RegAlert

Rule · BCRA · 11 Feb 2011 · A 5180

Valuation of Debt Instruments of the Non‑Financial Public Sector and Monetary Regulation of the Central Bank

capital

Effective 1 March 2011, all existing valuation criteria for non‑financial public‑sector debt and Central Bank monetary‑regulation instruments are nullified and replaced by the new rules set out in the attached annex. Financial entities must record the difference between fair market value (or present value) and the net book value of the regularising account, may activate any resulting loss and amortise it over up to 60 monthly installments, and must notify the Superintendence of Financial and Currency Entities of such activation. Specific provisions of the prior regulations – including limits on public‑title holdings, distribution‑of‑results rules, minimum‑capital requirements, and consolidated‑supervision clauses – are repealed and substituted with the new wording, and entities may apply the new provisions early to December 2010 if they notify the Superintendence by 21 February 2011.

ArgentinaBanco Central de la Republica Argentina

"2011 – Year of Decent Work, Health and Safety of Workers"

COMMUNICATION "A" 5180 11/02/2011

TO FINANCIAL ENTITIES:

Reference: Circular

  • LISOL 1 - 531
  • OPRAC 1 - 652
  • CONAU 1 - 943

Valuation of debt instruments of the non‑financial public sector and monetary regulation of the Central Bank

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

  1. Nullify, as of 1 March 2011, all valuation criteria then in force applicable to debt instruments of the non‑financial public sector and monetary regulation of the Central Bank of the Argentine Republic, which will be replaced by those indicated in point 2 of this communication.

  2. Establish, as of 1 March 2011, the validity of the rules on “Valuation of debt instruments of the non‑financial public sector and monetary regulation of the Central Bank of the Argentine Republic” attached in the Annex and forming part of this communication.

    • On that date, and prior to the (if applicable) application of the limit concerning deposits set out in point 2.2.9 of Section 2 of that regulation, entities must charge to results the difference between fair market value (quotation value or present value) and the net book value of the regularising account (if applicable) for all securities that can be valued according to Section 1 (excluding those that must be specifically charged to Section 2).

  3. Nullify, from 1 March 2011, point 5 of Communication “A” 4861 (text according to point 3 of Communication “A” 4976), relating to the limit on the total value of national public securities accounted for in “Investment Account” and “Special Investment Account” with respect to the total assets of financial entities.

  4. Nullify, as of 1 March 2011, point 3.1.2.3 of Section 3 of the rules on “Distribution of Results” and replace point 2.1.6 of Section 2 of the referred regulation with the following:

    2.1.6. Net balances in the concept of loss activation that may arise from the application of the rules on “Valuation of debt instruments of the non‑financial public sector and monetary regulation of the Central Bank of the Argentine Republic”.

  5. Nullify, as of 1 March 2011, the penultimate paragraph of factor “INC” contemplated in point 3.1 of Section 3 and replace point 2.1 of Section 4 of the rules on “Minimum Capital of Financial Entities” with the following:

    2.1. Subject to minimum‑capital requirement for market‑risk and Central Bank monetary‑regulation instruments of the Argentine Republic.

  6. Replace, effective 1 March 2011, point 5.4.1.2 and subsection ii) of point 5.6.3.2 of Section 5 of the rules on “Minimum Capital of Financial Entities” with the following:

    5.4.1.2. Public securities and monetary‑regulation instruments of this Institution recorded at fair market value (as listed in the present values list) and also those valued at cost plus yield (as provided respectively in Sections 1 and 2 of the rules on “Valuation of debt instruments of the non‑financial public sector and monetary regulation of the Central Bank of the Argentine Republic”).

    ii) Financing to the non‑financial public sector and holdings recorded at cost plus yield (as provided in Section 2 of the rules on “Valuation of debt instruments …”) that are updateable by “CER” shall be charged in full to the temporal band corresponding to the first month. The same treatment shall apply to Central Bank monetary‑regulation instruments updateable by “CER”.

  7. Replace, with effect from 1 March 2011, subsection i) of point 6.2.1.1 of Section 6 of the rules on “Minimum Capital of Financial Entities” with the following:

    i) Public securities and monetary‑regulation instruments of this Institution included in the volatility list published by this Central Bank and recorded in Section 1 of the rules on “Valuation of debt instruments …”.

  8. Nullify, as of 1 March 2011, point 5.4.2 of Section 5 of the rules on “Consolidated Supervision” and incorporate the following:

    5.2.1.9. Valuation of debt instruments of the non‑financial public sector and monetary regulation of the Central Bank of the Argentine Republic.

    5.2.2.6. Valuation of debt instruments of the non‑financial public sector and monetary regulation of the Central Bank of the Argentine Republic.

  9. Establish that financial entities may accountably activate the loss that may arise on 1 March 2011 from the application of the valuation rules referred to in point 2 of this communication; this option must be reported to the Superintendence of Financial and Currency Entities. In such cases, the activated amount shall be amortised over a maximum of 60 equal, monthly, consecutive installments starting April 2011, the annual amortised amount representing at least 1 % of the computable equity as of 31 December 2010. The amount will not be considered a fixed asset nor a deductible concept from the computable equity and will have the same effect in all technical relationships based on it.

  10. Establish that financial entities may anticipate the application of the provisions set out in the preceding points to December 2010, provided they notify the Superintendence of Financial and Currency Entities by 21 February 2011. If the loss activation of the previous point is applied, the resulting amount must be amortised starting January 2011.

Finally, we enclose in the annex the pages that, in replacement of those previously provided, must replace the texts ordered in the regulations on “Distribution of Results”, “Minimum Capital of Financial Entities”, “Capital‑Minimum Non‑Compliance and Technical Relationships. Applicable Criteria”, “Relationships for Fixed Assets and Other Concepts”, and “Consolidated Supervision”.

It is also reminded that on this Institution’s website www.bcra.gov.ar, under “normativa” (“ordered texts”), the modifications will be found with the changes highlighted in special characters (strikethrough and bold).

Sincerely,

BANCO CENTRAL DE LA REPÚBLICA ARGENTINA

Darío C. Stefanelli – Manager of Norms Emission Alfredo A. Besio – Deputy General Manager of Norms

ANNEX

Index

Section 1. Registration at fair market value.

  • 1.1. Accounting registration.
  • 1.2. Scope.
  • 1.3. Provision for valuation fluctuation.

Section 2. Registration at cost plus yield.

  • 2.1. Accounting registration.
  • 2.2. Securities covered, incorporation value and accrual criterion.
  • 2.3. Determination of internal rate of return.
  • 2.4. Disaffection of holdings.
  • 2.5. Presentation in the financial statements.
  • 2.6. Passive pass‑through operations.

Section 3. Observance bases of the rules.

  • 3.1. Individual basis.
  • 3.2. Consolidated basis.

Section 4. Methodology for determining the present value of public‑debt instruments.

  • Correlation table.

ORDERED TEXT OF THE RULES ON “VALUATION OF DEBT INSTRUMENTS OF THE NON‑FINANCIAL PUBLIC SECTOR AND MONETARY REGULATION OF THE CENTRAL BANK OF THE ARGENTINE REPUBLIC”

Version: 1a. COMMUNICATION “A” 5180

Effective date: 01/03/2011

1.1. Accounting registration.

Securities shall be recorded at their quotation value or present value, as appropriate.

