2021 - YEAR OF TRIBUTE TO THE NOBEL PRIZE IN MEDICINE DR. CÉSAR MILSTEIN

COMMUNICATION “A” 7429
30/12/2021

TO FINANCIAL INSTITUTIONS:

Ref.: Circular
LISOL 1-963,
OPRAC 1-1126,
REMON 1-1052,
RUNOR 1-1708:

Minimum cash. Financing to the non-financial public sector. Spot transactions to be settled and forward transactions, repos, collateralized loans, other derivatives and with mutual investment funds. Adjustments.

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

“- Establish, with effect from 1.1.22, that the peso balances of the deposit accounts of payment service providers that offer payment accounts (PSPOCP) in which their clients' funds are deposited are subject to the minimum cash reserve requirement rate of 100 %.”

On the other hand, we send you the sheets that, replacing those previously provided, should be incorporated into the referenced regulations. In this regard, it is recalled that on this Institution's website 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

María D. Bossio
Deputy General Manager of
Financial Regulation

ANNEX

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

Concept	Rates in %
	Group “A” and G-SIB not included in that group	Remaining entities
ii) From 30 to 59 days.	5	5
iii) From 60 to 89 days.	3	3
iv) From 90 or more.	0	0
1.3.11. Labor Cessation Fund for Workers of the Construction Industry in UVA.	7	7
1.3.12. Deposits and time investments constituted in the name of minors with funds received gratuitously.	0	0
1.3.13. Peso demand deposits that constitute the assets of money market mutual funds (“money market”).	0	0
1.3.14. Peso deposits in accounts of payment service providers that offer payment accounts (PSPOCP) in which their clients' funds are deposited.	100	100

1.3.15. In the case of peso transactions, when the locality in which the operating office where they are made is located, in accordance with the provisions of the regulations on “Categorization of localities for financial institutions”, belongs to categories II to VI, the rates provided for demand placements shall be reduced by 2 percentage points and for time placements by 1 percentage point up to a minimum of zero (including point 1.3.11.). In both cases, it does not include deposits in securities. Time deposits in pesos arranged remotely (e.g. by “home banking”, web time deposit, etc.) shall receive the same treatment as those captured in categories II to VI.

1.3.16. Financial institutions included in Group “A” and the branches or subsidiaries of G-SIB not included in that group may integrate the peso requirement –for the period and daily– with “National Treasury Bonds in pesos at fixed rate maturing May 2022” in up to:

a) 5 percentage points of the rates provided in points 1.3.1., 1.3.2.1., 1.3.3. and 1.3.9. and in subsections i) and ii) of points 1.3.5.1. and 1.3.7.1.

b) 2 percentage points of the rates provided in subsection iii) of points 1.3.5.1. and 1.3.7.1.

1.3.17. Financial entities may integrate the requirement in pesos –for the period and daily– with BCRA Liquidity Bills (LELIQ) and/or BCRA Notes (NOBAC) and/or national public securities in pesos –including those adjustable by the CER and excluding those linked to the evolution of the US dollar– with residual term (at the time of subscription): a) not less than 180 days nor more than 450 calendar days acquired by primary subscription from 1.6.21 and b) not less than 120 days nor more than 450 calendar days acquired by primary subscription from 1.11.21 –which will continue to be counted until their maturity, as long as their integration is maintained– in accordance with the following:

1.3.17.1. Fixed-term deposits and term investments made by holders of the non-financial private and non-financial public sectors, and those provided for in point 1.3.11.: the entire requirement, except for the maximum proportion admitted for integration in “National Treasury Bonds in pesos at fixed rate” (point 1.3.16.).

1.3.17.2. Term investments with variable remuneration made by clients with agricultural activity in accordance with point 2.5.2.2. of the rules on “Deposits and term investments”–: the entire requirement.

