2018 - YEAR OF THE CENTENARY OF THE UNIVERSITY REFORM

COMMUNICATION “A” 6531
28/06/2018

TO FINANCIAL INSTITUTIONS:

Ref.: Circular
LISOL 1 - 803
REMON 1 - 945

Guarantees. Minimum capital of financial institutions. Minimum cash. Liquidity coverage ratio. Adjustments.

We address you to inform you that this Institution adopted the resolution that, in its pertinent part, provides:

“1. Replace, with effect from 1.7.18, points 1.1.10. and 1.1.14. of the rules on “Guarantees” with the following:

“1.1.10. Credit instruments (deferred payment checks, promissory notes, bills of exchange and credit invoices) discounted with recourse to the transferor, to the extent that the following conditions are observed:

1.1.10.1. In the set of transactions carried out with each transferor, it must be verified with respect to any of the parties legally obligated to pay other than the transferor:

a) That at least 85 %, measured in relation to the face value of the documents, are classified as “normal situation” (category 1) according to the latest information available in the “Central de deudores del sistema financiero”.

b) That, at most, 15 %, measured in relation to the face value of the documents, are classified in category 2 or are persons not reported in said central registry.

c) That, at most, 20 % of the face value of the documents corresponds to the same party obligated to pay. This limitation shall not apply when it concerns documents of up to the equivalent of 5 % of the reference amount established in point 1.4.

These requirements must be observed considering the face value of the documents still pending maturity and the new documents that are discounted, when carrying out each discount transaction.

1.1.10.2. With respect to the assigned documents, it must be verified:

a) That, in addition to the pertinent endorsement, evidence of the transfer made by the transferor remains.

b) That they are valued according to the category assigned to the party obligated to pay in the “Central de deudores del sistema financiero” – whatever the classification of the transferor –, considering the following percentages with respect to their face value:

− Classified in Category 1: 100 %

− Classified in Category 2 and unclassified: 90 %

c) That they come from sale transactions or provision of services corresponding to the transferor's activity. This condition may be verified by means of a sworn statement made by the client or by any other means that the entity deems convenient.

When the transferor client of the financial institution is a credit cooperative, a mutual that provides the economic aid service or another legal person not included in article 2 of the Law on Financial Institutions, whose activity is the discount of third-party documents, the financial institution must require said legal person to state, as a sworn statement, that it has verified that the discounted instruments come from sale transactions and/or provision of services corresponding to the activity of each third-party transferor client of the aforementioned legal person, which must be indicated in an annex to the aforementioned sworn statement.

Without prejudice to the foregoing, the treatment as preferred guarantee “A” shall not be applicable when the third-party transferor is any of the legal persons indicated in the previous paragraph.

When the parties obligated to pay are clients of the financial institution, the amount of the assistance granted under this modality shall be charged to their credit margins.

In all cases in which this point mentions “party/parties obligated to pay” it refers to any of the persons signing the documents who holds that condition in their capacity as drawer, endorser, acceptor or guarantor.”

“1.1.14. Credit instruments (deferred payment checks, promissory notes, bills of exchange and credit invoices), discounted with recourse to the transferor, in which any of the parties legally obligated to pay, who holds that condition in their capacity as drawer, endorser, acceptor or guarantor, meets at least one of the following conditions:

1.1.14.1. Record a level of indebtedness with the system equal to or greater than the equivalent of 170 % of the reference amount established in point 1.4., according to the latest information available in the “Central de deudores del sistema financiero” and be reported by at least two financial institutions in which the indebtedness – in each of them – is at least 85 % of the aforementioned reference amount.

It must be classified, in said central registry, “in normal situation” by all the

BANCO CENTRAL
DE LA REPÚBLICA ARGENTINA

financial institutions and, in the case of maintaining outstanding negotiable obligations or other debt securities, verify the provisions of point 1.1.14.2.

1.1.14.2. Maintain outstanding negotiable obligations or other debt securities in the local market for a sum not less than the equivalent of 90 % of the reference amount established in point 1.4. and comply with the provisions of point 2.2.1. of the rules on “Credit Evaluations”.”

2. Replace, with effect from 1.7.18, point 2.4.4.2. of the rules on “Minimum capital of financial institutions” with the following:

“2.4.4.2. MSMEs (including financing to natural persons for the development of their professional activity): $ 30,000,000.”

3. Replace, with effect from 1.7.18, the second paragraph of point 4.2.1. of the rules on “Liquidity coverage ratio” with the following:

“It includes deposits and other sources of funds obtained from MSMEs that financial institutions manage using the criteria applied to the retail sector and whose liquidity risk is considered to generally present characteristics similar to retail funding sources, provided that the total aggregate funding obtained from the MSME is less than thirty million pesos ($ 30,000,000) – jointly for the economic group where applicable, taking into account the criterion established by the enforcement authority of Law 24,467 (and its amendments)–.”

4. Replace, with effect from 1.7.18, point 1.5. of the rules on “Minimum Cash” with the following:

“1.5. Reduction of the average requirement in pesos.

