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

COMMUNICATION “A” 7430
30/12/2021

TO FINANCIAL INSTITUTIONS:

Ref.: Circular
CAMEX 1-906,
LISOL 1-964,
OPRAC 1-1127,
RUNOR 1-1709,
OPASI 2-650:

Spot transactions to be settled and forward transactions, repos, collateralized loans, other derivatives and with mutual investment funds. Adjustments.

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

“- To provide that financial institutions may hold units of mutual investment funds authorized by the National Securities Commission, subject to the “Special regime for the constitution of SME Mutual Investment Funds” established by that body through General Resolution No. 803/2019 (and its amendments and supplements).

Participation in each of these funds may not exceed 15 % of the total issuance and the holding of units of those funds must be computed for the purposes of the limit on total holdings of units provided in the last paragraph of point 7.2.1.2. of the rules on “Spot transactions to be settled and forward transactions, repos, collateralized loans, other derivatives and with mutual investment funds” -2 % of RPC-.

The aforementioned investment may be made provided that it involves funds whose investments are composed of:

a) instruments provided in subparagraphs (i), (ii), (iii) and/or (iv) of article 21 of Section V “Special regime for the constitution of SME Mutual Investment Funds”, Chapter II of Title V, of the rules of the National Securities Commission (N.T. 2013 and amendments), that do not imply granting financial assistance to persons -natural or legal- linked to the financial institution in accordance with point 1.2.2. of the rules on “Large exposures to credit risk”.

In the case of discounted instruments, the amounts must come from the collection of sale and/or service provision transactions corresponding to the activity of the SME that discounts them.

b) at least 85 % of the investments, by instruments with respect to which the persons legally obligated to pay are classified in “normal situation” (category 1) according to the latest information available in the “Central de deudores del sistema financiero”.

These conditions must be verified prior to making the investment.

Additionally, compliance with social security obligations must be verified in accordance with the provisions of article 12 of Law 14.499.”

In this regard, it is clarified that the holding of units of funds subject to the “Special regime for the constitution of SME Mutual Investment Funds” will be computable for the purposes of the reduction of the minimum cash requirement provided in point 1.5.1. of the rules on “Minimum cash”, and may not be computed for compliance with the provisions established in the rules on “Financing line for productive investment of MSMEs”.

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

ANNEX

B.C.R.A.
SPOT TRANSACTIONS TO BE SETTLED AND FORWARD TRANSACTIONS, REPOS, COLLATERALIZED LOANS, OTHER DERIVATIVES AND WITH MUTUAL INVESTMENT FUNDS
Section 7. Transactions with mutual investment funds.

7.1. Name.

The name of the mutual investment funds with respect to which financial institutions act, directly or indirectly, as managers, custodians, placement agents or promoters must allow it to be clearly distinguished that they are independent from one another.

The use of common words or words with the same root, abbreviations, acronyms, symbols, etc. that identify them with financial institutions shall not be admitted, so other names must be used that leave no doubt to the investing public that the mutual investment funds do not have the equity or financial backing of the intervening financial institutions.

7.2. Restrictions.

7.2.1. Holding of units.

7.2.1.1. Prohibition.

Financial institutions may not hold units of mutual investment funds, whatever the nature of the assets that make up the fund's estate.

7.2.1.2. Exceptions.

i) Units of new mutual investment funds for 120 consecutive days counted from the date on which the public offering is launched, with respect to which financial institutions act as managers, custodians, placement agents or promoters.

ii) Units of closed mutual investment funds with public offering authorized by the CNV, whose investment object is any –one or more– of those provided in article 206 of Law 27440 on Productive Financing.

iii) Units of open mutual investment funds authorized by the CNV, subject to the “Special regime for the constitution of Open Mutual Investment Funds for the Financing of Infrastructure and the Real Economy” established by that body through General Resolution No. 897/21 (and its amendments and supplements).

iv) Units of mutual investment funds authorized by the CNV, subject to the “Special regime for the constitution of SME Mutual Investment Funds” established by that body through General Resolution No. 803/19 (and its amendments and supplements). The investment may be made provided that it involves funds whose investments are composed of:

Section 7. Transactions with mutual investment funds.

a) instruments provided for in subparagraphs i), ii), iii) and/or iv) of Article 21 of Section V "Special regime for the constitution of SME Mutual Investment Funds", Chapter II of Title V, of the rules of the National Securities Commission (N.T. 2013 and amendments), which do not imply granting financial assistance to persons –natural or legal– linked to the financial entity in accordance with point 1.2.2. of the rules on "Large exposures to credit risk".

