2019 - YEAR OF EXPORT

COMMUNICATION “A” 6726 28/06/2019

TO FINANCIAL INSTITUTIONS,
TO ELECTRONIC CLEARING HOUSES,
TO COMPANIES ADMINISTERING AUTOMATED TELLER MACHINE NETWORKS:

Ref.: Circular
SINAP 1 - 87

National Payment System - Checks and other clearable instruments. Agreement on truncation, generation and electronic management of checks and other clearable documents .

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

“1. Incorporate into the rules on “National Payment System - Checks and other clearable instruments”, as point 3.4.3., the following:

“3.4.3. Roles.

There will be three types of roles: issuance, management and deposit.

3.4.3.1. Issuance: shall be an exclusive function of financial institutions.

3.4.3.2. Management: may be performed by financial institutions as well as by systemically important financial market infrastructures, authorized for such purposes by the BCRA. With regard to the custody/registration of checks generated by electronic means (ECHEQs) for their stock exchange negotiation, such infrastructures must also have the approval of the pertinent supervisory body. In cases of negotiation of an ECHEQ or other clearable electronic document, the ECHEQ managing entities must send the required information to the storage system, being their exclusive responsibility the integrity and validity of the data provided regarding the last legitimate holder and/or, where applicable, the existing guarantees.

3.4.3.3. Deposit: shall be an exclusive and mandatory function of financial institutions.

3.4.3.4. Financial institutions and other participants must make available to their clients the functionalities included in the role or service of issuance, management or deposit as applicable, and may not carry out partial implementations for the same service.”

2. Replace Section 8 of the rules on “National Payment System - Checks and other clearable instruments”, with the provisions in the Annex that forms part of this communication.

3. Establish that in order to participate in the ECHEQ operation, participants must sign the agreement referred to in Section 8 of the rules on “National Payment System - Checks and other clearable instruments”, within the terms determined by this Central Bank in the regulations issued on the matter.”

The signing of the agreement cited in point 3 must be done at the Current Accounts Management of this Institution, between 1 and 5 July 2019, by legal representative or attorney with sufficient power accredited at the act by the participant involved.

Likewise, we inform you that we will subsequently send you the sheets that, replacing those previously provided, must be incorporated into the reference rule.

We greet you attentively.

CENTRAL BANK OF THE ARGENTINE REPUBLIC

Luis Alberto D’ Orio
Principal Manager of Payment Systems and
Current Accounts

Julio César Pando
Deputy General Manager of Payment Means

ANNEX

B.C.R.A.
Section 8. Agreement on truncation, generation and electronic
management of checks and other clearable documents
Annex to
Com. “A”
6726

8.1. General concepts.

8.1.1. Objective.

The purpose of this is to regulate the truncation, generation and electronic management of checks and other clearable documents in accordance with what is regulated by the Central Bank of the Argentine Republic (hereinafter BCRA).

For this purpose, the entities that, by this or in the future, sign or adhere to it agree that reciprocal mandates are granted and accepted in all that is required to allow compliance with their obligations by application of the Checks Law, the provisions applicable to these and other clearable documents and, in particular, the rules issued by the BCRA, in accordance with the terms and conditions established herein.

Whenever in this contract reference is made to the rules, it shall be understood that the mention corresponds to the legal, regulatory and other applicable regulations.

8.1.2. Technical and operational instructions.

This agreement is complemented by the so-called "Technical and operational instructions" (hereinafter the “Instructions”), which are an integral part thereof, even if established separately, in accordance with the provisions of point 6., in order to enable a simpler and more expeditious procedure for defining and modifying technical and operational aspects than the modification of this agreement.

8.1.3. Documents included.

Included within the scope of this are checks issued in paper form or by electronic means (ECHEQ), and other clearable documents that meet the conditions provided in the rules issued or that the BCRA may issue in the future in order to be subject to the procedures dealt with herein.

Such procedures imply that documents in paper form shall remain in the possession of the depositary entities, regardless of their place of capture and their domicile of payment, and that all Participating Entities shall accept as true the information included in the applicable Storage System and shall act accordingly, unless there is a judicial order or final judgment to the contrary.

