Minimum Capital of Financial Entities. Impact of Profits of Controlled Financial Entities in Periods Without Auditor Reports on the Determination of RPC. Regulatory Adaptation — BCRA — AR

"2006 - Year of Tribute to Dr. Ramón CARRILLO"

BANCO CENTRAL DE LA REPÚBLICA ARGENTINA
COMMUNICATION "A" 4539 17/05/2006

TO FINANCIAL ENTITIES:
Ref.: Circular
LISOL 1 - 455
Minimum Capital of Financial Entities. Impact of Profits of Controlled Financial Entities in Periods Without Auditor Reports on the Determination of RPC. Regulatory Adaptation. ______

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

"- Replace points 7.2.4.5. and 7.2.4.6. of Section 7 of the norms on 'Minimum Capital of Financial Entities' with the following:

"7.2.4.5. Net Participations in Financial Entities:
i) provisions for devaluation risk, except when exemptions apply so as not to deduct them, and ii) when they refer to controlled financial entities and it is necessary to apply what is provided in point 7.2.2.4., 50% of the profits thereof in proportion to the respective participation."

"7.2.4.6. Net Participations in Foreign Financial Entities:
i) provisions for devaluation risk, and ii) when they refer to controlled financial entities and it is necessary to apply what is provided in point 7.2.2.4., 50% of the profits thereof in proportion to the respective participation."

We send you attached the sheets that, in replacement of those previously provided, correspond to replace in the consolidated text of the referenced norms. Likewise, it is recalled that on this Institution's website www.bcra.gov.ar, accessing "regulations" ("consolidated texts"), you will find the modifications made with texts highlighted in special characters (strikethrough and bold).

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We salute you very respectfully.

BANCO CENTRAL DE LA REPUBLICA ARGENTINA
Darío C. Stefanelli José I. Rutman
Manager of Emission of Norms a/c
Deputy General Manager of Norms

ANNEX

MINIMUM CAPITAL OF FINANCIAL ENTITIES
B.C.R.A.
Section 7. Computable Patrimonial Responsibility.

7.2.4.3. Securities issued by governments of foreign countries, whose international risk rating is lower than that assigned to national public securities of the Argentine Republic, and which do not have markets where they trade habitually for relevant values.
This deduction shall be made for the amount of the highest balance recorded during the month to which the determination of computable patrimonial responsibility corresponds. To this end, mandatory investments that branches or subsidiaries -subject to consolidated supervision regime- of local financial entities must carry out due to requirements imposed by the monetary or control authority of the country where they operate will not be considered.

7.2.4.4. Debt securities, contractually subordinated to other liabilities, issued by other financial entities.
This deduction shall be made for the amount of the highest balance recorded during the month to which the determination of computable patrimonial responsibility corresponds.

7.2.4.5. Net Participations in Financial Entities:
i) provisions for devaluation risk, except when exemptions apply so as not to deduct them, and ii) when they refer to controlled financial entities and it is necessary to apply what is provided in point 7.2.2.4., 50% of the profits thereof in proportion to the respective participation.

7.2.4.6. Net Participations in Foreign Financial Entities:
i) provisions for devaluation risk, and ii) when they refer to controlled financial entities and it is necessary to apply what is provided in point 7.2.2.4., 50% of the profits thereof in proportion to the respective participation.

7.2.4.7. Participations linked to the application of the deferral of tax payments, incorporated until 19.2.99, or subsequently when they come from irrevocable subscription commitments instrumented until that date, from the month following the expiration of the legal period of unavailability or lapse, whatever the reason, of the tax benefits, according to pertinent legal and regulatory provisions.

7.2.4.8. Shareholders.

7.2.4.9. Real estate, regardless of the date of their incorporation into assets, destined or not for the operation of the entity, whose accounting registration is not backed by the pertinent deed of transfer of ownership duly registered in the respective Real Estate Registry, except those acquired through judicial auction.

Version: 4th COMMUNICATION "A" 4539
Validity:
17/05/2006

MINIMUM CAPITAL OF FINANCIAL ENTITIES
CONSOLIDATED TEXT SOURCE NORM
Section Point Paragraph Com.
Cap./
Annex
Point Paragraph
Observations

7.2.4.5. "A" 414
LISOL-1
VI 3.2. According to Comm. "A" 4172 and "A" 4539.
"A" 1215 Specifications of the items of participations in entities financial non-deductible for determining the responsability patrimonial computable. According to Comm. "A" 4172.

7.2.4.6. "A" 414
LISOL-1
VI 3.2. According to Comm. "A" 4172 and "A" 4539.

7.2.4.7. "A" 2863 3. According to Comm. "A" 4172.

7.2.4.8. "A" 414
LISOL-1
VI 3.2. According to Comm. "A" 4172.

7.2.4.9. "A" 2730 Incorporates interpretative clarification. According to Comm. "A" 4172.

7.2.4.10. "A" 2545 According to Comm. "A" 4172.

7.2.4.11. "A" 414
LISOL-1
VI 3.2. Modified by Comm. "A" 986 and
"A" 4172.

7.2.4.12. "A" 414
LISOL-1
VI 3.2. According to Comm. "A" 4172.

7.2.4.13. "A" 2287 4. According to Comm. "A" 4172.
"A" 2607 1. According to Comm. "A" 4172.

7.2.4.14. "A" 2893 1. According to Comm. "A" 4172.

7.2.4.15. "A" 3087 According to Comm. "A" 4172.

7.2.4.16. "A" 3918 According to Comm. "A" 4172.

7.3. "A" 414
LISOL-1
VI 3.4. According to Comm. "A" 1858 and "A" 4172.

8.1. "A" 2227 unique 5.2.1. last According to Comm. "A" 2649 and "A" 4172.

8.2. 1º "A" 2227 unique 5.1.1. and
5.1.7.
According to Comm. "A" 2649 and "A" 4172.
"A" 2227 unique 5.2.2. According to Comm. "A" 4172.

8.2. last "A" 2461 unique V. According to Comm. "A" 4172.

9.1. "A" 3959 According to Comm. "A" 4172.

9.2. "A" 3959 According to Comm. "A" 4172.

9.3. "A" 3985 According to Comm. "A" 4172.

9.4. "A" 3985 According to Comm. "A" 4172.

9.5. "A" 3986 2. and 4. According to Comm. "A" 4172 and "A" 4270.

9.6. "A" 3986 3. and 4. According to Comm. "A" 4172.

9.7. "A" 4238 2. According to Comm. "A" 4368.