In the case of discounted instruments, the securities must come from the collection of sale and/or service provision transactions corresponding to the activity of the SME that discounts them.

b) at least 85 % of the investments, in instruments with respect to which the parties legally obligated to pay are classified in "normal situation" (category 1) according to the latest information available in the "Central de deudores del sistema financiero".

These conditions must be verified prior to making the investment.

Additionally, compliance with social security obligations must be verified in accordance with the provisions of Article 12 of Law 14499.

Participation in each of the funds referred to in subparagraphs ii), iii) and iv) may be up to 15 % of the total issuance.

Total holdings of units –calculated as the monthly average of daily balances– must not exceed the amount equivalent to 2 % of the RPC recorded by the financial entity in the month immediately preceding the corresponding month.

7.2.2. Transactions with fund assets.

7.2.2.1. On own account.

Financial entities may not carry out any transaction that implies providing liquidity to mutual investment funds –with respect to which they perform or not the functions of managers, custodians, placement agents or promoters–, such as the purchase or assignment of the assets that make up their portfolio, unless they are monetary regulation instruments of the BCRA or securities, public or private, with normal and habitual quotation, in the country or abroad, widely disseminated and easily accessible to public knowledge, in transactions agreed at market prices.

7.2.2.2. On behalf of third parties.

Financial entities may act as intermediaries –whether as negotiation agent and/or settlement and clearing agent (integral or proprietary)– in transactions with other instruments of the funds. These operations must be completed on the same day, so that at the daily close the securities involved are not recorded as holdings.

B.C.R.A.
CASH TRANSACTIONS TO BE SETTLED AND FORWARD, REPOS, GUARANTEES, OTHER DERIVATIVES AND WITH MUTUAL INVESTMENT FUNDS
Section 7. Transactions with mutual investment funds.

7.2.3. Bases of observance.

The established limitations must be observed on an individual and consolidated basis.

For the purposes of calculation on a consolidated basis, holdings of units recorded by non-financial companies that must consolidate information with the financial entity are excluded from the computation, provided that in the transactions they have used resources from their own business that –directly or indirectly– have not been provided to make the acquisition by the controlling entity.

7.3. Transparency.

7.3.1. Information to investors.

7.3.1.1. Mandatory nature.

Financial entities that, directly or indirectly, act as managers, custodians, placement agents or promoters of mutual investment funds must inform interested parties that the units of the funds do not constitute deposits in the intervening financial entity, which is also prohibited 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 providing liquidity for that purpose.

7.3.1.2. Exception.

In cases where the resources of a fund are placed in term investments in accordance with current regulations that contemplate the possibility of ensuring the maintenance of the capital value, or where options with the same effect have been directly sold to the fund, whatever the intervening entity, the prohibition in the matter referred to in point 7.3.1.1 shall not apply.

7.3.2. Legend.

7.3.2.1. Scope.

The intervening financial entities shall expressly state the aspects mentioned in point 7.3.1.1. in the graphic advertising carried out through any medium and in the documentation (subscription requests and account statements detailing holdings of units) related to the placements made.

It must also be displayed in all premises of the intervening entities where units of the funds are promoted and/or sold.

B.C.R.A.
CASH TRANSACTIONS TO BE SETTLED AND FORWARD, REPOS, GUARANTEES, OTHER DERIVATIVES AND WITH MUTUAL INVESTMENT FUNDS
Section 7. Transactions with mutual investment funds.