8.2. Participating entities.

The effects of this, and the provisions issued as a consequence thereof, reach and bind the administrator(s) of the Storage System; financial institutions; and the Financial Market Infrastructures Managing and/or that perform the custody/registration of checks generated by electronic means (ECHEQs) for their stock exchange negotiation, authori- zed as provided by the BCRA.

To this end, they must subscribe to it, adhering to it as a condition to be able to participate in the generation and management of these documents with the scope established by the applicable rules.

8.3. Requirements of the documents.

The documents must meet the requirements established by current legislation and by the BCRA's provisions.

8.4. Determination of obligations and functions.

8.4.1. Obligations of the Depositary Entity (beneficiary's entity).

8.4.1.1. Carry out the controls arising from current rules, when they must be performed on checks or compensable documents because they were created in paper format, including, by way of example, the following:

a) It must be verified that it meets the requirements demanded in accordance with the provisions of current legislation to be considered a check / compensable document.

b) The design characteristics and security measures of the check determined by the BCRA in the rules on "Characteristics of payment instruments issued by financial institutions".

c) Verify the design and security characteristics corresponding to the other compensable documents in accordance with current regulations.

d) Verify that the checks and other compensable documents presented for collection are within the legal validity period.

e) Absence of adulterations without the need for an expert in the matter.

f) The existence of a regular chain of endorsements and that it does not exceed the limit established by the regulations.

g) The proper verification of the identity of the depositor and that the latter has endorsed "for collection" the check/compensable document.

8.4.1.2. The proper verification of the corresponding instruments when the depositor acts by mandate or assignment.

8.4.1.3. Compliance with the rules and regulations of the Electronic Clearing Houses in all matters that are applicable.

8.4.1.4. Compliance with the rules established in the "Instructions".

8.4.1.5. Receive and keep in custody the original documents in paper format, until their delivery to whom it corresponds, for the periods and in accordance with the provisions established in the rules and instructions applicable to each type.

8.4.1.6. Deliver to the Drawee Entity, when requested for any reason, the original or image of the document in paper format, within the period established by the applicable rules.

8.4.1.7. The non-presentation for a second time of a check/compensable document rejected as appropriate previously by the Drawee Entity for reasons of insufficient funds, closed account, stop-payment order or court order.

8.4.1.8. The conservation, during the period established in the "Instructions", of the information corresponding to the checks/compensable documents presented for clearing.

8.4.1.9. The communication to the Drawee Entity of the rejected checks and other compensable documents arising from the control of the paper documents.

8.4.1.10. The record and the statement of causes of rejection of checks/compensable documents rejected by itself or on behalf and by order of the Drawee Entity. The said certificate must be integrated in the manner set by the rules.

8.4.1.11. The retention and delivery to the Drawee Entity of the original documents on paper support rejected by a do not pay order for: "Report of Loss" or "Theft of the cheque", "Values stolen or lost from cheque books not delivered to customers", "Judicial Order", "Forged Cheque" and "Altered Cheque". In the last two cases ("Forged Cheque" and "Altered Cheque"), the exception shall apply even if there is no prior Do Not Pay Order.

8.4.1.12. The delivery of the rejected cheque/clearable document on paper support to the customer, except in the case of cheques rejected by a do not pay order for: "Report of Loss" or "Theft of the cheque", "Values stolen or lost from cheque books not delivered to customers", "Judicial Order", "Forged Cheque" and "Altered Cheque". In the last two cases ("Forged Cheque" and "Altered Cheque"), the exception shall apply even if there is no prior Do Not Pay Order. In all cases, the original cheques shall be replaced by the respective photocopies certified by the depositary bank, as indicated by the regulations in force.

8.4.1.13. Transmit to the Drawee Entity, as applicable, the data and/or images of the front and back of the cheques/clearable documents in accordance with the provisions of the applicable rules and instructions.

The transmission of the data and/or images shall be carried out through the pro- cedure and under the safeguards provided for in the regulations in force, in order to ena- ble them to be transmitted in such a way that they reach the recipient unaltered, complete and fully legible.

8.4.1.14. Establish and/or apply the agreements, procedures and security elements that allow their customers to access the data of ECHEQs and other clearable documents on electronic support of which they are beneficiaries; and manage them so that their actions cannot be disclaimed by them.

8.4.1.15. Make effective and/or communicate to the Storage System the Instructions regarding ECHEQ and other clearable documents on electronic support that are valid in accordance with the applicable rules, agreements, procedures and security elements that prevent such instructions from being disclaimed by the issuing customer.