1.2. Scope.

It includes public securities and monetary‑regulation instruments that appear in the volatility lists or present‑value lists published by the Central Bank, which may be used for purchase‑sale or intermediation unless expressly assigned under the terms of Section 2. It also covers trust‑debt instruments whose underlying assets consist of any of the assets described in the preceding paragraph, accounted for in the proportion corresponding to those assets. Securities no longer appearing in the cited lists shall be recorded according to the regime provided in points 2.2.4 and 2.2.5 of Section 2, as appropriate.

1.3. Provision for valuation fluctuation.

Financial entities may create a provision for valuation fluctuation of the public securities covered in this section to mitigate the effect on the income statement of significant swings in the fair value of those instruments. To that end, its Board of Directors or equivalent authority must previously approve a policy containing the criteria on which the entity may make charges to this provision. The account balance must not exceed 10 % of the registration value of the instruments and may be affected when such variations occur, without exceeding that limit.

VALUATION OF DEBT INSTRUMENTS OF THE NON‑FINANCIAL PUBLIC SECTOR AND MONETARY REGULATION OF THE CENTRAL BANK OF THE ARGENTINE REPUBLIC

Section 1. Registration at fair market value.

Version: 1a. COMMUNICATION “A” 5180

Effective date: 01/03/2011

2.1. Accounting registration.

Securities shall be recorded at their incorporation value, increased monthly according to the internal rate of return, following the applicable accrual criterion.

2.2. Securities covered. Incorporation value and accrual criterion.

2.2.1. National Government bonds received pursuant to articles 28 and 29 of Decree No 905/02 and Chapter II of Law 25.796 (Annex II of Decree No 117/04), unless on 28 February 2011 they are recorded at market value or, subsequently, a definitive decision is made to assign them wholly or partially to that valuation segment.

  • Incorporation value: technical value, according to contractual conditions.
  • Monthly accrual shall be charged to results.

2.2.2. “Guaranteed Loans” issued by the National Government under Decree No 1387/01 and promissory notes with similar issuance conditions to public securities.

  • Incorporation value: net book value recorded on 28 February 2011, net of the respective regularising account, if applicable.
  • At the end of each month, if the net book value of the regularising account exceeds the present value reported by the Central Bank, the entity shall charge to the regularising account 100 % of the monthly accrual of its internal rate of return. When that net book value is equal to or lower than the present value disseminated by the Central Bank, the entity shall disaffect the respective regularising account up to the amount corresponding to the difference between the present value and the net book value of the regularising account.

2.2.3. Public‑debt instruments – not acquired in the secondary market – subscribed by financial entities from 01 January 2009 onward, through exchange, debt‑for‑equity, or swap for other public‑debt instruments expressly admitted for such purposes by the competent national authority. This treatment does not apply to those instruments that, on 28 February 2011, are recorded at market value unless a later definitive decision is made to assign them wholly or partially to that valuation segment.

  • Incorporation value: net book value – proportional part of the regularising account, if applicable – of the instruments applied in that operation at the date of subscription effectiveness.

SECTION 2. Registration at cost plus yield.

Version: 1a. COMMUNICATION “A” 5180

Effective date: 01/03/2011

At the end of each month, if the net book value of the regularising account exceeds the present value reported by the Central Bank, the entity shall charge to the regularising account 50 % of the monthly accrual of its internal rate of return. When that net book value is equal to or lower than the present value disseminated by the Central Bank, the entity shall disaffect the respective regularising account up to the amount corresponding to the difference between the present value and the net book value of the regularising account. In the case that the security is expressly listed in the volatility list published monthly by this Institution, the quotation value shall replace the present value.

2.2.4. Central Bank monetary‑regulation instruments, provided they are not included in the volatility list published by this Institution.

  • Incorporation value: cost.
  • Monthly accrual of its internal rate of return shall be charged to results.

2.2.5. Public securities, provided they are not included in the volatility or present‑value lists published by this Institution and not covered by point 2.2.3.

  • Incorporation value: present value of the cash‑flow discounted at the internal rate of return of instruments of similar characteristics and “duration” that have volatility published by this Institution, or, failing that, using a yield rate resulting from the methodology for determining the present value of public‑debt instruments provided in Section 4. The calculation shall be performed by the financial entity.
  • At the end of each month, if the net book value of the regularising account exceeds the value calculated by the entity itself, the entity shall charge to the regularising account 100 % of the monthly accrual of its internal rate of return.

2.2.6. Financing to the non‑financial public sector existing as of 31 March 2003 (except public securities and Guaranteed Loans).

  • Incorporation value: net book value of the respective regularising accounts on 28 February 2011.
  • Monthly accrual of its internal rate of return shall be charged to results.

2.2.7. Other financing to the non‑financial public sector not instrumented as public securities granted after 31 March 2003.

  • Incorporation value: technical value, according to contractual conditions.

2.2.8. Debt instruments of trusts whose underlying assets consist of any of the instruments covered in the preceding points, accounted for in the proportion corresponding to those underlying assets.

  • Incorporation value: that corresponding to the underlying assets, considered individually, proportionally allocated.
  • Monthly accrual shall be performed according to the criterion applicable to each underlying asset, proportionally allocated.

2.2.9. Public securities that may be assigned to Section 1 but are decided to be affected to the present section.

  • According to the policy defined by the entity, securities may be transferred for an amount not exceeding the margin resulting from the following expression:

```
MTP = DISP + IRM + TP – DEP * 0.4
```

Where:

  • MTP – maximum amount of public securities transferable to this section.
  • TP – public securities that may be considered at fair market value (Section 1) net of the provision foreseen in point 1.3.
  • DEP – book value corresponding to the Deposits line item.
  • DISP – book value corresponding to the Availability line item.
  • IRM – book value of Central Bank monetary‑regulation instruments, irrespective of the valuation criterion used.

The computation of the indicated concepts shall be performed monthly on the basis of accounting balances at the end of each period.
If public securities are assigned according to this point and the result of the preceding expression is lower than that assignment or negative, the entity shall reclassify them to the valuation criterion provided in Section 1 to the extent necessary to reach the obtained margin or zero, respectively, or until the total holding is transferred, as the case may be.

Entities shall explicitly state the business model that underlies the administration of their public‑security portfolio, indicating the proportion of securities that may be valued at fair market value exceeding the margin set out in this point and that opt to be valued at cost plus yield, given that their objective is to retain them to obtain contractual cash flows.

2.3. Determination of the internal rate of return.

It shall be the rate that equates the present value of the cash‑flow of the respective asset with its incorporation value at the date of incorporation.
For the purpose of determining the internal rate of return, foreign‑currency securities shall be computed by their incorporation value and cash‑flow in that currency. The resulting value shall be converted to pesos at the end of each period using the applicable exchange rate.

2.4. Disaffection of holdings.

The procedure shall be:

  1. Sale, considering – if applicable – the maintenance conditions established by the entity in its policy referred to in point 2.2.9.
  2. Mandatory reclassification to Section 1, in accordance with point 2.2.9.
  3. Voluntary reclassification – partial or total – to Section 1, in accordance with points 2.2.1 and 2.2.3.

