Resolution 054/2002 Approving the Regulation for the Administration of Additional Collateral for Intraday and Overnight Credits in the High-Value Payments System (SIPAV)

BOARD OF DIRECTORS RESOLUTION NO. 054/2002

SUBJECT: MONETARY OPERATIONS MANAGEMENT - APPROVES THE REGULATION FOR THE ADMINISTRATION OF ADDITIONAL COLLATERAL FOR INTRADAY AND OVERNIGHT CREDITS IN THE HIGH-VALUE PAYMENTS SYSTEM (SIPAV).

HAVING SEEN:

Law 1670 dated October 31, 1995.

Law 1864 of June 15, 1998 on Popular Property and Credit.

Board of Directors Resolution No. 070/2001 of July 24, 2001, which approves the Regulation of the High-Value Payments System.

Board of Directors Resolution No. 128/2001 of December 13, 2001, which approves the New Statute of the Central Bank of Bolivia.

The Report from the Monetary Operations Management SOMA No. 001/2002 of April 18, 2002.

The Report from the Legal Affairs Management SANO No. 098/2002 of May 24, 2002.

CONSIDERING:

That Law 1864 modifies Article 3 of Law 1670, empowering the Central Bank of Bolivia (BCB) to formulate general application policies in monetary, exchange, and payments system matters, for the fulfillment of its object.

That subsections a), b), and o) of Article 54 of Law 1670 empower the Board of Directors of the BCB to issue the norms necessary for the fulfillment of its functions, competencies, and faculties assigned by law, as the entity responsible for the administration of payment systems among authorized financial entities, with the power to approve, modify, and interpret the Regulations of the BCB.

That numeral 2 of Article 41 of Board of Directors Resolution No. 070/2001 determines that, to expand the limits of their intraday credit in the High-Value Payments System, financial intermediation entities may constitute additional collateral with securities issued by the TGN and the BCB.

That numeral 13 of Article 11 of the BCB Statute establishes that it is an attribution of the BCB Board of Directors to approve the norms for the functioning of the Payments System, and that Article 53 of the aforementioned Statute points out the composition and purpose of the Open Market Operations Committee.

That the Technical Report from the Monetary Operations Management No. 001/2002 recommends the approval of the Regulation for the Administration of Additional Collateral for Intraday and Overnight Credits in the High-Value Payments System (SIPAV), to contribute to the efficient functioning of this real-time gross settlement system.

That through report SANO No. 098/2002, the Legal Affairs Management states that it corresponds to the BCB Board of Directors to consider the approval of the Draft Regulation for the Administration of Additional Collateral for Intraday and Overnight Credits in the SIPAV.

THEREFORE,

THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA

RESOLVES:

Article 1.- Approve the Regulation for the Administration of Additional Collateral for Intraday and Overnight Credits in the SIPAV in its 4 chapters and 8 articles, which as an annex forms part of this Resolution.

Article 2.- The Presidency and the General Management are charged with the execution and compliance of this Resolution.

La Paz, May 28, 2002

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Juan Antonio Morales A.

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Juan Medinaceli V. Roberto Camacho S.

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Javier Comboni S. Enrique Ackermann A.

ANNEX

REGULATION FOR THE ADMINISTRATION OF ADDITIONAL COLLATERAL FOR INTRADAY AND OVERNIGHT CREDITS IN THE HIGH-VALUE PAYMENTS SYSTEM (SIPAV)

CHAPTER I GENERAL PROVISIONS

Article 1.- (Object) The present Regulation aims to regulate the administration of securities constituted as additional collateral by the direct participants of the High-Value Payments System (SIPAV), to expand the limits of the intraday and overnight credits granted by the BCB through this System.

Article 2.- (Scope of Application) The provisions contained in this Regulation apply to securities issued by the General Treasury of the Nation (TGN) and the Central Bank of Bolivia (BCB), owned by the direct participants of SIPAV, constituted as additional collateral.

CHAPTER II DEFINITION AND EXECUTION BODIES

Article 3.- (Attributions of the Open Market Operations Committee) In accordance with what is established in the Regulation of the High-Value Payments System, the Open Market Operations Committee (COMA) has the following attributions:

I. Define the maximum limits permitted to constitute additional collateral. II. Determine the valuation methodology for public securities constituted as additional collateral for intraday and overnight credits.

Article 4.- (Executive Body) The Monetary Operations Management (GOM), through the Sub-Management of Open Market Operations (SOMA), is responsible for the custody, valuation according to what determined by the COMA, administration, and liquidation of the securities constituted as additional collateral.

CHAPTER III CONSTITUTION, ADMINISTRATION, VALUATION, AND LIQUIDATION OF THE ADDITIONAL COLLATERALS

Article 5.- (Constitution) The direct participants of SIPAV may constitute additional collateral through securities issued by the TGN and the BCB, based on their needs and within the limits and operational conditions defined by the COMA.

Participants may constitute, withdraw, or replace their additional collateral daily during the business hours of the Money Desk. To do so, they must communicate their decision to the BCB one business day in advance before proceeding to the respective valuation to calculate the available credit amount.

Article 6.- (Registration, Custody, Valuation, and Administration) To constitute the additional collateral, participants must deliver in the Money Desk the Securities duly endorsed in property in favor of the BCB. When the collateral is constituted by dematerialized public titles, the Securities Depository Entity will proceed to the inscription of precautionary measures on the registered values through account annotations.

The valuation methodology of the additional collateral will be determined by the COMA. At the end of each day, the valuation of the additional collateral will be introduced by the SOMA into the Integrated Accounting System (COIN). This valuation will be considered by the SIPAV to effect intraday and overnight credits the following business day.

The direct participants of SIPAV are responsible for withdrawing or replacing the additional collateral in case of the expiration of any of them. The values will cease to constitute additional collateral one business day before their expiration.

Article 7.- (Liquidation) If until 10:00 a.m. of the following business day the beneficiary of an overnight credit has not canceled it, the SOMA will proceed to the liquidation of the collateral for the collection of the principal and the interests generated in the operation.

The SOMA will liquidate those titles whose total value, according to the valuation methodology defined by the COMA, is closest to the amount owed. If necessary, the respective fragmentation will be proceeded. Likewise, if there is a cash remainder favorable to the participant, it will be deposited in their current and reserve account.

CHAPTER IV OTHER PROVISIONS

Article 8.- (Resolution of Unforeseen Operational Aspects) The COMA, in coordination with the Monetary and Exchange Policy Committee, may resolve any operational aspect not foreseen in this Regulation.