8.4.1.16. Deliver the certificates for civil actions of ECHEQs and other documentation as provided for, in accordance with the rules and instructions applicable to each type of clearable document.

8.4.2. Obligations of the Drawee Entity (drawer's entity).

8.4.2.1. Instruct the Depositary Entity, as applicable, on the rejection of the cheque/clearable document and the reason for it based on one of the authorized grounds.

8.4.2.2. The payment of cheques/clearable documents that have not been rejected within the period resulting from the rules that will regulate the operation of the Clearing House.

8.4.2.3. Keep, for the period established in the "Instructions", the information corresponding to the documents received in the clearing.

8.4.2.4. Comply with the obligations arising from the current account contract and the regulations issued by the BCRA based on the electronic data and/or images provided by the Depositary Entity, by means of the electronic records transmitted by it through the Electronic Clearing Houses or included in the applicable Storage System.

8.4.2.5. Compliance with the rules established in the "Instructions".

8.4.2.6. Compare, on cheques issued on paper support, the drawer signature(s) of the cheques with their respective records, when they individually exceed the amount established by the BCRA, based on the images of the same provided by the Depositary Entity.

8.4.2.7. At the request of the holder of the cheque, provide the information to the Depositary En-
tity so that it can complete the cheque rejection certificate in order to identi- fy the drawer of the same and their last registered address.

8.4.2.8. Establish and/or apply the agreements, procedures and security mecha-
nisms that prevent their customers from creating ECHEQs and clearable docu- ments on electronic support with formal defects or that may be dis- claimed by the drawer.

8.4.2.9. Inform the Storage System, in accordance with the applicable rules and instruc-
tions, of the data of the ECHEQ and clearable documents on electronic support issued using the means it provides to its customers for this purpose; as well as any updates that these report to it or that it becomes aware of on its own regarding the same.

8.4.2.10. Inform the Storage System, in accordance with the applicable rules and instruc-
tions, and notify the drawer of the rejection of the ECHEQ and clearable documents on electronic support based on one of the permitted grounds.

8.4.2.11. Deliver the certificates for civil actions of ECHEQ and other documen-
tation as provided for in the case of ECHEQs, in accordance with the rules and ins- tructions applicable to each type of clearable document.

8.4.3. Power of the Drawee Entity.

In the event that, from the data and/or the image received of the cheque/clearable document, grounds warranting its rejection by the Depositary Entity were to arise, the Drawee Entity shall be authorized to proceed and/or report its rejection based on the corresponding ground, as established by the instructions issued in this regard.

Without prejudice to this power of the Drawee Entity, it is recorded that, for clearable documents on paper support, responsibility for the controls and obligations enumerated in point 8.4.1. falls exclusively on the Depositary Entity.

8.4.4. Obligations of the ECHEQ Management Entity and/or the entity that performs the custody/registration of cheques generated by electronic means (ECHEQs) for their stock exchange trading and other electronic clearable documents.

8.4.4.1. Establish the agreements, procedures and security elements that al-
low its clients to access the data of ECHEQs and other electronic settleable documents that are their property.

8.4.4.2. Establish the agreements, procedures and security elements that prevent
invalid instructions or that may be disowned by their issuer.

8.4.4.3. Verify that the instruction received is valid and was processed, in accor-
dance with the agreed security mechanisms.

8.4.4.4. Safeguard the agreed security elements for the management of ECHEQs and
other electronic settleable documents and the data of these, preventing their use by persons or under unauthorized conditions.

8.4.4.5. Make effective the agreements, procedures and security elements to
dismiss any challenge to the validity of the instruction received.

8.4.4.6. Transmit to the Storage System in its entirety the instruction recei-
ved in accordance with the procedures and means established for that purpose. This includes instructions for return, repudiation, endorsement, receipt, guarantee and payment, as well as arbitrating the mechanisms that allow informing the registry for its negotiation and its subsequent management by the legitimate holder or by the cus- tody or authorized registry agent.

8.4.4.7. Inform the repository administrator of all news in this regard, includ-
ing any tampering that it detects or that is reported to it.