2.5. Presentation in the financial statements.

The difference between the book value and the quotation value of securities with volatility, or, where applicable, the present value published by the Central Bank or calculated by the entities themselves for the securities covered by point 2.2.5, shall be disclosed in a note to the quarterly and annual financial statements.

2.6. Passive pass‑through operations.

Holdings referred to in point 2.2 may only be used in passive pass‑through operations without affecting their book value, in accordance with the rules on “Asset Assignment as Collateral”, provided the counter‑party is:

  • another domestic financial entity,
  • a foreign bank, or
  • the Central Bank of the Argentine Republic.

End of Document

Valuation of Public‑Sector Non‑Financial Debt Instruments and Monetary Regulation of the Central Bank of the Argentine Republic (B.C.R.A.)

Section 3. Bases for observance of the rules

Version: 1a. COMMUNICATION “A” 5180
Effective: 01/03/2011

3.1. Individual base

Financial entities shall observe these rules on an individual basis.

3.2. Consolidated base

Without prejudice to individual compliance, controlling financial entities subject to consolidated supervision shall observe these rules on a monthly consolidated basis and, additionally and independently, on a quarterly basis.

Valuation of Public‑Sector Non‑Financial Debt Instruments and Monetary Regulation of the Central Bank

The reference present values for the public‑debt instruments reached shall be estimated considering the modified durations and internal rates of return (IRR) of the securities with quotations of instruments of similar characteristics corresponding to the valuation date, or, in their absence, the last business day prior, taking into account liquidity conditions and the secondary market context of public debt.

The IRR of each security without quotation shall correspond to the value that arises from linear interpolation between the highest IRRs of the quoted securities whose modified durations are immediately before and after the adjusted modified duration of the non‑quoted security to be valued. Once obtained, it shall be applied as the discount rate for the cash‑flow streams of each security, projected according to their issuance conditions.

For securities denominated in pesos without adjustment by the Reference Stabilization Coefficient (CER), the aforementioned interpolation shall be performed on the yield curve of securities quoted in pesos adjustable by CER. To the IRR thus obtained, a multiplicative factor equal to the implicit inflation rate used to adjust the cash‑flows of assets and liabilities that are CER‑adjustable in the determination of the minimum capital requirement for interest‑rate risk for the corresponding month shall be added, thereby obtaining the discount rate for these securities.

For the determination of the IRR of securities in pesos with a variable rate, the cited procedure shall be followed using the yield curve in pesos adjustable by CER. To the IRR obtained from the interpolation on that curve, a multiplicative spread shall be added, which shall be estimated based on the simple average of the daily multiplicative spreads observed in the last 10 trading days prior to the study date, between the IRRs of quoted securities in pesos with that variable rate and the IRRs that arise from the interpolation on the CER‑adjustable peso curve from the market modified duration of these securities. The IRR obtained, as the curve in CER‑adjustable pesos shifts due to the application of the spread, shall constitute the discount rate to be applied to the cash‑flow streams of the variable‑rate peso securities.

For securities that have a quotation but no volatility published by the Central Bank, such quotation may be taken as a reference in the analysis and determination of the respective present value.

Section 4. Methodology for the determination of the present value of public‑debt instruments

Version: 1a. COMMUNICATION “A” 5180
Effective: 01/03/2011

Ordered Text – Source Norm

SectionPointParagraphComm.AnnexPointParagraphObservations
1.1.“A”51802.
1.2.“A”51802.
1.3.“A”51802.
2.1.“A”51802.
2.2.1.“A”51802.
2.2.2.“A”51802.
2.2.3.“A”51802.
2.2.4.“A”51802.
2.2.5.“A”51802.
2.2.6.“A”51802.
2.2.7.“A”51802.
2.2.8.“A”51802.
2.2.9.“A”51802.
2.3.“A”51802.
2.4.“A”51802.
2.5.“A”51802.
2.6.“A”51802.
3.3.1.“A”51802.
3.3.2.“A”51802.
4.“A”51802.

Origin of the provisions included in the ordered text of the norms on “Valuation of public‑sector non‑financial debt instruments and monetary regulation of the Central Bank of the Argentine Republic”

2.1. Determination of distributable result

Entities not covered by any of the situations foreseen in point 1.1 may distribute results up to the positive amount that arises from deducting, off‑balance‑sheet, from the year‑end balances recorded in account “Unassigned Results” (code 450000), the amounts of legal and statutory reserves – whose constitution is mandatory – and thereafter the amounts corresponding to the concepts (recorded on the same date) detailed below:

  • 2.1.1. Balances for the activation of differences resulting from payments made in compliance with judicial measures arising from cases that question the applicable current regulation to “peso‑denominated” deposits, regardless of whether new long‑term loans are granted, as referred to in the resolution disseminated by Communication “A” 4439.
  • 2.1.2. The positive net difference between book values and market quotation values, in the case that the financial entity records public‑debt instruments and/or Central Bank monetary regulation instruments not valued at market prices, which have volatility published by the Central Bank.
    • When the public security appears in the present‑value list published by the Central Bank, that present value shall be used for the comparison.
    • For public securities and Central Bank monetary regulation instruments that are not included in the volatility or present‑value lists published by the Institution, the value shall be calculated by the financial entities based on the corresponding cash‑flow discounted at the internal rate of return of instruments of similar characteristics and duration that have volatility published by the Institution, or, failing that, using a rate of return consistent with the methodology provided in Section 4 of the norms on “Valuation of public‑sector non‑financial debt instruments and monetary regulation of the Central Bank of the Argentine Republic”.
    • The criteria above shall also apply for the determination of valuation differences in participation certificates and debt securities of financial trusts, proportionally, when their underlying is constituted by the mentioned instruments not valued at market price.
  • 2.1.3. Valuation adjustments of assets notified by the Superintendency of Financial and Currency Entities – accepted or not by the entity – that are pending registration and/or those indicated by the external audit that have not been recorded in the accounts.
  • 2.1.4. Individual asset‑valuation franchises granted by the Superintendency of Financial and Currency Entities, including adjustments derived from not considering the agreed‑upon adjustment plans.
  • 2.1.5. Balances for the activation of the difference existing between the peso‑equivalent value of judicial deposits in the original currency of the imposition and the book value of those deposits constituted in foreign currency that, as of 5.1.02, were affected by Law 25.561 and Decree No. 214/02.
  • 2.1.6. Net balances for the activation of losses that may arise from the application of the norms on “Valuation of public‑sector non‑financial debt instruments and monetary regulation of the Central Bank of the Argentine Republic”.

