Communication A 7143: Update of Consolidated Texts

"2020 - YEAR OF GENERAL MANUEL BELGRANO" COMMUNICATION "A" 7143 19/10/2020 TO FINANCIAL ENTITIES:
Ref.: Circular
CREFI 2 - 125
OPRAC 1 - 1068
REMON 1 - 1031
LISOL 1 - 918
CONAU 1 - 1437
OPASI 2 - 625
RUNOR 1 - 1613
CAMEX 1 - 868
Communication "A" 7108. Update of consolidated texts. ____________________________________________________________ We address you to deliver to you the attached sheets, which, in replacement of those previously provided, must be incorporated into the regulations regarding "Authorities of financial entities", "Interest rates on credit operations", "Minimum cash", "Cash settlement and forward operations, swaps, pledges, other derivatives and with common investment funds", "Guidelines for risk management in financial entities", "Minimum capital of financial entities", "Large credit risk exposures" and "Distribution of results", based on the provisions disseminated through Communication "A" 7108. On this Institution's website www.bcra.gob.ar, accessing "Financial System – LEGAL AND REGULATORY FRAMEWORK – Regulation and summaries – Consolidated texts of general regulations" you will find the modifications made with texts highlighted in special characters (strikethrough and bold). We salute you sincerely. CENTRAL BANK OF THE ARGENTINE REPUBLIC Matías A. Gutiérrez Girault Darío C. Stefanelli Manager of Emission of Regulations Principal Manager of Emission and Regulatory Applications

ANNEX

The separation of executive and administrative functions shall be carried out based on the group in which the financial entity falls, according to the classification provided in point 4.1. and in order to what is established in point 4.2. For these purposes, administrative functions are understood as those belonging to the Board of Directors – or equivalent authority of the financial entity – and executive functions as those referring to the implementation of policies set by the administrative body, such as the function of the general manager, executive director, and managers, and which imply a functional subordination relationship with respect to the president (or equivalent authority) of the entity.

4.1. Classification of entities.
4.1.1. Group A: integrated by those entities in which the amount of their assets is greater than or equal to 1% of the total assets of the financial system.
4.1.2. Group B: integrated by those entities in which the amount of their assets is less than 1% and greater than or equal to 0.25% of the total assets of the financial system.
4.1.3. Group C: integrated by those entities in which the amount of their assets is less than 0.25% of the total assets of the financial system.
For the purpose of calculating the indicator, the average of the assets corresponding to the months of July, August, and September of the previous year will be considered, according to the data arising from the corresponding reporting regime. The indicator will be considered individually, except for controlling financial entities subject to consolidated supervision, in which case it will be calculated on a consolidated monthly basis. Entities included in Group A whose indicator moves to between 1% (exclusive) and 0.50% (inclusive) will remain in Group A in the following calendar year and will only be classified in Group B if – for the subsequent calendar year – said indicator continues to be less than 1%; if their indicator moves to between 0.50% (exclusive) and 0.25% (inclusive) they will be directly classified in Group B in the following calendar year; whereas, if their indicator becomes less than 0.25%, they will be directly classified in Group C in the following calendar year. Entities included in Group B whose indicator moves to between 1% (inclusive) and 1.5% (inclusive) will remain in Group B in the following calendar year and will only be classified in Group A if – for the subsequent calendar year – said indicator continues to be greater than or equal to 1%; if their indicator becomes greater than 1.5% they will be directly classified in Group A in the following calendar year; whereas, when their indicator moves below 0.25% they will remain in Group B in the following calendar year and will only be classified in Group C if – for the subsequent calendar year – said indicator continues to be less than 0.25%. Entities included in Group C whose indicator moves to between 0.25% (inclusive) and 0.5% (inclusive) will remain in Group C in the following calendar year and will only be classified in Group B if – for the subsequent calendar year – said indicator continues to be greater than or equal to 0.25%; if their indicator moves above 0.5% they will be directly classified in Group B in the following calendar year; whereas, if their indicator becomes greater than 1.5% they will be directly classified in Group A in the following calendar year.

AUTHORITIES OF FINANCIAL ENTITIES
B.C.R.A.
Section 4. Separation of executive and administrative functions.
Version: 3a. COMMUNICATION "A" 7143 Validity:
01/10/2020

4.2. Separation of executive and administrative functions.
4.2.1. Group A entities: there must be separation between executive and administrative functions.
4.2.2. Groups B and C entities: separation of executive and administrative functions is not required.

4.3. Periodicity.
The classification of the entity in the groups indicated in point 4.1. will be carried out once a year and will govern for the calendar year following the calculation year. The Superintendence of Financial and Currency Entities (SEFyC) will annually publish the list of financial entities classified in each group.

4.4. SEFyC Intervention.
For those entities in which directors perform executive functions, if after one year in the performance of said functions SEFyC observes substantially unfavorable changes in the entity's internal controls, this may lead to the cessation of that executive function, without implying that the person involved must necessarily conclude their term as director.

4.5. Public financial entities.
Public financial entities – defined in point 1.3. of the regulations on "Authorization and composition of capital of financial entities" – regardless of the group to which they belong, must have separation between executive and administrative functions.

4.6. New entities.
New financial entities will be considered included in the corresponding group – A, B, or C – according to the amount of their assets at the date of commencement of their activities, until there is sufficient information to perform the calculation provided in point 4.1. At the time of holding the respective assembly or meeting of the oversight body, as applicable, in which the persons proposed to serve in the administrative body are appointed, it must be recorded in the minutes that the proposed persons do not violate these provisions.