8.4.4.8. Manage, at the request of the beneficiary, the collection of the ECHEQ or electronic
settleable document, in accordance with the rules and Instructions applicable to each spe- cies of settleable document.

8.4.4.9. Deliver the certificates for ECHEQ civil actions and other documenta-
tion provided for, in accordance with the rules and instructions applicable to each species of settleable document in those cases where the infrastructure acts as the collection manager.

8.4.5. Obligations of the Administrator of the Storage System.

In accordance with the provisions regulating their activity in the rules and Instructions, those who administer storage systems for settleable securities must:

8.4.5.1. Implement the controls and validations provided for (it is understood that in-
cludes the validations that are required through instructions).

8.4.5.2. Record the events reported to it by the Participating Entities and
retain the information it records, ensuring its integrity.

8.4.5.3. Allow access to the information of the settleable documents to the sub-
jects authorized for that purpose.

8.4.5.4. Enable those Financial Market Infrastructure Managers authorized
in accordance with the provisions of the BCRA to connect to the Storage System.

8.5. Obligations of the Participating Entities.

8.5.1. Provide the necessary and sufficient information that enables the correct traceability and management of ECHEQs, ensuring adequate privacy conditions.

8.5.2. The inquiries and/or procedures carried out in the storage system must be conducted preserving the confidentiality of the information under the terms of articles 39 and 40 of the Law on Financial Entities (Law 21.526 and complementary provisions) and of the Law on Personal Data Protection (Law 25.326 and complementary provisions).

8.5.3. Refrain from making inquiries about the ECHEQs and other electronic compensable documents that do not correspond to express requests from their own clients regarding their own data.

8.6. Non-compliances

In all cases, the Participating Entity is responsible for the veracity and integrity of the data it generates or safeguards and for the controls it carries out on the checks or compensable documents. The non-compliance by any of the Participating Entities with this, or any of the obligations arising from this document and, in particular, of the controls on the checks/compensable documents, generates the obligation to reimburse the payer the amount effectively paid as a consequence of the non-compliance up to the amount for which the instrument on which the applicable obligations were breached was drawn, without prejudice to the liability that may correspond to it in other instances.

8.7. Remunerations for services.

The Participating Entities will agree on all matters related to the payment of remunerations for services provided among themselves.

8.8. Procedure for Modification of the Instructions.

The modification of the "Instructions" will be made at the discretion of the "Interbank Commission of Payment Means of the Argentine Republic" (CIMPRA) and the BCRA, which will inform the adhering entities of such situation, indicating the effective date of the modification, its compliance being mandatory for all entities.

8.9. Communications between Participating Entities and obligation of cooperation.

In the event of any claim or request of any nature arising from the provisions of this agreement addressed to a Participating Entity, said entity shall communicate it to

the others that may be involved in such claim, with sufficient time so that they may take the defense measures or measures of another nature that they consider pertinent.
Likewise, the entities shall provide each other with the cooperation necessary for the best resolution of the claims.

8.10. Models.

8.10.1. Model to be signed by the financial entities and by the Administrator of the Storage System.

In the Autonomous City of Buenos Aires, on the [….] day of the month of [......] of 2019, [...........................................................], represented in this act by [................] DNI No.[..................], who establishes domicile at [................], and accredits their status as [.......................................... ] with [.............................................], adheres to the content of the attached AGREEMENT ON TRUNCATION, GENERATION AND ELECTRONIC MANAGEMENT OF CHECKS AND OTHER COMPENSABLE DOCUMENTS, signing in proof of conformity each of the pages that comprise it.

8.12.2. Model to be signed by the Managing Financial Market Infrastructures and/or those that carry out the custody/registration of checks generated by electronic means (ECHEQs).

In the Autonomous City of Buenos Aires, on the [….] day of the month of [……..] of 20…., […….….] (full name of the IMF), represented in this act by Mr./Ms. […….] (full name and DNI), who accredits their status as [……](attorney-in-fact, legal representative, president, etc.) by means of [………], establishing domicile at [………], adheres to the content of the attached AGREEMENT ON TRUNCATION, GENERATION AND ELECTRONIC MANAGEMENT OF CHECKS AND OTHER COMPENSABLE DOCUMENTS, assuming the obligations derived from the activity of management and/or custody/registration of checks generated by electronic means (ECHEQs), and signs in proof of conformity each of the pages that comprise it.”