Com. “A” 4751.
1.3.1. “A” 1 I 1.3.1. According to Com. “A” 4751.
1.3.2. “A” 1 I 1.3.2. According to Com. “A” 4751.
1.3.3. “A” 1 I 1.3.3. According to Com. “A” 4751.
1.3.4. “A” 3617 According to Com. “A” 4751, 6034 and
“B” 8359.
1.4. “A” 4751
1.5. “A” 4409 1. According to Com. “A” 4751, 6034,
6094, 6443 and “B” 9469.
1.6. “A” 1 III to V According to Com. “A” 4751 and 6034.
1.
1.7. “A” 4751
2.1.1. “A” 1893 unique 1. 3° According to Com. “A” 4751 and 6034.
2.1.2. “A” 4409 3. 3° According to Com. “A” 6034.
2.2. “A” 1893
Appendix
II
IV, 2.
According to Com. “A” 3593, 4409,
4751 and 6034.
2.3. “A” 1893 unique 7. According to Com. “A” 4409 and 6034.
2.4. “A” 3593 unique 6.
2.5. “A” 1893 unique 5. According to Com. “A” 4751.
2.6. “A” 1893 unique 9. According to Com. “A” 3593.
2.7. “A” 1893 unique 12. According to Com. “A” 3593 and 4751.
2.
2.8.
“A” 4409
According to Com. “A” 4751, 6034 and
“B” 9180.
3.1. “A” 334 unique According to Com. “A” 4751.
3.
3.2. “A” 4751
1° “A” 4751 According to Com. “A” 6034.
4. 4.1. “A” 4751
4.2. “A” 4751 According to Com. “A” 6034.

Index -
Section 1. Scope.
1.1. Objective.
1.2. Expansion plans.
1.3. Public entities.
1.4. Valuation of assets.
1.5. Distribution of dividends.
Section 2. Guidelines.
2.1. Large exposures to credit risk and Financing to the non-financial public sector –as applicable–.
2.2. Minimum capital.
2.3. Accounting.
Correlation table.

B.C.R.A.
ORDERED TEXT OF THE "REGIME TO FACILITATE THE
PRIVATIZATION OF PROVINCIAL AND MUNICIPAL BANKS AND MERGERS AND ACQUISITIONS" Version: 2nd COMMUNICATION “A” 6639 Validity:
01/01/2019

2.1. Large exposures to credit risk and Financing to the non-financial public sector
–as applicable–.
Only the following situations will be considered, with respect to the observance of assistance limits.
2.1.1. Privatized entities.
2.1.1.1. Financing to the public sector of the respective jurisdiction.
A gradual framing process may be admitted for the excesses –with respect to 25% of the calculable equity of the new entity– originated in pre-existing financings at the time of initiating the privatization processes, provided that they are operations that have the guarantee from the allocation of funds from the federal tax sharing. The proposed term may not exceed 60 months, counted from the taking of possession of the entity. The acceptance and the definitive term that is approved will be conditioned on the capitalization effort made by the new shareholders. Within that term and with adjustment to the framing process, the refinancing or renewal of the operations will be admitted.
2.1.1.2. Related clients.
A term of up to 3 months, counted from the taking of possession of the entity, will be granted for the framing within the limits provided in points 2.3., 2.4. and the global limit provided in point 2.5.1. of the rules on “Large exposures to credit risk”, in the case that the assistance to and/or to the bidders is included in their regulations. With respect to the assistance to the directors and/or administrators who, as a consequence of the privatization, cease to perform functions in the entity to be privatized and, where applicable, that which is granted to their controlled companies (group or economic group), the limits established in points 2.1. and 2.2. of the rules on “Large exposures to credit risk”, in point 6.1.1.1. of the rules on “Financing to the non-financial public sector” and in point 2.5.3. of the rules on “Large exposures to credit risk” will be observed, unless by that transformation the limits provided in points 2.3., 2.4. and 2.5.1. of the rules on “Large exposures to credit risk” become applicable. Therefore, what is provided in point 1.2.2.2. of the rules on “Large exposures to credit risk”, which considers related the directors or administrators –and the companies controlled by them or over which they exercise significant influence, by themselves or through included family members–, who have performed (and no longer do so) in those positions during the last three years prior to the date of the credit agreements, will not be applicable.

REGIME TO FACILITATE THE PRIVATIZATION OF PROVINCIAL AND MUNICIPAL BANKS AND B.C.R.A. MERGERS AND ACQUISITIONS
Section 2. Guidelines.
Version: 3rd COMMUNICATION “A” 6639
Validity:
01/01/2019