AUTHORITIES OF FINANCIAL ENTITIES
B.C.R.A.
Section 4. Separation of executive and administrative functions.
Version: 3a. COMMUNICATION "A" 7143 Validity:
01/10/2020

AUTHORITIES OF FINANCIAL ENTITIES
CONSOLIDATED TEXT ORIGINATING REGULATION Sec. Point Para. Com. Annex Chap. Sec. Point Para. OBSERVATIONS
3.1.3. 1st "A" 3700 I 1. According to Com. "A" 5785 and
6304.
3.1.3.1. "A" 3700 I 1. According to Com. "A" 5785 and
5803.
3.1.3.2. "A" 3700 I 1. According to Com. "A" 5345,
5785 and 5803.
"A" 2241 I 1. 1.2.2.6. and
1.2.2.7.
3.1.4.
"A" 3700 1.
According to Com. "A" 5248,
5485, 5785, 5803, 6111,
6290 and 6304. Includes interpretative clarification.
3.1.5. "A" 3700 According to Com. "A" 5785,
6111 and 6304. Includes interpretative clarification.
3.1.6. "A" 3700 I 1. According to Com. "A" 4490,
5345, 5785, 5803 and 6111.
3.1.7. "A" 4490 According to Com. "A" 5785.
3.2. "A" 5785
3.3. "A" 3135 3rd According to Com. "A" 4499
5785 and 6304.
3.4. "A" 5785 unique
3.5. "A" 5485 7. According to Com. "A" 5785 and
6304.
3.
3.6. "A" 6304 2.
1st "A" 5106 1. According to Com. "A" 6475.
2nd "A" 5106 1. According to Com. "A" 6475.
4.1. "A" 5106 1.
4.1.1. "A" 5106 1. According to Com. "A" 6475,
7108 and 7143.
4.1.2. "A" 5106 1. According to Com. "A" 6475,
7108 and 7143.
4.1.3. "A" 7108 1. According to Com. "A" 7143.
4th "A" 5106 According to Com. "A" 6475, 7108 and 7143. 5th "A" 5106 According to Com. "A" 7143. 6th "A" 6475 unique According to Com. "A" 7108 and 7143. 7th "A"6475 unique 1. According to Com. "A" 7108 and 7143. 4.1. 8th "A" 7108 1.
4.2. "A" 5106 1. According to Com. "A" 6475.
4.2.1. "A" 5106 1. According to Com. "A" 6475.
4.2.2. "A" 5106 1. According to Com. "A" 6475,
7108 and 7143.
4.3. "A" 5106 1. According to Com. "A" 6475,
7108 and 7143.
4.4. "A" 5106 1.
4.5. "A" 6475 unique 1.
4.6. "A" 5106 According to Com. "A" 6475,
7108 and 7143.
4. last "A" 5106 1. According to Com. "A" 6475.

AUTHORITIES OF FINANCIAL ENTITIES
CONSOLIDATED TEXT ORIGINATING REGULATION Sec. Point Para. Com. Annex Chap. Sec. Point Para. OBSERVATIONS
5.1. "A" 2282 1.
5.2. "A" 2282 1.
5.2.1. "A" 2282 1.
5.2.2. "A" 2282 1.
5.2.3. "A" 2282 1. According to Com. "A" 5671 and
6690.
5.
5.2. last "A" 2282 1.
6.1. "A" 5485 According to Com. "A" 5785,
5803, 6111 and 6304. Includes interpretative clarification.
6.2. "A" 2241 I 1. 1.2.2.7. According to Com. "A" 5485 and
6111.
6.3. "A" 3700 I 1. According to Com. "A" 5785 and
6304.
6.4.1. "A" 3700 I 1.
6.4.2. "A" 2241 I 1. 1.2.2.7. According to Com. "A" 5485.
6.4.3. "A" 2241 I 1. 1.2.2.7. According to Com. "A" 5485.
6.5. "A" 2241 I 1. 1.2.2.7. According to Com. "A" 5485 and
6111.
6.
6.6. "A" 6304 2.
7.
7.1. "A" 6290 3. According to Com. "A" 6567.
Includes interpretative clarification.

6.1. The provisions in point 2.5. will apply to violations detected from
1.1.16 and as long as they are not prescribed according to the applicable legislation in each case.
6.2. Until 31.3.2021, the compensatory interest for financing linked to credit cards that entities belonging to Group C may apply cannot exceed the annual nominal rate established in point 2.1.2. This, without prejudice to the application of the limit established in article 16 of Law 25.065 on Credit Cards and other provisions contained in the last 3 paragraphs of point 2.1.1.
Version: 3a. COMMUNICATION "A" 7143 Validity:
01/10/2020
INTEREST RATES ON CREDIT OPERATIONS B.C.R.A.
Section 6. Transitional provisions.