2.2. Verification of liquidity and solvency

The amount to be distributed according to the proposal submitted to the Superintendency of Financial and Currency Entities, which may not exceed the amount determined in point 2.1, shall not compromise the entity’s liquidity and solvency. This requirement shall be considered fulfilled when the absence of integration defects in the minimum capital position – both individual and consolidated – at the close of the fiscal year to which the unassigned results pertain (or in the last closed position, according to information available at the date of such submission) is verified, recalculating them and also, for that sole purpose, computing the following effects based on the corresponding data for each of those dates:

  • 2.2.1. The results of deducting from assets the concepts mentioned in points 2.1.1 to 2.1.4.
  • 2.2.2. The non‑consideration of the franchises granted by the Superintendency of Financial and Currency Entities that affect the requirements, integrations or the minimum capital position.
  • 2.2.3. The deduction of unassigned results amounts corresponding to the following concepts:
    • 2.2.3.1. The amount to be distributed and, where applicable, the amount destined to constitute the reserve for the repayment of representative debt instruments, which may be included in the computable patrimonial responsibility, according to the proposal submitted to the Superintendency of Financial and Currency Entities.
    • 2.2.3.2. Credit‑balance amounts resulting from the application of the presumed minimum profit tax – net of devaluation risk provisions – that have not been deducted from the basic net equity, in accordance with the norms on “Minimum capitals of financial entities”.

Section 3. Specific Procedure

Version: 6a. COMMUNICATION “A” 5180
Effective: 01/03/2011

3.1. Conditions for its application – Determination of distributable result and verification of liquidity and solvency

For the payment of financial services corresponding to issuances of representative debt instruments, referred to in point 7.2.2 of Section 7 of the norms on “Minimum capitals of financial entities”, the specific procedure detailed below shall be used:

  • 3.1.1. The issuance of such debt instruments must have prior approval of the shareholders’ meeting or equivalent corporate body, which shall issue a resolution on the issuance and its conditions. In those issuance conditions and in any offers made, the requirements that condition, under this regime, the payment of financial services must be explicitly stated, referencing the applicable Central Bank provisions.
    • When the instruments are negotiable obligations, the requirement shall also be considered fulfilled if the Ordinary General Assembly or equivalent corporate body authorizes a program for the issuance of representative debt instruments in a generic manner, delegating to its Board of Directors the determination of the specific terms and conditions, observing the provisions of article 9° of Law 23.576. This is without prejudice to the analyses that, regarding this aspect and others pertinent to each issuance and placement, correspond to the National Securities Commission in the matter of legality control, adjusted to the public offering regime, in its capacity as the applying authority of Law 17.811.
  • 3.1.2. To determine the existence of sufficient balance to proceed with payment, the general‑procedure provided in points 2.1 and 2.2 relating to the determination of distributable result capacity shall be used, with the following exceptions:
    • 3.1.2.1. The amounts corresponding to the concepts foreseen in points 2.1.1 and 2.1.2 shall not be deducted from unassigned results, nor considered for the recalculation of minimum capital positions – point 2.2.
    • 3.1.2.2. The amount corresponding to the concept foreseen in point 2.1.5 shall not be deducted from unassigned results – point 2.1 – nor considered as a deduction in the computable patrimonial responsibility (term “Cd” in the expression contained in point 7.1 of Section 7 of the norms on “Minimum capitals of financial entities”) for the recalculation of minimum capital positions – point 2.2.

The Superintendency of Financial and Currency Entities, without prejudice to the prior authorization granted to the issuance, shall annually verify, based on the corresponding distribution proposal, the correct application of the procedure for calculating the purified unassigned results according to these provisions and the required solvency and liquidity levels for this case, as well as the constitution of the corresponding reserve for the coverage of financial services.

Consequently, issuances of debt instruments that do not meet the applicable requirements or, at the entity’s option, shall be subject to the general‑procedure provided in Section 2.

Origin of the provisions included in the ordered text of the norms on “Distribution of Results”

Ordered Text – Source Norm

Sec.PointParagraphComm.AnnexChap.Sec.PointParagraph
1.1.“A”45891.
1.1.1.“A”45891.1.
1.1.2.“A”45891.2.According to Comm. “A” 4591 (point 6.) and 5072.
1.1.3.“A”45891.3.
1.1.4.“A”45891.4.According to Comm. “A” 5072.
2.1.“A”45892.According to Comm. “A” 4591 (point 6.)
2.1.1.“A”45892.1.
2.1.2.1° “A”45892.2.1° According to Comm. “A” 4698, 4898, 4976, 5072 and “B” 9186.
2.1.2.2° “A”45892.2.2° According to Comm. “A” 4591 (point 7.), 4664, 4898 and 4976.
2.1.2.3° “A”4898According to Comm. “A” 4976, 5072 and 5180.
2.1.2.4º “A”45892.2.3°
2.1.3.“A”45892.3.
2.1.4.“A”45892.4.
2.1.5.“A”46863.
2.1.6.“A”47024.According to Comm. “A” 5180.
2.2.“A”45893.According to Comm. “A” 4591 (point 8.), 5072 and “B” 9104.
2.2.1.“A”45893.1.According to Comm. “A” 4591 (point 8.).
2.2.2.“A”45893.3.iv) According to Comm. “A” 4591 (point 8.) and “B” 9104.
2.2.3.“A”45893.3.According to Comm. “A” 4591 (point 8.).
2.3.“A”45894.
3.1.“A”45911.
3.1.1.“A”45911.Incorporates the interpretative criterion of Comm. “C” 46841.
3.1.2.“A”45911.According to Comm. “A” 4686, 4702, 5072, 5180 and “B” 9104.

Credit Exposure Resulting From:

  • i) The sum of positions not covered by contracts to hedge price variations of basic commodities (“commodities”). Positions sold to clients that are not matched by hedges acquired by the financial entity, regardless of the underlying or the client, shall be considered uncovered.
  • ii) The use of expanded credit lines referred to in points 4 and 5 of Communication “A” 4838 and complementary provisions (for excesses over the limits established in points 7 and 8 of Communication “A” 3911 and its amendments) concerning financial assistance granted and/or holdings of debt instruments of financial trusts or fiduciary funds referred to in point 5.1 of Section 5 of the norms on “Financing the non‑financial public sector” and point 3.2.4 of Section 3 of the cited regulation, computed according to the following schedule, which shall operate once the works have begun to be economically used or the equipment generates income for the trust or fiduciary fund through tariffs, rates, fees or similar concepts.

Computation as “INC” of the use of the expanded quota – in % of such utilization

FromTo
25%First month
50%Seventh month
100%Thirteenth month
  • To the credit‑graduation limits (Section 3 of the respective regulation), and
  • To the limits on financial assistance to the non‑financial public sector – point 12 of Communication “A” 3911 (text according to point 3 of Communication “A” 4546).

The provisions contained in Section 2 of the norms on “Non‑Compliance of Minimum Capitals and Technical Relationships – Applicable Criteria” shall apply, unless the provisions of Section 3 of those norms are applicable.

IP: Increment due to the expansion of the general limit of the net negative global foreign‑currency position, in accordance with the provisions of point 2.1 of Section 2 of the norms on “Global Net Foreign‑Currency Position” (effective from 01/01/2007).