1.5.1. Based on certain financings.

The requirement shall be reduced in accordance with the share of financings to micro, small and medium-sized enterprises (MSMEs) in the same currency in the institution's total financings to the non-financial private sector in pesos –in accordance with the definition contained in the rules on “Determination of the status of micro, small or medium-sized enterprise”– considering that classification at the time of granting, according to the following table:

Share of financings to MSMEs in relation to total financings to the non-financial private sector, at the institution. In %	Deduction (on the total of the items included in pesos). In %
Less than 4	0.00
Between 4 and less than 6	0.75
Between 6 and less than 8	1.00
Between 8 and less than 10	1.25
Between 10 and less than 12	1.50
Between 12 and less than 14	1.75

CENTRAL BANK OF THE ARGENTINE REPUBLIC

Between 14 and less than 16
2.00
Between 16 and less than 18
2.20
Between 18 and less than 20
2.40
Between 20 and less than 22
2.60
Between 22 and less than 24
2.80
Between 24 and less than 26
3.00
Between 26 and less than 28
3.20
Between 28 and less than 30
3.40
30 or more
3.60

For the purposes of calculating financings to MSMEs, in order to determine the percentage share, account shall be taken of whether they meet that condition at the time the assistance is granted, considering all outstanding financings. If the borrower ceases to meet the MSME condition, the financings granted up to that moment shall be counted.

The balance at the end of the period prior to the under-reporting of peso financings (Loans and Credits for Financial Leases) granted to MSMEs shall be included.

1.5.2. Based on the granting of financings under the “AHORA 12” Program.

The requirement shall be reduced by an amount equivalent to 20% of the sum of the peso financings that the institution grants:

1.5.2.1. As provided for by the “AHORA 12” Program referred to in Joint Resolution No. 671/14 and 267/14 of the Ministry of Economy and Public Finance and the Ministry of Industry, respectively, whose purpose is the acquisition of goods and services covered by said resolution and its complementary rules.

For this purpose, the balance of the covered financings from the period prior to the computation of the requirement that meet the indicated requirements shall be considered.

1.5.2.2. To non-financial companies issuing credit cards at an interest rate of up to 17% nominal annual, to the extent that those companies have adhered to the “AHORA 12” Program.

For this purpose, the financings from the period prior to the computation of the requirement shall be considered, measured as the monthly average of daily balances.

The financial institution must require and have documentation proving that the borrowing company has used the funds to grant financings under the conditions of the aforementioned Program.

This deduction, furthermore, may not exceed 1% of the peso items subject to requirement, on average, for the month prior to the computation.” For this purpose, we are sending you as an annex the pages that, replacing those previously provided, should be incorporated into the referenced rules. Likewise, it is recalled that on the website of this Institution www.bcra.gob.ar, by accessing “Financial System - LEGAL AND REGULATORY FRAMEWORK –Compilations and summaries– Ordered texts of general regulations”, you will find the modifications made with texts highlighted in special characters (strikethrough and bold).

We greet you attentively.

CENTRAL BANK OF THE ARGENTINE REPUBLIC

Darío C. Stefanelli
Principal Manager of Issuance and
Regulatory Applications
Agustín Torcassi
Deputy General Manager of Regulations

ANNEX

1.1.7. "Warrants" over fungible goods that have normal and customary quotation in local or international markets, widely disseminated and easily accessible to public knowledge.

1.1.8. Guarantees constituted by the assignment of collection rights of invoices to consumers for services already rendered, issued by companies providing services to the public (companies that supply electricity, gas, telephone, water, etc.), provided that it is a set of invoices representing a quantity not less than 1.000 clients.

1.1.9. Guarantees constituted by the assignment of collection rights regarding credit card coupons.

1.1.10. Credit instruments (deferred payment checks, promissory notes, bills of exchange and credit invoices) discounted with recourse for the assignor, to the extent that the following conditions are observed:

1.1.10.1. In the set of operations carried out with each assignor, it must be verified with respect to any of the subjects legally obligated to pay other than the assignor:

a) That at least 85 %, measured in relation to the face value of the documents, are classified in "normal situation" (category 1) according to the latest information available in the "Central de deudores del sistema financiero".

b) That, at most, 15 %, measured in relation to the face value of the documents, are classified in category 2 or are persons not reported in said central registry.

c) That, at most, 20 % of the face value of the documents corresponds to the same subject obligated to pay. This limitation shall not be applicable when dealing with documents up to the equivalent of 5 % of the reference amount established in point 1.4.

These requirements must be observed considering the face value of the documents still pending maturity and the new documents that are discounted, when carrying out each discount operation.

1.1.10.2. With respect to the assigned documents, it must be verified:

a) That, in addition to the pertinent endorsement, there is evidence of the transfer made by the assignor.

b) That they are discounted in accordance with the category assigned to the subject obligated to pay in the "Central de deudores del sistema financiero" –whatever the classification of the assignor–, considering the following percentages with respect to their face value:

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− Classified in Category 1: 100 %

− Classified in Category 2 and unclassified: 90 %

c) That they come from sale operations or provision of services corresponding to the assignor's activity. This condition may be verified by means of a sworn statement made by the client or by any other means that the entity deems convenient.

When the assignor client of the financial entity is a credit cooperative, a mutual that provides the economic aid service or another legal person not included in article 2 of the Law on Financial Entities, whose activity is the discount of third-party documents, the financial entity must require said legal person to state, as a sworn statement, that it has verified that the discounted instruments come from sale operations and/or provision of services corresponding to the activity of each third-party assignor client of the aforementioned legal person, which must be indicated in an annex to the aforementioned sworn statement.

