Computable Net Worth of Exchange Houses and Agencies and Constituted Guarantees. Their Adaptation

BANCO CENTRAL DE LA REPÚBLICA ARGENTINA
COMMUNICATION “A” 3795 04/11/2002
TO FINANCIAL ENTITIES:
Ref.: Circular
RUNOR 1 - 597
Computable Net Worth of Exchange Houses and Agencies and Constituted Guarantees. Their Adaptation ____________________________________________________________ We address ourselves to you to inform you that this Institution has adopted the following resolution:

“1. Replace point 1.3. of Chapter XVI of Circular RUNOR - 1 (text according to Communications “A” 422, 1863 and 2744) with the following:

“1.3. Minimum Capital.
1.3.1. Minimum Requirements.
1.3.1.1. Exchange houses and agencies must maintain the minimum net worth indicated below:

TYPE OF ENTITY
CATEGORY
Exchange Houses
Exchange Agencies
(in thousands of pesos)
I
2,900
1,450
II
1,700
850
III
1,100
550
IV
600
300

1.3.1.2. The indicated categories comprise entities located in the following jurisdictions:

CATEGORY
JURISDICTION
I
City of Buenos Aires and the following districts of the province of Buenos Aires or those that may be created in the future through splitting or segregation: Almirante Brown, Avellaneda, Berazategui, Esteban Echeverría, Ezeiza, Florencio Varela, General San Martín, Hurlingham, Ituzaingó, José C. Paz, La Matanza, Lanús, Lomas de Zamora, Malvinas Argentinas, Merlo, Moreno, Morón, Presidente Perón, Quilmes, San Fernando, San Isidro, San Miguel, Tigre, Tres de Febrero and Vicente López. Cities of Córdoba, Mendoza and Rosario. II Cities of Mar del Plata, Posadas, Puerto Iguazú and Paso de los Libres and the following departments of the province of Mendoza: Godoy Cruz and the part of the departments of Guaymallén, Las Heras, Maipú and Luján, which are part of the so-called “Greater Mendoza”. III Cities of Bahía Blanca, La Plata, San Carlos de Bariloche and Santa Fe. IV Rest of the country.

1.3.1.3. Entities that have any subsidiary in a higher category location must maintain the net worth required for that latter category, without prejudice to what is established in point 1.3.2.

1.3.2. Additional Requirements.
The net worth referred to in point 1.3.1. must be increased by 10% for each branch or office in operation or that may be opened in the future.

1.3.3. Non-compliance.
Non-compliance with the minimum capital fixed in the previous point may lead to the suspension for 30 calendar days of the authorization to operate.
In the event that such deviation is not regularized during the suspension period, the Central Bank may order the revocation of said authorization.

1.3.4. Net Worth.
1.3.4.1. For the purposes indicated in these regulations, net worth is defined as integrated by the following concepts:
i) Integrated capital. ii) Adjustments to capital and/or for re-expression of items. iii) Advances received on an irrevocable basis against capital increases. iv) General (legal, statutory and discretionary) and special reserves, from books. v) Unassigned results from previous years and the current year, with a negative or positive sign depending on whether they are losses or gains, respectively.

1.3.4.2. For the purposes of all regulations related to capital, its integration and increase, contributions may be made:
i) By crediting accounts opened in local financial entities (authorized to receive funds from AFJPs) or banks abroad that have -in the latter case- an international risk rating of “A” or higher, granted by one of the rating agencies admitted by the regulations on “Evaluation of financial entities”. ii) In national public bonds with normal and usual quotation, in the country or abroad, of wide dissemination and easy access to public knowledge, in operations agreed at market prices, for which only one species must be chosen.”

2. Replace, with effect from 12/01/02, point 1.5. of Chapter XVI of Circular RUNOR - 1 (text according to Communications “A” 422 and 2744) with the following:

“1.5. Guarantees.
1.5.1. Exchange houses and agencies must constitute a guarantee not less than 10% of the capital requirement applicable to them, with a minimum of $ 100,000, which must respond to the compliance of the provisions regulating the activity of the entities.
In the case of exchange offices, the guarantee will amount to $ 100,000.