2.1.1.3. Unrelated clients.
Excesses to the established limits with respect to pre-existing operations will be admitted for the duration of the validity of the financings. As long as the excesses subsist, no new financings may be granted to the included clients, considering as such the forbearance, extensions, renewals or other express or tacit facilities.
2.1.2. Entities resulting from mergers or acquisitions.
With respect to the assistance to the directors and/or administrators who, as a consequence of the merger or acquisition, cease to perform functions in the entity resulting from the merger or acquisition and, where applicable, that which is granted to their controlled companies (group or economic group), the limits established in points
2.1. and 2.2. of the rules on “Large exposures to credit risk”, in the
point 6.1.1.1. of the rules on “Financing to the non-financial public sector” and in point 2.5.3. of the rules on “Large exposures to credit risk” will be observed, unless by that transformation the limits provided in points 2.3., 2.4. and 2.5.1. of the rules on “Large exposures to credit risk” become applicable. Therefore, what is provided in point 1.2.2.2. of the rules on “Large exposures to credit risk”, which considers related the directors or administrators –and the companies controlled by them or over which they exercise significant influence, by themselves or through included family members–, who have performed (and no longer do so) in those positions during the last three years prior to the date of the credit agreements, will not be applicable.
2.1.3. Effect of the facilities.
The admitted excesses will not be considered breaches and therefore will not be subject to charges, provided that the established conditions are met.
2.2. Minimum capital.
2.2.1. Requirement.
2.2.1.1. The minimum capital referred to in point 1.2. of the rules on “Minimum capital of financial entities” will not be required, both for
privatized entities and for mergers or acquisitions in which, together with it, the transformation of the entity into another class is proposed.

REGIME TO FACILITATE THE PRIVATIZATION OF PROVINCIAL AND MUNICIPAL BANKS AND B.C.R.A. MERGERS AND ACQUISITIONS
Section 2. Guidelines.
Version: 4th COMMUNICATION “A” 6639
Validity:
01/01/2019

ORDERED TEXT ORIGIN OF THE RULE
Sec. Point Para. Com. Annex Cap. Sec. Point Para.
OBSERVATIONS
1.1. “A” 3034
1.2. “A” 2280 unique 8)
1.3.1. “A” 2280 unique 2°
1.3.2. “A” 2280 unique 9)
1.4. “A” 2280 unique 4) 1° and 2° According to Com. “B” 5735.
1.
1.5. “A” 2280 unique 7) According to Com. “A” 2437.
2.1. “A” 2280 According to Com. “A” 6639
2.1.1.1. “A” 2280 unique 1.1. a)
2.1.1.2. “A” 2280 unique 1.1. b) According to Com. “A” 5520 and
6639.
2.1.1.3. “A” 2280 unique 1.1. c)
2.1.2. “A” 2280 unique 1.2. According to Com. “A” 5520 and
6639.
2.1.3. “A” 2280 unique 1) 2°
2.2.1. “A” 2280 unique 2) 3° “in fine”.
2.2.1.1. “A” 2280 unique 2) 1°
2.2.1.2. “A” 2280 unique 2) 2° According to the rules on
minimum capital and
Com. “A” 5520 and 6091.
2.2.1.3. “A” 2280 unique 4) 3° and 4° According to Com. “A” 5520.
2.2.1.4. “A” 2280 unique 2) 3°
2.2.2. “A” 2280 unique 3)
6) 1° “in fine”.
2.
2.3.1. “A” 2280 unique 6)

B.C.R.A.
ORIGIN OF THE PROVISIONS CONTAINED IN THE “REGIME TO FACILITATE THE PRIVATIZATION OF PROVINCIAL AND MUNICIPAL BANKS AND MERGERS AND ACQUISITIONS”

9.5.4.
Non-compliance with the rules on “Credit assistance to suppliers”.
Medium 80 N/A
9.5.5.
Non-compliance with the rules on “Credit line for productive investment” and on “Credit line for financing for production and financial inclusion”. Medium 80 N/A 9.5.6. Non-compliance with the rules on “Credit policy”. Low 50 N/A
9.6. Undeclared non-compliance with technical relationships.
9.6.1.
To the rules on “Assistance to related parties”.
High 250 N/A
9.6.2. To minimum capital. High 250 125
9.6.3.
To other provisions of the rules on “Large exposures to credit risk” and “Financing to the non-financial public sector”.
High 250 N/A
9.6.4.
To the rules on “Credit graduation”.
High 250 N/A
9.6.5.
To the rules on “Minimum cash”.
High 250 N/A
9.6.6.
To the rules on “Net global position in foreign currency” and “General Position of Changes”.
High 250 125
9.6.7.
To the rules on “Liquidity coverage ratio”.
Low 50 N/A
9.7. Non-observance of SEFyC instructions.
9.7.1.
Failure to comply with the indications formulated by the auditors appointed in the financial entity.
High 200 N/A
9.7.2.
Non-observance of instructions from the BCRA and non-compliance with the orders to cease and desist disposed by the SEFyC.
High 200 100
9.8. Rules on control and/or external audit.
9.8.1.
Absence of relevant working papers with respect to the reports on internal control and external audits.
High 150 75

DISCIPLINARY REGIME UNDER THE RESPONSIBILITY OF THE CENTRAL BANK OF THE ARGENTINE REPUBLIC B.C.R.A. ARGENTINA, LAWS 21.526 AND 25.065 AND THEIR AMENDMENTS
Section 9. Catalog of infractions.
Version: 3rd COMMUNICATION “A” 6639
Validity:
01/01/2019

