Risk and Compliance Governance Obligations in Argentina: A Regulatory Overview

Introduction

As of 2018, financial entities operating in Argentina are subject to rigorous risk governance obligations, aimed at ensuring the integrity of their operations and compliance with regulatory requirements.

Regulations and Guidelines

Regulation “A” 5,398 of the Argentine Central Bank sets forth guidelines for managing various types of risks, including credit, liquidity, market, interest rate, operational, securitization, concentration, reputational, and strategic risks.
Regulation “A” 6,131/2016 establishes Guidelines for the Settlement of Foreign Exchange Transactions, aimed at regulating the risk management of financial institutions in foreign exchange transactions.
Law No. 25,246, as amended, provides guidelines for entities subject to anti-money laundering and anti-terrorism financing standards.

Standards and Guidelines

The Financial Information Unit has issued several resolutions providing minimum standards for risk and compliance management processes.
- Resolution 30-E/2017: Establishes that risk and compliance management processes must be appropriate to the nature and business capacity of entities subject to these regulations.
- Resolution 21/2018: Provides guidance on implementing risk and compliance management processes.
The Argentine Securities Commission’s General Resolution 606/2012 provides general recommendations for companies listed for public offering.

Obligations

Undertakings domiciled or operating in Argentina are subject to the following risk and compliance governance obligations:

Financial Entities

Implement a governance structure that appoints a specific individual or unit responsible for risk management.
Develop internal standards based on their activities, which can supplement the minimum standards set forth by regulatory authorities.

Listed Corporations

Comply with anti-terrorist financing and money laundering regulations.
Disclose links with their corporate group and related companies.
Support an effective policy for identification, assessment, management, and disclosure of business risks.
Preserve the integrity of financial information through independent audits.
Respect the rights of shareholders.
Maintain direct and responsible links with the community.
Provide fair and accountable remunerations.
Promote corporate ethics.

Undertakings Implementing an Integrity Program

Conduct appropriate risk analysis as the basis for drafting and updating the program.
Include elements such as a code of ethics or conduct, specific rules and procedures to prevent illegal acts, and periodic training sessions for directors, managers, and employees.

Key Risk and Compliance Management Obligations

Financial entities are required to:

Implement risk management manuals, policies, procedures, and strategies tailored to their specific risks and size.
Provide business strategies and internal limits applicable to different types of risks faced by the entity.

Listed corporations must:

Disclose links with their corporate group and related companies.
Support an effective policy for identification, assessment, management, and disclosure of business risks.
Preserve the integrity of financial information through independent audits.
Respect the rights of shareholders.
Maintain direct and responsible links with the community.
Provide fair and accountable remunerations.
Promote corporate ethics.

Undertakings implementing an integrity program must:

Conduct appropriate risk analysis as the basis for drafting and updating the program.
Include elements such as a code of ethics or conduct, specific rules and procedures to prevent illegal acts, and periodic training sessions for directors, managers, and employees.

Conclusion

The regulatory environment in Argentina emphasizes the importance of effective risk management and compliance governance, aimed at ensuring the integrity and stability of financial markets.