Capacity Of Financial Institutions To Enter Into Derivative Transactions With Foreign Counterparties

Author:Mr Pablo Gayol
Profession:Marval O'Farrell & Mairal
 
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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:

have a credit rating of at least "investment grade"; and 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:

have a credit rating of at least "investment grade"; located (itself or its parent company) in a member of the Basel Committee on Banking Supervision (BCBS) be incorporated in countries...

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