Minimum capital requirement for operational risk: amendment to the implementation schedule

2012 – Year of Tribute to Doctor D. Manuel Belgrano

CENTRAL BANK OF THE ARGENTINE REPUBLIC

COMMUNICATION “A” 5346
23/08/2012

TO FINANCIAL INSTITUTIONS:

Ref.: Circular
LISOL 1 - 557
CONAU 1 - 991

Minimum capital requirement for operational risk. Amendment to the implementation schedule.

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

“To provide, with effect from 1.2.12, that for the purposes of the implementation of the provisions of Section 7. of the rules on “Minimum capital of financial institutions”, institutions whose deposit amount - considering the average of the last three months prior to 1.2.12 - is less than 1% of total deposits of the financial system, and therefore belong on that date to Groups “B” or “C” - point 1. of the Resolution made known through Communication “A” 5106 - must apply to the requirement arising from using the expression provided in point 7.1. of the aforementioned section the coefficient corresponding in accordance with the following schedule:

Period	Coefficient
February 2012 / March 2012	0
April 2012 / October 2012	0,25
November 2012 / May 2013	0,50
June 2013/ November 2013	0,75
December 2013	1 ”

Financial institutions that as of 1.2.12 belong to Group “A” shall continue to apply the schedule established in point 8. of the Resolution made known through Communication “A” 5272.

For the purposes of the verification of solvency referred to in point 2.2. of Section 2. of the rules on “Distribution of results”, the provisions of point 9. of Communication “A” 5272 - application of a coefficient equal to 1 - shall remain in force for all institutions, whatever group they belong to.

Likewise, we send you in an annex the pages that, in replacement of those previously provided, must be replaced in the ordered texts of the rules on “Minimum capital of financial institutions” and “Distribution of results”.

Finally, it is recalled that on the website of this Institution www.bcra.gov.ar, by accessing “regulations” (“ordered texts”), you will find the amendments 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 Inquiries

Alfredo A. Besio
Deputy General Manager of Standards

ANNEX

MINIMUM CAPITAL OF FINANCIAL INSTITUTIONS
B.C.R.A.
Section 10. Transitional provisions.

10.1. Acquisitions of financial institutions. For the purposes of determining the computable equity on a consolidated basis, the consolidating entity may add the amount recorded in the specific line item under the Liabilities Provisions heading.

10.2. Merger of financial institutions. For the purposes of determining the computable equity, the amount corresponding to the “negative goodwill” recorded in the specific line item under the Liabilities Provisions heading may be added.

10.3. For the purposes of the implementation of the provisions of Section 7., financial institutions must apply to the requirement arising from using the expression provided in point 7.1. the coefficient corresponding in accordance with the following schedules:

10.3.1. Financial institutions that as of 1.2.12 belong to Group “A” as provided in point 7.1. of Section 7. “Separation of executive and management functions”, Chapter I of Circular CREFI - 2 (text as per point 1. of Communication “A” 5106):

Period	Coefficient
February 2012 / March 2012	0
April 2012 / July 2012	0,50
August 2012 / November 2012	0,75
December 2012	1

10.3.2. Financial institutions that as of 1.2.12 belong to Groups “B” or “C” as provided in point 7.1. of Section 7. “Separation of executive and management functions”, Chapter I of Circular CREFI - 2 (text as per point 1. of Communication “A” 5106):

Period	Coefficient
February 2012 / March 2012	0
April 2012 / October 2012	0,25
November 2012 / May 2013	0,50
June 2013/ November 2013	0,75
December 2013	1

