Minimum Cash Requirements: Financing to the Non-Financial Public Sector – Adjustments

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

COMMUNICATION “A” 7290
27/05/2021

TO FINANCIAL INSTITUTIONS:

Ref.: Circular
LISOL 1-942,
OPRAC 1-1104,
REMON 1-1042:

Minimum cash. Financing to the non-financial public sector. Adjustments.

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

“1. To provide, with effect from 1.6.21, that any minimum cash requirement that –in accordance with the provisions of point 1.3.16. of the rules on “Minimum cash”– financial institutions may integrate with Liquidity Bills of the Central Bank of the Argentine Republic (LELIQ), may also be integrated with national public securities in pesos that are not linked to the US dollar –including those adjustable by the Reference Stabilization Coefficient (CER)– and residual term (at the time of subscription) not less than 180 days nor more than 450 days, acquired by primary subscription from that date, which are deposited in Subaccount 60 minimum cash enabled in the Central Registry and Settlement of Public Debt Instruments, Monetary Regulation and Financial Trusts (CRyL), which will continue to be computed until their maturity while they remain deposited in the aforementioned account.

For the purpose of integration, public securities must be valued at market prices –regardless of the valuation criterion used in their accounting registration–.

2. To establish, with effect from 1.6.21, that national public securities that are applied for the integration of minimum cash in pesos –as provided in point 1. of this communication–, will be excluded from the limits provided in the rules on “Financing to the non-financial public sector”.”

On the other hand, we send you the sheets that, in replacement of those previously provided, should be incorporated into the referenced rules. In this regard, it is recalled that on the page of this Institution www.bcra.gob.ar, accessing “Financial System – LEGAL AND REGULATORY FRAMEWORK – Ordering 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
General Deputy Manager of Financial Regulation

ANNEX

Concept	Rates in %
	Group “A” and G-SIB not included in that group	Remaining entities
1.3.7. Demand and time deposits made by order of the Justice with funds originating from the cases in which it intervenes, and their immobilized balances.
1.3.7.1. In pesos, according to their residual term, may be integrated with LELIQ and/or NOBAC and/or national public securities in pesos that are not linked to the US dollar –including those adjustable by the CER– with residual term (at the time of subscription) not less than 180 days nor more than 450 days acquired by primary subscription from 1.6.21 –which will continue to be computed until their maturity, while their integration is maintained– the requirement arising from time placements, except in the maximum proportion admitted for integration in “National Treasury Bonds in pesos at fixed rate maturity May 2022”.
i) Up to 29 days.	29	10
ii) From 30 to 59 days.	22	7
iii) From 60 to 89 days.	4	2
iv) From 90 days or more.	0	0
1.3.7.2. In foreign currency.	15	15
1.3.8. Special deposits linked to the entry of funds from abroad - Decree 616/05.	100	100
1.3.9. Time investments instrumented in non-transferable registered certificates, in pesos, corresponding to holders of the public sector that have the right to exercise the early cancellation option within a period of less than 30 days counted from their constitution.	32	11
1.3.10. Time deposits and investments of “UVA” and “UVI” –including savings accounts and debt securities (including negotiable obligations) in “UVA” and “UVI”–, according to their residual term.
i) Up to 29 days.	7	7
ii) From 30 to 59 days.	5	5
Concept	Rates in % Group "A" and G-SIB not included in that group	Remaining entities
iii) From 60 to 89 days.	3	3
iv) 90 or more.	0	0
1.3.11. Labor Cessation Fund for Workers in the Construction Industry in UVA.	7	7
1.3.12. Deposits and time investments constituted in the name of minors with funds received as a gift.	0	0
1.3.13. Demand deposits in pesos constituting the assets of money market mutual funds ("money market").	0	0

1.3.14. In the case of transactions in pesos, when the locality in which the operating office where they are made is located, in accordance with the provisions of the rules on "Categorization of localities for financial entities", 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. through "home banking", web time deposit, etc.) shall receive the same treatment as those captured in categories II to VI.

1.3.15. Financial entities included in Group "A" and branches or subsidiaries of G-SIBs 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" 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.

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

1.3.16.1. Time fixed deposits and time investments made by holders of the non-financial private and non-financial public sectors, and those provided 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 1.3.15.).

1.3.16.2. Time investments with variable remuneration made by clients with agricultural activity in accordance with point 2.5.2.2. of the rules on "Deposits and time investments"–: the entire requirement.

