Financial Intermediation Institutions - Regulatory Adjustment on Capital Requirements for Credit Risk

Montevideo, July 19, 2024
Ref: FINANCIAL INTERMEDIATION INSTITUTIONS –
REGULATORY ADJUSTMENT ON CAPITAL
REQUIREMENTS FOR CREDIT RISK.
The market is informed that, on July 10, 2024, the Superintendency of Financial Services adopted the following resolution:

1. REPLACE in Chapter II – Minimum Net Equity, of Title II – Equity, of Book II – Stability and Solvency, Articles 160 and 160.1 with the following:

ARTICLE 160 (CAPITAL REQUIREMENT FOR CREDIT RISK – COVERED EXPOSURES AND CALCULATION METHOD).
Covered Exposures:
Exposures subject to capital requirements for credit risk include those assets, risks, and contingent commitments – net of provisions – arising from the individual balance sheet and its annexes, prepared in accordance with Article 507, excluding assets that are deducted for the calculation of net equity by the deducted amount. Linear financial derivatives and acquired options, securities lending, and assets originated in pending settlement operations involving the exchange of securities, gold, and foreign currency for cash, which are subject to counterparty credit risk as indicated in Article 160.2, shall also be excluded. For their part, the instruments referred to in Articles 163 and 167 included in the trading book and those referred to in Article 169 shall not be subject to capital requirements for credit risk.

Calculation Method:
The capital requirement for credit risk shall be calculated according to the standard method, under which risk weights are assigned considering the type of exposure in question. The requirement applicable to banks, financial houses, financial intermediation cooperatives, administrators of advance savings groups, and external financial institutions is equivalent to 8% of the assets, risks, and contingent commitments weighted by credit risk, while this figure shall be 12% for retail banks and retail financial intermediation cooperatives and 15% for investment banks.

In sum, the capital requirement for credit risk of institution-i ( ) will result from applying a percentage x ( ) to the sum of the exposures of institution-i ( ) calculated according to the applicable credit risk weighter ( ), as expressed below:

Where, as previously provided,

ARTICLE 160.1 (CAPITAL REQUIREMENT FOR CREDIT RISK – REQUIRED WEIGHTERS).
The applicable credit risk weighters will depend on the type of exposure, as established in items 1) to 12) below, taking into account the following considerations:
(a) Exposures – regardless of type – that are secured by real estate and meet certain conditions shall be weighted in accordance with item 7).
(b) Foreign currency exposures – against individuals and companies in certain sectors – shall have a risk weighter resulting from applying a multiplier of 1.5 to the original weighter provided, as disposed in item 8). (c) All exposures – regardless of type – in default situation shall be weighted in accordance with item 10). (d) Exposures to risks and contingent commitments shall be governed by what is provided in item 9). (e) When institutions apply risk mitigation techniques, the risk weighters for the counterparty provided in this article may be replaced by the weighter of the collateral or guarantor, as provided in Article 160.1.1.

When the determination of the required weighter is based on the use of risk ratings, the following considerations must be taken into account:

• An international scale rating shall be used.
• Such ratings must be issued by a credit rating entity recognized by the SEC (Securities and Exchange Commission) of the United States of America as an NRSRO (Nationally Recognized Statistical Rating Organization) and registered in the Securities Market Registry of the Central Bank of Uruguay.
• The rating must refer to the instrument. In case it does not have a rating, the issuer's rating for the long term and in foreign currency must be used. The instrument's rating cannot be used as the issuer's rating. When entities organized as branches do not have a risk rating, the risk rating of their head office will be used, limited by the risk rating of the country where they are located.
• Ratings must be reviewed at least monthly.
• If an instrument or issuer is rated by more than one credit rating entity, the following considerations must be attended to:
  • When there are ratings associated with two different risk weighters, the rating corresponding to the highest risk weighter shall be used.
  • When there are ratings related to three or more different risk weighters, the ratings associated with the two lowest risk weighters shall be taken, and the one corresponding to the highest risk weighter of these two shall be used.
  • In all cases, when there are different ratings associated with the selected risk weighter, the second-best rating shall be used.

When the application of the aforementioned criteria can determine different ratings for the same issuer, the rating associated with the risk weighter that corresponds or would have corresponded to assets with terms greater than 90 days shall be used, even if such risks have not been assumed.

