The Argentine Central Bank issued Communiqué A 6038 which regulates the ability of financial institutions to enter into derivative transactions with foreign counterparties.

On August 8, 2016, the Argentine Central Bank issued the Communiqué A 6038 ("Communiqué 6038") which regulates the ability of financial institutions to enter into derivative transactions with foreign counterparties.

Communiqué 6038 establishes that financial institutions can enter into futures, forwards and any other kind of derivatives transaction with foreign counterparties only if such counterparties are:

a.  institutionalized markets from members of the Organization for Economic Co-operation and Development (O.E.C.D.), provided that:

  1. have a credit rating of at least "investment grade"; and
  2. transactions are settled by central counterparties clearing (CCP).

b.  Foreign banks if the contract provides for initial margins and the daily integration of margins to "market to market", and the foreign bank fulfills all the following requirements:

  1. have a credit rating of at least "investment grade";
  2. located (itself or its parent company) in a member of the Basel Committee on Banking Supervision (BCBS)
  3. be incorporated in countries which are tax cooperative with Argentina (Decree No. 589/2013); and
  4. is subject to principles, standards and regulations on prevention of money-laundering and terrorist financing that are internationally accepted by FATF-GAFI.

Before Communiqué 6038, there were no financial regulations restricting the capacity of financial institutions to enter into derivative transactions with foreign counterparties, unless collateral was posted. In connection with the regulations on posting of collateral, Communiqué  6038 harmonizes these regulations with the  new regulations on capacity, by providing that foreign counterparties must have a credit rating of at least "investment grade" in order to financial entities being authorized to post collateral in derivative transactions.

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