New Public Offering Regime With Automatic Authorization

By means of General Resolution 1047 of January 8, 2025, the Argentine Securities Commission (CNV) regulated a public offering regime with automatic authorization. This regime would initially be limited to notes issued under Law 23576.

The CNV pointed out that, aiming at stimulating the placement of securities, the regulation incorporates two special regimes applicable to the offering of securities within the framework of global programs and/or through the issuance of individual series or classes. These offerings, due to their low or medium impact, may be totally or partially exempted from obligations and requirements under the public offering regime and be considered public offerings that have the CNV’s automatic authorization.
 

The main aspects of the Resolution are:
 

1. Public offering with automatic authorization due to its low impact

Definition

An offer of securities will be considered a public offering with automatic authorization due to its low impact and will have automatic authorization of public offering when it meets these conditions (among others):
 

1. The offer is made by one or more issuers, although an unlimited number of registered agents acting as placement and distribution agents may participate. Issuers may also be SME CNV or SME CNV Guaranteed.
2. Only qualified investors, regardless of their number, may participate in the primary placement and in the secondary market.
3. Securities must be notes, including short term securities, that cannot be converted to shares.
4. The issuer may choose to make individual issuances, as individual series or classes, or issue the securities within the framework of global programs (authorized or not), including under the frequent issuer regime.

Maximum amount

The total nominal amount of the marketable securities issued at the time of making the calculation for the issuance of a new class, series or program must not exceed 1,000,000 Acquisition Value Units (UVA), or its equivalent, at the close of business day on the day prior to the issuance of the securities in ARS or in foreign currency.

Calculation period of the maximum amounts. Aggregation

To calculate the established maximum nominal amount, all the placements of negotiable securities made by the same issuer under this regime will be considered part of the same offer. The accumulation or aggregation will be for the previous 12 months, counted from the last date of issuance of marketable securities under this regime. These may be reissued within this maximum amount once they have been totally or partially amortized.

Corporate control

 

The issuer under this regime will be exempted from the obligations applicable to issuers or from the periodic information regime and will not be required to:
 

1. Carry out procedures to register in the public offering regime.
2. Prepare, file, or publish—if any—prospectuses, prospectus supplements, or similar documents for the CNV to approve. If any document is prepared, it must be published at the beginning of the dissemination period in the information systems of the authorized markets where the securities are listed and/or traded.
3. Comply with the obligations to submit information through the CNV reporting system.

 

Further,

1. The CNV’s administrative control will apply to legal entities making public offerings of their securities, except to CNV Guaranteed SMEs, if applicable, from the date of placement and until the cancellation of the public offering, even if the securities have been cancelled,
2.  those issuers that have a valid SME Certificate at the time of issuance may dispense of a statutory audit committee,
3. issuers admitted under another public offering regime will continue complying with the obligations applicable to such regime, and the provisions of the present regime will not apply to them,
4. the dissemination period under this regime may be reduced to one business day.

 

Notification

The issuer under this regime must, among others:
 

1. notify through the Remote Procedure Platform (TAD) the details and relevant information about the issuance,
2. publish on the CNV's website the notice in article 10 of Law 23576,
3. comply with the information requirements.

 

Secondary market

Securities issued under this regime must be placed and listed in a CNV-authorized market in a specific panel determined by such market.

Markets may not establish more requirements for listing and/or trading the marketable securities authorized under this regime, nor demand other requirements to withdraw from the public offering regime than those the CNV requires. They must adapt the admission to the guidelines of this regime so as not make the issuance more complicated. However, in the case of securities issued under the “Guidelines for the Issuance of Thematic Marketable Securities in Argentina,” markets may establish additional requirements to guarantee transparency and their alignment with the ICMA (International Capital Markets Association) Principles, provided that such requirements are exclusively aimed at complying with such principles and/or for the purpose of verifying the SVS+ (social, green, and sustainable) nature of the issuance, without imposing excessive burdens on the issuers.

Investors may freely transfer the marketable securities to other qualified investors at any time, without restrictions.

 

Warning to investors

The issuer and those acting as placement and distribution agents, or any other intervening in the issuance, must:
 

1. Inform in the prospectus, in any sales documentation, and/or in any other document distributed:
   1. whether the issuer is previously admitted to the public offering regime,
   2. that the offering has automatic public offering authorization due to its low impact, clarifying that the issuance is not subject to the CNV's general and periodic information regime, and that the CNV has not verified nor issued judgment on the issuance or regarding the data in the documents to be distributed.
       
2. Alternatively,  obtain an affidavit signed by each investor evidencing their knowledge of this information.

 

SME CNV Guaranteed Regime

Any issuer registered under the SME CNV Guaranteed regime will be eligible for the Public Offering regime with Automatic Authorization Due to Its Low Impact if it complies with the conditions above and if the issuance is guaranteed in full, with these modifications:
 

1. The maximum aggregate nominal amount of the securities issued under this regime by qualified investors may not exceed 10,000,000 UVAs or its equivalent in ARS or foreign currency.
2. The issuance may be under this regime or under the CNV Guaranteed SME Regime, which are compatible and non-exclusive, and allowing the maximum amounts allowed under these regimes to be cumulative.

 

Automatic Authorization
 

Public offerings with automatic authorization due to their low impact that comply with the requirements of this regime:
 

1. will have with the CNV’s automatic authorization of public offering,
2. will be considered authorized and regular public offerings, exempted from disciplinary sanctions related to irregular public offerings of marketable securities,
3. will not be subject to additional requirements for their entry into the public offering regime, nor to the compliance with the information regime in the CNV's rules,
4. its securities will be considered placed by public offering if they are effectively placed by means of duly accredited placement efforts.