1. Exposures with central governments and central banks.
   a. National Government and Central Bank of Uruguay.
   Table 1:
   Currency
   National Institution
   Foreign
   National Government 0% 20%
   Central Bank of
   Uruguay
   0% 0%

b. Foreign governments and central banks.
Table 2:
Risk Rating
AAA to
AA-
A+ to
A-
BBB+ to
BBB-
BB+ to
B-
Lower than B-
Unrated
0% 20% 50% 100% 150% 100%

2. Exposures with public sector companies.
   Exposures against public sector companies (PSC) not belonging to the central government, except against national financial PSCs which shall be governed by item 4), shall be weighted as established below. a. National non-financial PSCs.
   Table 3:
   Currency
   National
   Foreign
   20% 50%

b. Non-national PSCs.
Table 4:
Risk Rating
AAA to
AA-
A+ to
BBB-
BB+ to
B-
Lower than B-
Unrated
20% 50% 100% 150% 100%

3. Exposures with multilateral organizations.
   a. Multilateral development banks.
   Table 5:
   Risk Rating
   AAA to
   AA-
   A+ to
   A-
   BBB+ to
   BBB-
   BB+ to
   B-
   Lower than
   B-
   Unrated
   20% 30% 50% 100% 150% 100%

Exposures against the following multilateral development banks shall have a risk weight of 0%:

• World Bank Group (International Bank for Reconstruction and Development, International Finance Corporation, Multilateral Investment Guarantee Agency, and International Development Association).
• Asian Development Bank.
• African Development Bank.
• European Bank for Reconstruction and Development.
• Inter-American Development Bank.
• European Investment Bank.
• European Investment Fund.
• Nordic Investment Bank.
• Caribbean Development Bank.
• Islamic Development Bank.
• Council of Europe Development Bank.
• International Facility for Vaccination Finance.
• Asian Infrastructure Investment Bank.

b. Other multilateral organizations.
Exposures against the Bank for International Settlements, the International Monetary Fund, the European Central Bank, the European Union, the European Stability Mechanism, and the European Financial Stability Facility shall receive a risk weight of 0%.

4. Exposures with financial intermediation institutions of the country and banks abroad.
   Exposures in national currency with financial intermediation institutions of the country shall have a credit risk weight of 20%.
   When they are in foreign currency or with institutions abroad, the corresponding weighters shall be applied according to Table 6.

Table 6:
Maturity
Risk Rating
AAA to
AA-
A+ to
A-
BBB+ to
BBB-
BB+ to
B-
Lower than B-
Unrated

90
days
20% 30% 50% 100% 150% 100%
≤ 90 days
20% 20% 20% 50% 150% 100%

5. Exposures against companies.
   Exposures against companies in the private non-financial sector are divided into the categories detailed below. a. Specialized financing of investment projects.
   "Specialized financing of investment projects" is considered to be that exposure where the repayment and backing of the loan depends significantly on the revenues generated by the financed project, rather than the independent repayment capacity of the borrower. This type of financing is usually used for large, complex, and expensive facilities. It may consist of financing the construction of a new productive facility or refinancing an existing facility, with or without improvements. When project risk rating is available, credit risk weighters shall be based on Table 8. Otherwise, weighters shall be applied according to Table 7.

Table 7:
Typology
Weighter
Projects
Operational
Phase
High quality
80%
Rest
100%
Pre-operational
Phase
130%

For these purposes, the following definitions must be considered:

• Operational phase: that phase in which there is sufficient positive net cash flow to cover pending contractual obligations, as well as decreasing long-term debt.
• High-quality project: that project in which the entity executing or administering the project has solid capacity to meet its financial commitments, even if adverse changes in economic conditions occur. The following conditions must also be met:
  (i) The entity will have its capacity to act to the detriment of creditors limited (for example, it cannot issue additional debt without the consent of the original creditors). (ii) The entity must have sufficient resources or financial mechanisms to cover contingent financing requirements and necessary working capital. (iii) The profitability of the project must be contractually established (ensuring it, for example, with a mandatory purchase contract). (iv) Revenues must depend primarily on a central government, a PSC, or a company with a risk weighter of up to 75%. (v) Contractual provisions must provide for high creditor protection in case of default or cancellation of the project, covering them from losses derived therefrom. (vi) All assets and contracts necessary for the operation of the project must have been pledged in favor of the institution.

b. General exposures.
Exposures against companies not contemplated in the previous letter shall be weighted according to Table 8.

