The government takes new measures and restricts the operation of financial dollars

With few reserves at the Central Bank (BCRA), the National Capital Market Commission (CNV) said today that it has taken new measures to operate the financial dollars – the MEP and Cash with Liquidation (CCL) – with the aim of avoiding new arbitration , a “loop”, in the market associated with operators who settle differences in short-term activities. With new restrictions and a shortage of dollars, according to specialized analysts, the financial market is becoming more fragmented.

The entity did so through General Decision 969. The idea, they told CNV, is to “perfect the regulation” with the aim of ensuring that the volume of trading in government bonds in dollars “be genuine, eliminating arbitrage influence and ensuring a more faithful representation of actual asset transactions”.

Does the measure limit or affect investors buying MEP dollars? At CNV they confirmed that it “does not affect investors who use the stock market to dollarise”, but that they seek to limit “a loop that the merchants“, especially those that would operate under 48 hours. This would have caused the value of the MEP to rise, a price that BCRA intervenes on a daily basis trying to contain the jump into the blue.

According to CNV technicians, a “restriction” is added to the operation in financial dollars with different terms, which “only sophisticated investors use when trying to achieve low-risk performance.”

Henceforth, to buy a dollar bond with a foreign currency settlement, in a settlement period of less than 48 hours, the investor should not have sold in the previous 15 days (and commit not to do so in the 15 days) government dollar bonds with settlement in foreign currency.

According to the NVC, “It affects only sophisticated investors or arbitrageurs, who typically make trades to take advantage of price differences of the same or similar assets in different trading sessions.”

The financial team told this media that on any bond you can operate “instant cash”, “24 hours” or “48 hours”. The government found, they claimed, that some Clearing and Compensation Agents (ALyCs) were selling rights in “straight cash” to their clients and covered their operation in “48 hours”, the time frame in which the BCRA usually intervenes by selling bonds for controlling the price of bonds. “They cut a circle between ‘instant cash’ and ’48 hours.’ Historically, the “instant cash” price is cheaper than the “48 hour” price. In recent weeks, that has changed,” said a person close to Economy Minister Sergio Massa, explaining the measure.

“Basically, BCRA lost about $470 million in July to intervene, and between yesterday and today they’ve spent another $70 million to $80 million. With this they seek to spend less reserves and continue to intervene in the same way as CCL.” said economist Juan Ignacio Paolicchi, Empiria’s chief economist. “They’re looking to promote the use of reserves that they use to step in and that business arbitration doesn’t take that away,” he added. “What it’s aimed at is reducing the intensity that works. to reduce the BCRA intervention, which has been increasing since the last week of July. Volumes had increased a lot and a more significant intervention by BCRA appeared to ease the pressure on financial dollars,” said Martín Vauthier, of Anker, who added that the entity’s ammunition is “rare”.

“They try not to arbitrate deadlines, since the government interferes with some deadlines more strongly than others, and the MEP and the CCL are non-arbitrable. In this way, the market has specified terms to earn a currency and this costs it dollars [al Gobierno]. And they haven’t. The two main terms are immediate cash and t+2 (48 hours),” explained the economist from the consulting firm Ledesma, Gabriel Caamaño Gómez. “Before they segmented ‘screen’ and Senebi, and now they segment the terms. it is more shares If you operate on “straight cash”, you cannot operate “T+2”″. In May, the CNV cut another “loop”, in this case with, among others, an MEP and Ledes. This is how the “intervention” versions were born and others were not.

“All tables used ‘instant cash’, ’24 hour’ and ’48 hour’ dearbitrage. You bought the same bond “spot” and sold it “48 hours”, and there was a big difference. Now they narrowed it down to you,” said one operator.

“The resolution provides that agents may process orders to settle purchase transactions of government bonds denominated and payable in foreign currency with settlement in foreign currency, in the field of simultaneous offer with time price priority and with terms of cash settlement immediately or in cash within twenty-four ( 24) hours, only if during the previous fifteen (15) calendar days, the client did not perform sales operations of bonds denominated and payable in US dollars issued by the Republic of Argentina in accordance with local and/or foreign legislation, with foreign settlement currency, in the part of the coincidence of offers with priority of time price and, likewise, that there is a reliable statement that this will not be done in the next fifteen (15) calendar days”, CNV estimates in an official statement published. on a web page. THE NATION CNV authorities were consulted, but they declined to comment.

“So, the provisions of Article 6 BIS of Chapter V of Title XVIII of the Regulations (NT 2013 and mod.) are amended in order to extend the conditions provided therein for the completion of transactions of purchase of negotiable securities with settlement in foreign currency, in which the provisions are met of Article 5 TDC of Chapter V of Title XVIII of the Regulations (NT 2013 and amend.), in the section on the coincidence of offers with time-price priority and with certain settlement conditions”. closed the entity directed by Sebastián Negri.