INTEREST RATES ON CREDIT OPERATIONS CONSOLIDATED TEXT ORIGINATING REGULATION Sec. Point Para. Com. Annex Chap. Sec. Point Para. OBSERVATIONS
3.4. "A" 49 Unique II S/Com. "A" 5592 (pt. 1.)
and 6173.
3.4.1. "A" 49 Unique II 2.1. 1st S/Com. "A" 2689 (pt. 2.),
3052, 5482, 5592 (pt.
1.), 6173 and 6541.
3.4.2.1. "A" 49 Unique II 2.3. S/Com. "A" 2689 (pt. 2.).
3.4.2.2. "A" 49 Unique II 2.3. S/Com. "A" 2689 (pt. 2.).
3.4.2.3. "A" 49 Unique II 2.3. S/Com. "A" 2689 (pt. 2.)
and 5592 (pt. 1.).
3.4.2.4. "A" 49 Unique II 2.3. S/Com. "A" 2689 (pt. 2.).
3.4.2.5. "A" 49 Unique II 2.3. S/Com. "A" 2689 (pt. 2.)
and 5592 (pt. 1.).
3.4.2.6. "A" 49 Unique II 2.3. S/Com. "A" 2689 (pt. 2.)
and 5592 (pt. 1.).
3.4.2.7. "A" 49 Unique II 2.3. S/Com. "A" 2689 (pt. 2.).
3.
3.4.3.1. to
3.4.3.5.
"A" 49 Unique II 2.3. S/Com. "A" 2689 (pt. 2.).
"A" 49 Unique II 2.2. S/Com. "A" 2689, 3052, 4621, 5684 and 6541. 4.1. Last. "A" 4621 Unique S/Com. "A" 5853, 5887, 5905 and 6191.
4.1.1. to
4.1.3.
"A" 49 Unique II 2.2.2. 1st S/Com. "A" 2689 (pt. 2.), 4621 and 5853.
4.1.4. "A" 49 Unique II 2.2.3. S/Com. "A" 2689 (pt. 2.)
and 4621.
4.2. "A" 49 Unique II 2.2. 4th S/Com. "A" 2689 (pt. 2.),
4621, 5684, 5853, 5887,
5905 and 6191.
4.3. "A" 49 Unique II 2.2.2. 2nd and
3rd
S/Com. "A" 2689 (pt. 2.),
3052 and 4621.
4.4. "A" 49 Unique II 2.2.2. 5th S/Com. "A" 2689 (pt. 2.)
and 4621.
4.
4.5. "A" 49 Unique II 2.2.4. S/Com. "A" 4621, 5887,
5905 and 6191.
1st "A" 1827 4. 1st S/Com. "A" 3052.
2nd "A" 2667
5.1.1.
3rd "A" 1828 Penultimate
5.1.2. "A" 1828 Last.
5.1.3. "A" 1864 Unique 1. S/Com. "A" 2134.
5.2. "A" 1828 1.
5.3. "A" 1828 3.
5.4. "A" 1828 4. S/Com. "A" 3052.
5.5. Communication No. 14290.
5.
5.6. "A" 1864 Last. S/Com. "A" 3052.
6. 6.1. "A" 5849 7. S/Com. "A" 5891.
6.2. "A" 7108 6.

6.1. Minimum daily integration in foreign currency.
6.1.1. From 1.11.11, the defect of application of resources in that species will be excluded from the calculation base for the minimum daily integration requirement in foreign currency.
6.1.2. From 1.6.12, the minimum daily integration requirement in foreign currency referred to in point 2.3. is suspended.
6.2. Reduction of the minimum cash requirement based on the special treatment provided for financing covered by Resolution No. 1/19 of the Ministry of Territorial Development and Habitat.
For the period February 2020 to January 2021 inclusive, the minimum average cash requirement in pesos will be reduced by 0.8% of the contractual balance – by end of November 2019 – of the financing that the entity decides to subject to the special treatment provided in point 6.4. of the regulations on "Credit Policy".
6.3. Until 31.3.2021, for peso operations provided in point 1.3.5.1. with a residual term of up to 29 days – subsection i) – and 30 to 59 days – subsection ii) –, the reserve rates that financial entities belonging to Group C must apply will be 21% and 17%, respectively.
MINIMUM CASH B.C.R.A.
Section 6. Transitional provisions.
Version: 28a. COMMUNICATION "A" 7143 Validity:
01/10/2020

MINIMUM CASH
CONSOLIDATED TEXT ORIGINATING REGULATION Sec. Point Para. Com. Annex Sec. Point Para. OBSERVATIONS
6. 6.1.1. "A" 5246 3.
6.1.2. "A" 5312 According to Com. "A" 5333.
6.2. "A" 6884 2.
6.3. "A" 7108 2.

-IndexSection 6. Options.
6.1. Purchase of options.
6.2. Sale of options.
6.3. Options whose underlying asset is commodities or basic products
–“commodities”–.
Section 7. Operations with common investment funds.
7.1. Designation.
7.2. Restrictions.
7.3. Transparency.
7.4. Identification and tax status.
Section 8. Net LELIQ position.
8.1. Limits.
8.2. Expansion.
8.3. Reduction.
8.4. Violations.
Section 9. Transitional provisions.
Correlation table.
B.C.R.A.
CONSOLIDATED TEXT OF THE REGULATIONS ON "CASH SETTLEMENT AND FORWARD OPERATIONS, SWAPS, PLEDGES, OTHER DERIVATIVES AND WITH COMMON INVESTMENT FUNDS" Version: 8a. COMMUNICATION "A" 7143 Validity:
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Until 31.3.2021, entities belonging to Group C will be subject to the limits for the net LELIQ position indicated for 1.5.2020 in point 8.1.2., with the limits provided in points 8.1.2.1. and 8.1.2.2. not applying, nor the reduction established in point 8.3. Version: 1a. COMMUNICATION "A" 7143 Validity:
01/10/2020
OPERATIONS ON CASH SETTLEMENT AND FORWARD, SWAPS, PLEDGES, B.C.R.A. OTHER DERIVATIVES AND WITH COMMON INVESTMENT FUNDS
Section 9. Transitional provisions.