Table 8:
Risk Rating
AAA to
AA-
A+ to
A-
BBB+ to
BBB-
BB+ to
BB-
Lower than BB-
Unrated
20% 50% 75% 100% 150% 100%

In the case of micro, small, and medium-sized enterprises (MSMEs) – as defined in Article 189 – that do not have a risk rating, what is established in item 6) ("retail exposures") shall apply.

6. Retail exposures.
   Exposures against individual borrowers or MSMEs, without risk rating, shall receive the treatment provided in Table 9, according to the definitions presented below.

Table 9:
Subcategory
Counterparty
Weighter
Renewable
Payment
Method
Individuals or
MSMEs
45%
Other
75%
Non-renewable
MSMEs
85%
Individuals
100%

"Renewable retail" exposures shall be considered those that meet the following conditions:

• Product: the exposure refers to self-renewing credits and credit lines (credit cards and authorized overdrafts), financial leases, and discounting of documents and credits granted to MSMEs.
• Value of exposures: the maximum aggregate exposure against the same counterparty shall not exceed 1% of the basic equity for banks.
• Disaggregation: no aggregate exposure against the same counterparty shall exceed 0.2% of the renewable retail portfolio on the last day of the previous month.

Renewable retail exposures shall be considered "payment methods" when they refer to credit card debtors used as purchase cards, that is, the card balance is fully amortized on each due date.

7. Exposures secured by real estate.
   Those that meet the following conditions shall be treated as exposures secured by real estate:

• Built property: the property backing the exposure must be fully built, with the exceptions established in letter a. "residential real estate-secured exposures".
• Legal force: any right over the real estate must be legally enforceable in all relevant jurisdictions. The collateral agreement and the legal process on which it is based must allow the bank to realize the value of the collateral in a reasonable time.
• Rights over the property: first mortgage on the property.

In case the guarantee does not meet the previously detailed conditions, the applicable weighter shall be determined based on the type of counterparty.
The applicable credit risk weighter will depend on the "loan-to-value" (LTV) ratio. This ratio must be calculated as the outstanding amount of loans secured by the same property divided by the estimated net sale value at public auction of said property, updated in accordance with the current regulatory provisions of Article 269 (Debtor File).

Exposures secured by real estate are divided into the categories described below. a. Residential real estate-secured exposures.
Residential real estate-secured exposures are those contracted with individuals that are secured by properties for housing purposes.
Loans granted to individuals secured by a residential property under construction or by land on which a residential property will be built may be considered within this category, provided that the property under construction is intended for a maximum of four families and is the borrower's primary residence. The loan to the individual shall not serve to indirectly finance the exposures for land acquisition and construction described in letter c ("exposures for land acquisition and construction").

The applicable risk weighters depend on the LTV ratio, depending on whether the loan repayment depends substantially or not on the cash flows generated by the property securing the loan, according to Table 10.

Table 10:
Dependency (*)
LTV ()
≤
50%
(50% ;
60%]
(60% ;
80%]
(80% ;
90%]
(90% ;
100%]

100%
No
20% 25% 30% 40% 50% 70%
Yes
30% 35% 45% 60% 75% 105%

(*) "Yes" indicates that the loan repayment depends substantially on the cash flows generated by the property securing the loan, "no" refers to the opposite case, () LTV = "loan-to-value".

b. Commercial real estate-secured exposures.
Commercial real estate-secured exposures are those secured by a property that does not have residential purposes nor are they exposures included in specialized financing of investment projects (item 5, letter a.).

When loan amortization does not depend substantially on the cash flows generated by the property, institutions shall apply a risk weight of 60% or the counterparty's risk weighter, if lower, to the part of the exposure up to 55% of the property value, and the counterparty's risk weighter to the rest of the exposure.

The applicable risk weighters will depend on the LTV ratio when the loan repayment depends substantially on the cash flows generated by the property securing the loan or loans, according to Table 11.

Table 11:
LTV ()
≤ 60%
(60% ; 80%]

80%
70%
90%
110%

() LTV = "loan-to-value"

c. Exposures for land acquisition and construction.
This category includes loans to companies or real estate developers for the construction of residential or commercial properties or for the acquisition of land for construction purposes. These exposures shall receive a credit risk weighter of 150%, except when there are pre-sale or pre-leasing contracts representing at least 50% of the total cost of the project, in which case a weighter of 100% shall be applied. Such contracts must be legally executed and the buyer or tenant must have formalized a cash deposit that will be forfeited in case of contract termination.