“DISCIPLINARY REGIME UNDER THE RESPONSIBILITY OF THE CENTRAL BANK OF THE ARGENTINE REPUBLIC, LAWS 21.526 AND 25.065 AND THEIR AMENDMENTS” ORDERED TEXT ORIGIN OF THE RULE
Section Point Paragraph Com. Cap. Point Paragraph
OBSERVATIONS
7.1. “A” 6167 1.
7.2. “A” 6167 1.
7.3. “A” 6167 1.
7.4. “A” 6167 1.
7.5. “A” 6167 1.
7.6. “A” 6167 1.
7.
7.7. “A” 6167 1.
8.1. “A” 6167 1. According to Com. “A” 6421.
8. 8.2. “A” 6167 1. According to Com. “A” 6421, “B”
11650 and 11792.
9.
“A” 6167 1. According to Com. “A” 6305, 6421 and 6639 .

1.1. Procedures manual.
Banks will specify in a procedures manual the conditions they will observe for the opening, operation and closing of current accounts, which must be based on objective criteria, and may not set preferential guidelines for persons or companies related to them, in which aspect the provision in point 2.2. of the rules on “Large exposures to credit risk” will be taken into account. The procedures corresponding to situations of operational discontinuity in which the due diligence of the client could not be applied, as required by point 1.1.1. of the rules on “Prevention of money laundering, terrorist financing and other illicit activities”, must be detailed. This manual must be approved by the Board of Directors or equivalent authority of the entity, prior to the view of the Audit Committee, a circumstance that must be recorded in the respective minutes. This procedure will also be used for any modification of the manual that is incorporated in the future and for any exception to the general criteria, along with the grounds for those decisions.
1.2. Account service.
Current accounts must have the use of checks, unless they are opened in the name of legal entities, in which case the use of checks may be established as optional. Accounts will function in accordance with what is provided in this regulation, within the framework of
Article 26 of Decree No. 905/02, as provided by Resolution M.E. No. 668/02.
1.3. Identification of current account holders and persons authorized to operate in them.
1.3.1. Natural persons (holders, each of the persons to whose order the account will be,
and legal representative, authorities and authorized to use the account in the case of legal entities).
1.3.1.1. Full names.
1.3.1.2. Date and place of birth.
1.3.1.3. Marital status.
1.3.1.4. Profession, trade, industry, commerce, etc., which constitutes their main activity,
determining the branch or specialty to which they are dedicated.
1.3.1.5. Real and special addresses, the latter being mandatory to be constituted
in the Argentine Republic, which will be considered for all legal and regulatory effects derived from the operation of the account, including those arising from the check. In the event that there is more than one holder, a single special address will be constituted.

REGULATION OF THE BANK CURRENT ACCOUNT
B.C.R.A.
Section 1. Operation.
Version: 7th COMMUNICATION “A” 6639
Validity:
01/01/2019

Financial entities may not have any type of participation or connection –in the latter case, according to what is provided in point 2.2. of the rules on “Large exposures to credit risk”– with non-financial companies that exploit and/or administer these ATMs. In cases where non-financial companies operate their own ATMs and designate a financial entity as administrator, the following aspects must be complied with:
12.8.1. The administering financial entity must:
− Represent said company before the electronic clearing chamber that corresponds.
− Assume responsibility for the compliance by the non-financial company of the obligations established to interact with the ATM network.
12.8.2. The administrators of ATM networks, and the financial entities
participants in what corresponds, will be responsible for arranging the necessary means, complying with the “Principles for Financial Market Infrastructures” (Communication “A” 5775 and complementary), so that the non-financial company can participate in said networks on equal terms with respect to the rest of the participating financial entities.
12.9. Deposit accounts for guarantees of futures and options operations.
When these accounts are used exclusively by markets or clearing houses for capital for the deposit of third-party guarantees, their denomination must carry the addition “Third-party guarantee”.
12.10. Opening of accounts remotely.
When financial entities admit the remote opening of accounts through electronic and/or communication media, they must comply with the following requirements:
12.10.1. Ensure that such means allow them to fully comply with the regulations
in the matter of prevention of money laundering and terrorist financing –especially with respect to the identification and knowledge of the client–, as well as the remaining provisions that are applicable.
12.10.2. The procedures, technologies and controls used for the remote
opening of said accounts must ensure compliance with the provisions in the matter of electronic channels and those related to the conservation, integrity, authenticity and confidentiality of the information and documents employed, for the purpose of protecting them against alteration or destruction, as well as against improper access or use.