7.3.2.2. Text.

In a legible and prominent manner, the following text shall be used:

"Investments in units of the Fund do not constitute deposits in .................... (name of the intervening financial entity) for the purposes of the Financial Entities Law nor do they have any of the guarantees that such demand or term deposits may enjoy in accordance with the legislation and regulations applicable to deposits in financial entities. Likewise, ................. (name of the intervening financial institution) is prevented by regulations of the Central Bank of the Argentine Republic from assuming, tacitly or expressly, any commitment as to the maintenance, at any time, of the value of the invested capital, the yield, the redemption value of the units or the granting of liquidity for such purpose.”

7.4. Identification and tax status.

7.4.1. Identification.

When carrying out the first transaction, natural persons who are holders or in whose name a transaction is recorded, legal representatives of legal entities, etc. shall use any of the documents provided for in the regulations on “Identification documents in force”.

7.4.2. Tax status.

Legal entities or natural persons who are holders or in whose name an account or transaction is recorded, legal representatives, etc. shall report their status before the Federal Administration of Public Revenue (AFIP) by providing the corresponding element, as indicated below:

7.4.2.1. Unique tax identification key (CUIT).

7.4.2.2. Unique labor identification code (CUIL).

7.4.2.3. Identification key (CDI). The financial institutions involved in the transaction shall manage compliance with this requirement through the process generated for such purposes by the AFIP.

CENTRAL BANK OF THE ARGENTINE REPUBLIC

“CASH TRANSACTIONS TO BE SETTLED AND FORWARD, REPOS, GUARANTEES, OTHER DERIVATIVES AND WITH MUTUAL INVESTMENT FUNDS”

CONSOLIDATED TEXT ORIGINAL RULE OBSERVATIONS Sect. Point Par. Com. Annex Chap. Sect. Point Par.
4.
4.5.2.1. “A” 1465 I 1.2.1. and
5.2. 1st
According to Com. “A” 2061,
2064, 2181 and 2275.
4.5.2.2. “A” 1465 I 1.2.4. According to Com. “A” 6472.
Includes interpretive clarification.
4.5.2.3. “A” 1465 penulti-
mate
According to Com. “A” 6472.
Includes interpretive clarification.
4.5.3. "A" 1590 I 1.2.
4.5.3.1. “A” 1590 I 1.2.1. and
4.2. 1st
According to Com. “A” 2181.
4.5.3.2. "A" 1590 I 1.2.3.
4.5.3.3. “A” 1590 I 1.2.5. According to Com. “A” 6472.
Includes interpretive clarification.
4.5.3.4. “A” 1590 I 1.2.6. According to Com. “A” 6472.
Includes interpretive clarification.
4.6. “A” 6472 Includes interpretive
clarification.
5.
“A” 2061 5. According to Com. “A” 1746,
1769, 2064, 2181,
2275, 2286, 2356,
2393, 2771, 6472 and
6978.
6.
6.1. “A” 2461 sole IV 2nd and
last
According to Com. “A” 5740 and
6472.
6.2. “A” 2461 sole IV 1st According to Com. “A” 5740 and
6472.
6.3. “A” 6663 1.
7.
7.1. 1st “B” 5484 1st and
2nd
According to Com. “A” 2953
(point 2., par. 1st).
2nd “B” 5484 2nd According to Com. “A” 2953 (point 2, para. 2).
7.2.1. "A" 3027
7.2.1.1. "A" 2953 1. 1st According to Com. "A" 2996
(Annex, point 1, para.
1).
7.2.1.2. i) "A" 2953 1. 1st According to Com. "A" 2996
(Annex, point 1, para.
2 b), 3558 and 7234. ii) "A" 7234 1. According to Com. "A" 7341. iii) “A” 7341 1. iv) “A” 7430 5° “A” 7234 1. According to Com. “A” 7341 and 7430. last “A” 7234 2. According to Com. “A” 7341.
7.2.2. “A” 2996 único 2.
7.2.2.1. “A” 2953 1. 2° According to Com. “A” 2996
(Annex, point 2., par.
1°), 6522 and 6523.