"OPERATIONS ON CASH SETTLEMENT AND FORWARD, SWAPS, PLEDGES, OTHER DERIVATIVES AND WITH COMMON INVESTMENT FUNDS" CONSOLIDATED TEXT ORIGINATING REGULATION Sec. Point Para. Com. Annex Chap. Sec. Point Para. OBSERVATIONS
7.2.2.2. "A" 2996 unique 2. 2nd According to Com. "A" 6472.
Includes interpretative clarification.
1st "B" 6566 1. According to Com. "A" 2996 (Annex, point 3.). 7.2.3. 2nd "B" 6609
7.3.1. "A" 3027
7.3.1.1. "A" 2996 unique 4.1. 1st
7.3.1.2. "A" 2996 unique 4.1. 2nd According to Com. "A" 3027.
7.3.2. "A" 2996 unique 4.2. According to Com. "A" 3027.
1st "A" 2953 1. 3rd According to Com. "A" 2996 (point 4.2., para. 1st). 7.3.2.1. 2nd "A" 2996 unique 4.2. 3rd
7.3.2.2. "A" 2953 1. 4th According to Com. "A" 2996
(point 4.2., para. 2nd).
7.4.1. "A" 3323 According to Com. "A" 5728.
7.
7.4.2. "A" 3323 According to Com. "A" 4875 and
6472.
1st "A" 6647 1. According to Com. "A" 6661 and
7054. Includes interpretative clarification.
8.1.1. "A" 6937 1. According to Com. "A" 6979,
6993, 7022 and 7054.
Includes interpretative clarification.
8.1.2. "A" 6937 3. According to Com. "A" 6946,
6979, 6993, 6998,
7022, 7047 and 7054.
Includes interpretative clarification.
8.2. 1st "A" 7091 Includes interpretative clarification.
8.2.1. "A" 7027 3. According to Com. "A" 7034 and
7091.
8.2.2. "A" 7077 According to Com. "A" 7091.
8.2.3. "A" 7078 2.
8.2. last "A" 7091 Includes interpretative clarification.
8.3. "A" 7006 1. and
4.
According to Com. "A" 7022 and
7054.
8.
8.4. "A" 6647 3.
9. "A" 7108 3.

iii) the sensitivity of RTICI internal measures to the main assumptions on which the models are based; iv) the effect of perturbation (shock) and stress scenarios on positions related to different interest rate indices (basis risk); v) the effect on economic value and net interest income (NII) of position mismatches in different currencies; vi) the effect of implicit losses; that is, the difference – when this results in a loss – between the book value and the economic value of instruments in the investment portfolio; vii) the distribution of capital in relation to risks among legal entities forming part of the same economic group, as well as the sufficiency of total capital in consolidated terms; viii) the determining factors of underlying risk; and ix) the circumstances in which the risk could materialize. The results of capital sufficiency regarding RTICI must be considered in the ICAAP and transferred to capital needs for business lines.
1.3.2.2. Entities belonging to Group A.
Financial entities classified in Group A according to point 4.1. of the regulations on "Authorities of financial entities" must use their internal models to quantify economic capital needs based on their risk profile (which they carry out within the framework of the "Internal Capital Adequacy Assessment Process", ICAAP) based on the application of the guidelines provided in these provisions.
1.3.2.3. Entities belonging to Groups B or C.
Financial entities belonging to Groups B or C according to point 4.1. of the regulations on "Authorities of financial entities" may choose, for the quantification of economic capital needs based on their risk profile (which they carry out within the framework of the ICAAP), between using their internal economic capital determination models or applying the simplified methodology described in point 1.3.3. The exercise of the option must be adopted by decision of the Board of Directors of the financial entity. GUIDELINES FOR RISK MANAGEMENT B.C.R.A. IN FINANCIAL ENTITIES
Section 1. Risk management process.
Version: 3a. COMMUNICATION "A" 7143 Validity:
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Financial entities that opt for the simplified methodology must comply with the general provisions established for the risk management process provided in Sections 1. to 11., being exempt from applying the measurement methods contemplated therein, except regarding the determination of EVE provided in point 5.4. for the purposes provided in point 1.3.3.
1.3.3. Simplified methodology.
Financial entities belonging to Groups B or C that opt to use a simplified methodology to quantify economic capital based on their risk profile (within the framework of the ICAAP) must apply the following expression:
CE = (1.05 x CM) + max [0; EVE – 15% x Net Equity)] Where:
CE: economic capital based on risk profile (ICAAP).
CM: minimum capital requirement as provided in point 1.1. of the regulations on "Minimum capital of financial entities". EVE: risk measure calculated according to the Standardized Framework provided in point 5.4. Net Equity: basic net equity (tier one capital). Financial entities belonging to Groups B or C whose computable net worth (RPC) is insufficient to cover the economic capital needs arising in the first year of application of the simplified methodology will have a classification period of 5 years – counted from the year following the adoption of the simplified methodology – to cover the difference in economic capital registered (expressed in %), at least at a rate of 20% annual accumulated of that difference.
1.4. General principles.
Financial entities must have:
1.4.1. Risk management strategies approved by the Board of Directors.
Risk management must be integral – that is, covering the entity as a whole – and include detailed policies and prudential limits for the main risks based on the financial entity's activities. GUIDELINES FOR RISK MANAGEMENT B.C.R.A. IN FINANCIAL ENTITIES
Section 1. Risk management process.
Version: 4a. COMMUNICATION "A" 7143 Validity:
01/10/2020