1.3.16.3. 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 in subsection i) of point 1.3.5.1.;

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

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

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

For the integration with "National Treasury Bonds in pesos at fixed rate maturing May 2022", national public securities in pesos that are not linked to the US dollar –including those adjustable by CER–, LELIQ and/or NOBAC as provided in points 1.3.7.1., 1.3.15. and 1.3.16. 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 time obligation is equivalent to the number of days remaining until its maturity.

1.4.1.2. Time investments.

In the cases of time 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 they are 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 originally agreed term, in case 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 that which would result from the eventual exercise of the extension option by the entity, to the extent that it is the holder of the right. When the investor is the holder of that right, the originally agreed term shall be taken into account or, where applicable, that resulting from the renewal when the option has been exercised.

1.4.1.3. Refinanceable time obligations.

When the financial entity enters into agreements or option contracts that ensure the total or partial refinancing of time obligations, for the purpose of establishing the residual term until the 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 entered into with a foreign bank that complies with the provisions of point 3.1. of the rules on "Credit Assessments" – requiring for that 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. Liabilities 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 the foreign entity is contractually expected to be able to require early cancellation or the term originally agreed upon, when subject to a decision of the local entity, shall be taken into account.

B.C.R.A. ORIGIN OF THE PROVISIONS CONTAINED IN THE RULES ON "MINIMUM CASH"

ORDERED TEXT	SOURCE RULE	OBSERVATIONS
Sec. Point Par.	Com. Annex Sec. Point Par.
1.	1.1. "A" 3274 II 1. 1.1.	S/Com. "A" 3498.
	1.1.1. "A" 3274 II 1. 1.1.1.	S/Com. "A" 3597, 4815, 6634 (includes interpretive clarification), 6706, 6719, 6745 and "B" 9186.
	1.1.2. "A" 3274 II 1. 1.1.2.	S/Com. "A" 3498, 3905, 4473, 5945 and 6069.
	1.1.3. "A" 3274 II 1. 1.1.3.	S/Com. "A" 3304, 3498, 3597, 4449, 4716 (includes interpretive clarification), 4815, 5471, 6288, 6327, 6349, 6719, 7046 and "B" 9186.
	1.2. "A" 3274 II 1. 1.2.	S/Com. "A" 5356, 5980, 6209, 6616 and 7019.
	1.3. "A" 3274 II 1. 1.3.	S/Com. "A" 3338, 3417, 3498, 3597, 3917, 3967, 4032, 4051, 4147, 4276, 4449, 4473, 4509, 4549, 4602, 4712, 5108, 5356, 5980, 6195, 6526, 6532 and 6616.
	1.3.1. "A" 3274 II 1. 1.3.1.	S/Com. "A" 3338, 3399, 3417, 3498, 3597, 3824, 3917, 3967, 4032, 4051, 4147, 4179, 4276, 4449, 4473, 4509, 4549, 4602, 4754, 4809, 4851, 5007, 5091, 5164, 5234, 5356, 5534, 5555, 5569, 5873, 5893, 5980, 6148, 6195, 6341, 6526, 6532 and 6616.
	1.3.2. "A" 3274 II 1. 1.3.2., 1.3.3. and 1.3.4.	S/Com. "A" 3338, 3417, 3498, 3597, 3917, 3967, 4032, 4051, 4147, 4276, 4449, 4509, 4549, 5356, 5980, 6195, 6526, 6532 and 6616.
	1.3.3. "A" 3274 II 1. 1.3.5.	S/Com. "A" 5356, 6616 and 6350.
	1.3.4. "A" 3274 II 1. 1.3.7.	S/Com. "A" 3506 (point 2.), 3549, 3732, 3824, 3905, 3917, 3925, 3967, 4032, 4140, 4179, 4276, 4360 (point 3.), 4449, 4549, 4602, 4754, 4851, 5356, 5534, 5555, 5569, 5873, 5893, 5945, 5980, 6195, 6519, 6526, 6532, 6616, 6728 and 6978.
	1.3.5. "A" 3498 sole 1. 1.3.8. and 1.3.12.	According to Com. "A" 3597, 3732, 4032, 5356, 6595, 6616 and 6776.
	1.3.6. "A" 3498 sole 1. 1.3.11.	According to Com. "A" 4179, 4388, 4549, 4851, 5356, 5534, 5555, 5569, 5873, 5893, 5980, 6195, 6526, 6532, 6616, 6706, 6728, 6740, 6817, 7016 and 7290.
	1.3.7. "A" 3549 1.