1.3.17.3. Other placements.

i. Entities included in Group “A” and branches or subsidiaries of G-SIBs not included in that group:

a) up to 16 percentage points of the rate provided for in subsection i) of point 1.3.5.1.;

b) up to 13 percentage points of the rate provided for in subsection ii) of point 1.3.5.1.;

c) up to 3 percentage points of the rates provided for in subsections i) to iii) of point 1.3.10.; and

d) up to 2 percentage points of the rate provided for in subsection iii) of point 1.3.5.1.

ii. Entities not included in the preceding subsection:

a) up to 3 percentage points of the rates provided for in subsections i) and ii) of point 1.3.5.1., and in subsections i) to iii) of point 1.3.10.; and

b) up to 2 percentage points of the rate provided for in subsection iii) of point 1.3.5.1.

For integration with “National Treasury Bonds in pesos at fixed rate maturing May 2022”, national public securities in pesos –including those adjustable by the CER and excluding those linked to the evolution of the US dollar–, LELIQ and/or NOBAC as provided for in points 1.3.7.1., 1.3.16. and 1.3.17., to be admitted, they must be valued at market prices –regardless of the valuation criterion for their accounting registration– and be deposited in Subaccount 60 minimum cash enabled in the Central Registry and Settlement of Public Debt Instruments, Monetary Regulation and Financial Trusts (CRyL).

1.4. Residual term.

1.4.1. Determination.

1.4.1.1. General case.

The residual term of each term obligation is equivalent to the number of days remaining until its maturity.

1.4.1.2. Term investments.

In the cases of term investments, the following criteria shall apply:

i) At constant term.

The remaining term until maturity shall be considered, taking into account the automatic extension or, where applicable, the term arising from the exercise of the option to revoke it.

ii) With early cancellation option.

The remaining term until the date on which the investor may exercise the early cancellation option shall be taken into account, to the extent that the investor is the holder of the right, except for deposits with early cancellation option in Units of Purchasing Value adjustable by “CER” - Law 25.827 (“UVA”), or the term originally agreed, in the event that the entity is the holder of that right.

iii) With renewal option for a determined term.

The remaining term until maturity shall be considered, taking into account for this purpose the term that would result from the eventual exercise of the extension option by the entity, to the extent that the entity is the holder of the right.

When the investor is the holder of that right, the term originally agreed or, where applicable, the term resulting from the renewal when the option has been exercised shall be taken into account.

1.4.1.3. Refinanceable term obligations.

When the financial entity enters into agreements or option contracts that ensure the total or partial refinancing of term obligations, for the purpose of establishing the residual term until maturity of the obligations, the term arising from making use of those facilities shall be considered, for the portion of the liability covered by the agreement.

This criterion is applicable in the event that the agreement is carried out with a foreign bank that complies with the provisions of point 3.1. of the rules on “Credit Assessments” –requiring for this purpose at least an international risk rating of “investment grade”–, to the extent that it is not the parent company or the controlling or controlled company or branches of the local entity.

1.4.1.4. Obligations for foreign financial lines (not linked to the financing of foreign trade operations).

i) With early cancellation clauses.

For the determination of the residual term, the remaining term until the date on which it is contractually provided that the foreign entity may require early cancellation or the term originally agreed shall be taken into account, when it is subject to a decision of the local entity.

This criterion is applicable in the event that the agreement is carried out with a foreign bank that complies with the provisions of point 3.1. of the rules on “Credit Assessments” –requiring for this purpose at least an international risk rating of “investment grade”–, to the extent that it is not the parent company or the controlling or controlled company or branches of the local entity.

ii) Without early cancellation clauses.

The term remaining until maturity shall be taken into account to the extent that early cancellation by any of the parties is explicitly excluded. Otherwise, they shall be treated as demand obligations.

1.4.2. Fixed-term deposits.

In the case of fixed-term deposits in pesos, the established rates – according to the opening by fixed terms set – shall be applied to the daily balances of the aforementioned obligations determined based on point 1.2.

