BCRA Boosts Market of Negotiable Obligations in Argentine Pesos

The measure passed by the Argentine Central Bank (the “BCRA” after its acronym) incorporated the Negotiable Obligations (ON after its acronym in Spanish) issued by certain companies as eligible assets to establish collaterals in active repurchase agreements. The purpose of this measure is to stimulate the local capital market by giving more liquidity to the ON in Argentine pesos.

The list of eligible ON will be available on the BCRA website. Only ONs that have been traded in one of the last five business days may be used as collateral.

Finally, a financial entity may not use a listed ON as collateral if they are issued or guaranteed by the financial entity itself or by any other entity with which it has “close economic ties” as the term is defined in the Communique. The provision regarding the close economic ties does not apply if such ties exist between the counterparty and the public sector or when the instruments are guaranteed by a public sector entity.