Minimum Capitals of Financial Entities

Section 3. Minimum capital for credit‑risk. Version: 11a. COMMUNICATION “A” 5180 Effective: 01/03/2011

2. Public securities.
2.1. Subject to minimum capital requirement for market risk and Central Bank monetary regulation instruments.0
2.2. Others of the country.
2.2.1. Provincial, municipal and City of Buenos Aires governments, including their companies – regardless of legal nature – whose issuance does not have the explicit guarantee of the National Government or resources from federal tax co‑participation or the Federal Housing System (Law 24.464), through the direct or indirect assignment of the corresponding rights, with the pertinent intervention of the Ministry of Economy and Public Finance of the Nation.100
2.2.2. National Government corporations that do not have its explicit guarantee.100
2.3. Bonds of agencies or departments of central governments of OECD member countries that have an international risk rating of “AA” or higher.20
3. Loans.
3.1. To the non‑financial private sector.
3.1.1. With preferred guarantees.
3.1.1.1. In cash (in pesos, US dollars, Swiss francs, British pounds, yen and euros) and gold.0
3.1.1.2. Collaterals of time‑deposit certificates issued by the creditor entity itself.
i) In pesos, US dollars, Swiss francs, British pounds, yen and euros.0
ii) In national public securities at 75% of their market value.0
3.1.1.3. Automatic reimbursements of export operations corresponding to multilateral or bilateral reciprocal credit agreements for foreign trade.0

Section 4. Risk‑weight table

Version: 9a. COMMUNICATION “A” 5180
Effective: 01/03/2011

Section 5. Minimum capital for interest‑rate risk

  • r_me: average deposit rate in US dollars for 30‑ to 59‑day deposits of the month to which the assets and liabilities subject to the requirement correspond, according to the daily survey of the Central Bank of the Argentine Republic, expressed as a fraction.
  • r_me': r_me plus 0.01.

5.3. Temporal bands

To discount cash‑flows and establish present values, the relevant cash‑inflows and outflows shall be grouped into temporal bands defined as follows:

  • 5.3.1. An initial band, called “band zero”.
  • 5.3.2. Monthly bands for the first 24 months.
  • 5.3.3. Annual bands for the subsequent 27 years.
  • 5.3.4. A final band for cash‑flows that mature from the thirtieth year onward, whose midpoint shall be 420 months.

5.4. Included assets and liabilities

5.4.1. Concepts included

Assets and liabilities arising from financial intermediation operations, including the following:

  • 5.4.1.1. Liquidity.
  • 5.4.1.2. Public securities and monetary regulation instruments of this Institution recorded at fair market value – that appear in the present‑value list – and also those valued at cost plus yield (as provided respectively in Sections 1 and 2 of the norms on “Valuation of public‑sector non‑financial debt instruments and monetary regulation of the Central Bank of the Argentine Republic”).
  • 5.4.1.3. Loans and deposits of securities not subject to minimum capital requirement for market risk.
  • 5.4.1.4. Interest on loans and deposits of securities subject to minimum capital requirement for market risk.
  • 5.4.1.5. Active and passive repos, including term positions, of securities, credit‑portfolio documents and other assets not subject to minimum capital requirement for market risk.
  • 5.4.1.6. Credits and obligations for term positions linked to active and passive repos, respectively.
  • 5.4.1.7. Purchases and sales on term not linked to repos and their counterparties, of securities not covered by the minimum capital requirement for market risk.

MINIMUM CAPITALS OF FINANCIAL ENTITIES

B.C.R.A.

Section 5. Minimum Capital for Interest‑Rate Risk

ii) Financing to the non‑financial public sector and holdings recorded at cost plus yield (as provided in Section 2 of the rules on "Valuation of debt instruments of the non‑financial public sector and monetary regulation of the Central Bank of the Argentine Republic") that are re‑indexed by CER shall be fully assigned to the temporal band corresponding to the first month.

The same treatment shall apply to the Central Bank’s monetary‑regulation instruments that are re‑indexed by CER.

iii) The remaining variable‑rate assets linked to a local indicator and the assets re‑indexed by CER, at the option of each entity, shall be subject to the following treatment:

a) Individual computation.
When the residual maturity is up to one year (except for assets re‑indexed by CER), the same treatment as provided for variable‑rate liabilities based on a local indicator (paragraph i of point 5.6.3.1) shall be applied.

For assets with a residual maturity greater than one year, 60 % of the balance shall be assigned to the period of the first rate review and the remainder, according to the maturity and amortisation type, shall follow the table inserted in paragraph c.

If the asset is re‑indexed by CER with a residual maturity of up to one year, the provision in the second paragraph of paragraph ii of point 5.6.3.1 shall apply.

When the residual maturity of the aforementioned assets exceeds one year, 60 % of the balance shall be assigned to the temporal band corresponding to the first month and the remainder shall follow the table inserted in paragraph c.

b) Global computation by line.
Financings that belong to the same credit line (mortgage loans, pawn loans, personal loans, etc.) may be considered globally for each line and the respective cash‑flows shall be assigned according to the following criteria:

  • 60 % to the temporal band corresponding to the third month, regardless of the period in which the first rate review must be made.
  • The remainder: according to the table inserted in paragraph c, taking into account the average residual maturity of the respective portfolio.

When the average residual maturity of each portfolio is equal to or less than one year, the totality of its cash‑flows shall be assigned to the temporal band corresponding to the sixth month.

