CNV Promotes Infrastructure and Real Economy Projects

On August 6, 2021, the Argentine Securities and Exchange Commission (“CNV,” after its acronym in Spanish) issued General Resolution No. 897 (the “Resolution”), approving a new regime applicable to Mutual Funds for the financing of infrastructure and the real economy (the “Funds”).

The Resolution was preceded by Resolution No. 891, by means of which the preliminary General Resolution was submitted to public consultation.

The Resolution aims to review the “Special Regime for the constitution of Mutual Investment Funds for Productive Projects of Regional Economies and Infrastructure,” established by CNV General Resolution No. 568 of 2010, as it was incorporated into the 2013 Amended Text without modifications.

With the purpose of promoting innovative regulatory improvements to increase financing channeled to infrastructure projects or projects with an impact on the real economy, the scope of these instruments has been broadened. Thus, the CNV issued the amendment to the current regime which from now on will be called “Special Regime for the Creation of Open-End Mutual Funds for the Financing of Infrastructure and the Real Economy.”

The Resolution mainly sets forth the following for the special regime for the constitution of the Funds:

• eligible assets for the constitution of these Funds must be invested in (i) securities earmarked, at least in 75%, for the development and/or direct or indirect investment of productive projects with an impact on the local economy (“Special Purpose Assets”), and (ii) securities partially earmarked for the above activities, i.e. representing less than 75% (“Multipurpose Assets”);
• the total investment in Multipurpose Assets may not exceed 45% of the Fund's assets;
• the investment of up to 10% is allowed of the Fund's assets in Closed Mutual Fund quotas aimed at investment goals that are compatible with this regime and which are managed by another Mutual Fund Manager;
• the eligible Fund’s assets must be incorporated within a period of three hundred and sixtyfive calendar days; and
• a forewarning period, which may not exceed 25 business days, applies to request the redemption of quotas, as well as a longer period for paying the redemption, which may not exceed ten business days.

Finally, the Resolution updates regulatory references and establishes adequacy guidelines for the existing Funds for when its provisions enter into force.