REGULATION OF THE BANK CURRENT ACCOUNT
B.C.R.A.
Section 12. General provisions.
Version: 7th COMMUNICATION “A” 6639
Validity:
01/01/2019

ORDERED TEXT ORIGIN OF THE RULE
Sec. Point Para. Com. Annex Cap. Sec. Point Para.
OBSERVATIONS
“A” 3244 1.
1.1. “A” 3244 1.1. S/Com. “A” 5520, 5612
and 6639 .
1.2. “A” 3075 1.1. S/Com. “A” 3244 and 3827
(pto. 10.).
1.3. “A” 2514 unique 1.1.1. and
1.1.1.1.
S/Com. “A” 3075 and
3244.
1.3.1. “A” 2514 unique 1.1.1.1. S/Com. “A” 3075 and
3244.
1.3.1.1. “A” 2514 unique 1.1.1.1.1.
1.3.1.2. “A” 2514 unique 1.1.1.1.2.
1.3.1.3. “A” 2514 unique 1.1.1.1.3.
1.3.1.4. “A” 2514 unique 1.1.1.1.4.
1.3.1.5. “A” 2514 unique 1.1.1.1.5. S/Com. “A” 3244.
1.3.1.6. “A” 2514 unique 1.1.1.1.6. S/Com. “A” 3075 and
6273.
1.3.1.7. “A” 2514 unique 1.1.1.1.7.
1.3.1.8. “A” 2514 unique 1.1.1.1.8.
1.3.1.9. “A” 2514 unique 1.1.1.1.9. S/Com. “A” 3075, 5387
and 5728.
1.3.2. “A” 2514 unique 1.1.1.7.
1.3.2.1. “A” 2514 unique 1.1.1.7.1.
1.3.2.2. “A” 2514 unique 1.1.1.7.1. S/Com. “A” 3075.
1.3.2.3. “A” 2514 unique 1.1.1.7.2. S/Com. “A” 3075.
1.3.2.4. “A” 2514 unique 1.1.1.7.3. S/Com. “A” 6273.
1.3.2.5. “A” 2514 unique 1.1.1.1.6. S/Com. “A” 6273.
1.3.2.6. “A” 2514 unique 1.1.1.7.4.
1.3.2. last “A” 6273
1.3.3. “A” 3075 1. 1.2.4. S/Com. “A” 3244.
1.4. “A” 2514 unique 1.1.1.1. and
1.1.1.7.
S/Com. “A” 3244.
1.4.1. “A” 2514 unique 1.1.1.2. and
1.1.1.7.
S/Com. “A” 3225 and
3244.
1.4.2. “A” 2514 unique 1.1.1.5. and
1.1.1.8.
S/Com. “A” 3075 and
3244.
1.4.3. “A” 3075 1.2.3.3. S/Com. “A” 3244 and
3831.
1.4.4. “A” 2514 unique 1.1.2. S/Com. “A” 3075, 3244
and 4063 (pto.1.).
1.4.5. “A” 2514 unique 1.1.3. S/Com. “A” 3244.
1.4.6. “A” 2514 unique 1.1.4.
1.5. “A” 2514 unique 1.2. S/Com. “A” 3244.
1.5.1. “A” 2514 unique 1.2.1.
1° “A” 2514 unique 1.2.1.1. S/Com. “A” 3075.
1.
1.5.1.1.
2° “A” 2514 unique 1.1.1.3. 2° S/Com. “A” 3075.

B.C.R.A.
ORIGIN OF THE PROVISIONS CONTAINED IN THE RULES ON “REGULATION OF THE BANK CURRENT ACCOUNT”

REGULATION OF THE BANK CURRENT ACCOUNT
ORDERED TEXT ORIGIN OF THE RULE
Sec. Point Para. Com. Annex Cap. Sec. Point Para.
OBSERVATIONS
9.3. “A” 2514 unique 1.5.
9.3.1. 1° “A” 2514 unique 1.5.3.3. 1° and 2° S/Com. “A” 3244.
2° “A” 2514 unique 1.5.2. 2° and 5° S/Com. “A” 3244.
9.3.2. “A” 2514 unique 1.5.3.3. 3° S/Com. “A” 3075 and
3244.
9.
9.4. “A” 2514 unique 1.7.
“A” 3075
10.1. 1° “A” 2514 unique 1.6.3. 3° S/Com. “A” 3075.
2° “A” 2514 unique 1.6.3. 4° S/Com. “A” 3075, 3244 and 4063 (pto. 1.).
10.2. “A” 3075
10.
10.2.1. a
10.2.4.
“A” 2514 unique 1.9.4. Texts that replace models of formula notices. S/Com. “A” 3075, 3235, 3244, 3831 and 4063 (pto. 1.).
11.1. “A” 4063 4.
11.2. “A” 4063 4.
11.
11.3. “A” 4063 4. S/Com. “A” 6638.
“A” 3075
12.1. “A” 2530
12.1.1. 1° “A” 2530 1° S/Com. “A” 3075.
2° “A” 2530 3° and 4°
12.1.2. “A” 2530 2°
12.2. “A” 1199 I 5.1.
12.2.1. “A” 1199 I 5.1.1.
12.2.2. “A” 1199 I 5.1.2.
12.2.3. “A” 1199 I 5.1.3.
12.3. “A” 2514 unique 1.13.2. S/Com. “A” 3075.
12.4. “B” 6572 S/Com. “A” 5388.
12.5. “A” 3235
12.6. 1° “A” 5212
12.6.1. “A” 5127 3. S/Com. “B” 9961 and “A”
5164, 5212, 5473, 5718 and 5927.
12.6.2. “A” 5212 S/Com. “A” 5718.
12.7. “A” 5588
12.7.1. “A” 5588
12.7.2. “A” 5588
12.8. “A” 5928 10. S/Com. “A” 6236, 6483
and 6639.
12.9. “B” 11269
12.
12.10. “A” 6273