MINIMUM CASH
ORDERED TEXT
SOURCE RULE OBSERVATIONS Sec. Point Par.
Com.
Annex Sec. Point Par.

1.
1.3.8. "A" 4360 2. According to Com. "A" 5356 and 6616.
1.3.9. "A" 4754 6. According to Com. "A" 5356, 5980,
6195, 6526, 6532, 6616 and 6728.
1.3.10. "A" 5945 4. According to Com. "A" 6069, 6204 and
6616.
1.3.11. "A" 6341 According to Com. "A" 6616.
1.3.12. "A" 6069 4. According to Com. "A" 6616.
1.3.13. "A" 6992
1.3.14. "A" 5356 1. According to Com. "A" 6616 and 6706.
1.3.15. "A" 6526 According to Com. "A" 6532, 6550,
6587, 6616, 6706, 7016 and 7290.
1.3.16. "A" 6550 According to Com. "A" 6556, 6559,
6575, 6587, 6616, 6706, 6738,
6740, 6817, 7018, 7029, 7047,
7092 and 7290. Includes interpretive clarification.
1.3. Last "A" 6526 According to Com. "A" 6532, 6556,
6569, 6575, 6587, 6616, 6628,
6740, 7016 and 7290.
1.4. “A” 3905 3. According to Com. “A” 4179, 4449,
4473, 5671, 5740, 6232, 6349,
6719, 6871 and 7046.
1.5. “A” 5356 2. According to Com. “A” 5471.
1.5.1. “A” 5356 2. According to Com. “A” 5471, 5623,
6531, 6703 and 6705.
1.5.2. “A” 5631 1. According to Com. “A” 5638, 6217,
6531, 6857, 6910, 6937 and 7114.
1.5.3. “A” 6740 1. According to Com. “A” 7254.
1.5.4. “A” 6858 1. According to Com. “A” 6901 and 6907.
1.5.5. “A” 6937 2. According to Com. “A” 6943, 7054,
7140 and 7155.
1.5.6. “A” 6993 2. According to Com. “A” 7082 and 7157.
1.5.7. “A” 7006 2.
1.5.8. “A” 7161 5.
1.5.9. “A” 7254 1. According to Com. “A” 7287. Includes
regulatory clarification.
1.5. last “A” 6858 2. According to Com. “A” 6965, 6993,
7006, 7140, 7155, 7161 and 7254. i) “A” 7132 According to Com. “A” 7140. ii) “A” 7140 2. According to Com. “A” 7157.
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,
6349, 6719 and 7046.
1.7.2. “A” 3274 II 1. 1.6.2. According to Com. “A” 3304, 4449,
6349 and 6719.
1.8. “A” 3498 único 1. 1.8. According to Com. “A” 4147, 6537 and
7003.

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 splitting and the consequent observance of the admitted excesses, the amount of the declared margin –used or not– shall be taken into account together with the other computable assets.

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 “Breaches of minimum capital and technical relations. 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 the financing of construction, 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 register 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 “Bonos del Tesoro Nacional en pesos a tasa fija vencimiento mayo de 2022” and national public securities in pesos that are not linked to the US dollar –including those adjustable by the Reference Stabilization Coefficient (CER)– with residual term (at the time of subscription) not less than 180 days nor greater than 450 days acquired by primary subscription since 1.6.21 that are applied to the integration of the minimum cash in that currency (in accordance with the provisions of points 1.3.7.1., 1.3.15. and 1.3.16. of the rules on “Minimum cash”) shall be excluded from the limits provided for in these rules.

9.3. Within the period comprised between 28.10.19 and 31.7.21 inclusive, financial assistance destined for the payment of personnel salaries that comply with the requirements provided for in point 3.2.5. shall be considered –additionally– as an excluded concept for the purposes of the computation of the basic individual and global limits established in matters of credit risk splitting –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.

Advances that are in force as of 1.8.21 shall become subject to the credit limits indicated above.

FINANCING TO THE NON-FINANCIAL PUBLIC SECTOR

CONSOLIDATED TEXT		SOURCE RULE				OBSERVATIONS
Section	Point	Paragraph	Com.	Cap.	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 and 6635 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 and 7290.
	9.3.		“A” 6816			According to Com. “A” 6852, 6919, 7075 and 7207.