Short-term rates
1 day
(0.0028A)
1 day < t_cf ≤ 1M
(0.0417A)
1M < t_cf ≤ 3M
(0.1667A)
3M < t_cf ≤ 6M
(0.375A)
6M < t_cf ≤ 9M
(0.625A)
9M < t_cf ≤ 1Y
(0.875A)
1Y < t_cf ≤ 1.5Y
(1.25A)
1.5Y < t_cf ≤ 2Y
(1.75A)
Medium-term rates
2Y < t_cf ≤ 3Y
(2.5A)
3Y < t_cf ≤ 4Y
(3.5A)
4Y < t_cf ≤ 5Y
(4.5A)
5Y < t_cf ≤ 6Y
(5.5A)
6Y < t_cf ≤ 7Y
(6.5A)
Long-term rates
7Y < t_cf ≤ 8Y
(7.5A)
8Y < t_cf ≤ 9Y
(8.5A)
9Y < t_cf ≤ 10Y
(9.5A)
10Y < t_cf ≤ 15Y
(12.5A)
15Y < t_cf ≤ 20Y
(17.5A) t_cf > 20Y
(25A)
Time intervals (M: months; Y: years)

5.4.2. Treatment of positions according to the possibility of standardization.
All notional cash flows subject to reappraisal associated with assets, liabilities, and off-balance sheet items sensitive to interest rate variations are assigned to the time bands or their midpoints for each interest rate disturbance scenario i and for each currency c (hereinafter denoted by CFi,c(k) or CFi,c(tk)) based on the possibility of standardizing them.

Financial entities that on September 30 of the year prior to that in which the IRRC exposure is calculated belong to groups B or C, in accordance with the classification provided in point 4.1 of the rules on “Financial Entity Authorities”, must not observe the treatments provided for automatic options (point 5.4.3.) and behavioral options other than NMDs (subsection iii of point 5.4.2.3.).

5.4.2.1. Positions susceptible to standardization.
Notional cash flows subject to reappraisal can be attributed to the corresponding time bands or their midpoints based on their contractual maturity, if they pay a fixed rate, or based on the next reappraisal period, if they pay a variable rate.

i) Fixed interest rate positions: these positions generate certain cash flows until their contractual maturity. This is the case for fixed interest rate loans without implicit prepayment options, term deposits without early withdrawal risk, and other amortizable products, such as mortgage loans. All cash flows from interest payments and partial or final capital repayment must be assigned to the time bands –or midpoints– corresponding to their contractual maturity.

ii) Variable interest rate positions: these positions generate cash flows that are not predictable beyond the next reappraisal date, except for the fact that their present value will be reset to par value. Consequently, these positions must be treated as a series of fixed interest payments until the next reappraisal date and a notional cash flow at par in the time band –or midpoint– corresponding to the reappraisal date.

RISK MANAGEMENT GUIDELINES
B.C.R.A. IN FINANCIAL ENTITIES
Section 5. Interest rate risk management in the investment portfolio.
Version: 2nd. COMMUNICATION “A” 7143 Validity:
01/10/2020

Financial entities must determine an adequate procedure for the allocation of cash flows from basic deposits –retail and wholesale deposits separately–, without exceeding the maximum weighted average maturity by amount for each category specified in the following table.

Maximum limit to the proportion of basic deposits (%) Maximum limit to the weighted average maturity by amount of basic deposits (years) Retail/transactional 90 5 Retail/non-transactional 70 4.5 Wholesale 50 4

ii) Treatment of NMDs for financial entities in groups B and C. The remaining financial entities must consider 50% of their total NMDs as basic deposits. The cash flows from basic deposits must be assigned to the corresponding time bands or midpoints without exceeding the maximum weighted average maturity by amount of 4 years. Non-basic deposits –that is, the remaining 50% of their total NMDs– must be considered as 1-day deposits and, consequently, assigned to the 1-day time band or its midpoint.

iii) Treatment of positions with behavioral options other than NMDs. The treatment described in this subsection applies only to behavioral options related to retail customers. When a wholesale customer has an option that could modify the pattern of notional cash flows subject to reappraisal, that option must be included within the category of implicit automatic interest rate options and treated as provided in point 5.4.3. In fixed interest rate loans subject to prepayment risk and in term deposits subject to early withdrawal risk, the customer has an option that, if exercised, will alter the temporal profile of the financial entity's cash flows. The exercise of the option by the customer is influenced, among other factors, by interest rate variations. In the case of a fixed rate loan, the customer may have an option to pay off the loan early, while in a fixed term deposit, the customer may have the option to withdraw their deposit before the scheduled date.

RISK MANAGEMENT GUIDELINES
B.C.R.A. IN FINANCIAL ENTITIES
Section 5. Interest rate risk management in the investment portfolio.
Version: 2nd. COMMUNICATION “A” 7143 Validity:
01/10/2020

CONSOLIDATED TEXT ORIGIN OF THE STANDARD
Section Point Paragraph Com. Chapter Point Paragraph
OBSERVATIONS
1.1. “A” 5203 According to Com. “A” 5398.
1.2. “A” 5203 According to Com. “A” 5867, 6327 and
6131.
1.3. “A” 5398
1.3.2. “A” 5398 According to Com. “A” 6459 (point
1.).
1.3.2.1. “A” 6397 2.
1.3.2.2. “A” 6459 1.
1.3.2.3. “A” 6459 1. According to Com. “A” 6475, 6534,
7108 and 7143.
1.3.3. “A” 6459 2. According to Com. “A” 6475, 6534,
7108 and 7143.
1.4. “A” 5203 According to Com. “A” 5398 and 6327.
1.
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.
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, 6107,
6685 and 6729.
3.4. “A” 5203
3.
3.5. “A” 6685 1.
4.1. “A” 5203 According to Com. “A” 5398.
4.2. “A” 5203
4.3. “A” 5203 According to Com. “A” 5398.
4.
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, 6534,
7108 and 7143.
5.4.2.3. i) “A” 6397 According to Com. “A” 6729.
5.
5.4.2.3. ii) “A” 6397 1. According to Com. “A” 6475, 6534,
7108 and 7143.
B.C.R.A.
ORIGIN OF THE PROVISIONS CONTAINED IN THE RULES ON “RISK MANAGEMENT GUIDELINES IN FINANCIAL ENTITIES”