1.1. Included concepts.
1.1.1. Shares of domestic companies.
1.1.1.1. Without quotation.
1.1.1.2. With quotation when the holding exceeds 2.5% of the capital and/or votes of the
company or when, without exceeding that margin, the eventual liquidation of the holding may significantly affect the quotation taking into account the daily amount of transactions carried out.
1.1.2. Diverse credits.
1.1.2.1. Facilities granted to enable the sale on credit of the entity's goods,
whatever the nature of the asset, when any of the following conditions are met:
i) the pertinent analyses and evaluations on the patrimonial situation of the acquirer have not been carried out nor have the rules in credit matters been observed. ii) the borrower is related –in the terms established in point 1.2.2. of the rules on “Large exposures to credit risk”– to the holder of the debt that originated the dation in payment or to the creditor financial entity. iii) that the assistance is granted under conditions that are more favorable than those in force in the market for financings of the same nature (term, interest rate, amortization system, grace periods, guarantees, etc.).
1.1.2.2. Balance in favor of the value added tax and advances of other taxes.
1.1.2.3. Balances in favor by application of the minimum presumed profit tax.
1.1.2.4. Assets affected as collateral, including, among others, those related to compliance with obligations related to acting as a market agent
or over-the-counter.

LIST OF IMMOBILIZED ASSETS AND OTHER CONCEPTS
B.C.R.A.
Section 1. Immobilized assets.
Version: 6th COMMUNICATION “A” 6639
Validity:
01/01/2019

2.1. Included concepts.
Financing to related clients –with the exception of those included among the immobilized assets (point 1.1.)– reached by the rules on “Large exposures to credit risk”, without prejudice to the observance of those provisions.
2.2. Exclusions.
Credit assistance related to the activities contemplated in points 2.2.6. and
2.2.8. of Section 2. of the rules on “Complementary services of the financial activity and permitted activities”, to the extent that shareholdings, direct or indirect, exceeding 50% of the share capital and 50% of the total votes are maintained.
Version: 4th COMMUNICATION “A” 6639
Validity:
01/01/2019

LIST OF IMMOBILIZED ASSETS AND OTHER CONCEPTS
B.C.R.A.
Section 2. Other concepts.

ORDERED TEXT ORIGIN OF THE RULE
Section Point Paragraph Com. Cap. Point Paragraph
OBSERVATIONS
1.1.1. “A” 2736 unique 1.6. According to Com. “A” 4093 (penultimate
paragraph).
1.1.2. “A” 2736 unique 1.5. According to Com. “A” 3131, 4093 (penultimate paragraph) and 4296 (point 1.).
1.1.2.1. ii) “A” 2736 unique 1.5.1. According to Com. “A” 3131, 5520 and
6639 .
1.1.3. and
1.1.4.
“A” 2736 unique 1.1. and
1.2.
According to Com. “A” 2753.
1.1.5. “A” 5496 According to Com. “A” 5626.
1.
1.2.1. “A” 2753 1. Includes interpretative clarification.
According to Com. “A” 2832, 3558, 4093
(penultimate paragraph), 4502, 4817
(point 9.), 4888 and 5183.
2.1. “A” 2736 1. 1° According to Com. “A” 4093 (point 6.)
2. 5520 and 6639 .
2.2. “A” 4093 4.
3.1.1. “A” 2736 unique 1. last According to Com. “A” 2966, 4093 (penultimate paragraph), 5580 and “B” 9074.
3.1.2.1. “A” 2736 unique 3. According to Com. “A” 4093 (penultimate
paragraph).
3.1.2.2. “A” 414
LISOL-1
VII 5.2.2.
3.1.2.3. “A” 2736 unique 3.
3.1.2.4. “A” 6327 21.
3.2. “A” 2736 1. 3° According to Com. “A” 2966 (includes
interpretative clarification), 4093
(penultimate paragraph), 5580 and “B”
9074.
3.
3.3. “A” 2736 1. 2°
4. 4.1. “A” 2736 1. 1° According to Com. “A” 4093 (point 1.),
4838 (point 9.), 4937 (point 4.),
6327 and “B” 9745.
5.1.1. “A” 3161 1.
5.1.2. “A” 3161 1. According to Com. “A” 3171 (point 2.).
5.2. “A” 3161 1.
5.2.1. “A” 3161 1.
5.2.2. “A” 3161 1.
5.2.2.1. “A” 3161 1.
5.2.2.2. “A” 3161 1.
5.2.3. “A” 3161 1. According to Com. “A” 3171 (point 3.).
5.3.1. “A” 2241
CREFI-2
I 3.2.3. According to Com. “A” 5983.
5.
5.3.2. “A” 3161 1. According to Com. “A” 3171 (point 4.).

B.C.R.A.
ORIGIN OF THE PROVISIONS CONTAINED IN THE RULES ON “LIST OF IMMOBILIZED ASSETS AND OTHER CONCEPTS”

The societies registered in the aforementioned registry must observe – at all times – the following conditions:

2.1. Risk Fund.
2.1.1. Requirement.
The amount equivalent to 25% of the guarantees granted, as derived from the last quarterly balance sheet.