Version: 8a. COMMUNICATION “A” 5180
Effective date: 01/03/2011

6.1. Requirement

The requirement shall be the sum of the risk values of the asset portfolios included:

```
VaRp = VaRAN‑B + VaRAN‑A + VaRAE‑B + VaRAE‑A + VaRME ```

Where:

  • VaRp: risk value of the total portfolio.
  • VaRAN‑B: risk value of the national‑asset portfolio – bonds.
  • VaRAN‑A: risk value of the national‑asset portfolio – equities.
  • VaRAE‑B: risk value of the foreign‑asset portfolio – bonds.
  • VaRAE‑A: risk value of the foreign‑asset portfolio – equities.
  • VaRME: risk value of foreign‑currency positions.

6.2. Risk Value of the National‑Asset Portfolio

6.2.1. Bonds

6.2.1.1. Included positions

i) Public securities and monetary‑regulation instruments of this Institution included in the volatility list published by this Central Bank and recorded in Section 1 of the rules on "Valuation of debt instruments of the non‑financial public sector and monetary regulation of the Central Bank of the Argentine Republic".

ii) Units of mutual funds whose object is such securities or the mentioned instruments.

6.2.1.2. Calculation of the risk value

i) The bought and sold positions in the considered assets shall be grouped into four zones according to their average life ("modified duration": md):

  • a) Bonds issued in pesos with md ≤ 2.5.
  • b) Bonds issued in pesos with md > 2.5.
  • c) Bonds issued in foreign currency with md ≤ 2.5.
  • d) Bonds issued in foreign currency with md > 2.5.

Section 6. Minimum Capital for Market Risk

Version: 9a. COMMUNICATION “A” 5180
Effective date: 01/03/2011

ORIGIN OF THE PROVISIONS INCLUDED IN THE ORDERED TEXT OF THE RULES ON “MINIMUM CAPITALS OF FINANCIAL ENTITIES”

SectionPointParagraphComm.Cap./ AnnexObservation
1.1.“A” 21361.1st according to Comm. “A” 2859 and 3558.
1.2.1.“A” 2237b)According to Comm. “A” 2923 (point 3.1.2.3 of Section 3.), 4631 and “B” 9186.
1.2.2.“A” 29233.3.2.2.
1.2.3.“A” 29233.3.3.
1.3.“A” 21362.1st according to Comm. “A” 2223.
1.4.1.“A” 21363.1.“A” 3171 According to Comm. “A” 3959.
i)“A” 21363.2.2nd according to Comm. “A” 3959.
ii)“A” 21363.2.4.According to Comm. “A” 2241 and 4771.
1.4.2.1.“A” 414 LISOL‑1 VI 6.1.1.
1.4.2.2.“A” 3171According to Comm. “A” 3959.
2.1.1.“A” 2241CREFI‑2 I 1.3.1. According to Comm. “A” 4368.
2.1.2.“A” 2241CREFI‑2 I 1.3.1. According to Comm. “A” 4368, 4771 and 5168.
2.2.“A” 26502.According to Comm. “A” 3128, 4238 and 4368.
2.3.1.“A” 2237a)According to Comm. “A” 2923 (point 3.1.1.2 of Section 3.).
2.3.2.“A” 29233.3.2.1.
2.3.3.“A” 29233.3.3.
3.1.“A” 21361.According to Comm. “A” 2541, 2736, 2938, 3039, 3307, 3959, 4598, 4702 (incorporates clarification), 4741, 4742, 4961, 4996, 5180 and “B” 9745.
3.2.“A” 2136 IAccording to Comm. “A” 2541, annex, criteria, d), 2nd paragraph and 3040.
3.3.1.“A” 2136 IAccording to Comm. “A” 2541, annex, criteria, d), 2nd paragraph.
3.3.2.“A” 22875.
3.3.3.“A” 2412In the second paragraph of point 3.3.3.3. incorporates a criterion not previously disclosed generally. According to Comm. “A” 3959.
3.4.1.“A” 27682.According to Comm. “A” 2948, 3911, 3925, 3959, 4180 and “B” 9074.
3.4.2.“A” 2227unique5.2.2. 3rd
3.5.1.“A” 21361.1.
3.5.2.1.“A” 2136 IAccording to Comm. “A” 2541, annex, criteria, g).
3.5.2.2.“A” 2136 IAccording to Comm. “A” 2541, annex, criteria, d), 1st paragraph.
3.5.2.3.“A” 2136 IAccording to Comm. “A” 2541, annex, criteria, b).
1st“A” 2136 IAccording to Comm. “A” 2541, annex, criteria, c) and “B” 9074.
3.5.2.4.2ndIncorporates interpretative clarification.
3.5.2.5.“A” 2136 IAccording to Comm. “A” 2541, annex, criteria, i).
3.5.2.6.“A” 2249
3.5.2.7.“A” 2136 IAccording to Comm. “A” 2541, annex, criteria, k).
1.1.“A” 2136 IAccording to Comm. “A” 2541, annex, 3274 and 3558.
1.2.“A” 2136 IAccording to Comm. “A” 2541, annex and 4141.
1.3.“A” 2136 IAccording to Comm. “A” 2541, annex.
1.4.“A” 2136 IAccording to Comm. “A” 2541, annex.
1.4.1.“A” 2192penultimate
1.4.2.“A” 22901st and 2nd
1.5.“A” 2136 IAccording to Comm. “A” 2541, annex.
2.“A” 2136 IAccording to Comm. “A” 2541, annex, 2793, 2872, 3039, 3274, 3925, 3959, 4141, 4741 and 5180. The point 2.2.1. includes interpretative clarification.
3.1.1.1.a
3.1.1.5.“A” 2136 IAccording to Comm. “A” 2541, annex, 3925 and 3959.
3.1.1.6.i)“A” 2136 IAccording to Comm. “A” 2632, 2939, 3314 and 3959.
ii)“A” 45511. According to Comm. “A” 4559, point 2.
iii)“A” 2136 IAccording to Comm. “A” 2541, annex, 3314 and 3959.
3.1.1.7.“A” 2136 IAccording to Comm. “A” 3314 and 3959.
3.1.1.8.a
3.1.1.10.“A” 2136 IAccording to Comm. “A” 3959.
3.1.1.11.“A” 2136 IAccording to Comm. “A” 2541, annex, 3141, 3314, 3959 and 4465.
3.1.1.12.“A” 3314
3.1.1.13.“A” 44912. According to Comm. “A” 4501.
3.1.1.14.4.
3.1.2.“A” 2136 IAccording to Comm. “A” 2541, annex.

MINIMUM CAPITALS OF FINANCIAL ENTITIES

Ordered Text – Source Norm

SectionPointParagraphComm.AnnexObservation
3.2.“A” 2136 IAccording to Comm. “A” 2541, annex, 3133 and 3959.
3.3."A" 2136 IAccording to Comm. “A” 2541, annex, 3133, 3238 and 3959. Includes interpretative clarification.
3.4.y
3.5."A" 2136 IAccording to Comm. “A” 2541, annex and 4141.
4.1.y
4.2.
4.3."A" 2136 IAccording to Comm. “A” 3133.
4.13.a
"A" 2136 IAccording to Comm. “A” 2541, annex, 3133, 3274, 3959 and 4141.
4.14."A" 2136According to Comm. “A” 2541, 3133, 3238 and 3959. Includes interpretative clarification.
4.15."A" 2136According to Comm. “A” 2541, 3133 and 4141.
4.16.“A” 30643.
5.“A” 2136 IAccording to Comm. “A” 5067.
5.1.“A” 2136 IAccording to Comm. “A” 2632, 3314, 3959 and 4559, point 4.
5.2.y
5.3.“A” 2136 IAccording to Comm. “A” 2541, annex and 3314.
6.“A” 2136 IAccording to Comm. “A” 2541, annex, 2793, 2872, 3959, 4141, 4168 and 4465.
7.1.a
7.3."A" 2136 IAccording to Comm. “A” 2541, annex and 3133.
7.4."A" 2136According to Comm. “A” 2541, annex, 3133, 3238, 3959 and 4141.
7.5."A" 2136According to Comm. “A” 2541, annex, 3133 and 4961.
4.last "A" 2136 IAccording to Comm. “A” 2541, annex and 3307.
5.1.“A” 2922 IAccording to Comm. “A” 3959, 4172 and 4180.
5.2.“A” 2922 IAccording to Comm. “A” 3959, 4032 and 4172.
5.3.“A” 2922 IAccording to Comm. “A” 4172.
5.4.1.1.a
5.4.1.8.“A” 2922 IAccording to Comm. “B” 6523, “A” 4172, 4741 and 5180. Includes interpretative clarifications.
5.4.1.9.“A” 2922 IAccording to Comm. “B” 6523, "A" 3064 and 4172.
5.4.2.“A” 2922According to Comm. “A” 3959 and 4172.
5.5.“A” 2922 IAccording to Comm. “A” 2948, 3959, 4172, 4180, “B” 6523 and 9074.
5.6.“A” 2922 IAccording to Comm. “A” 3274, 3959, 4172 pto 5.6.4.5., 4180, 4543, 4874, 5091, 5180, “B” 6523, 9186 and 9516.
6.1.y
6.2.“A” 2461unique I and II According to Comm. “A” 4172, 4741 and 5180.
6.3.y