RISK MANAGEMENT GUIDELINES IN FINANCIAL ENTITIES CONSOLIDATED TEXT ORIGIN OF THE STANDARD
Section Point Paragraph Com. Chapter Point Paragraph
OBSERVATIONS
5.5. “A” 6397 1.
5. 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.
6.1.3. “A” 4793
6.2. 1° “A” 4793
2° “A” 4793 According to Com. “A” 4854, 5203 and 5398.
6.2.1. “A” 4793 According to Com. “A” 5203, 5398 and
6603.
6.2.2. “A” 4793 According to Com. “A” 4854 and 5203.
6.2.3. “A” 4793 According to Com. “A” 5203 and 5398.
6.2.4. “A” 4793 According to Com. “A” 4854 and 5203.
6.3. 1° “A” 4793 According to Com. “A” 5203 and 5398.
6.3.1. “A” 4793 According to Com. “A” 5398.
6.3.2. “A” 4793 According to Com. “A” 4854, 5203 and
5398.
6.
6.3.3. “A” 4793
According to Com. “A” 4854, 5203 and 5398.
7.1. “A” 5398 According to Com. “A” 6327.
7.2. “A” 5398
7.3. “A” 5398
7.3.3. “A” 5398 According to Com. “A” 6433.
7.4. “A” 5398
7.
7.5. “A” 5398
8.1. “A” 5398
8.2. “A” 5398
8.3. “A” 5398
8.4. “A” 5398
8.5. “A” 5398
8.
8.6. “A” 5398
9.1. “A” 5398
9. 9.2. “A” 5398
9.3. “A” 5398
10.1. “A” 5398
10.2. “A” 5398
10.3. “A” 5398
10.
10.4. “A” 5398
11.1. “A” 5203
11.
11.2. “A” 5203 According to Com. “A” 5398.

-Index6.5. Capital requirement for risk of positions in commodities.
6.6. Capital requirement for risk of positions in options.
6.7. Computation.
6.8. Policies and procedures for the management of the trading portfolio.
6.9. Additional requirements to include positions in the trading portfolio.
6.10. Treatment for less liquid positions.
6.11. Responsibilities.
6.12. Internal audit.
Section 7. Minimum capital for operational risk.
7.1. Requirement.
7.2. Limit for entities belonging to groups B or C.
7.3. New entities.
Section 8. Computable equity.
8.1. Determination.
8.2. Computable concepts.
8.3. Criteria related to computable concepts.
8.4. Deductible concepts.
8.5. Limits.
8.6. Capital contributions.
8.7. Procedure.
Section 9. Bases for compliance with the rules.
9.1. Individual basis.
9.2. Consolidated basis.
Section 10. External Credit Assessment Institutions (ECAI).
Section 11. Other provisions.
Correlation table.
B.C.R.A.
CONSOLIDATED TEXT OF THE RULES ON
“MINIMUM CAPITALS OF FINANCIAL ENTITIES” Version: 23rd. COMMUNICATION “A” 7143 Validity:
01/10/2020

• results from the sale of species classified and measured at amortized cost or fair value with changes in OCI.
  7.2. Limit for entities belonging to groups B or C.
  The requirement determined through the application of the expression described in point 7.1. may not exceed 17% in the case of Group B entities and 14% in the case of Group C entities, of the average of the last 36 months –prior to the month corresponding to the determination of the requirement– of the minimum capital requirement for credit risk calculated as provided in Section 2. The maximum limits established above will be reduced to 11% and 8%, respectively, when the financial entity has rating 1, 2 or 3 according to the valuation granted by the SEFyC, at the time of the last inspection carried out, regarding all of the following aspects: the entity as a whole, its computer systems, and the work of the responsible for the evaluation of their internal control systems. In cases where the financial entity has rating 1 or 2 in all the cited aspects, the maximum limit will decrease to 7% or 5%, depending on whether it belongs to group B or C, respectively. To this effect, the last rating reported for the calculation of the requirement that will correspond to integrate the third month following that in which the notification takes place will be considered. The applicable limit will always be in effect provided that the financial entity is not a branch or subsidiary of a foreign bank classified as systemically important (G-SIB), in which case, the operational risk requirement will be computed at 100% as provided in point 7.1.
  7.3. New entities.
  The monthly minimum capital requirement for operational risk corresponding to the first month will be equivalent to 10% of the sum of the requirements determined by the credit and market risks –in this case, for the positions of the last day– of that month. From the second to the thirty-sixth month, the monthly requirement will be equivalent to 10% of the average of the requirements determined for the months elapsed up to the calculation period –inclusive–, resulting from considering the risks mentioned in the preceding paragraph, according to the following expression:

MINIMUM CAPITALS OF FINANCIAL ENTITIES B.C.R.A.
Section 7. Minimum capital for operational risk.
Version: 10th. COMMUNICATION “A” 7143 Validity:
01/10/2020