Without prejudice to the provisions established above, the treatment as preferred guarantee "A" shall not be applicable when the third-party assignor is any of the legal persons indicated in the previous paragraph.

When the subjects obligated to pay are clients of the financial entity, the amount of the assistance granted under this modality shall be charged to their credit margins.

In all cases in which this point mentions "subject/s obligated to pay", it refers to any of the persons signing the documents who holds that condition in their capacity as drawer, endorser, acceptor or guarantor.

1.1.11. Direct guarantees issued by central governments, agencies or dependencies of central governments of countries that are members of the Organization for Economic Cooperation and Development (O.E.C.D.) that have an international risk rating of "A" or higher.

1.1.12. Guarantees constituted by the assignment of rights over the collection of tariffs and fees in public works concessions, provided that it does not exceed 50 % of the projected income.

1.1.13. Guarantees or securities of private securities (shares or bonds) issued by national or foreign companies, taking into account permanently their market value, which must respond to a normal and customary quotation in local or international markets, widely disseminated and easily accessible to public knowledge.

Local issuing companies must comply with the provisions of point 2.2.1. of the rules on "Credit Evaluations".

Foreign securities must correspond to companies that comply with the provisions of point 3.2. of the rules on "Credit Evaluations", requiring for that purpose that their debt papers have an international risk rating of "A" or higher.

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1.1.14. Credit instruments (deferred payment checks, promissory notes, bills of exchange and credit invoices), discounted with recourse for the assignor, in which any of the subjects legally obligated to pay, who holds that condition in their capacity as drawer, endorser, acceptor or guarantor, meets at least one of the following conditions:

1.1.14.1. Register a level of indebtedness with the system equal to or greater than the equivalent of 170 % of the reference amount established in point 1.4., according to the latest information available in the "Central de deudores del sistema financiero" and be reported by at least two financial institutions in which the indebtedness –in each of them– is at least 85 % of the aforementioned reference amount.

It must be classified, in said central, "in normal situation" by all financial institutions and, in the case of maintaining outstanding negotiable obligations or other debt securities, verify the provisions of point 1.1.14.2.

1.1.15. Guarantees granted by mutual guarantee companies or by public guarantee funds registered in the Registries enabled in the BCRA, whatever the term of the operation, provided that they make effective the unpaid credits within 30 calendar days of their maturity.

1.1.16. Export credit insurance –operations without responsibility for the assignor– that cover commercial risk and, if applicable, extraordinary risks (borne by the National State, Ley 20.299), including credit risk insurance "with public buyer coverage", whatever the term of the operation. The policy covering commercial risk must provide for the effective payment of the credits within 180 calendar days of their maturity and be issued by:

a) Local insurance companies with respect to which the provisions of point 2.2.2. of the rules on "Evaluaciones crediticias" are complied with and that have reinsurance with insurance companies:

i) local ones with respect to which the provisions of the aforementioned point 2.2.2. of the rules on "Evaluaciones crediticias" are also verified; or

ii) foreign ones that comply with the provisions of point 3.2. of the rules on "Evaluaciones crediticias", requiring for that purpose an international risk rating of "A" or higher.

The amount of the reinsurances must be adapted to the regulations issued by the Superintendencia de Seguros de la Nación.

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b) Local branches of foreign insurance companies with respect to which compliance with the provisions of point 2.2.2. of the rules on "Evaluaciones crediticias" is verified and their parent company complies with point 3.2. of the aforementioned rules –requiring for that purpose an international risk rating of "A" or higher–.

c) Local subsidiaries of foreign insurance companies with respect to which compliance with the provisions of point 2.2.2. of the rules on "Evaluaciones crediticias" is verified and their controlling company complies with point 3.2. of the aforementioned rules –requiring for that purpose an international risk rating of "A" or higher– and has explicitly guaranteed the obligations of the subsidiary.

1.2. Preferidas “B”.

They are constituted by real rights over assets or commitments of third parties that, reliably instrumented, ensure that the entity may dispose of the funds for the cancellation of the obligation contracted by the client, previously complying with the procedures established for the enforcement of the guarantees.

Included in this category, as a taxative enumeration, are the following:

1.2.1. First-degree mortgage on real estate or surface rights, and whatever their degree of priority provided that the entity is the creditor in all degrees. Also included are real estate and/or surface rights over which a fiduciary property has been constituted, to the extent that the lending financial entity has assigned –in the trust contract– the best collection priority with respect to the rest of the creditors, whatever the modality by which that collection preference is granted.

1.2.2. Fixed pledge with first-degree registration or with transfer to the entity on motor vehicles and agricultural, road and industrial machinery (to the extent that they are registered in the pertinent national registry of motor vehicle property and have a market that allows obtaining a reference value), or fixed pledge with registration on bovine cattle.

1.2.3. Floating pledge with registration on:

1.2.3.1. motor vehicles and agricultural, road and industrial machinery (to the extent that it is instrumented on assets that have manufacturing certificates or other documents that limit the disposal of the asset, which must be retained by the entity until the cancellation of the assistance granted), or

1.2.3.2. bovine cattle.

1.2.4. Guarantees granted by mutual guarantee companies or by public guarantee funds registered in the Registries enabled in the BCRA, whatever the term of the operation, to the extent that the requirement mentioned in point 1.1.15. is not met.