8. Multiplier for foreign currency exposures.
   In the case of foreign currency exposures, against individuals and companies in the non-financial sector – with the exception of those covered by item 2 ("exposures with public sector companies") – a multiplier of 1.5 shall be applied to the credit risk weighter resulting from applying what is established in the remaining items (original weighter). The weighter that must be applied (final weighter) shall be equal to the minimum between one and a half times the original weighter and 150%:

Where,

• = final credit risk weighter.
• = original credit risk weighter.

The following are exempt from this requirement:

1. Exposures against companies belonging to the activity sectors detailed in the instructions to be issued by the Superintendency of Financial Services, considering their generation of income in foreign currency.

2. Exposures against companies that have a risk rating under the terms provided in this article.

3. Exposures against companies that have financial coverages against exchange rate risk resulting from the mismatch between the currency in which the loan is denominated and the borrower's income currency, contracted with the financial intermediation institution itself, which must cover the loan terms regardless of the number of coverages used.

4. Contingent risks and commitments.
   "Contingent risks and commitments" include operations or commitments in which the institution assumes a credit risk by obligating itself to third parties to make a payment or disbursement that must be recovered from its clients upon the occurrence of a future event. Contingent risks and commitments – prior to being weighted – shall be converted into credit equivalents by using credit conversion factors (CCF). The CCF expresses the probability that contingent risks and commitments will become a balance sheet position. The applicable credit risk weighter will depend on the type of counterparty.

Types of contingent risks and commitments:
a. Operation of organization and administration of groupings, closed circles, and consortia. b. Discretionary credit lines.
Unused amounts of credit lines that allow clients to use the credit without prior decisions by the institution.
c. Discretionary credit lines with immediate cancellation.
Discretionary credit lines, defined in the previous item, that the institution can cancel unilaterally at any time and without prior notice, or for which automatic cancellation is contemplated according to the contractual conditions established between the parties. d. Contingent risks and commitments originated by the constitution of bid bonds and performance bonds before public bodies.

e. Letters of credit for merchandise circulation operations.
Risks arising, both for the issuing bank and the confirming bank, from self-liquidating commercial letters of credit with a maturity of less than one year, arising from merchandise circulation operations (for example, confirmed documentary or foreign letters of credit). This includes documentary letters of credit issued by the bank that have not yet been negotiated. f. Guarantees and sureties. Guarantees, standby letters of credit, independent first-demand guarantees, and solidary sureties granted. g. Other risks and contingent commitments. Risks and contingent commitments not covered in the previous items (a. to f.). To calculate contingent exposures, the Credit Conversion Factors (CCF) established in Table 12 must be considered.
Table 12:
Type of exposure CCF
Organization and administration operations of pools, closed circles, and consortia 0% Free-disposition credit lines with immediate cancellation 10% Letters of credit for merchandise circulation operations 20% 4 Other free-disposition credit lines 40% Contingent risks arising from the constitution of guarantees for maintaining bids and fulfilling tenders before public bodies 50% 6 Guarantees and sureties 100% 7 Other risks and contingent commitments 100%

10. Exposures in default.
    The unsecured portion, that is, that which does not have admissible guarantees as provided in article 160.1.1, of a matured credit – according to the definition given in the accounting rules established by the Superintendency of Financial Services – will have a credit risk weight of 100%, except when the provisions assigned to these credits represent less than 20% of the exposure, in which case a weight of 150% must be applied. When it concerns secured exposures with residential real estate, where the repayment of the credit does not depend substantially on the cash flows generated by the property securing the loan, a weight of 100% will be applied in all cases.
11. Exposures against securitizations.
    The credit risk weights for exposures against securitizations of financial intermediation institutions will be determined based on the type of securitization involved: traditional, synthetic, or re-securitization. A traditional securitization is a structure in which cash flows from a set of underlying assets are used to service – at least – two risk positions stratified or tranches with different degrees of credit risk or preference. The preference of the tranches determines the distribution of losses during their validity period. A synthetic securitization is a structure with – at least – two risk positions stratified or tranches with different degrees of credit risk or preference, in which the credit risk of a set of underlying assets is transferred, totally or partially, through the use of guarantees or credit derivatives. Re-securitization is a structure in which the risk associated with a set of underlying assets is segmented and, at least, one of them is a securitization. The underlying assets to be securitized may include, among others, credits, asset securitization bonds, mortgage securitization bonds, negotiable obligations, and shares. The exposure to the risks of a traditional or re-securitization referred to in this article arises from the holding by a financial intermediation institution of securities issued within the framework of the securitization or re-securitization.

