Mutual funds for productive projects

On March 16, 2010, the Argentine Securities Commission (Comisión Nacional de Valores, or “CNV”) passed General Resolution No. 568/2010 (the “Resolution”) which provides a special regime for the creation of mutual funds (Fondos Comunes de Inversión or “FCI”) investing in regional economies and infrastructure projects.

The Resolution provides a special regime for the creation of open-ended FCIs (FCI Abiertos) and close-ended FCIs (FCI Cerrados), with the main objective of investing in regional economies and infrastructure projects.

The Resolution provides investment guidelines depending on the type of assets that make up the fund and any additional information to be provided during the lifetime of the fund.

The open-ended FCI shall contain in its denomination the following wording: “open-ended FCI for productive projects for regional economies and infrastructure”.

The open-ended FCI shall comply with certain investment guidelines regarding the type of assets that constitute the fund and additional information to be given during its lifetime.  Due to the lack of negotiation and/or liquidity of its assets, the prospectus must establish a period of up to 365 days to definitively incorporate the fund’s assets and a period of up to 25 days for the redemption of mutual fund shares.

The close-ended FCI structure under this Resolution shall have a precise investment plan which is adjusted to the objective of the FCI.  The prospectus must include information about the nature and the characteristics of the project to be financed.  The FCI must contain in its denomination the following wording “close-ended FCI for productive projects for regional economies and infrastructure”.

A failure to comply with the investment regulations set forth in the Resolution would make liquidation enforceable for the FCI.