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GARANTÍAS B.C.R.A.
Sección 1. Clases.

1.2.5. Credits for financial leases ("leasing") that had been agreed in accordance with the provisions of the Código Civil y Comercial de la Nación on real estate and on motor vehicles and agricultural, road and industrial machinery (to the extent that they are registered in the pertinent national registry of motor vehicle property and have a market that allows obtaining a reference value).

1.2.6. Export credit insurance, to the extent that the periods for payment of claims for commercial risk exceed 180 days without exceeding 270 consecutive days counted from the maturity of the credits, whatever the term of the transaction, and the other requirements provided in point 1.1.16 are observed.

1.2.7. Trusts for guarantee constituted in accordance with the provisions of the Civil and Commercial Code of the Nation (article 1666 et seq.) for the purpose of backing the payment of financings granted for the construction of real property provided that, at a minimum, the following requirements are verified:

1.2.7.1. The owner of the domain assigns to the trust for guarantee the real property on which the construction of the development will be carried out and the rights and other assets resulting from the execution and completion of the works and their commercialization in fiduciary ownership, with the scope agreed in the trust contract.

1.2.7.2. The proceeds of such commercialization are destined to the partial or total cancellation of the obligations contracted by the borrower by reason of the financing agreed in the terms established in the trust contract.

1.2.7.3. The trustee has broad powers to carry out effective control of the tasks provided in point 1.2.7.1., as well as to remove from their functions the natural or legal persons that have been designated to carry them out and designate their replacements, in case of non-compliance or poor performance of their functions.

1.2.7.4. The assigned assets are free of liens.

1.2.7.5. In cases where there are other beneficiaries besides the lending financial entity, the respective contracts contemplate a clause establishing that in the event of non-compliance, by the borrower, of the payment –partial or total– of the financings granted, the lending/beneficiary financial entity will have preference in collection over the other beneficiaries of the trust's product.

1.2.7.6. The deed of fiduciary transfer of the trust real properties and the trust contracts contain a clause by which the settlor grants in advance the required consent such that in the event the objective conditions of non-compliance contained in the trust contract are verified, the trustee is authorized to dispose of the asset and transfer its full ownership, with the consequent registry effect.

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1.2.7.7. In the purchase-sale agreement of the assets resulting from the development, whose model will be included in an annex forming part of the trust for guarantee contract, it must be indicated by a specific clause that there is fiduciary ownership over the real property on which the construction is developed, in which the identification data of the trustee of the trust for guarantee shall be recorded.

1.2.8. Pledge or assignment in guarantee –including fiduciary– of the purchase-sale agreement of lands, lots or parcels –whether urban or rural–, or of warehouses, premises, offices, parking spaces and already constructed dwellings with respect to which a mortgage cannot be constituted because the real property is not registered in the real estate registry of the corresponding jurisdiction. This, to the extent that the total price of the real property is paid, possession is delivered to the acquirer and there is an irrevocable power to execute the deed –with signature certified by public notary– in favor of the latter.

1.2.9. Pledge or assignment in guarantee of rights over real estate developments implemented through trusts –in the terms of article 1666 et seq. of the Civil and Commercial Code of the Nation– or construction companies, provided that the existence of the following elements is verified:

1.2.9.1. Copy authenticated by notary of the corresponding contract instrumented by public deed, from which arises the obligation of the trustee or of the company –as applicable– to carry out the work to whose financing the guarantee is imputed.

1.2.9.2. Certificate of domain of the land issued by the corresponding Real Property Registry, from which arises the ownership in favor of the trustee or the construction company. In its absence, purchase-sale agreement instrumented by public deed with an age no greater than 6 months, through which the trustee or the construction company has paid, at a minimum, 60 % of the purchase value of the land.

1.2.9.3. Permit or authorization of work, granted by the corresponding jurisdictional authority for the start of construction.

1.2.9.4. The contract, whose rights are the object of the pledge or assignment, must contemplate clauses by which the borrowers authorize or grant a mandate to the lending financial entity so that the funds granted in loan are contributed or trust, as the case may be, for the purpose of carrying out the work.

The contracts that instrument the financings must clearly establish that the failure to contract insurance in favor of the acquirers of the projected functional units, in accordance with the provisions of article 2071 of the Civil and Commercial Code of the Nation, will not deprive the financial entity of any right arising from the financing granted.

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When it concerns the pledge or assignment as collateral of rights over functional units for financing granted directly to the acquirers, in addition to the aforementioned requirements, the following shall be required: i) the presentation of a copy authenticated by a notary of the instruments by which those rights were constituted in favor of the respective acquirers and ii) a copy of the plan of work approved by the competent authority in which it is observed that all of the projected functional units to be subdivided are included.

1.2.10. Pledge or assignment as collateral of the debt instruments referred to in point 3.2.10. of the rules on “Financing to the non-financial public sector”.

1.3. Remaining guarantees.

Guarantees not explicitly included in the preceding points, such as a mortgage in a rank other than first and the pledge or surety of shares or commercial documents and liens constituted abroad in accordance with legislation other than local – except in the cases expressly provided for – shall be considered non-preferred.