Version: 2nd. COMMUNICATION “A” 5346
Validity:
01/02/2012
Page 1

MINIMUM CAPITAL OF FINANCIAL INSTITUTIONS

CENTRAL BANK OF THE ARGENTINE REPUBLIC

CONSOLIDATED TEXT ORIGINAL RULE
Section Point Paragraph Comm.
Chap./
Annex
Point Paragraph
Observations
1st “A” 2497 1. According to Comm. “A” 3621, 4172 and 5183.
8.2.5.2. last “A” 2263 2. According to Comm. “A” 4172.
1st and last
8.2.5.3. “A” 2287 3.2. According to Comm. “A” 4172.
2nd “A” 2474 Procedural rules on requirement and integration of mini- mum capital (point 3.2.7.). Amended by Comm. “A” 4172.
8.2.5.4. “A” 2264 1. According to Comm. “A” 4172 and 4576
(point 7.).
“A” 414
LISOL-1
VI 3.2. According to Comm. “A” 4172, 4539 and 4665.
8.2.5.5.
“A” 1215 Specifications of the items of holdings in non-deductible financial institutions to determine computable net worth. According to Comm. “A” 4172.
8.2.5.6. “A” 414
LISOL-1
VI 3.2. According to Comm. “A” 4172, 4539 and 4665.
8.2.5.7. “A” 2863 3. According to Comm. “A” 4172.
8.2.5.8. “A” 414
LISOL-1
VI 3.2. According to Comm. “A” 4172.
8.2.5.9. “A” 2730 Incorporates interpretive
clarification. According to Comm. “A” 4172.
8.2.5.10. “A” 2545 According to Comm. “A” 4172.
8.2.5.11. “A” 414
LISOL-1
VI 3.2. Amended by Comm. “A” 986 and
4172.
8.2.5.12. “A” 414
LISOL-1
VI 3.2. According to Com. “A” 4172.
8.2.5.13. “A” 2287 4. According to Com. “A” 4172.
“A” 2607 1. According to Com. “A” 4172.
8.2.5.14. “A” 2893 1. According to Com. “A” 4172.
8.2.5.15. “A” 3087 According to Com. “A” 4172.
8.2.5.16. “A” 4725 6.
8.2.5.17. “A” 5069 2.
8.3. “A” 414
LISOL-1
VI 3.4. According to Com. “A” 1858, 4172,
4631, 4652 and “B” 9186.
8.
8.4. “A” 4652 2.
9.1. “A” 2227 sole 5.2.1. last According to Com. “A” 2649 and 4172.
9.2. 1st “A” 2227 sole 5.1.1. and
5.1.7.
According to Com. “A” 2649 and 4172.
“A” 2227 sole 5.2.2. According to Com. “A” 4172.
9.
9.2. last “A” 2461 sole V. According to Com. “A” 4172 and 5272.
10.1. “A” 3985 According to Com. “A” 4172.
10.2. “A” 3985 According to Com. “A” 4172. .
10.3. 8. According to Com. “A” 5346.

DISTRIBUTION OF RESULTS
B.C.R.A.
Section 4. Transitional provisions.

As of February 2012, for the purposes of the verification of solvency referred to in point 2.2. of Section 2., the coefficient to be applied to the requirement resulting from the expression provided in point 7.1. of Section 7. of the rules on “Minimum capital of financial institutions”, shall be equal to 1.

Version: 2nd. COMMUNICATION “A” 5346
Effective:
23/08/2012
Page 1

B.C.R.A.
ORIGIN OF THE PROVISIONS INCLUDED IN THE CONSOLIDATED TEXT OF THE RULES ON “DISTRIBUTION OF RESULTS”

CENTRAL BANK OF THE ARGENTINE REPUBLIC

CONSOLIDATED TEXT			SOURCE RULE					OBSERVATIONS
Sect.	Point	Para.	Com.	Annex	Chap.	Sect.	Point	Para.
1.	1.1.		“A” 4589			1.
	1.1.1.		“A” 4589			1.1.
	1.1.2.		“A” 4589			1.2.		According to Com. “A” 4591 (point 6.) and 5072.
	1.1.3.		“A” 4589			1.3.
	1.1.4.		“A” 4589			1.4.		According to Com. “A” 5072.
2.	2.1.		“A” 4589			2.		According to Com. “A” 4591 (point 6.) and 5273.
	2.1.1.		“A” 4589			2.1.
	2.1.2.	1º	“A” 4589			2.2.	1º	According to Com. “A” 4698, 4898, 4976, 5072 and “B” 9186.
		2º	“A” 4589			2.2.	2º	According to Com. “A” 4591 (point 7.), 4664, 4898 and 4976.
		3º	“A” 4898					According to Com. “A” 4976, 5072 and 5180.
		4º	"A" 4589			2.2.	3rd
	2.1.3.		"A" 4589			2.3.
	2.1.4.		"A" 4589			2.4.
	2.1.5.		"A" 4686			3.
	2.1.6.		"A" 4702			4.		According to Com. "A" 5180.
	2.2.		"A" 4589			3.		According to Com. "A" 4591 (point 8.), 5072, 5273 and "B" 9104.
	2.2.1.		"A" 4589			3.1.		According to Com. "A" 4591 (point 8.).
	2.2.2.		"A" 4589			3.3.	iv)	According to Com. "A" 4591 (point 8.) and "B" 9104.
	2.2.3.		"A" 4589			3.3.		According to Com. "A" 4591 (point 8.).
	2.3.		"A" 4589			4.
3.	3.1.		"A" 4591			1.		According to Com. "A" 5282.
	3.1.1.		"A" 4591			1.		Incorporates the interpretative criterion of Com. "C" 46841.
	3.1.2.		"A" 4591			1.		According to Com. "A" 4686, 4702, 5072, 5180, 5282 and "B" 9104.
4.			"A" 5272			9.		According to Com. "A" 5282 and 5346.