6.4.“A” 2461unique I and II According to Comm. “A” 3959 and 4172.
6.5.“A” 2461unique I and II According to Comm. “A” 2736, 2768, 2948, 3959, 4172 and “B” 9074. pto 6.5.2. includes interpretative clarification.
6.6.“A” 2461unique III According to Comm. “A” 3161 and 4172.
6.7.“A” 2461unique VI According to Comm. “A” 4172.
6.8.“A” 2461unique VII According to Comm. “A” 4172.
7.1.“A” 414 LISOL‑1 VI 3.1.1st According to Comm. “A” 2279, 2453, 2793, 2914, 3039 and 4172.
7.2.1.“A” 414 LISOL‑1 VI 3.1.1.According to Comm. “A” 2223, 2227, 4296, (point 2.), 4576 (point 1.) and 4665.
7.2.2.“A” 45762. According to Comm. “A” 4591 (points 2.,3.,4. and 5.), 4665 – point 7.2.2.5. includes interpretative clarification – and 4782.
7.2.3.“A” 414 LISOL‑1 VI 3.1.2.According to Comm. “A” 2223, 2768, 2948, 4172, 4576 (point 3.), 4665, 4702 and “B” 9074.
7.2.4.1st “A” 414 LISOL‑1 VI 3.1.2.2.According to Comm. “A” 2264, 4172, 4576 (point 4.) and 4782.
7.2.4.1.y
7.2.4.2.“A” 414 LISOL‑1 VI 3.1.2.2.According to Comm. “A” 2264, 4172, 4576 (points 5. and 6.) and 4782.
7.2.4.3.y
7.2.4.4.“A” 414 LISOL‑1 VI 3.1.2.2.According to Comm. “A” 2264, 4172 and 4782. Second paragraph of point 7.2.4.3. incorporates interpretative clarification.
7.2.4.5.“A” 22642. According to Comm. “A” 4172 and 4576 (point 8.).
7.2.4.6.“A” 414 LISOL‑1 VI 3.1.2.2.According to Comm. “A” 2264, 4172 and 4665.
7.2.5.1.“A” 22873.1. and 3.3. According to Comm. “A” 2890, 4172 and 5093.
7.2.5.2.“A” 22873rd According to Comm. “A” 4172 and 5093.
7.2.5.3.1st “A” 24971. According to Comm. “A” 3621 and 4172.
7.2.5.4.last “A” 22632. According to Comm. “A” 4172.
7.2.5.5.1st and last “A” 22873.2. According to Comm. “A” 4172.
7.2.6.
7.2.7.2nd “A” 2474Rules on procedure for requirement and integration of minimum capitals (point 3.2.7). Modified by Comm. “A” 4172.

CONSOLIDATED SUPERVISION

B.C.R.A.

Section 5. Observance of Rules

5.1. Individual basis

Unless otherwise provided, financial entities (including their domestic and foreign subsidiaries) shall observe the applicable rules on an individual basis.

For the minimum cash requirement, the individual basis shall not include foreign subsidiaries.

5.2. Consolidated basis

Without prejudice to individual compliance, controlling financial entities subject to consolidated supervision shall observe, on a consolidated basis, the following rules:

  • 5.2.1. Monthly consolidated basis

    • 5.2.1.1. Minimum capital.
    • 5.2.1.2. Classification of debtors and minimum provisions for credit‑risk loss.
    • 5.2.1.3. Credit‑risk fractionation.
    • 5.2.1.4. Credit grading.
      • i) Maximum limit for holdings in companies that do not provide complementary financial‑service activities.
      • ii) Maximum limit of 2.5 % of the computable equity of the entity for the second month preceding the granting of the corresponding financing, which reaches a complementary margin of 200 % of the computable equity of the client.
    • 5.2.1.5. Maximum limit applicable to financings, except those destined to other financial entities, for which the granting does not require the intervention of credit‑area officials and the general manager and the approval of the lending entity’s directors, set at 2.5 % of the computable equity of the second month preceding the granting.
    • 5.2.1.6. Global maximum limits, according to the rules on "Credit Management" for:
      • a) Small‑amount loans.
      • b) Micro‑entrepreneur loans.
    • 5.2.1.7. Minimum liquidity position and coefficients.
    • 5.2.1.8. Ratio for fixed assets and other concepts.
    • 5.2.1.9. Valuation of debt instruments of the non‑financial public sector and monetary‑regulation instruments of the Central Bank of the Argentine Republic.

  • 5.2.2. Quarterly consolidated basis
    Without prejudice to individual compliance, and in addition and independently of the monthly consolidated basis, controlling financial entities subject to consolidated supervision shall observe, on a quarterly consolidated basis, the following rules:

    • 5.2.2.1. Minimum capital, except for market‑risk capital.
    • 5.2.2.2. Classification of debtors and minimum provisions for credit‑risk loss.
    • 5.2.2.3. Credit‑risk fractionation.
    • 5.2.2.4. Maximum limit for holdings in companies that do not provide complementary financial‑service activities.
    • 5.2.2.5. Ratio for fixed assets and other concepts.
    • 5.2.2.6. Valuation of debt instruments of the non‑financial public sector and monetary‑regulation instruments of the Central Bank of the Argentine Republic.

  • 5.2.3. Observance of the rules on "Prevention of Money Laundering and Other Illicit Activities" and "Prevention of Terrorist Financing"
    The provisions contained in the cited rules shall also be observed by subsidiaries and affiliates covered by this regime, to the extent permitted by the applicable legal provisions in the country where they are domiciled. Observance does not extend to the provisions for the integration of the base referred to in point 1.7 of the first provision, nor to the reporting of suspicious operations arising from both regimes.

    Within this framework, financial entities shall ensure that subsidiaries and affiliates include within the internal‑control scheme related to "Prevention of Money Laundering and Other Illicit Activities" and "Prevention of Terrorist Financing" the following:

Version: 4a. COMMUNICATION “A” 5180
Effective date: 01/03/2011

The determination of the computable equity shall be made by applying the established rules, both for the requirement and for the integration, on a consolidated basis.

5.3.2. Quarterly consolidation

Data from the local financial entity, including its domestic and foreign subsidiaries, and all its subsidiaries required to consolidate quarterly shall be taken.

Maximum limits for credit‑risk fractionation shall always be observed on a consolidated basis, i.e., considering the operations of the respective clients in the entities and companies subject to quarterly consolidation.

The determination of the computable equity shall be made considering, for both requirement and integration, the balances at the end of the quarter, applying the other aspects of the established rules.

That equity shall be the comparison base during the following quarter to determine compliance with the rules to be observed on a quarterly consolidated basis.

5.4. Other aspects

5.4.1. Fund‑raising operations with a term of less than 30 days. Brokerage firms subject to consolidated supervision may not carry out securities operations with a term of less than 30 days, nor cancel them prematurely before 30 days have elapsed, when such operations directly or indirectly involve a fund‑raising.

