Argentina Fintech Legal News #6.
CIRCULAR
Fintech Department Report | Argentina Fintech Legal News #6
Dear Sir or Madam,
We are pleased to provide a brief summary of recent legal developments in Argentina’s fintech environment.
New Registry for Payment Service Providers (PSPs)
For those PSPs who operate with payment accounts
In our last report, when we commented about the first regulation that the Central Bank of Argentina (BCRA) addressed directly to PSPs (Communication “A” 6859), we anticipated that it was very likely that the BCRA was going to establish some sort of registry in the short term to be able to better identify and supervise those entities, in line with what other countries have made in this respect.
As we have foreseen, on January 30, 2020, less than one month after that first regulation, the BCRA issued a new rule (Communication “A” 6885), by means of which it now sets forth a specific registry for PSPs and, at the same time, it dictates a series of general rules for the activity (the “New Communication”).
The provisions of the New Communication only reach “Payment Service Providers (PSPs) who offer payment accounts”. Even though the New Communication defines technically each of those terms, in practice the New Communication only reaches those companies who operate as e-wallets or with virtual accounts for retail payments.
The New Communication prohibits operating as a PSP if (i) the company is not properly incorporated in Argentina (either as a local company or as a branch of a foreign company), (ii) the company is registered as a “stock exchange”, “clearing chamber” or “agent” with the National Securities Commission (CNV), or (iii) if the shareholders or authorities of the company are disqualified for performing commercial or financial activities in the country.
Secondly, the New Communication establishes that all PSPs that offer payment accounts must register with the “Registry of Payment Service Providers that Offer Payment Accounts” managed by the Superintendence of Financial and Exchange Entities” of the BCRA (the PSPs that already operate must complete this registration by April 30, 2020).
The registration request may be filed electronically and, for that purpose, certain general information about the company and about its business will need to be submitted. Within 10 business days as from filing, the BCRA will check and validate the information so submitted and may request corrections. If no observations are made, the PSP will receive a registration certificate and a registration number.
Regarding the management of funds in payment accounts, the New Communication reaffirms the rule of the former Communication “A” 6859, in the sense that those funds must be 100% available at all times and deposited in accounts in Pesos opened in local financial entities (notwithstanding clients may be granted the possibility of applying those amounts into “money market funds” regulated by the CNV).
In third place, the New Communication provides that PSPs must comply with a reporting regime that will be regulated by the BCRA soon. In addition, PSPs will need to grant access to the BCRA to their facilities and documentation and provide the BCRA will real-time monitoring tools.
On the other hand, the New Communication mandates that in every publicity and documentation produced by the PSPs, they must include the following disclaimers: (i) that PSPs only offer payment services, but are not authorized to operate as financial entities, and (ii) that the funds deposited in payment accounts are bank deposits, and they do not enjoy any insurance deposit guarantees.
In line with the former Communication “A” 6859, the New Communication reiterates that breaches to these new rules will entail the imposition (over the PSP and over its authorities) of the sanctions set forth in the Financial Entities Law.
Lastly, the New Communication clarifies that the activities provided by PSPs must be considered as “Complementary Services of the financial activity”, therefore enabling banks to invest in the equity of any PSP.
Suspension of the Promotional Regime for Knowledge-Based Economy
A new bill of law was submitted to Congress to debate possible reforms
By Resolution 30/2020 of the Ministry of Productive Development, published on January 20, 2020, the Ministry resolved, among other things, to derogate the procedure for requesting the registration in the promotional regime for IT activities and, as well, to suspend the deadlines for the Government to analyze and process those requests.
According to comments that governmental authorities provided to the press, this measure intended to review some of the conditions established by the new regime, and therefore it is expected that the registration procedure will resume soon (though no certainty was given in this respect).
On the other hand, by means of Decree 111/2020, published on January 29, 2020, the Executive Branch proposed to amend the agenda for the Extraordinary Sessions of Congress, so to discuss a reform to the recent Law that established the new promotional regime.
New Implementation Phase for ECHEQs
Schedule for adoption is set between April and July 2020
On January 22, 2020, the Inter-banking Commission for Means of Payment (CIMPRA) published its Bulletin 523, in which certain new functionalities for electronic checks (ECHEQs) were approved, as part of its Phase 2-A.
The new functionalities are as follows: (i) it will be now possible to issue ECHEQs with a “non-endorsable” provision, (ii) as a consequence, it will now be possible to transfer ECHEQs by means of an assignment of rights, instead of through endorsements, and (iii) it will be possible to issue “multichecks” (i.e. several ECHEQs in a single batch).
The “Free Universal Account” was reinstated
For people who does not have any account in the financial system
On January 23, 2020, the BCRA issued Communication “A” 6876, by means of which it reinstated the obligation for banks to open savings accounts for free to those people who does not have any type of account in the financial system.
The obligation will only apply over banks that operate with ATMs, who will need to comply with this new rule as from February 2020.
The Communication establishes that these free accounts may be opened in person or remotely. Together with the opening of the account, the bank must provide to the customer a debit card. These accounts will only operate in Pesos, their balances will be remunerated, no monthly statements will need to be delivered (as long as they can be checked in ATMs), and almost no costs may be imposed over their transactions.
Do not hesitate to contact us should you require any further information on these matters.
Sincerely,
Daniel Levi
María Shakespear
Pablo J. Torretta
Andrés Schreiber
Luciana Liefeldt
This report contains a summary of regulations published in Argentina. The summary as such is not complete and does not imply advice of any kind. Do not hesitate to contact us shall you require assistance on these matters.