Circular OPASI 2 - 157. New modalities for term resource collection

BANCO CENTRAL DE LA REPUBLICA ARGENTINA
__________________________________________________________________ COMUNICACION " A " 2482 15/10/96 __________________________________________________________________ TO FINANCIAL ENTITIES:
Ref.: Circular
OPASI 2 - 157.
New modalities for term resource collection

We address you to inform you that this Institution adopted the following resolution:

"1. Establish that, as of 11.1.96, financial entities may use new modalities to collect third-party resources, with the characteristics indicated in each case:

A) Constant-term investments.

1. Term: not less than 180 days.
   The term will have permanent validity, such that after thirty days have passed, the term automatically extends by a period equal to that amount, unless there is an express statement to the contrary by the holder. In this case, maturity will occur on the day the original agreed term is met, counted from the date of the deposit or from the last automatic extension if this circumstance occurred.
2. Holders: qualified investors according to the definition contained in point 1. of Communication "A" 2252 (with modifications according to point 3. of this resolution).
3. Instrumentation: transferable or non-transferable registered certificate.
4. Currency: in pesos or in United States dollars. In the latter case, the placements are subject to the regime for deposits and loans in foreign currency (Communication "A" 1820 and complementary).
5. Interest rate: freely agreed upon. During the course of the originally agreed term, it may be fixed. Thereafter, it must be renegotiated, and pre-established margins ("spreads") calculated on indicators of a financial nature with wide national or international dissemination may be applied. It may also be agreed to use variable rates from the start of the deposit. The calculation bases must be clearly fixed in the contract.
6. Settlement and payment of interest: at final maturity or periodically -at least every 30 days-.
7. Liquidity requirements: those corresponding according to the remaining term until maturity will be observed, taking into account the automatic extension or, if applicable, according to the term resulting from the exercise of the option to revoke it.

B) Investments with early cancellation option:

1. Term: greater than 180 days, with the possibility of early cancellation.
   Cancellation before maturity may be requested by the investor or by the entity, depending on who holds the right to exercise that option. This right may only be exercised once the agreed period has elapsed, which may not be less than 30 days counted from the date of the deposit.
2. Holders: qualified investors according to the definition contained in point 1. of Communication "A" 2252 (with modifications according to point 3. of this resolution), when it is agreed that the entity possesses the right to cancel the investment early. Any natural or legal person in the case where only the investor possesses the right of early cancellation.
3. Instrumentation: transferable or non-transferable registered certificate.
4. Currency: in pesos or in United States dollars. In the latter case, the placements are subject to the regime for deposits and loans in foreign currency (Communication "A" 1820 and complementary).
5. Interest rate: fixed, freely agreed upon.
6. Settlement and payment of interest: at final maturity or periodically -at least every 30 days-.
7. Price of the option: must be specified in the contract in one of the following forms:
   a) a fixed sum of money disbursable at the start of the operation. b) the value of the investment at the moment of exercising the right of early cancellation, detailing the method of determination.
8. Liquidity requirements: those corresponding according to the time remaining until the date on which the investor can exercise the early cancellation option will be observed, to the extent that they are the holder of the right. When the entity is the holder of that right, the originally agreed term will be taken into account.

C) Investments with option for renewal for a determined term.

1. Term: not less than 90 days, with the possibility of being extended for a predetermined term established in the contract, upon maturity of the originally fixed term. Renewal may be requested by the investor or by the entity, depending on who holds the right to exercise that option.
2. Holders: qualified investors according to the definition contained in point 1. of Communication "A" 2252 (with modifications according to point 3. of this resolution), when it is agreed that the entity possesses the right to renew the investment. Any natural or legal person in the case where only the investor possesses the right of renewal.
3. Instrumentation: transferable or non-transferable registered certificate.
4. Currency: in pesos or in United States dollars. In the latter case, the placements are subject to the regime for deposits and loans in foreign currency (Communication "A" 1820 and complementary).
5. Interest rate: freely agreed upon. It may be fixed during the validity period of the original placement, and the rate at which it will be renewed when the right to extension is exercised must also be agreed upon. Pre-established margins calculated on indicators of a financial nature with wide national or international dissemination may be applied.
6. Settlement and payment of interest: at final maturity or periodically -at least every 30 days-.
7. Price of the option: the contract must specify the fixed sum of money that will be disbursed at the time the investment is constituted, as an increase or decrease of the placed capital. Alternatively, it may be expressed as a decrease or increase, as appropriate, with respect to the interest rate for the initial period.
8. Liquidity requirements: those corresponding according to the remaining term until maturity will be observed, taking into account for this purpose the term that would result from the possible exercise of the extension option by the entity, to the extent that it is the holder of the right. When the investor is the holder of that right, the originally agreed term or, if applicable, the term resulting from the renewal when the option was exercised will be taken into account.

D) Term investments with variable remuneration.

1. Minimum term: 180 days.
2. Currency: in pesos or in United States dollars. In the latter case, the placements are subject to the regime for deposits and loans in foreign currency (Communication "A" 1820 and complementary).
3. Instrumentation: transferable or non-transferable registered certificate.
4. Remuneration.
   4.1. Fixed: as arising from the interest rate freely agreed upon (it may be equal to 0), and/or
   4.2. Variable: based on the proportion established with respect to the positive variation in the price of a financial asset, or of financial asset indices, with usual quotation in national or international markets.
5. Approval by the Central Bank.
   The collection of resources under this regime will be subject to prior approval by the Central Bank, for which entities must supply the particular characteristics that will be assigned to the modality. The Central Bank will determine the applicable capital requirements for each case according to the proposed structure.

Insofar as not expressly provided for, the general provisions established in Circular OPASI - 2 for fixed-term deposits will apply, including the rules on guarantee insofar as applicable, and the regulations on liquidity requirements.

Entities may use other names to identify the aforementioned collection modalities for their dissemination, even though in the instrumentation they must adhere to the denominations contained in this resolution, mentioning the Central Bank communication that regulates them.

With respect to what is provided in points 1.4. and 1.5. of Communication "A" 2252 -text according to point 3. of this resolution-, it will be taken into account that the execution of the operations mentioned therein in a financial entity, even if it is not a wholesale bank, qualifies the holder as a qualified investor for the purposes of this resolution.

2. Admit the periodic settlement and payment of interest, before the maturity of the deposit, that accrue on fixed-term deposits, provided that it is made in arrears with a frequency not less than every 30 days and refers to deposits with terms of 180 days or more.

3. Replace points 1.4. and 1.5. of the resolution disseminated by Communication "A" 2252, with the following:

"1.4. Joint-stock companies and limited liability companies, cooperatives, mutual entities, social security funds, civil associations, foundations, and professional associations of workers with union status, which enter into term deposits with the wholesale bank in the admitted modalities or in savings accounts or passive pass operations or acceptances for amounts not less than $ 100,000, in any of those forms of investment."

"1.5. Natural persons with real domicile in the country who enter into term deposits with the wholesale bank in the admitted modalities or in savings accounts or passive pass operations or acceptances for amounts not less than $ 100,000, in any of those forms of investment."

We salute you very attentively.
BANCO CENTRAL DE LA REPUBLICA ARGENTINA
Juan Carlos Isi Alfredo A. Besio
Submanager of Standards Manager of Standards for for Financial Entities for Financial Entities