5.4.2. Restrictions regarding mutual‑fund units. Limits on the holding of mutual‑fund units and on transactions that provide liquidity to those funds shall be observed on both individual and consolidated bases.

Version: 5a. COMMUNICATION “A” 5180
Effective date: 01/03/2011

CONSOLIDATED SUPERVISION – ORDERED TEXT OF SOURCE NORM

SectionPointParagraphComm.AnnexObservation
5.2.1.6.“A” 48918.
5.2.1.7.“A” 2690unique6.
5.2.1.8.“A” 2227unique5.1.8. According to Comm. “A” 2736.
5.2.1.9.“A” 51808.
5.2.2.“A” 2227unique5.1. According to Comm. “A” 2649. Complemented by Comm. “A” 2461, 2736, 2839, 5180 and “B” 5902.
5.2.3.“A” 48354.
5.2.4.“A” 5093
5.3.1.“A” 2227unique5.2.1. According to Comm. “A” 2649.
5.3.2.“A” 2227unique5.2.2.
5.4.1.“B” 61153rd
5.4.2.“B” 65661st
5.
5.5.“A” 2227unique5.3. According to Comm. “A” 2649.

2.1. Concepts Included

The following excesses shall be subject to the treatment provided in this section:

2.1.1. Limits provided for:

  • i) The ratio of fixed assets and other concepts,
  • ii) Credit‑risk fractionation (including the expanded credit quotas referred to in points 4 and 5 of Communication “A” 4838 and complementary provisions),
  • iii) Financing to related clients,
  • iv) Credit grading,
  • v) Financial assistance to the non‑financial public sector (point 12 of Communication “A” 3911 – text according to point 3 of Communication “A” 4546).

2.1.2. Expanded credit quotas referred to in points 4 and 5 of Communication “A” 4838 and complementary provisions (financial assistance and/or holding of debt instruments of financial trusts or fiduciary funds), to the extent that the works or equipment have begun to generate income for the trust or fiduciary fund through fees, rates, tariffs or similar concepts, in accordance with the schedule provided in point 3.1 of Section 3 of the rules on "Minimum Capitals of Financial Entities".

2.1.3. Credit exposure resulting from the sum of positions not covered by contracts sold to hedge price variations of commodity products.

2.2. Reported non‑compliance by entities

2.2.1. Information entered on time

Will generate an increase in the minimum capital requirement for credit risk by an amount equal to 100 % of the excess to the ratio, starting from the month in which the non‑compliance is recorded and while it persists.

In the case of credit relationships, the computation of the offset shall be performed on the basis of the monthly average of daily excesses.

NON‑COMPLIANCE OF MINIMUM CAPITALS AND TECHNICAL RELATIONS – APPLICABLE CRITERIA

Section 2. Excesses to technical relations and uncovered derivative positions

Version: 8a. COMMUNICATION “A” 5180
Effective date: 01/03/2011

ORIGIN OF THE PROVISIONS INCLUDED IN THE ORDERED TEXT OF THE RULES ON “NON‑COMPLIANCE OF MINIMUM CAPITALS AND TECHNICAL RELATIONS. APPLICABLE CRITERIA”

SectionPointParagraphComm.Cap.Observation
1°“A” 31611.1.
2°“A” 31611.1. According to Comm. “A” 3171 (point 1.).
1.1.
3°“A” 31711.
1.2.“A” 3161
1.2.1.“A” 31611.2.1.
1.2.2.“A” 31611.2.2.
1.2.2.1.“A” 31611.2.2.1.
1.2.2.2.“A” 31611.2.2.2.
1.3.“A” 31611.3.
1.3.1.“A” 31611.3.1.
1.3.2.“A” 31611.3.2.
1.3.2.1.“A” 31611.3.2.1.
1.3.2.2.“A” 31611.3.2.2.
1.
1.4.“A” 3161
2.1.“A” 3161According to Comm. “A” 4546, 4742, 4838, 4861, 4926 (point 1.), 4937 (point 4.), 4961, 4996, 5180 and “B” 9745.
2.2.1.“A” 31612.1.1.
2.2.2.“A” 31612.1.2. According to Comm. “A” 3171 (point 2.).
2.3.“A” 31612.2.
2.3.1.“A” 31612.2.1.
2.3.2.“A” 31612.2.2.
2.3.2.1.“A” 31612.2.2.1. According to Comm. “B” 9745.
2.3.2.2.“A” 31612.2.2.2.
2.3.3.“A” 31612.2.3. According to Comm. “A” 3171 (point 3.).
2.4.“A” 31612.3. According to Comm. “A” 3171 (point 4.).
2.5.“A” 31612.4.
2.
2.6.“A” 31612.5.
3.1.“A” 31613.1.
3.
3.2.“A” 31613.2.

INDEX

Section 1. Fixed assets

1.1. Included concepts.
1.2. Exclusions.

Section 2. Other concepts

2.1. Included concepts.
2.2. Exclusions.

Section 3. Computation of concepts

3.1. Fixed assets.
3.2. Other concepts.
3.3. Exclusions.

Section 4. Ratio

4.1. Maximum limit.

Section 5. Non‑compliance

5.1. Non‑compliance reported by entities.
5.2. Non‑compliance detected by the Superintendency of Financial and Currency Entities.
5.3. Other consequences.
5.4. Accounting exposure.
5.5. Regularisation and restructuring plans.

Section 6. Bases of observance of the rules

6.1. Individual basis.
6.2. Consolidated basis.

Section 7. Transitional provisions.

CORRELATION TABLE

B.C.R.A.

SectionPointParagraphComm.AnnexObservation
5.5.5.“A” 414 LISOL‑1 V 4. According to Comm. “A” 817 and 4093 (penultimate paragraph).
6.1.“A” 2227unique5.2.1. last According to Comm. “A” 2649.
6.“A” 2227unique5.1.8. According to Comm. “A” 2736.
6.2.“A” 2227unique
7.1.“A” 39541. According to Comm. “A” 4020, 4124, 4254, 4402 and 4439, pto. 2.
7.
7.2.“A” 51809.

DIFFERENCES RESULTING FROM JUDICIAL MEASURES

Until 31/12/08, the amount activated from differences resulting from the fulfillment of judicial measures arising in cases that question the applicable current legislation for deposits and other obligations by financial intermediation in the financial system, originally contracted in foreign currency under Law 25.561, Decree No 214/02 (ratified by Law 25.967, art. 64) and complementary provisions, shall not be counted for the purpose of determining compliance with the maximum limit contemplated in Section 4.

The balance of accounts reflecting the activated amounts of those differences shall also not be counted, where the amortisation may be deferred as a consequence of granting new long‑term loans.

ACTIVATION DUE TO CHANGES IN VALUATION CRITERIA

The activated amount of the loss that may arise from the application of the rules on "Valuation of debt instruments of the non‑financial public sector and monetary regulation of the Central Bank of the Argentine Republic" shall not be counted for the purpose of determining compliance with the maximum limit contemplated in Section 4 (points 9 and 10 of Communication “A” 5180).

RELATION FOR FIXED ASSETS AND OTHER CONCEPTS

Section 7. Transitional provisions.

Version: 9a. COMMUNICATION “A” 5180
Effective date: 01/03/2011

RELATION FOR FIXED ASSETS AND OTHER CONCEPTS – ORDERED TEXT OF SOURCE NORM

SectionPointParagraphComm.Cap.Observation
5.5.5.“A” 414 LISOL‑1 V 4. According to Comm. “A” 817 and 4093 (penultimate paragraph).
6.1.“A” 2227unique5.2.1. last According to Comm. “A” 2649.
6.“A” 2227unique5.1.8. According to Comm. “A” 2736.
6.2.“A” 2227unique
7.1.“A” 39541. According to Comm. “A” 4020, 4124, 4254, 4402 and 4439, pto. 2.
7.
7.2.“A” 51809.

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