1.4. Reference amount.

The amount to be considered shall be the maximum level of the total annual sales value for the “Micro” category corresponding to the “Commerce” sector determined by the enforcement authority of Law 24.467 (and its amendments).

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B.C.R.A.
ORIGIN OF THE PROVISIONS CONTAINED IN THE RULES ON “GUARANTEES”

CONSOLIDATED TEXT			SOURCE RULE		OBSERVATIONS
Section	Point	Paragraph	Com.	Annex Point Paragraph
1.1.			“A” 2932	sole 1.1.	According to Com. “A” 4242 and 6374.
1.1.1.			“A” 2216	I 1. 3rd, a)	According to Com. “A” 2443, 2932, 3918, 4242 and 6374.
1.1.2.			“A” 2216	I 1. 3rd, a)	According to Com. “A” 2443, 2932 and 3918.
1.1.3.			“A” 2216	I 1. 3rd, b)	According to Com. “A” 2932, 3918, 4242 and 6374.
1.1.4.			“A” 2216	I 1. 3rd, c)	According to Com. “A” 2932 and 4242.
1.1.5.			“A” 2216	I 1. 3rd, d)	According to Com. “A” 2932, 4741, 6091 and 6327.
1.1.6.			“A” 2216	I 1. 3rd, e)	According to Com. “A” 2932, 3918, 4242, 5671, 5740, 6328 and 6374.
1.1.7.			“A” 2216	I 1. 3rd, g)	According to Com. “A” 2932.
1.1.8.			“A” 2216	I 1. 3rd, h)	According to Com. “A” 2932.
1.1.9.			“A” 2216	I 1. 3rd, i)	According to Com. “A” 2932.
1.1.10.			“A” 2932	sole 1.1.11.	According to Com. “A” 3104, 4242, 4522, 4957, 5998 and 6531.
1.1.11.			“A” 2932	sole 1.1.12.	According to Com. “A” 4141, 5671, 5740 and 6374.
1.1.12.			“A” 2932	sole 1.1.13.	According to Com. “A” 4242 and 6374.
1.1.13.			“A” 2932	sole 1.1.14.	According to Com. “A” 3918, 5671 and 5740. Includes interpretive clarification.
1.1.14.			“A” 3114	1.
1.1.14.1.	1°		“A” 3114		According to Com. “A” 3918, 4055, 5671, 5740, 5998 and 6531. Includes interpretive clarification.
1.1.14.2.			“A” 3114	1.	According to Com. “A” 3918, 4055, 5671, 5740, 5998 and 6531.
1.1.15.			“A” 3141		According to Com. “A” 3307, 3918, 4465 and 5275.
1.1.16.			“A” 3314		According to Com. “A” 4529, 5671 and 5740.
1.2.			“A” 2932	sole 1.2.	According to Com. “A” 3104 and 6374.
1.2.1.			“A” 2419	1. 1°	According to Com. “A” 2563 (points 1. and 2.), 2932, 3314, 6250 and 6297.
1.2.2.			“A” 2448		Statement of debtors' situation (point 6.1.2.2.2.). According to Com. “A” 2932, 3918 and 6162.
1.2.3.			“A” 6162	4.
1.2.4.			“A” 2448		Statement of debtors' situation (point 6.1.2.2.2.). According to Com. “A” 2932, 3918 and 5275.
			“A” 2410	7.	According to Com. “A” 3141.
1.2.5.			“A” 3259	1.	According to Com. “A” 3314, 5067 and 6250.
1.2.6.			“A” 3314		According to Com. “A” 4529.

MINIMUM CAPITAL OF FINANCIAL INSTITUTIONS
B.C.R.A.
Section 2. Minimum capital for credit risk.

2.4.3. Concentration criterion.

The portfolio must be diversified. For this purpose, the total exposure with each debtor must not exceed 0.2% of the institution's total retail portfolio, without considering financings with more than 90 days past due.

To calculate the limit defined in the preceding paragraph, the aforementioned percentage shall be applied to the balance of the retail portfolio at the end of the month prior to the month to which the balances used to determine the requirement refer. Debtors whose balance of computable exposures at the end of the month referred to in the second term exceed that limit may not be counted within the retail portfolio.

2.4.4. Limit.

The maximum exposure to a single debtor must not exceed, at the time of the agreement, the following amounts:

2.4.4.1. Natural persons – consumer portfolio –: the amount equivalent to 75 (seventy-five) times the Minimum, Vital and Mobile Wage established by the National Council for Employment, Productivity and the Minimum, Vital and Mobile Wage for monthly workers who work the full legal working day, in force at the close of the month prior to the month in question.

2.4.4.2. MSMEs (including financings to natural persons for the development of their professional activity): $ 30,000,000.

For the purposes of considering credits incorporated through a portfolio purchase in the retail portfolio, the necessary information must be available to verify compliance with the criteria and limits detailed above.

2.5. Criteria for determining risk-weighted assets.

2.5.1. The risk weights established in point 2.6 shall be applied.

2.5.2. The term “exposure” encompasses all financings granted by the institution – in their different modalities, such as loans, holdings of securities, guarantees, sureties and other contingent liabilities –, including those arising from transactions carried out in the securities, currency and derivatives markets.