2.1.2. Investment.
It must be invested in accordance with the provisions made known by the Authority applying Law 24.467 (and its amendments).

2.1.3. Custody.
Investments must be held in custody by financial entities authorized to perform that function in accordance with the provisions made known by the Authority applying Law 24.467 (and its amendments).

2.2. Individual Limit.
The total of guarantees granted to each client may not exceed 5% of the risk fund of the granting society (corresponding to the last quarterly balance sheet) or the amount equivalent to 3.3 times the reference amount established in point 2.6., whichever is lower. This latter amount shall not apply when the guarantees operate on issuances of debt instruments from companies offered to the market through the legal public offering regime. For the purpose of determining the individual limit, sets or economic groups must be considered as a single client.

2.3. Prohibition.
Guarantees may not be agreed upon with clients linked to the SGR, for which purpose the provisions of point 1.2.2. of the regulations on “Large credit risk exposures” shall be taken into account, except in cases of linkage due to personal relationships that may arise from the participation of partner members in the corporate bodies of the SGR (Article 61 of Law 24.467 and complementary laws).

SOCIEDADES DE GARANTÍA RECÍPROCA (ART. 80 OF LAW 24.467) B.C.R.A.
Section 2. Requirements.
Version: 4th. COMMUNICATION “A” 6639
Validity:
01/01/2019

B.C.R.A.
ORIGIN OF THE PROVISIONS CONTAINED IN THE REGULATIONS ON “SOCIEDADES DE GARANTÍA RECÍPROCA (ART. 80 OF LAW 24.467)” CONSOLIDATED TEXT ORIGINATING REGULATION
Section Point Paragraph Com. “A” Point Paragraph
OBSERVATIONS unique “A” 2411 1.
1.1. “A” 2411 1. According to Com. “A” 6383 and 6437. Includes formal adjustments.
1.
1.2. “A” 2411 1. Includes formal adjustments.
“A” 2411 2.
2.1. “A” 2411 2.1.
2.1.1. “A” 2411 2.1. 1st and 2nd According to Com. “A” 2806 and 6383.
2.1.2. “A” 2411 2.3. 1st According to Com. “A” 3141, 4009, 5183 and 5419.
2.1.3. “A” 2411 2.3. 2nd According to Com. “A” 5183 and 5419.
2.2. “A” 2411 2.2. 1st According to Com. “A” 4169, 4253, 4531, 5275, 5637, 5998, 6383 and 6437.
2.3. “A” 2411 2.2. 2nd According to Com. “A” 5520, 6383, 6437 and 6639.
2.4. “A” 2411 2.4. 1st According to Com. “A” 3141, 6383 and 6437.
2.5. “A” 2411 2.4. 1st According to Com. “A” 6398.
2.
2.6. “A” 5998 1. According to Com. “A” 6528

5.1. Individual Base.
Unless otherwise provided, financial entities (including their branches in the country and abroad) shall individually observe the regulations applicable to them. In the case of the minimum cash, as well as the liquidity coverage ratio and the stable net funding ratio, in the latter cases when dealing with entities covered by the regulations on “Liquidity Coverage Ratio” and “Stable Net Funding Ratio”, the individual base does not include branches abroad.

5.2. Consolidated Base.
Without prejudice to individual compliance, controlling financial entities subject to consolidated supervision shall observe the following regulations on a consolidated basis:

5.2.1. Monthly Consolidated Base.
5.2.1.1. Minimum Capital.
5.2.1.2. Classification of debtors and minimum provisions for uncollectible risk.
5.2.1.3. Financing to the non-financial public sector.
5.2.1.4. Credit grading.
i) Maximum limit for holdings in companies that do not provide services complementary to the financial activity. ii) Maximum limit of 2.5% and 10% of the computable net worth of the entity from the second month prior to the granting of the corresponding financing, which reaches the complementary margin of 200% and 300%, respectively, of the computable net worth of the client.
5.2.1.5. Large credit risk exposures.
5.2.1.6. Maximum limit reaching financings, except those destined for other financial entities, regarding the granting of which the intervention of credit area officials and the general manager and the approval of the lending entity's executives is not required, fixed at 2.5% of the computable net worth of the second month prior to granting.
5.2.1.7. Global maximum limits, according to the regulations on “Credit Management” for:
a) Small amount loans. b) Loans for micro-entrepreneurs. c) Loans for micro, small and medium-sized enterprises – from subsection iii) of point 1.1.3.3.–. CONSOLIDATED SUPERVISION B.C.R.A.
Section 5. Compliance with regulations.
Version: 10th. COMMUNICATION “A” 6639
Validity:
01/01/2019