In the case of fixed-term deposits in foreign currency, the established rates – according to the opening by fixed terms set – shall be applied to the amounts resulting from multiplying the total daily balance of those obligations – recorded in the corresponding month – by the percentages resulting from the residual term structure of the previous month, considering the number of days remaining in that period until the maturity of each obligation, counted from each of the days of said period.

1.4.3. Remaining term operations.

In these cases – including term investments and obligations with banks and foreign correspondents that are computable – the residual terms shall be equivalent to the number of days remaining until the maturity of each obligation, counted from each of the days of the period prior to the one corresponding to the minimum cash integration, when dealing with peso deposits, or of the same period in the case of operations in foreign currency or securities.

The requirement shall arise from applying the established rates to the daily balances of the aforementioned obligations based on the different residual term brackets set.

In the particular case of obligations payable in capital installments, the amounts of amortization services maturing within the year, counted from each of the days of the period prior to the one corresponding to the minimum cash in pesos or of the same period in the case of obligations in foreign currency, shall be considered independently for the purposes of applying to them the rate that is applicable based on the number of days remaining until their maturity.

MINIMUM CASH

CONSOLIDATED TEXT SOURCE RULE OBSERVATIONS Sec. Point Par. Comm. Annex Sec. Point Par.
1.
1.3.8. "A" 4360 2. According to Comm. "A" 5356 and 6616.
1.3.9. "A" 4754 6. According to Comm. "A" 5356, 5980,
6195, 6526, 6532, 6616 and 6728.
1.3.10. "A" 5945 4. According to Comm. "A" 6069, 6204 and
6616.
1.3.11. "A" 6341 According to Comm. "A" 6616.
1.3.12. "A" 6069 4. According to Comm. "A" 6616.
1.3.13. "A" 6992
1.3.14. "A" 7429
1.3.15. "A" 5356 1. According to Comm. "A" 6616 and 6706.
1.3.16. "A" 6526 According to Comm. "A" 6532, 6550,
6587, 6616, 6706, 7016 and 7290.
1.3.17. "A" 6550 According to Comm. "A" 6556, 6559,
6575, 6587, 6616, 6706, 6738,
6740, 6817, 7018, 7029, 7047,
7092, 7290, 7295 and 7383. In- cludes regulatory clarification.
1.3. Last "A" 6526 According to Comm. "A" 6532, 6556,
6569, 6575, 6587, 6616, 6628,
6740, 7016, 7290 and 7295. In- cludes regulatory clarification.
1.4. "A" 3905 3. According to Comm. "A" 4179, 4449,
4473, 5671, 5740, 6232, 6349,
6719, 6871 and 7046.
1.5. "A" 5356 2. According to Comm. "A" 5471.
1.5.1. "A" 5356 2. According to Comm. "A" 5471, 5623,
6531, 6703 and 6705.
1.5.2. "A" 5631 1. According to Comm. "A" 5638, 6217,
6531, 6857, 6910, 6937, 7114 and
7334.
1.5.3. "A" 6740 1. According to Comm. "A" 7254.
1.5.4. "A" 6858 1. According to Comm. "A" 6901 and 6907.
1.5.5. "A" 6937 2. According to Comm. "A" 6943, 7054,
7140 and 7155.
1.5.6. "A" 6993 2. According to Comm. "A" 7082 and 7157.
1.5.7. "A" 7006 2.
1.5.8. "A" 7161 5.
1.5.9. "A" 7254 1. According to Comm. "A" 7287. Includes
regulatory clarification.
1.5.10. "A" 7342 2.
1.5. last "A" 6858 2. According to Comm. "A" 6965, 6993,
7006, 7140, 7155, 7161, 7254 and
7342. i) "A" 7132 According to Comm. "A" 7140. ii) "A" 7140 2. According to Comm. "A" 7157.
1.6. "A" 3274 II 1. 1.5. According to Comm. "A" 3498.
1.7. "A" 3274 II 1. 1.6.
1.7.1. "A" 3274 II 1. 1.6.1. According to Comm. "A" 4405, 4449,
6349, 6719 and 7046.
1.7.2. "A" 3274 II 1. 1.6.2. According to Comm. "A" 3304, 4449,
6349 and 6719.

