BCRA: New Requirements for Accessing the Foreign Exchange Market and Operating with Blue Chip Swaps

The Argentine Central Bank (the “BCRA,” after its acronym in Spanish) established new requirements for accessing the foreign exchange market for outflow transactions and new restrictions on the operation of Blue Chip Swap transactions. The measures were handed down through Communiques “A” 7327 dated July 10, 2021 and Communique “A” 7340 dated August 12, 2021.

Communique “A” 7327

The new provisions implemented by the communique include incorporating swaps of securities for other external assets in the client’s sworn statement on transactions with securities (this rule applies to swaps starting July 12, 2021).

In the case of individuals or legal entities, the sworn statement must state the following:

•    that on the day it requests access to the market and in the previous ninety (90) calendar days it has not arranged swaps of securities for other external assets;  

•    that it pledges not to arrange swaps of securities for other assets as from the time it requests access and for 90 (ninety) calendar days thereafter.

In these cases, pending or effective transfers of securities to foreign depositories by the client for the purpose of participating in an exchange of debt securities issued by the Federal Government, local governments or resident issuers of the private sector are not considered.

To waive approval if the client is a legal entity, it must also submit a sworn statement:

a.    that contains a list of the human or legal persons exercising direct control over the client (consistent with the criteria outlined in the “Large exposures to credit risk” rules);
b.    that states that, on the day it requests access to the market and in the 90 calendar days prior to that, it has not delivered funds in the country in local currency or other liquid local assets to any human or legal person exercising direct control over it, except for those directly associated with regular transactions for the acquisition of goods and/or services.

Point “b.” requirements (which apply exclusively to funds in local currency or other liquid local assets delivered as from July 12) may be deemed met if the client has submitted a sworn statement signed by each individual or legal entity detailed in item “a.” outlining the common requirements applicable to individuals and legal entities.

Finally, the BCRA removed the exemption applicable to “the entity's own transactions as a client” from the duty to submit a sworn statement of securities transactions.   Entities are now required to meet the requirements outlined in points “a.” and “b.” above for their own operations as clients.

Communique “A” 7340

Under the communique, securities trading transactions settled in foreign currency must be paid: 

a)    by transfer of funds to and from demand accounts in the client’s name in local financial entities, and
b)    against “dólar cable” in bank accounts in the client’s name in a foreign entity that is not incorporated in countries or territories where the Recommendations of the Financial Action Task Force do not apply or do not sufficiently apply.

Under no circumstances may these transactions be settled through payment in foreign currency bills or by deposit in custody accounts or in  third party accounts.