Emerging Markets Rates and Currencies Handbook

Offshore non deliverable forwards are traded OTC under ISDA Masteragreements. These NDFs are net settled in USD and use the PPN as the fixing rate. Pursuant to FX Regulations in force, access to the FX Market by Argentine residents to buy USD to settle offshore NDF transactions is subject to the BCRA prior approval. Onshore NDFs are traded OTC as well as in the following trading venues: Rosario Futures Exchange (ROFEX), Mercado Abierto Electrónico (MAE) and Bolsas y Mercados Argentinos (ByMA). Onshore NDF traded by Argentine financial entities must be settled in ARS. A local master agreement and a confirmation are required. Onshore NDFs use the BCRA Reference Rate “A” 3500 for fixing purposes and are net settled in ARS. Options: Currently there is no FX Options market. XCCY swaps: Offshore swaps are traded OTC under ISDA Master Agreement definitions. Swaps are also settled in USD and have poor liquidity. Pursuant to FX Regulations in force, access to the FX Market by Argentine residents to buy USD to settle offshore cross currency swaps is subject to the BCRA prior approval. Requirements to open a foreign currency account Residents are allowed to have USD denominated accounts. Remittance by residents of USD funds from their accounts in Argentina to offshore accounts is permitted in certain circumstances expressly established in the Consolidated Text of FX Regulations and subject to compliance with applicable requirements. Documentation Requirements Supporting documentation requirements for: FX Spot: Instruction letter as per Citi´s forms with transaction details and mandatory information plus supporting documentation. Onshore NDF: Local Master Agreement + Confirmation Offshore Derivatives: ISDA Master Agreement + Confirmation. Spot Regulations (as of June 2023) The market is highly regulated and many FX regulations were publishedafter the issuanceof Decree 609/2019 and BCRACommuni que“A” 6770. Below we list the mo st importantFX regulationsas of June 2023. The information below must be read togetherwith relevant regulationsand may be subject to change from time to time. BCRA Communi quesand the ConsolidatedTextof FX Regulationscan be found on the BCRA website. All FX transactionsmust be made throughan authorized financ ial ent ity and requi re written instructionsby the client. Banks must verify the authenticityand reasonabi lityof the transaction instructed and compl iancewith limits and requi sitesestabl ishedin BCRA regulations.Clients must provide suppo rting documentationaccording to the type of FX transaction instructed. Banksmust daily reportthe BCRAall expectedtransfers of foreign currency out side Argent ina equal to or exceeding USD 10,000 (on an agate basis per count erparty) to be closed on T+2, T+3 and T+4. Inflows: Proceeds from exports of goods and services must be transferred into Argent ina and converted into ARS within the appl icable term. Proceedsfrom foreignfinancialinde btedne ssdisbursed as of September1, 2019and proceedsfrom the issuance by Argentine residents of USD-denominated debt securities registered in Argentina as of November 29, 2019,must be transferredinto Argent inaand converted into ARS as a manda tory condi tion to access the FX Market to repay interest and pr inc ipa l at matur ity. Outflows: The pur chase of foreign currency is subject to compliancewith applicablerequirements.Accessto the FX Market to buy foreign currency without the BCRA prior approval is permitted in the cases listed below, subj ectto fulfillmentof the requirementsestablishedin BCRA regulations (inc ludi ng, but not limited to, those described below). Other cases require BCRA prior approval (for example, among other cases, dividend payments, prepayments of financ ial debt and transactions with affiliates). 1) Any pur chase of foreign currency, inc ludi ng transactions between different foreign currencies