MINIMUM CAPITALS OF FINANCIAL ENTITIES CONSOLIDATED TEXT ORIGIN OF THE STANDARD
Section Point Paragraph Com.
Chapter/
Annex
Point Paragraph
OBSERVATIONS
6.6. “A” 5867 1. According to Com. “A” 6663 and 6690.
6.7. “A” 2461 unique III According to Com. “A” 3161, 4172, 5272,
5867 and 6690.
6.8. a
6.10.
“A” 5867 1. According to Com. “A” 6690.
6.11. “A” 2461 unique VI According to Com. “A” 4172, 6690 and 6832.
6.
6.12. “A” 5867 1. According to Com. “A” 6690.
7.1. “A” 5272 2. According to Com. “A” 6327.
7.2. “A” 5737 2. According to Com. “A” 5746, 6260, 6475
7. (point 4.), 6633, 7108 and 7143.
7.3. “A” 5272 2. According to Com. “A” 5369, 5580, 5737 and
5867.
8.1. “A” 414
LISOL-1
VI 3.1. 1º According to Com. “A” 2279, 2453, 2793, 2914, 3039, 4172 and 5369 (Annex I).
8.2.1. “A” 414
LISOL-1
VI 3.1.1. According to Com. “A” 2223, 2227, 4296, (point 2.), 4576 (point 1.), 4665, 5369 (Annex I), 6327, 6396 and 6428.
8.2.2. “A” 5369 I
8.2.3. “A” 414
LISOL-1
VI 3.1.2. According to Com. “A” 2223, 2768, 2948, 4172, 4576 (point 3.), 4665, 4702, 5369 (Annex I) and “B” 9074.
8.3. “A” 5369 I
8.3.1. “A” 5369 I
“A” 4576 2. According to Com. “A” 4591 (points 2. to 5.), 4665, 4782 and 5369 (Annex I). penultimate “A” 5369 I According to Com. “A” 5831. 8.3.2. last “A” 5831
8.3.2.2. “A” 4576 2. According to Com. “A” 4665, 5369 (Annex I)
and 5831.
8.3.2.7. “A” 4576 2. According to Com. “A” 4591 (point 2.),
4665, 5369 (Annex I) and 5831.
8.3.3. “A” 414
LISOL-1
VI 3.1.2.2. According to Com. “A” 2264, 4172, 4576 (points 4., 5., 6. and 8.), 4665, 4782 and 5369 (Annex I).
8.3.4. “A” 5369 I
8.3.4.1. “A” 5369 I According to Com. “A” 5831.
8.3.4.4. “A” 5369 I According to Com. “A” 5831.
8.3.5. “A” 5369 I
8.4.1. “A” 5369 I
8.4.1.1. “A” 4296 2. According to Com. “A” 4576, 4665, 5369
(Annex I) and 6327.
8.4.1.2. “A” 2287 3.
3.1. and
3.3. last According to Com. “A” 2890, 4172, 5093,
5671 and 5740.
1º “A” 2497 1. According to Com. “A” 3621, 4172, 5183, 5831 and 6628. 8. 8.4.1.3. last “A” 2263 2. According to Com. “A” 4172 and 6327.

The sum of all credit risk exposure values of a financial entity towards a single counterparty or, where applicable, towards a group of connected counterparties –in accordance with the definition provided in point 1.2.1.– may not exceed at any time the limits detailed below calculated with respect to the admissible capital base.
2.1. General criterion.
The limit towards a non-financial private sector counterparty will be 15%. This limit will be increased by 10 percentage points for the portion of exposures that are covered with any of the preferred guarantees contemplated in Section 1 of the rules on “Guarantees” –provided that they do not constitute admissible guarantees in the terms of point 3.3.–, which will be computed considering the coverage margins fixed in the cited rules. For the portion that exceeds the computable value of the corresponding guarantee, the exposures will be considered without guarantees. When preferred guarantees are admissible, they must first be applied according to point 3.3. and the remaining amount –net of the corresponding coverage– (that is, the portion not applied to the guarantor) will receive the treatment provided in the preceding paragraph.
2.2. Specific criteria: reciprocal guarantee societies (SGR), public guarantee funds (FGP) and financial entities.
2.2.1. Exposures to and/or guaranteed by SGR and FGP, registered in the records authorized at the BCRA: 25% –even if the SGR is linked to the financial entity in the terms of point 1.2.2.–.
The cited limit will be increased by 25 percentage points when the lending financial entity belongs to groups B or C in accordance with the classification provided in point 4.1 of the rules on “Financial Entity Authorities” and provided that the exposures to the SGR (even if linked) or to the FGP do not exceed the basic margin provided in point 3.1.1 of the rules on “Credit Graduation”.
2.2.2. Financial entities from the country and abroad.
2.2.2.1. General criterion: 25%.
The cited limit will be increased by 75 percentage points when the lending financial entity is a second-degree commercial bank and belongs to groups B or C in accordance with the classification provided in point 4.1 of the rules on “Financial Entity Authorities”. The cited limits will not apply when any of the conditions provided in points 2.2.2.2. and 2.2.2.3. are met.
2.2.2.2. Financial entities with rating 4 or 5 from the SEFyC: 0% when both the lending financial entity and the borrowing financial entity have that rating.

