Resolution 094/2011

BOARD RESOLUTION NO. 094/2011
SUBJECT: MONETARY OPERATIONS MANAGEMENT - APPROVES MODIFICATIONS TO THE OPEN MARKET OPERATIONS REGULATION.

HAVING SEEN:

Law No. 1670 of October 31, 1995, of the Central Bank of Bolivia, and its modifications.

The Statute of the Central Bank of Bolivia, approved by Board Resolution No. 128/2005 of October 21, 2005, and its modification approved by Board Resolution No. 031/2006 of April 18, 2006.

Board Resolution No. 01/2011 of January 12, 2010, which approves the Internal Personnel Regulation.

The Open Market Operations Regulation (OMA), approved by Board Resolution No. 127/2003 of November 11, 2003, and the modifications approved by Board Resolutions No. 017/2004, No. 070/2005, No. 108/2007, of February 10, 2004, May 24, 2005, August 21, 2007, and 130/2007 of October 16, 2007, respectively.

The Report from the Monetary Operations Management BCB-GOM-SOMA-2011-026 of July 26, 2011.

The Report from the Legal Affairs Management BCB-GAL-SANO-2011-264 of August 1, 2011.

CONSIDERING:

That Article 6 of Law No. 1670 empowers the Central Bank of Bolivia to execute monetary policy and regulate the quantity of money and the volume of credit according to its monetary program, being able to issue, place, and acquire securities and carry out other open market operations for this purpose.

That Article 54, subsection d) of Law No. 1670 and numeral 4) of Article 11 of the BCB Statute, empower the BCB Board of Directors to issue regulations for Open Market Operations.

That Article 87 of Law No. 1670 establishes that the BCB, within the scope of its functions as the monetary authority and payments system, and in its capacity as the government's financial agent, may carry out, under the conditions determined by its Board of Directors, the deposit, custody, registration, administration, transaction, clearing, and settlement of securities issued, guaranteed, or administered by the BCB and by the General Treasury of the Nation.

That Article 1 of Board Resolution No. 108/2007 of August 21, 2007, authorizes the sale of public securities issued by the BCB to natural and legal persons, with the exception of financial entities with a license granted by the Superintendence of Banks and Financial Entities or by the Superintendence of Pensions, Securities and Insurance.

That Article 11, subsection c) of the Internal Personnel Regulation establishes that BCB public servants are subject to the following incompatibilities: conducting business or drafting private contracts associated with the performance of their tasks in public service.

That the Monetary Operations Management recommends that the BCB Board of Directors approve the modification of Article 12 of the Open Market Operations Regulation.

That in the opinion of the Legal Affairs Management, there is no legal impediment for the Board to approve the modification in the aforementioned Regulation within the framework of what is provided in the BCB Internal Regulation for BCB public servants regarding avoiding situations that generate the possibility of incurring in conflict of interest or incompatibilities.

THEREFORE,

THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA

RESOLVES:

Article 1.- Modify Article 12, numeral IV of the Open Market Operations Regulation, in the following terms:

SAYS:

Article 12 (Operational Mechanisms).

OMAs may be carried out through public auction, BCB money desk, direct sale to natural or legal persons, market makers, or other mechanisms authorized by the BCB Board of Directors.

IV. Sale through Market Makers. It is a mechanism through which authorized financial entities receive securities from the BCB to then sell them to natural and legal persons, with the exception of financial entities with a license granted by the SBEF or by the SPVS. The conditions of this mechanism will be defined through a specific regulation approved by the BCB Board of Directors.

SHOULD SAY:

“Article 12 (Operational Mechanisms).

OMAs may be carried out through public auction, BCB money desk, direct sale to natural or legal persons, market makers, or other mechanisms authorized by the BCB Board of Directors.

IV. Sale through Market Makers. It is a mechanism through which authorized financial entities receive securities from the BCB to then sell them to natural and legal persons, with the exception of financial entities with a license granted by the SBEF or by the SPVS. The conditions of this mechanism will be defined through a specific regulation approved by the BCB Board of Directors.

BCB officials may not acquire public securities under this mechanism.”

Article 2. The modification established in this Resolution shall enter into force from its approval.

Article 3. The Presidency and the General Management are charged with the execution and compliance of this Resolution.

La Paz, August 2, 2011

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Marcelo Zabalaga Estrada

_______________________ _______________________ Hugo Dorado Araníbar Rolando Marín Ibáñez

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Ernesto Yáñez Aguilar Gustavo Blacutt Alcalá Rafael Boyán Téllez