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B.C.R.A.
ORIGIN OF THE PROVISIONS CONTAINED IN THE RULES ON “MINIMUM CAPITAL OF FINANCIAL INSTITUTIONS”

CONSOLIDATED TEXT			SOURCE RULE			OBSERVATIONS
Section	Point	Paragraph	Com.	Chap./ Annex	Point	Paragraph
1.	1.1.		"A" 2136		1.	1st	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.	1st	According to Com. "A" 2223.
	1.4.1.		"A" 2136		3.1.
	1.4.2.1.		"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.
		iii)	"A" 414 LISOL-1	VI	6.1.
	1.4.2.2.		"A" 3171				According to Com. "A" 3959.
2.	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 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	sole	5.2.2.	3°
	2.4.		"A" 5369	I
		last	"A" 5580				Includes interpretive 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 and 6531.
	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 and 6327.
		3°	"A" 5580
	2.5.3.		"A" 5369	I			According to Com. "A" 5821.
	2.5.4.		"A" 5369	I			According to Com. "A" 5580.

LIQUIDITY COVERAGE RATIO
B.C.R.A.
Section 4. Total cash outflows.

Computable wholesale funding for the purposes of determining the LCR is defined as all funding that is due within the 30-day horizon or whose nearest contractual maturity date falls within said horizon - such as term deposits and debt securities - as well as funding with an indefinite maturity term.

It must include any source of funding that grants the provider of funds the option to accelerate the withdrawal of its investment so that the return of the funds must be made effective within the 30-day horizon or grants the financial institution the option to redeem it early within said term, when it is feasible that the financial institution decides to exercise the option for reputational reasons.

The following are excluded:

i) wholesale funding that may be cancelled early by the provider of funds, but subject to a notice period provided for in the contract that exceeds the 30-day horizon;

ii) obligations related to derivative contracts; and

iii) deposits contractually assigned as collateral for financing granted by the financial institution if all of the following conditions are met:

the financing will not mature or be cancelled in the next 30 days;
the collateral contract does not allow the withdrawal of the deposit prior to the payment or total cancellation of the financing;
the amount to be excluded will not be greater than the balance of the financing or the drawn balance, in the case of a credit facility.

When the deposit is assigned as collateral for an unused credit facility, the greater of the factors corresponding to the unused facility and the deposit assigned as collateral must be applied.

Unsecured wholesale funding comprises the categories indicated below.

4.2.1. Unsecured wholesale funding provided by MSMEs.

This funding will receive the treatment provided for in point 4.1. applicable to retail deposits, for which a distinction must be made between "Stable funding provided by MSMEs" and "Other funding provided by MSMEs".

It comprises deposits and other sources of funds obtained from MSMEs that financial institutions manage with the criteria they apply to the retail sector and whose liquidity risk is considered to generally present characteristics similar to retail sources of funds, provided that the total aggregate funding obtained from the MSME is less than thirty million pesos ($ 30,000,000) – jointly for the economic group where applicable, taking into account the criterion established by the enforcement authority of Law 24,467 (and its amendments) –.

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B.C.R.A.
ORIGIN OF THE PROVISIONS CONTAINED IN THE RULES ON "LIQUIDITY COVERAGE RATIO"

CONSOLIDATED TEXT			SOURCE RULE				OBSERVATIONS
Section	Point	Paragraph	Com.	Chap./ Annex	Point	Paragraph
1.	1.1.		"A" 5693		3.		According to Com. "A" 6209.
	1.2.		"A" 5693	sole	1.1.
	1.3.		"A" 5693	sole	1.2.
	1.4.		"A" 5693	sole	1.3.
	1.5.		"A" 5693	sole	1.4.
	1.6.		"A" 5693	sole	1.5.
	1.7.		"A" 5693	sole	1.6.
		1st and 2nd	"A" 5693	sole		1st and 2nd
2.	2.1.		"A" 5693	sole	2.1.
	2.2.		"A" 5693	sole	2.2.		According to Com. "A" 6241 and 6327.
3.	3.1.		"A" 5693	sole	3.1.
	3.2.		"A" 5693	sole	3.2.
	3.3.		"A" 5693	sole	3.3.
4.	4.1.		"A" 5693	sole	4.1.
	4.1.1.		"A" 5693	sole			According to Com. "A" 6004.
	4.2.		"A" 5693	sole	4.2.
	4.2.1.		"A" 5693	sole	4.2.		According to Com. "A" 6531.
	4.2.2.		"A" 5693	sole	4.2.
	4.2.3.		"A" 5693	sole	4.2.
	4.2.4.		"A" 5693	sole			According to Com. "A" 6004.
	4.3.		"A" 5693	sole	4.3.
	4.4.		"A" 5693	sole	4.5.
	4.4.2.1.		"A" 5693	sole	4.5.		According to Com. "A" 6004.
	4.4.5.		"A" 5693	sole	4.5.		According to Com. "A" 6004.
	4.4.6.1.		"A" 5693	sole	4.5.		According to Com. "A" 6004.
	4.4.6.2.		"A" 5693	sole	4.5.
	4.4.6.3.		"A" 5693	sole	4.5.		According to Com. "A" 6004.
5.	5.1.		"A" 5693	único	5.1.
	5.2.		"A" 5693	único	5.2.
6.	6.1.		"A" 5693	único	6.1.
	6.1.4.2.		"A" 5693	único	6.1.		According to Com. "A" 6008.
	6.1.4.11.		"A" 5693	único	6.1.		According to Com. "A" 6004 and 6008.
	6.2.		"A" 5693	único	6.2.
7.	7.1.		"A" 5693	único	7.1.
	7.2.		"A" 5693	único	7.2.
8.	8.1.		"A" 5693	único	8.1.
	8.2.		"A" 5693	único	8.2.
9.	9.1.	único	"A" 5693	único	único		According to Com. "A" 6502.
	9.2.		"A" 6475		3.