B.C.R.A. FINANCING TO THE NON-FINANCIAL PUBLIC SECTOR
Section 9. Transitional provisions.

9.1.3.4. Computation of the margin.

For the purposes of determining the status of the relations on credit risk diversification and the consequent observance of the admitted excesses, the amount of the declared margin –used or not– together with the other computable assets shall be taken into account.

9.1.3.5. Non-observance of the margin.

Non-observance of the margin shall have the treatment provided for in Section 2. of the rules on “Non-compliance with minimum capital and technical ratios. Applicable criteria”.

For this purpose, the excess over the 25 % limit of the RPC or the lower limit chosen by the entity shall be considered.

9.1.4. Debt instruments issued by financial trusts or fiduciary funds for construction financing, in which the participation of the National State as settlor came to exceed 50 % as referred to in point 3.2.4., which for that reason became subject to the maximum limits established in point 6.1.1.1., without prejudice to the computation referred to in point 6.1.2.3.

9.1.5. Financing to public trusts or fiduciary funds.

For entities that record admitted excesses, the expanded individual maximum limits referred to in point 6.1.1.2. shall be equivalent to the positive difference between 15 % of the entity's RPC and the respective admitted excess.

This, without prejudice to the application of the amortizations collected admitted in point 9.1.2.

9.2. The “National Treasury Bonds in pesos at fixed rate maturing May 2022” and national public securities in pesos –including those adjustable by the Reference Stabilization Coefficient (CER) and excluding those linked to the evolution of the US dollar– with residual term (at the time of subscription): a) not less than 180 days nor more than 450 calendar days acquired by primary subscription from 1.6.21 and b) not less than 120 days nor more than 450 calendar days acquired by primary subscription from 1.11.21, which are applied to the integration of the minimum cash in that currency (in accordance with the provisions of points 1.3.7.1., 1.3.16. and 1.3.17. of the rules on “Minimum cash”) shall be excluded from the limits provided for in these rules.

9.3. Within the period between 28.10.19 and 31.1.22 inclusive, financial assistance destined for the payment of personnel salaries that meet the requirements provided for in point 3.2.5. shall be considered –additionally– as an excluded concept for the purposes of computing the basic individual and global limits established in matters of credit risk diversification –points 6.1.1. and 6.1.2., respectively–, up to the amount equivalent to the basic individual limit provided for in point 6.1.1.1. by which the jurisdiction in question may be financed.

CENTRAL BANK OF THE ARGENTINE REPUBLIC

FINANCING TO THE NON-FINANCIAL PUBLIC SECTOR

	CONSOLIDATED TEXT			ORIGINATING RULE			OBSERVATIONS
Section	Point	Paragraph	Com.	Chap.	Point	Paragraph
6.	6.3.3.		“A” 6635
	6.3.3.1.		“A” 4725				According to Com. “A” 5472, 6635, 6978, “C” 50385 and 50828. Includes interpretive clarification.
	6.3.3.2.		“A” 4725				According to Com. “A” 5472, 6091, 6327, 6635, 7278 and “B” 10185.
	6.3.4.		“B” 5902	10.			According to Com. “A” 5013, 5472 and 6635.
	6.3.5.		“A” 414 LISOL-1				According to Com. “A” 5472 and 6635. Includes interpretive clarification.
7.		1°	“A” 6635
	7.1.		“A” 2019				According to Com. “A” 2140, 5472 and 6635.
	7.2.		“A” 6635
	7.2.1.		“A” 4817	4.			According to Com. “A” 4876, 5472 and 6635.
	7.2.2.		“A” 5472				According to Com. “A” 6635.
	7.3.		“A” 414 LISOL-1				According to Com. “A” 817, 4093, 5472, 6167 and 6635. Includes interpretive clarifications.
8.	8.1.		"A" 6635
	8.2.		"A" 6635
9.	9.1.		"A" 3911				According to Com. "A" 4155, 4230, 4343, 4455, 4546, 4676, 4825, 4898, 4932, 4937, 4996, 5015, 5472, 6091, 6327, 6526, 6635 and "B" 9627.
	9.2.		"A" 6526	4.			According to Com. "A" 6635, 7016, 7290, 7295, 7383 and 7429. Includes regulatory clarification.
	9.3.		"A" 6816				According to Com. "A" 6852, 6919, 7075, 7207 and 7330.

