On May 21, the Superintendence of Banking, Insurance and Pension Funds (SBS in Spanish) put out to public consultation a draft reform of the Market Risk Management Regulations. SBS aims to reduce exposure to foreign exchange risk by lowering the limit on overbuying in foreign currency, given that market risk indicators are highly volatile due to the COVID-19 crisis. Comments may be submitted until May 28, 2020.

Multi-trading companies, according to the proposal, are to be subject to the following limits to the overall foreign currency position, which must be complied with on a daily basis:

• Limit to overall oversold position: The overall oversold position may not exceed 10% of any business’s effective equity.
• Limit to overall overbought position: In this case, the overall position may not exceed 10% of any company’s effective equity or the average of the percentage of cash equity recorded by the company from November 2019 to April 2020.

The last effective equity reported by the company and the accounting exchange rate at the end of the month published by the Superintendence with respect to such effective equity is to be taken as a reference for the calculation of these limits.