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Head of Argentina's CNV casts doubt on creation of 2nd national depository

Carlos Hourbeigt, the director of Argentina's national securities commission CNV, is skeptical of the initiative of a group of banks to create a second national depository that will compete with Caja de Valores, El Cronista reported.

According to Hourbeigt, infrastructure consolidation has been the norm in the financial world for years. He noted that "95% of the markets have a single depository for operational and economic reasons, and in most cases the owner is a single market, so we believe that there is no technical sense to make a new one and all these discussions are based on a lack of trust between the actors."

A second depository will only lead to rising costs, the director argued. "The technological and capital costs are very high, and are almost fixed costs, so we are looking to increase the volume so that the percentage that is paid for each operation is lowered. If there are two infrastructures, with a double cost, the same volume should pay two fixed costs, so the costs per operation should be higher."

Hourbeigt said that they have introduced a regulation that will implement an "egalitarian" access protocol, to ensure that Caja de Valores is up to technical challenges and offers services with equal access and low cost. Meanwhile, CNV requires that commissions on operations do not go above the regional curve, which lowers charges on operations as the volume increases.

In addition, the regulator has demanded that Caja de Valores obtain a banking license, a process the depository has already initiated. "What remains for the coming months is the new requirement of capital, in line with European regulations, in order to have robust infrastructure and encourage integration with the world," Hourbeigt said.

As for the banks creating the second national depository, the initiative aims to create a more efficient capital market and promote competition. "If the local market grows, in order to attract foreign investment funds, it is key to offer a service with the best technology," the group of banks hailing from stock exchange MAE said in the report.