Argentine Securities Commission: Regulatory Big Bang

The Argentine Securities Commission (CNV) issued General Resolutions 1132 to 1135, which propose a package of regulatory amendments aimed at promoting the development of the capital markets, expanding sources of financing for the productive sector, and automating authorization processes for different types of negotiable securities. This set of measures would significantly impact access to the Argentine capital markets, since it seeks to simplify procedures, streamline processes, and reduce bureaucracy for entry into the capital markets, eliminating barriers that currently hinder investment and financing. The regulation proposed is modern and forward-looking, designed to accompany the dynamism and flexibility that the capital markets require.

If the Resolutions are approved, the CNV will no longer review or grant prior approval to the documentation required to obtain public offering authorization for certain procedures, as detailed below. However, it will fully retain its supervisory powers, while at the same time ensuring high standards of disclosure and transparency equivalent to those required under the general regimes.

GR 1132: amendments regarding the issuance of shares and/or negotiable obligations

General Resolution 1132 proposes creating a new Public Offering Regime with Automatic Authorization for Expanded Medium Impact emissions. This regime would apply to issuances of negotiable obligations or shares of up to UVA 100,000,000, thus significantly increasing the current limit applicable to medium impact issuances (UVA 15,000,000). Likewise, it would be possible to exceed such amount—without limit—in cases where the entire issuance is directed exclusively to qualified investors.

A public offering of negotiable securities will qualify under the Expanded Medium Impact Automatic Authorization regime if it complies with all requirements applicable to the Medium Impact Automatic Authorization regime for shares or negotiable obligations, together with the specific conditions established for the new regime. If the proposal is approved, issuers using this regime will be required to comply with the entire disclosure regime applicable to issuers under the General Regime, without the disclosure simplifications established for smaller-scale regimes.

The Resolution also proposes a 180-calendar-day transition mechanism for adapting to International Financial Reporting Standards (IFRS) and allows using reconciliation mechanisms in financial information during such period. This significantly reduces the prior adaptation periods currently required before accessing the market.

It also proposes incorporating the possibility of issuances under the current medium impact regime for Guaranteed CNV SMEs and for issuers of negotiable obligations fully guaranteed by guarantee entities. This allows them to direct their offerings to both qualified and retail investors.

Finally, the proposal intends to reduce the threshold for qualified investor status—with respect to resident individuals and legal entities incorporated in Argentina—from UVA 350,000 to UVA 200,000 (a 43% reduction), expressly incorporating a reference to virtual assets. If approved, this amendment would broaden the universe of investors eligible to participate in issuances directed exclusively to qualified investors.

 

GR 1133: financial trusts

General Resolution 1133 proposes incorporating a new Public Offering Regime with Automatic Authorization for Expanded Medium Impact Trust Securities, subject to requirements similar to those applicable to issuers. It also contemplates the possibility of Real Estate Development Financial Trusts to issue under the Public Offering Regimes with Automatic Authorization for Low Impact, Medium Impact, and Expanded Medium Impact.

GR 1133 proposes improvements to the Financial Trusts Regime with Automatic Authorization for Frequent Issuances, reducing access requirements: the number of required issued series would be reduced from seven to five, of which at least two must have been issued within the last 12 months prior to submitting the required documentation.

Likewise, it proposes increasing the limit amount under the Public Offering Regime with Automatic Authorization for Medium Impact from 7 to 15 million UVAs, in line with the increase contemplated for issuers under GR 1125.

GRs 1134 and 1135: mutual funds

In line with the approach initiated through Resolutions 1055 and 1082, the CNV proposes further simplification and streamlining of procedures relating to both open-ended and closed-ended mutual funds (FCI). GRs 1134 and 1135 propose automatically authorizing the incorporation and amendment procedures for all open-ended FCIs.

Regarding closed-ended FCIs—including Real Estate FCIs—the Resolutions proposes creating an automatic authorization regime for amounts of up to UVA 100,000,000, with the possibility of exceeding such amount—without limit—when the entire issuance is directed exclusively to qualified investors.

As this is a project subject to public consultation, the amendments described here may be modified before being approved. The agency will retain broad powers regarding compliance with the requirements established in each case.