B.C.R.A.
SPOT AND FORWARD TRANSACTIONS, REPOS, COLLATERAL, OTHER DERIVATIVES AND WITH MUTUAL INVESTMENT FUNDS
Section 8. Net LELIQ position.

The net position that financial institutions record in BCRA Liquidity Bills (LELIQ), without counting those admitted for the integration of the minimum cash requirement in pesos in accordance with the provisions of point 1.3.17. of the rules on "Minimum cash" –excess net LELIQ position–, shall be subject to the provisions of this section.

8.1. Limits.

8.1.1. From 17.4.2020 and until 30.4.2020, it may not exceed 90 % of the excess holding recorded as of 19.3.2020.

For the purposes of complying, they must decrease their excess net position as they collect the LELIQ.

8.1.2. It may not exceed –on a monthly average of daily balances– that arising from the following table, according to the financings computed for the previous period:

Financings as a percentage of potential credit to MSMEs	Limits to the excess net position (as a percentage of the excess holding recorded as of 19.3.2020)
	from 1.5.2020	from 1.7.2020	from 1.9.2020
100 %	90	85	85
< of 100 % up to 75 %	85	80	70
< of 75 % up to 50 %	80	75	65
< of 50% up to 25 %	75	70	60
< of 25 %	70	65	55

For the purposes of this scheme, "potential credit to MSMEs" shall be calculated in accordance with the following:

8.1.2.1. Period from 1.7.2020 to 31.8.2020. It shall be the sum of:

− 10 % of the LELIQ holdings that exceed those admitted for the integration of the minimum cash requirement in pesos, provided for in point 1.3.17. of the rules on "Minimum cash", recorded as of 19.3.2020; and

− the amount of the decrease in the average requirement in pesos of minimum cash provided for in point 1.5.5. of the rules on "Minimum cash" or 4 % of the items subject to requirement, whichever is lower.

B.C.R.A.
SPOT AND FORWARD TRANSACTIONS, REPOS, COLLATERAL, OTHER DERIVATIVES AND WITH MUTUAL INVESTMENT FUNDS
Section 8. Net LELIQ position.

8.1.2.2. From 1.9.2020. It shall be the sum of:

− 15 % of the LELIQ holdings that exceed those admitted for the integration of the minimum cash requirement in pesos, provided for in point 1.3.17. of the rules on "Minimum cash", recorded as of 19.3.2020; and

− the amount of the reduction of the requirement, in average pesos, of minimum cash provided for in point 1.5.5. of the rules on “Minimum Cash” or 6 % of the items subject to the requirement, whichever is lower, plus 40 % of the monthly average of daily balances of the previous period of the financings allocated to the “Financing Line for Productive Investment of MSMEs” –or, in the case of entities not covered by those rules, 40 % of the financings that fully fall within the conditions provided for in the aforementioned line–, without considering those applied to point 8.3.1.

The amount of financings to be considered shall be the monthly average of daily balances of the previous period of the financings allocated to the aforementioned Line –or, in the case of entities not covered by those rules, of the financings that fully fall within the conditions of the aforementioned Line–, except those applied to point 8.3.1., plus the increase recorded between the monthly average balance of the previous period and the balance as of 19.3.2020 of the financings provided for in the first paragraph of point 1.5.5. of the rules on “Minimum Cash”. When the financings referred to last have been allocated to MSMEs for the payment of salaries –under the terms provided for in that point and the financial entity is a payment agent for those wages– they shall be counted at 130 % for the purposes of this point, for which the MSME must submit a sworn statement on the destination of the funds.

