This content is from: Local Insights

Foreign financial institutions

The Argentine Central Bank has recently issued a Communiqué embracing a new regulatory regime applicable to representatives of foreign financial institutions that are not authorised to operate in Argentina.

This new regime embraces several requirements that, in practice, representatives were already subject to, and also makes clearer certain interpretations of the Central Bank on the few existing rules and introduces new provisions.

It is made clearer that in order for an individual to act in Argentina as a representative of a foreign financial institution it must have the prior authorisation of the Central Bank.

Further, the day-to-day activity of representatives will have to comply with new cumbersome requirements, including the maintenance of a special book that contains a chronological registration of all their activities. Representatives are also obliged to report the transactions that their represented bank has executed with Argentine residents (including transactions performed through the foreign bank's branches and affiliates in other countries). This is a sensitive issue that may affect foreign secrecy laws.

One important new provision relates to prohibited transactions. The new regulations provide that a representative is forbidden to "carry out actions directly or indirectly aimed at soliciting financial resources in any manner for itself, third parties or for its principal". The new regulations may affect any person that is not registered with the Central Bank but that represents a foreign bank and performs such activity in Argentina.

The new regulations are still under analysis by the local market. The interpretation and practice to be adopted by the Central Bank on certain of the above issues will be particularly important.

Luciano Ojea Quintana

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