5.2.1.8. Ratio for immobilized assets and other concepts.
5.2.1.9. Liquidity coverage ratio – when dealing with financial entities included in these regulations – according to the scope established in point 8.2. of the regulations on “Liquidity Coverage Ratio”.
5.2.2. Quarterly Consolidated Base.
Without prejudice to individual compliance, and additionally and independently of compliance on a monthly consolidated basis, controlling financial entities subject to consolidated supervision shall observe the following regulations on a quarterly consolidated basis:
5.2.2.1. Minimum Capital.
5.2.2.2. Classification of debtors and minimum provisions for uncollectible risk.
5.2.2.3. Credit risk fragmentation.
5.2.2.4. Maximum limit for holdings in companies that do not provide services complementary to the financial activity.
5.2.2.5. Ratio for immobilized assets and other concepts.
5.2.2.6. Stable net funding ratio – when dealing with financial entities included – according to what is established in point 6.2. of the regulations on “Stable Net Funding Ratio”.
5.2.2.7. Large credit risk exposures.
5.2.3. Compliance with regulations on “Prevention of money laundering, terrorist financing and other illicit activities”.
Financial entities must ensure that branches and subsidiaries included in this regime consider within the internal control scheme the following:
5.2.3.1. Existence of written policies and procedures for the prevention of money laundering and terrorist financing framed within international standards, consistent with the specific characteristics of the different activities and consistent with those of the parent company and/or controlling entity.
CONSOLIDATED SUPERVISION
B.C.R.A.
Section 5. Compliance with regulations.
Version: 11th. COMMUNICATION “A” 6639
Validity:
01/01/2019

CONSOLIDATED SUPERVISION
B.C.R.A.
Section 5. Compliance with regulations.
5.2.3.2. Appointment of a compliance officer responsible for implementing the policies and procedures indicated in the previous point and keeping the highest level of the parent company and/or controlling entity informed on the matter.
5.2.3.3. Existence of an organizational structure with clear definition of roles and responsibilities consistent with that of the parent company and/or controlling entity.
5.2.3.4. Existence of a written procedure for reporting unusual or suspicious operations in accordance with respective legal requirements, and consistent with that of the parent company and/or controlling entity.
5.2.3.5. If it has internal audit to evaluate programs and controls consistent with those of the parent company and/or controlling entity and if its conclusions are analyzed on a consolidated basis.
5.2.3.6. If there are staff training programs in the matter, consistent with those of the parent company and/or controlling entity and if they are fulfilled.
Financial entities must take means to obtain information regarding the compliance of the points detailed previously by each of their included branches and subsidiaries, for example, through reports issued by the external and internal auditors of the aforementioned branches and subsidiaries.
5.2.4. The branches abroad of financial entities and their significant subsidiaries, according to what is provided in point 2.1.2. of these regulations, shall observe the regulations on “Correspondent Accounts”.
5.3. Applicable Criteria.
For the purposes indicated above, the following shall be taken into account:
5.3.1. Monthly Consolidation.
The data of the local financial entity, including its branches in the country and abroad, and its significant subsidiaries, shall be taken. The maximum limits provided in the regulations on “Financing to the non-financial public sector” and “Large credit risk exposures” must be observed on a consolidated basis, that is, considering the operations included from the respective clients in the entities and companies subject to monthly consolidation. Version: 6th. COMMUNICATION “A” 6639 Validity:
01/01/2019

CONSOLIDATED SUPERVISION
B.C.R.A.
Section 5. Compliance with regulations.
The determination of the computable net worth shall be carried out applying the regulations established in the matter, both regarding the requirement and the integration, on a consolidated basis.
5.3.2. Quarterly Consolidation.
The data of the local financial entity, including its branches in the country and abroad, and all its subsidiaries included in the obligation to consolidate quarterly, shall be taken. The maximum limits provided in the regulations on “Financing to the non-financial public sector” and “Large credit risk exposures” must be observed on a consolidated basis, that is, considering the operations included from the respective clients in the entities and companies subject to quarterly consolidation. The determination of the computable net worth shall be carried out considering, both for the requirement and for the integration, the balances at the end of the quarter, and applying in other aspects the regulations established in the matter. Such responsibility shall be the comparison base during the following quarter to determine compliance with the regulations to be observed on a quarterly consolidated basis.
5.4. Other Aspects.
5.4.1. Restrictions regarding common investment funds.
The limitations on the holding of fund shares and transactions that agree liquidity to such funds must be observed on individual and consolidated bases.
5.5. Responsibilities.
It shall be the obligation of the local financial entity to ensure full compliance on a consolidated basis of the regulations subject to that compliance. When this requirement is not observed, the entity shall be subject to the charges and other provisions, for cases of non-compliance, provided by each of the regulations. Additionally, the Superintendent of Financial and Foreign Exchange Entities may:
5.5.1. Order that the treatment established for related persons be applicable to the financial entity or entities subject to consolidation.
5.5.2. Revoke the authorization previously granted to acquire the participation in the subsidiary.
Version: 9th. COMMUNICATION “A” 6639
Validity:
01/01/2019

B.C.R.A.
ORIGIN OF THE PROVISIONS CONTAINED IN THE REGULATIONS ON “CONSOLIDATED SUPERVISION” CONSOLIDATED TEXT ORIGINATING REGULATION
Section Point Paragraph Com. Annex Point Paragraph OBSERVATIONS
1.1. “A” 2227 1. 1st According to Com. “A” 6327.
1.2. “A” 2227 1. last