The exposure to the risks of a synthetic securitization comes from the granting of guarantees or sale of credit risk derivatives by the financial intermediation institution to the originator entity of the securitization. For the purpose of determining the credit risk weights for exposures against securitizations, the following variables must be calculated:

• Tranche attachment point (A): represents the threshold from which the losses of the set of underlying assets will begin to be assigned to the securitization position held by the institution. It is the greater value between 0 and the ratio between the balance of all underlying assets minus the balance of all tranches with preference or equal seniority relative to the tranche to which the institution is exposed (including this tranche) and the balance of all underlying assets of the securitization.
• Tranche detachment point (D): constitutes the threshold from which the losses of the set of underlying assets will result in a complete loss of the principal of the tranche or entity position. It is the greater value between 0 and the ratio between the balance of the underlying assets minus the balance of the tranches with preference relative to the tranche to which the entity is exposed and the balance of all underlying assets of the securitization.
• Senior tranche: The exposure is considered to a senior tranche when such tranche is in the first place for seniority purposes in the corresponding payments.
• Tranche maturity (M): is the effective residual maturity – in years – calculated as follows:
  Where CFt represents the cash flows (principal, interest, and commissions) contractually payable by the originator entity of the securitization in period t. Contractual payments must be unconditional. If unconditional contractual payment dates were not available, the final legal maturity will be used. If the value resulting from the formula is less than 1, M = 1 shall be considered, and if the value is greater than 5, M = 5 shall be considered. For exposures against traditional securitizations, the risk weights detailed in Table 13 must be considered, which must be adjusted as indicated below.

Table 13:
Tranche risk rating
Senior tranche
Non-senior tranche
Tranche maturity
1 year 5 years 1 year 5 years
Weight (%)
AAA 15 20 15 70
AA+ 15 30 15 90
AA 25 40 30 120
AA- 30 45 40 140
A+ 40 50 60 160
A 50 65 80 180
A- 60 70 120 210
BBB+ 75 90 170 260
BBB 90 105 220 310
BBB- 120 140 330 420
BB+ 140 160 470 580
BB 160 180 620 760
BB- 200 225 750 860
B+ 250 280 900 950
B 310 340 1050 1050
B- 380 420 1130 1130
CCC- to CCC+ 460 505 1250 1250
< CCC- 1250
Unrated 1250
For maturities between 1 and 5 years, these weights must be adjusted by linearly interpolating the values in the table.
In the case of non-senior tranches, the weight will depend on the relative size of the tranche in relation to the total underlying assets of the securitization (T) of the tranche, according to the following formula:
Where,

• = credit risk weight for non-senior tranches.

• = credit risk weight adjusted for maturity.

• , where “D” is the tranche detachment point and “A” is the tranche attachment point.
  In the case of exposures against synthetic securitizations or re-securitizations, the weight will be 1250%.

12. Other exposures.
    The risk weight for the rest of the assets will be 100%, except in the following cases, where a weight of:

• 0% will be applied:
  i) Cash and gold. ii) Checks and other documents for clearing. iii) Assets to be given to consortium members, provided their holding period does not exceed one year counted from the date of their incorporation into the assets. iv) Fiscal asset for current tax.
• 150%:
  Shares, in national and foreign currency, of leveraged investment funds (those that use credits or derivative instruments, such that the amount of investments exceeds the amount of the fund's equity).
• 250%:
  Amount corresponding to deferred tax assets arising from non-deductible temporary differences from common capital, according to what is established in article 154.3.

2. INCORPORATE into Chapter II – Minimum Net Equity Liability, of Title II – Equity Liability, of Book II – Stability and Solvency, the following article:
   ARTICLE 160.1.1 (CAPITAL REQUIREMENT FOR CREDIT RISK – RISK MITIGATION TECHNIQUES).
   For the purpose of mitigating credit risk, institutions may use the techniques described in the following items.
   When the institution uses more than one risk mitigation technique to cover the same exposure, it must subdivide it into the parts covered by each technique and calculate separately the risk-weighted assets corresponding to each part.