1.5.2. It may be integrated in any of the following forms:
1.5.2.1. National public bonds with normal and usual quotation, in the country or abroad, of wide dissemination and easy access to public knowledge, in operations agreed at market prices, for which only one species must be chosen.
To this end, a pledge will be constituted in favor of the Central Bank of the Republic Argentina regarding said securities deposited in Caja de Valores S.A., according to the procedure authorized for this purpose.

1.5.2.2. Certificates of time deposits issued by local financial entities (authorized to receive funds from AFJPs) or banks abroad that have -in the latter case- an international risk rating of “A” or higher, granted by one of the rating agencies admitted by the regulations on “Evaluation of financial entities”.
The deposit certificate must be issued in the name of the exchange house, agency or office, as applicable, and to the order of the Central Bank of the Republic Argentina, where it will remain in custody until its maturity. Such deposit certificate must be issued with the clause of “automatic renewal”, due to the fact that the original is deposited in custody.

1.5.2.3. Guarantees in favor of the Central Bank of the Republic Argentina granted by local financial entities (authorized to receive funds from AFJPs) or banks abroad that have -in the latter case- an international risk rating of “A” or higher, granted by one of the rating agencies admitted by the regulations on “Evaluation of financial entities”.
The documents representing these guarantees must be sent to the Central Bank of the Republic Argentina by the granting financial entity/bank.

1.5.2.4. Deposit in a special custody account in United States dollars, opened at the Central Bank of the Republic Argentina in the name of the exchange house, agency or office, as applicable, and to the order of said Institution.
It will be constituted for the amount equivalent to the requirement converted by the reference exchange rate of the United States dollar corresponding to the day prior to the deposit, which is made known by the Central Bank of the Republic Argentina.

1.5.3. Non-compliance with the effective guarantee fixed may lead to the suspension for 30 calendar days of the authorization to operate.
In the event that such deviation is not regularized during the suspension period, the Central Bank may order the revocation of said authorization.

1.5.4. The constituted guarantees will extinguish once 180 calendar days have elapsed from the date of cancellation of the authorization, unless there is a contrary judicial order or legitimate opposition from the Central Bank.

1.5.5. In cases where the firms are suspended or under investigation, the guarantees must be maintained even if the entities request their extinction, unless they are totally replaced by cash deposits or by national public bonds of a single species as established in point 1.5.2.1.”

3. Replace the amounts of the licensing fees for the installation of new exchange houses and agencies, and their subsidiaries, fixed by point 1. of the resolution made known by Communication “A” 1884, with the following:

Exchange houses: $ 10,800
Exchange agencies: $ 8,600
Subsidiaries: $ 4,300

4. Establish that exchange houses and agencies authorized to operate that, according to the last information entered into the Central Bank as of the date of this resolution, register an integration lower than the new minimum requirements referred to in point 1., must adjust to them no later than the following dates:

• 12/31/02, to the extent that the increase in requirement does not exceed 50% of the last reported integration.
  In cases where the increase is higher, at least an amount equivalent to that 50% must be integrated.

• 03/31/03, to the extent that the increase in requirement exceeds 50% of the last reported integration, without prejudice to the partial integration referred to in the second paragraph of the preceding section.

5. Provide that, for the purposes of the integration of the guarantee referred to in point 2. of this resolution, time deposits that entities had constituted for such concept and that, as a consequence of the application of the general rescheduling regime, had been replaced by “CEDROS” considered at their technical value, may be computed.”

We salute you very attentively.
BANCO CENTRAL DE LA REPUBLICA ARGENTINA
Alfredo A. Besio José Rutman
Manager of Issuance
Manager of
Norms and Authorizations

WITH COPIES TO EXCHANGE HOUSES, AGENCIES, OFFICES AND BROKERS.