1st and 2nd “A” 2227 5.
1.3. 3rd and
last
“A” 2227 6.
2.1. “A” 2227 unique 1. According to Com. “A” 2649, 2988 and 6327.
2.2. “A” 2227 unique 1.
2.3. “A” 2619 1st and
last
According to Com. “A” 2988, 5700 and 6304.
2.
2.4. “A” 2227 unique 3.
3.1. “A” 2227 unique 2.2. According to Com. “A” 6327.
3.2. “A” 2227 unique 2.3. According to Com. “A” 2988 and 6327.
3.3. “A” 2227 unique 2.4. According to Com. “A” 6327.
“A” 2227 10. 1st
3.
3.4.
“A” 2732 2nd and 4th
According to Com. “A” 5115 and 6327.
4.1. “A” 2227 unique 4.1.
4.2. “A” 2227 unique 4.2. According to Com. “A” 6327.
1st “A” 2227 unique 4.3. 1st
4.3. 2nd “A” 2227 11.
last “A” 2227 unique 4.3. last
4.4. “A” 2227 unique 4.4. According to Com. “A” 6327.
4.
4.5. “A” 2227 unique 5.4. According to Com. “A” 6327.
5.1. “A” 2227 unique 5.2.1. last According to Com. “A” 2649, 3274, 3558, 5693 and 6306.
5.2. “A” 2227 unique 5.1. and
5.2.1. last
According to Com. “A” 2649.
5.2.1.1. “A” 2227 unique 5.1.1. and
5.1.7.
According to Com. “A” 2649.
5.2.1.2. “A” 2227 unique 5.1.5. According to Com. “A” 2649.
5.2.1.3. “A” 2227 unique 5.1.2. and
5.1.3.
According to Com. “A” 2649 and 6639.
1st “A” 2227 unique 5.1.4. According to Com. “A” 2649 and 3558.
5.2.1.4.i)
2nd “A” 2227 13.
5.2.1.4.ii) “B” 5902 5. According to Com. “A” 2649, 6023 and 6505.
5.2.1.5. “A” 6639
5.
5.2.1.6. “B” 5902 5. According to Com. “A” 2649.

CONSOLIDATED SUPERVISION
CONSOLIDATED TEXT ORIGINATING REGULATION
Section Point Paragraph Com. Annex Point Paragraph
OBSERVATIONS
5.2.1.7. “A” 4891 8. According to Com. “A” 5557.
5.2.1.8. “A” 2227 unique 5.1.8. According to Com. “A” 2736.
5.2.1.9. “A” 5693 According to Com. “A” 5724
(interpretative clarification).
5.2.2. “A” 2227 unique 5.1. According to Com. “A” 2649, 2461, 2736, 2839, 5180, 5272, 5369, 6306, 6327, 6639 and “B” 5902.
5.2.3. “A” 4835 4. According to Com. “A” 5223 and 6639.
5.2.4. “A” 5093
5.3.1. “A” 2227 unique 5.2.1. According to Com. “A” 2649, 5520 and 6639.
5.3.2. “A” 2227 unique 5.2.2. According to Com. “A” 5520 and 6639.
5.4.1. “B” 6566 1.
5.
5.5. “A” 2227 unique 5.3. According to Com. “A” 2649.

Review of the documentation presented to the Central Bank of the Argentine Republic for the fulfillment of technical relations and monetary regulations as well as the information regime established, including the notes to the financial statements. This review will include, among others, the following regulations: minimum capital, minimum cash, immobilized assets and other concepts, large credit risk exposures, financing to the non-financial public sector, and credit grading.
Review of the most significant income statements, by applying global tests, reprocessing and/or visualization of the documentation supporting the operations that originated them.
Verification that the balance sheet balances of the sector or branch, affiliate and/or subsidiary subject to review coincide with those considered in the consolidated balance sheet of the entity.

Other procedures
Regardless of the risk analysis carried out by the internal auditor, the following procedures must be fulfilled:

Review of the controls applied by the entity regarding the disqualifications provided for in art. 10 of the Financial Entities Law, regarding each designated official.
Verification of the reasonableness of the information contained in the Information Regime on Rejected Checks.
Verification of the reasonableness of the information contained in the Monthly Accounting Information Regime – Debtors of the Financial System Rectifying Partial, starting from the analysis of the documentation supporting the modifications and/or suppressions entered in the records of the debtors duly reported to the Central Bank of the Argentine Republic.
Verification of the control and monitoring carried out by the entity on the decentralization of administrative or non-operational activities carried out in third-party premises, regarding compliance by the entity with the same normative and regulatory conditions required for centralized activities, as well as verification of the existence of an outsourcing contract that includes the acceptance and compliance with such conditions by all intervening parties.
Any verification procedure that might be specifically required by the Central Bank of the Argentine Republic, either once or with the frequency that it determines.
MINIMUM INTERNAL CONTROLS REGULATIONS
B.C.R.A. FOR FINANCIAL ENTITIES
ANNEX III
Version: 3rd. COMMUNICATION “A” 6639
Validity:
01/01/2019

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