1. Collateral transactions
   A collateral transaction is one in which institutions are exposed to a real or potential credit risk and such exposure is totally or partially covered by collateral delivered by the counterparty or by a third party in favor of the counterparty. Institutions will apply the so-called “simple approach”, replacing the risk weight of the counterparty with the weight of the collateral for the collateralized tranche of the exposure, subject to a minimum weight of 20% with the exceptions detailed below. Maturity mismatches are not permitted in the aforementioned simple approach. The following instruments are admissible as collateral:
   (a) Cash and certificates of deposit issued by local banks or foreign banks rated in a category equal to or higher than AA-.
   (b) Gold.
   (c) Securities:
   (c.1) national public or
   (c.2) non-national public rated in a category equal to or higher than BBB- or equivalent issued by central governments, central banks, State-Owned Enterprises (ESPs), or multilateral organizations. (d) Credit rights from the sale of goods or services to the Uruguayan State, with the consent of the competent authority. The following conditions must be met:

• The instruments must be custodied in:
   the institution itself, in its branches abroad, in the head office, or in the head office premises, provided that non-resident institutions are domiciled in countries rated in a category equal to or higher than BBB+ or equivalent, or  in banks abroad rated in a category no lower than BBB- or equivalent.
• Deposits, custodies, and credit rights must be pledged, expressly and irrevocably, in favor of the resident financial intermediation institution.
• Securities must trade publicly through agile, deep, and non-influencable negotiation by individual private agents.

Finally, the following exceptions to the general treatment are established:
(i) Exceptions to the minimum 20% weight, when:
 the operation is collateralized with cash or similar – considering item (a) – provided the deposit is denominated in the same currency as the exposure or in currencies of countries with a rating equal to or higher than AA or in Euros, the minimum weight will be 0%;  the operation is collateralized with securities – as established in item (c) – to which a credit risk weight of 0% corresponds, the collateral and the exposure are denominated in the same currency, and the market value of the security has been discounted by 20%, the minimum weight will be 0%;  it concerns securities purchase operations with an irrevocable commitment to sell, according to the definition given by articles 283 and 284, the minimum weight will be 0%, provided all the following conditions are met:

• The collateral consists of securities to which a weight of 0% corresponds, within the framework of item (c).
• The exposure and the collateral are denominated in the same currency.
• The operation is overnight or the exposure and collateral are valued daily at market prices and are subject to daily margin replenishment.
• The operation is settled through a proven settlement system for this type of operation.
• After any default event, regardless of whether the counterparty is insolvent or bankrupt, the bank has the unrestricted and legally enforceable right to immediately take possession of the collateral and liquidate it for its own benefit.
  (ii) Exception to the simple approach: when the operation is collateralized by the assignment of credit rights against the Uruguayan State – item (d) –, the weight applicable to the collateralized part will depend on the currency of the credit:
• National currency: 20%.
• Foreign currency: 50%.

2. Guarantees
   Institutions may also mitigate credit risk through guarantees granted by third parties, among others, standby letters of credit, independent first-demand guarantees, and solidary sureties granted by multilateral development banks and foreign banks, provided the credit was granted in the same currency. In this case, the risk weight of the counterparty may also be replaced, for the tranche covered by the guarantee, by the weight of the guarantor. For these purposes, the guarantee must meet the following conditions:

• Represent a direct right of the institution against the guarantor.
• Be explicitly referred to a specific exposure.
• Be established in an irrevocable contract, not containing clauses that allow the provider of the guarantee to unilaterally cancel the coverage, except in the case of default of the counterparty with the guarantor.
• Be unconditional, not containing clauses that escape the direct control of the institution and exempt the guarantor from paying in case the counterparty fails to pay the owed amounts.
  Credit protection provided by governments and central banks, ESPs, multilateral organizations, and financial institutions, as well as the head office, controlling entity, subsidiaries, and companies of the same economic group, rated in a category no lower than BBB+ or equivalent, may be recognized. In addition, guarantees granted by the National Guarantee System (SNG) administered by the financial fiduciary CONAFIN AFISA are admitted provided they meet the conditions established in item iv) of section g) of Annex IV - Other guarantees of the Accounting Standards for the preparation of financial statements. These guarantees will be considered granted by the National Government (Table 1).

3. EFFECTIVE DATE. The provisions of the preceding items 1. and 2. will govern from January 1, 2026.
   JUAN PEDRO CANTERA
   Superintendent of Financial Services
   2024-50-1-01111