LARGE EXPOSURES TO CREDIT RISK B.C.R.A.
Section 2. Limits.
Version: 2nd. COMMUNICATION “A” 7143 Validity:
01/10/2020

“LARGE EXPOSURES TO CREDIT RISK”
CONSOLIDATED TEXT ORIGIN OF THE STANDARD Sec. Point Para. Com. Annex Chapter Sec. Point Para. OBSERVATIONS ii), 1° “A” 49 OPRAC-1 I 4.2.2. According to Com. “A” 5472. ii), a) “A” 5472 ii), b) “A” 49 OPRAC-1 I 4.2.2.2. According to Com. “A” 5472 and 6599. 1.2.2.2. ii), c) “A” 49 OPRAC-1 I 4.2.2.1. According to Com. “A” 5472 and 6599.
1.2.2.3. “A” 49
OPRAC-1
I 4.2.1. 2° According to Com. “A” 6599.
1.2.2.4. “A” 2573 1. 9°and
11°
According to Com. “A” 5472 and
6620.
1.2.3. “A” 6599 According to Com. “A” 6620.
1.2.4. “A” 6599
1.3. “A” 6599
1.3.1. “A” 6599
1.3.2. “A” 6599
1.3.3. “A” 2140 II 4.5. According to Com. “A” 2150
(point 1.), 3911 (point
6.), 4084 (point 6.),
5472, 6599 and “B” 9186.
1.3.4. “A” 6599
1.
1.4. “A” 6599 According to Com. “A” 6620.
1° “A” 6599 According to Com. “A” 6620.
2.1. “A” 2140 II 3.1. and
3.2.
According to Com. “A” 5472 and
6599.
2.2.1. “A” 2410 3. According to Com. “A” 5275
(point 10.), 5472, 6467,
6599, 7108 and 7143.
2.2.2.1. “A” 2140 II 3.5. and
3.6.1.
According to Com. “A” 5193,
5472, 5671, 5740, 6599,
7108 and 7143.
2.2.2.2. “A” 2140 II 3.5. According to Com. “A” 5193,
5472 and 6599.
2.2.2.3. “A” 2140 II 3.6.2. According to Com. “A” 5671,
5740, 6599 and 6620.
2.3. 1°and
2°
“A” 6599 i) “A” 3129 According to Com. “A” 4972 (point 3.), 5472 and 6599. ii) “A” 3129 According to Com. “A” 4817 (point 5.), 4972 (point 3.) and 5472. iii) “A” 3129 According to Com. “A” 4972 (point 3.) and 5472. 2.3.1.1. iv) “A” 3129
2.3.1.2. “A” 6599
2.3.1.3. “A” 2800 1. According to Com. “A” 2829
(point 1.).
2.3.1.4. “A” 4972 3. According to Com. “A” 4975
(point 4.) and 6599.
2.
2.3.2.1. i) “A” 3129 According to Com. “A” 4972
(point 4.) and 5700.

7.1. The countercyclical capital buffer margin that financial entities must apply to their exposures in Argentina, as established in point 4.2., is set, from 1.4.16, at 0%.
7.2. For the purpose of determining the distributable result, the computations provided in Sections 2. and 3. must be reduced by the increase in computable equity (RPC) resulting from the application of point 11.4 of the rules on “Minimum capitals of financial entities” and the lower provisions and higher RPC resulting from the treatments established in point 2 of Communication “A” 6946 (and amendments) –for financing to SMEs destined for the payment of salaries– and in point 13 of Communication “A” 6938 –which postponed until 1.1.21, for financial entities in groups B and C, the application of point 5.5 of IFRS 9–.
7.3. The distribution of results of financial entities is suspended until 31.12.2020.
DISTRIBUTION OF RESULTS
B.C.R.A.
Section 7. Transitional provisions.
Version: 7th. COMMUNICATION “A” 7143 Validity:
01/10/2020

CONSOLIDATED TEXT ORIGIN OF THE STANDARD OBSERVATIONS Sec. Point Para. Com. Annex Chapter Sec. Point Para. 1. “A” 4589 1. According to Com. “A” 5827 and 6464. 1°and 2° “A” 4589 2. According to Com. “A” 4591 (point 6.), 5273, 5827, 6327 and 6464.
2.1. “A” 6327 12.
2.2. “A” 6396 4.
2.3. “A” 6327 12.
2.4. “A” 4589 2.3.
2.5. “A” 4589 2.4.
2. last “A” 6327 26.
1° “A” 4589 3. According to Com. “A” 4591 (point 8.), 5072, 5273, 5827, 5985, 6464 and “B” 9104.
3.1. “A” 4589 3.1. According to Com. “A” 4591 (point
8.) and 6428.
3.2. “A” 4589 3.3. iv) According to Com. “A” 4591 (point
8.) and “B” 9104.
3.3. “A” 4589 3.3. According to Com. “A” 4591 (point
8.), 6428 and 6464.
3.4. “A” 5737 4.
3. last “A” 4589 1.1. to
1.4.
According to “A” 4591, 5072 and
6464.
4. “A” 5827
“A” 4591 1. According to Com. “A” 5282 and 5827.
5.1. “A” 4591 1. Incorporates the interpretative criterion of Com. “C” 46841.
5. According to Com. “A” 5393.
5.2. “A” 4591 1. According to Com. “A” 4686, 4702,
5072, 5180, 5282, 5369,
5580, 5827, 6013, 6464 and
“B” 9104.
6. “A” 6768
7.1. “A” 5938
7.2. “A” 6946 3. According to Com. “A” 7007, 7108
7. and 7143.
7.3. “A” 6939 According to Com. “A” 7007 and
7035.
B.C.R.A.
ORIGIN OF THE PROVISIONS CONTAINED IN THE RULES ON “DISTRIBUTION OF RESULTS”