8.2. Extensions.

The net surplus position shall be extended, concurrently where applicable, in accordance with the following:

8.2.1. As from 1.6.2020, for financial entities that from that date receive deposits at the minimum passive rate established in subparagraph ii) of point 1.11.1.1. of the rules on “Deposits and Time Investments”, in the amount equivalent to 18 % of the time deposits and investments in pesos constituted by the non-financial private sector and by the National, provincial, Autonomous City of Buenos Aires and/or municipal governments –in the case of official placements, only those for which a rate not lower than the minimum passive rate of the aforementioned subparagraph ii) of point 1.11.1.1. has been paid–, measured as the monthly average of daily balances of the previous month.

8.2.2. As from 1.9.2020, for financial entities that receive deposits at the minimum passive rate established in subparagraph i) of point 1.11.1.1. of the rules on “Deposits and Time Investments”, in the amount equivalent to 13 % of those deposits, measured as the monthly average of daily balances of the previous month.

CENTRAL BANK OF THE ARGENTINE REPUBLIC

“SPOT TRANSACTIONS TO BE SETTLED AND FORWARD, REPOS, COLLATERAL, OTHER DERIVATIVES AND WITH MUTUAL INVESTMENT FUNDS”

CONSOLIDATED TEXT				ORIGINATING RULE					OBSERVATIONS
Sect.	Point	Para.	Comm.	Annex	Chap.	Sect.	Point	Para.
7.	7.2.2.2.		“A” 2996	sole		2.	2nd		According to Comm. “A” 6472. Includes interpretive clarification.
	7.2.3.	1st	“B” 6566			1.			According to Comm. “A” 2996 (Annex, point 3.).
		2nd	“B” 6609
	7.3.1.		“A” 3027
	7.3.1.1.		“A” 2996	sole		4.1.	1st
	7.3.1.2.		“A” 2996	sole		4.1.	2nd		According to Comm. “A” 3027.
	7.3.2.		“A” 2996	sole		4.2.			According to Comm. “A” 3027.
	7.3.2.1.	1st	“A” 2953			1.	3rd		According to Comm. “A” 2996 (point 4.2., para. 1st).
		2°	“A” 2996	único		4.2.	3°
	7.3.2.2.		“A” 2953			1.	4°		According to Com. “A” 2996 (point 4.2., para. 2°).
	7.4.1.		“A” 3323						According to Com. “A” 5728.
	7.4.2.		“A” 3323						According to Com. “A” 4875 and 6472.
8.		1º	“A” 6647			1.			According to Com. “A” 6661, 7054 and 7429. Includes interpretive clarification.
	8.1.1.		“A” 6937			1.			According to Com. “A” 6979, 6993, 7022 and 7054. Includes interpretive clarification.
	8.1.2.		“A” 6937			3.			According to Com. “A” 6946, 6979, 6993, 6998, 7022, 7047, 7054, 7140 and 7429. Includes interpretive clarification.
	8.2.	1°	“A” 7091						Includes interpretive clarification.
	8.2.1.		“A” 7027			3.			According to Com. “A” 7034, 7091, 7131, 7139 and 7173.
	8.2.2.		“A” 7078			2.			According to Com. “A” 7131, 7139 and 7173.
	8.2.	último	“A” 7091						Includes interpretive clarification.
	8.3.1.		“A” 7006			1. and 4.			According to Com. “A” 7022, 7054 and 7140.
	8.3.2.		“A” 7122
	8.4.		“A” 7160			5.
	8.5.		“A” 6647			3.
9.			“A” 7108			3.			According to Com. "A" 7140, 7247 and 7427.