MINIMUM CASH B.C.R.A.
Section 1. Requirement.

1.4.3. Remaining forward transactions.

In these cases –including term investments and computable obligations with banks and foreign correspondents–, the residual terms shall be equal to the number of days remaining until the maturity of each obligation, counted from each of the days of the same month to which the minimum cash corresponds.

The requirement shall arise from applying the established rates on the daily balances of the aforementioned obligations according to the different tranches of fixed residual terms.

In the particular case of payment obligations in capital installments, the amounts of amortization services falling due within the year, counted from each of the days of the month to which the minimum cash corresponds, shall be considered independently for the purposes of applying to them the rate that is applicable based on the number of days remaining until the maturity of each of them.

1.5. Reduction of the requirement on average in pesos.

1.5.1. Based on certain financings.

The requirement shall be reduced in accordance with the share in the total financings to the non-financial private sector in pesos at the entity of financings to micro, small and medium-sized enterprises (MiPyMEs) in the same currency –in accordance with the definition contained in the rules on “Determination of the condition of micro, small or medium-sized enterprise”– considering that classification at the time of granting, according to the following table:

Share of financings to MiPyMEs with respect to total financings to the non-financial private sector, at the entity. In %	Deduction (on the total of the concepts included in pesos). In %
Less than 4	0,00
Between 4 and less than 6	0,75
Between 6 and less than 8	1,00
Between 8 and less than 10	1,25
Between 10 and less than 12	1,50
Between 12 and less than 14	1,75
Between 14 and less than 16	2,00
Between 16 and less than 18	2,20
Between 18 and less than 20	2,40
Between 20 and less than 22	2,60
Between 22 and less than 24	2,80
Between 24 and less than 26	3,00
Between 26 and less than 28	3,20
Between 28 and less than 30	3,40
30 or more	3,60

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For the purposes of calculating financings to MiPyMEs, in order to determine the share percentage, it shall be taken into account whether they meet that condition at the time of granting the assistance, considering all outstanding financings. If the borrower ceases to meet the MiPyMEs condition, the financings granted up to that moment shall be counted.

The balance at the end of the period prior to the under-reporting of peso financings (Loans and Credits for Financial Leases) granted to MiPyMEs shall be included.

1.5.2. Based on the granting of financings under the “AHORA 12” Program.

The requirement shall be reduced by an amount equivalent to 20% of the sum of the peso financings that the entity grants:

1.5.2.1. As provided for by the “AHORA 12” Program referred to in Joint Resolution No. 671/14 and 267/14 of the Ministry of Economy and Public Finance and the Ministry of Industry, respectively, whose purpose is the acquisition of goods and services included in the aforementioned resolution and its complementary rules.

For this purpose, the balance of the financings covered from the period prior to the computation of the requirement that meet the indicated requirements shall be considered.

1.5.2.2. To non-financial companies issuing credit cards at an interest rate of up to 17% nominal annual, to the extent that those companies have adhered to the “AHORA 12” Program.

For this purpose, the financings of the period prior to the computation of the requirement shall be considered, measured in monthly average of daily balances.

The financial entity must require and have documentation that proves that the borrowing company has used the funds to grant financings under the conditions of the aforementioned Program.

This deduction, furthermore, may not exceed 1% of the peso concepts subject to requirement, on average, of the month prior to the computation.

1.6. Specific increases in requirement due to concentration of liabilities.

When an excessive concentration of liabilities is verified (in holders and/or terms), which implies a significant risk with respect to the individual liquidity of the financial entity and/or has a significant negative effect on systemic liquidity, additional minimum cash may be set on the included liabilities of the financial entity and/or those complementary measures deemed pertinent.

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This situation shall be considered to be configured when, among others, any of the following factors is present:

A high percentage of liabilities is concentrated in a single holder or holders.
In term obligations, the term is short.
The aforementioned liabilities represent a significant percentage with respect to the integration of the minimum cash requirement and/or the total private sector deposits in the entity.

1.7. Transfers.

1.7.1. Admitted margin.

The integration of the minimum cash requirement of the position in monthly average may not be less than 80 % of the requirement resulting from the following expression:

EEMA (n) = EEF (n) + ENI (n-1)

Where

EEMA (n): adjusted minimum cash requirement corresponding to month “n”.

EEF (n): minimum cash requirement according to current regulations corresponding to month “n”.

ENI (n-1): requirement not integrated in month “n-1”.

1.7.2. Utilization period.

The admitted transfer of the requirement not integrated in each month to the following position may be made up to a maximum of six months, counted from the first month –inclusive– in which its utilization is chosen in accordance with the provisions above or from the first position immediately following that in which the transferred defects are offset or a charge is paid on them.

For its calculation, the numerals transferred from the month to which they correspond shall be computed, divided by the number of days of the month to which the transfer is made.

