The CNV Proposed Amendments to Rules on Public Offering and Negotiation of Deferred Payment Checks and Promissory Notes

On November 12, 2018, the Argentine Securities and Exchange Commission  the “CNV”after its acronym in Spanish),  issued General Resolution No. 769 (the “Resolution”) to modify the regime about the public offering and negotiation of deferred payment checks (“DPC”) and promissory notes (“PN”), to be carried out by a public consultation procedure (“procedimiento de elaboración participativa de normas”). For this decision, the CNV has taken into account the need of making changes to the current regime to encourage the use of these instruments in the capital markets.

Among some other provisions, the Resolution establishes:

(i) regarding the negotiation of DPC: (a) they must be deposited with an endorsement in favor of the Depositary Agent (“Agente de Depósito Colectivo”) or the financial entity authorized to operate in Argentina under the Act No. 21,526 and (b) that the Markets may file with the CNV for its approval, rules for some negotiation segments or other modalities of negotiation, different to the ones included in the CNV rules.

(ii) regarding the negotiation of PN: (a) eliminating from the list of requirements for its trading, the obligation to have the PN guaranteed by a mutual guarantee company (“sociedad de garantía recíproca”) and by public guarantee funds duly registered with the Argentine Central Bank; (b) that the regulations that the Markets may set on PN trading must comply with different requirements for guaranteed or unguaranteed instruments, and that CNV´s general rules on the different segments of DPC trading must be taken into account for the creation of new regulations and for the creation of new segments of trading on PN; and (c) that PN must be deposited for trading in favor of the Depositary Agent (“Agente de Depósito Colectivo”) or the financial entity authorized to operate in Argentina under the Act No. 21,526.

A 15-day term has been set for the market participants and the public in general to submit opinions and proposals on the Resolution’s text; i.e., until December 11, 2018. Such opinions and proposals must be submitted through the CNV’s website.