Operations with Mutual Funds

1999 - Year of Export
CENTRAL BANK OF THE ARGENTINE REPUBLIC

__________________________________________________________________ COMMUNICATION " A " 2953 I 21/07/99 __________________________________________________________________

TO THE FINANCIAL INSTITUTIONS:

Ref.: Circular
RUNOR 1 - 350.
LISOL 1 - 252.
OPRAC 1 - 456.
Operations with mutual funds investment

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

"1. Establish that, as of 1.8.99, financial institutions may not hold units of mutual funds -unless they are computable as integration of the minimum liquidity requirements-, whatever the nature of the assets that constitute the fund's assets, nor carry out any transaction that implies granting liquidity to those funds, such as the purchase or transfer of the assets that make up their assets.

When financial institutions, directly or indirectly, act as managers, custodians, placement agents or promoters of mutual funds, investors must be informed that the intervening financial institution is prevented from assuming any commitment that implies guaranteeing, at any time, the maintenance of the value of the invested capital, its yield, the redemption value of the units or granting liquidity for that purpose.

This shall be expressly stated in graphic advertising, offering prospectuses and documentation (subscription certificates, account statements, etc.) related to the placements made.

For this purpose, in the offering prospectuses and documentation (subscription certificates, account statements, etc.) related to the placements made, the following legend shall be used:

"In accordance with provisions of the Central Bank of the Argentine Republic (Communication "A" 2953), ...........(name of the promoting financial institution/placement agent/holder of the managing and/or depositary company), is prevented from assuming, tacitly or expressly, any commitment regarding the maintenance, at any time, of the value of the invested capital, its yield, the redemption value of the units or the granting of liquidity for that purpose."

Until 31.12.99, it will be admitted that this legend be included by stamp in the offering prospectuses and investment documentation.

2. Establish, with effect from 1.1.2000, that the name of the mutual funds with respect to which financial institutions act, directly or indirectly, as managers, custodians, placement agents or promoters must allow clearly distinguishing that they are independent from each other.

Consequently, as of that date, the use of common words or words with the same root, abbreviations, acronyms, symbols, etc., that identify them with financial institutions will not be admitted, so other names must be used that leave no doubt in the investing public that the mutual funds do not have the patrimonial or financial backing of the intervening financial institution.

For the purposes of the application of article 41 of the Financial Institutions Law, financial institutions that incur non-compliance with this provision will be subject to a daily fine equivalent, at minimum, to 0.5% and, at maximum, to 1% of the assets of the funds included, registered on the last day of the month prior to that in which the non-compliance is configured.

3. Set, as of 1.8.99, for demand placements in financial institutions -whatever the form of the deposit- that, at minimum, must constitute the assets of mutual funds, in accordance with the provisions of article 33 of Chapter X -Mutual Funds- of the Rules of the National Securities Commission, the following minimum liquidity requirements:

Month	Rates in %
August	20
September	40
October	60
November	80
December	100"

We greet you very attentively.

CENTRAL BANK OF THE ARGENTINE REPUBLIC

Juan Carlos Isi
Andrew Powell
Deputy Manager of Regulatory Regime
Chief Economist