1.8. Defect in the application of resources in foreign currency.

The defect in the application of resources corresponding to deposits in foreign currency determined in a month shall be computed for an equivalent amount in the calculation of the minimum cash requirement of that same period of the respective currency.

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1.9. Increase in the requirement for non-compliance with the rules on “Credit line for productive investment”.

The defect in the application of Cupo 2013 verified –as of 1.7.13 or 1.1.14, as the case may be, when it is the first tranche and 1.1.14 or 1.7.14, as the case may be, when it is the second tranche– shall be computed for an equivalent amount in the calculation of the minimum cash requirement in average in pesos, from said dates and for 24 months.

The defect in the application of Cupo 2014 verified –as of 1.7.14 or 1.1.15, as the case may be, when it is the first tranche and as of 1.1.15 or 1.7.15, as the case may be, when it is the second tranche– shall be computed for an equivalent amount in the calculation of the minimum cash requirement in average in pesos, from said dates and for 24 months.

Non-compliance with the provisions of the second paragraph of point 3.5.3.2. of the rules on “Credit line for productive investment” (register as of 30.9.14 agreements for at least 50 % of the total amount of the second tranche of Cupo 2014 and at least 50 % to MSMEs) shall generate an increase in the minimum cash requirement in average in pesos for an equivalent amount from the day following its verification (1.10.14) for 3 months.

Non-compliance with the provisions of the third paragraph of point 3.5.4.1. of the rules on “Credit line for productive investment” (register as of 31.3.15 agreements for at least 30 % of the total amount of the first tranche of Cupo 2015) shall generate an increase in the minimum cash requirement in average in pesos for an equivalent amount from the day following its verification (1.4.15) for 3 months.

Non-compliance with the provisions of the third paragraph of point 3.5.4.2. of the rules on “Credit line for productive investment” (register as of 30.9.15 agreements for at least 30% of the total amount of the second tranche of Cupo 2015) shall generate an increase in the minimum cash requirement in average in pesos for an equivalent amount from the day following its verification (1.10.15) for 3 months.

The defect in the application of the second tranche of Cupo 2015 verified -as of 1.4.16 or 1.7.16, as the case may be-, shall be computed for an equivalent amount in the calculation of the minimum cash requirement in average in pesos, from said dates and for 24 months.

This, without prejudice to the provisions of point 8.3. of the rules on “Credit line for productive investment”.

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Effective date:
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CENTRAL BANK OF THE ARGENTINE REPUBLIC

MINIMUM CASH REQUIREMENT

CONSOLIDATED TEXT			SOURCE RULE				OBSERVATIONS
Sec.	Point	Para.	Com.	Annex	Sec.	Point	Para.
1.	1.3.8.		“A” 3498	sole	1.	1.3.11.		According to Com. “A” 3597, 3732, 4032 and 5356.
	1.3.9.		“A” 3498	sole	1.	1.3.12.		According to Com. “A” 3905, 3917, 3967, 4032, 4179, 4276, 4449, 4549, 4851, 5356, 5534, 5555, 5569, 5873, 5893, 5980, 6195 and 6526.
	1.3.10.		“A” 3549			1.
	1.3.11.		"A" 3549			1.		According to Com. "A" 4179, 4388, 4549, 4851, 5356, 5534, 5555, 5569, 5873, 5893, 5980, 6195 and 6526.
	1.3.12.		"A" 4360			2.		According to Com. "A" 5356.
	1.3.13.		"A" 4754			6.		According to Com. "A" 5356, 5980, 6195 and 6526.
	1.3.14.		"A" 5945			4.		According to Com. "A" 6069 and 6204.
	1.3.15.		"A" 6341
	1.3.16.		"A" 6069			4.
	1.4.		"A" 3905			3.		According to Com. "A" 4179, 4449, 4473, 5671, 5740, 6232 and 6349. Includes interpretive clarification.
	1.5.		"A" 5356			2.		According to Com. "A" 5471.
	1.5.1.		"A" 5356			2.		According to Com. "A" 5471, 5623 and 6531.
	1.5.2.		"A" 5631			1.		According to Com. "A" 5638, 6217 and 6531.
	1.6.		"A" 3274	II	1.	1.5.		According to Com. "A" 3498.
	1.7.		"A" 3274	II	1.	1.6.
	1.7.1.		"A" 3274	II	1.	1.6.1.		According to Com. "A" 4405, 4449 and 6349.
	1.7.2.		"A" 3274	II	1.	1.6.2.		According to Com. "A" 3304, 4449 and 6349.
	1.8.		“A” 3498	único	1.	1.8.		According to Com. “A” 4147.
	1.9.		“A” 5380					According to Com. “A” 5449, 5516, 5600, 5654 and 5771. Includes interpretive clarification.
2.	2.1.		“A” 3274	II	2.	2.1.		According to Com. “A” 3498, 3597, 4716 (interpretive clarification), 4815, 6288 and “B” 9186.
	2.1.1.		“A” 3274	II	2.	2.1.2.		According to Com. “A” 3304, 3498, 4016 and 4147.
	2.1.2.		“A” 3498	único	2.	2.1.3.		According to Com. “A” 4147.
	2.1.3.		“A” 3274	II	2.	2.1.3.		According to Com. “A” 3498, 4147, 4276 and 5194.