 

2. Auction of Securities

Auctions of securities—judicial or extrajudicial, arising from the enforcement of security interests or guarantee trusts—will be automatically authorized for public offering if these conditions are met:

1. The auction includes securities that are not shares or securities representing the capital stock of companies admitted to the public offering regime.
2. At least one Broker-Dealer (ALyC) or Market Agent (AN) is involved in the auction process. Before carrying out the auction, this ALyC or AN must inform the bidders:
   1. whether the issuer is admitted to the public offering regime,
   2. that the offering has automatic authorization, clarifying that the issuance is not subject to the CNV's general and periodic information regime, and that the CNV has not verified nor issued a judgment on the issuance or with respect to the data contained in the documents to be distributed,
   3. that an affidavit signed by each investor evidencing their knowledge of this information may be obtained.
3. It must comply with the rules of the market where the auction process is carried out.

However, the regulations of such markets must be adapted to the guidelines so as not to make the regime more complicated, without imposing excessive burdens on the auctions.

 

Tariff

Auctions conducted under this regime are exempted from the fees in the CNV Regulations.

 

Public Offering Regime

Auctions of negotiable securities that comply with the provisions of this regime:
 

1. will have automatic authorization of public offering,
2. will be considered authorized and regular public offerings,
3. will not be subject to compliance with the informative regime,
4. will not require or imply the entry into the public offering regime by the issuer of these marketable securities or by any participant in the auction.

 

3. Public Offering with Automatic Authorization for its Medium Impact

Definition

An offer of securities will be considered a public offering with automatic authorization due to its medium impact when these conditions (among others) are met:
 

1. The issuer must enter the public offering regime or already be in it.
2. The offering is made by one or more issuers, and an unlimited number of registered agents acting as placement and distribution agents may participate.
3. Only qualified investors, without limitation in number, may participate in the primary placement and secondary trading.
4. Negotiable securities must be negotiable obligations, including short-term securities. They must not be convertible into shares.
5. The issuer may choose to issue as individual series or classes, or to issue under global programs (whether already authorized or not), including under the frequent issuer regime.

 

Maximum amount

The total nominal amount of the marketable securities issued at the time of the calculation for the issuance of a new class or series must not exceed 7,000,000 UVAs or its equivalent at the close of business on the day prior to the date of issuance of the securities in ARS or in foreign currency.

 

Calculation period of the maximum amounts. Aggregation

To calculate the established maximum nominal amount, all the placements of negotiable securities made by the same issuer under the current regime will be considered part of the same offer. The accumulation or aggregation will be for the previous 12 months counted from the last date of issuance of marketable securities under the current regime. They may be reissued within this maximum amount once they have been totally or partially amortized.

 

Automatic authorization

The publication of the prospectus in the AIF will imply the entry and admission of the issuer to the public offering regime with automatic authorization for its medium impact or, alternatively, in any other regime the CNV admits.

Issuers admitted to the present regime:
 

1. If they qualify as a CNV SME or are under the Simplified and Guaranteed Regime for Issuances of Negotiable Obligations with Social Impact, they must have at least one regular and one alternate trustee. Such requirement will be optional if issuers adopt the legal form of a limited liability company.
2. Must submit only annual financial statements, applying the technical resolutions in force that make up the Argentine Professional Accounting Standards (NCPA) and their interpretations (issued by the Argentine Federation of Professional Councils of Economic Sciences, Federación Argentina de Consejos Profesionales de Ciencias Económicas).
3. Must attach the external review report evidencing the thematic label of the marketable security, in the case of securities issued under the Guidelines for the Issuance of Thematic Marketable Securities in Argentina.

 

Admission to the public offering regime

Issuers complying with the conditions in the regime will benefit from a simplified informative regime, for which they will be exempted from complying (among others) with:
 

1. the provisions of the chapters on assemblies and statutory amendments and on administrative and supervisory bodies,
2. the provisions of the periodic information system,
3. if applicable, the administrative control of the CNV will apply to legal entities that make public offerings of their securities from the date of placement of the series or class issued and until the public offering is cancelled,
4. issuers admitted to the general public offering regime must continue to comply with the obligations applicable to it, and the provisions of this regimen will not apply to them.

 

Relevant facts

Issuers will be limited in the scope of the relevant events they must report and will only be required to report these relevant events:
 

1. initiation of negotiations to formalize an out-of-court reorganization agreement; request for the opening of reorganization proceedings, rejection, withdrawal, approval, compliance and nullity of the agreement; request for reorganization proceedings by grouping, approval of out-of-court reorganization agreements: bankruptcy petition by the entity or by third parties; declaration of bankruptcy or its rejection explaining the causes or conversion into reorganization proceedings; mode of conclusion: payment, settlement, closure, requests for extension of bankruptcy and derived liabilities;
2. facts of any nature and fortuitous events that hinder or may seriously hinder its activities, or the payment capacity of the issuer.

 

Prospectus

Issuers under this regime must draft an issuance prospectus that will not be subject to the CNV’s approval or review, but that must be published at the beginning of the dissemination period through the AIF and in the information systems of the authorized markets where the marketable securities are listed and/or traded.

 

Notification

Issuers under this regime must (among others):
 

1. 1. publish the prospectus through the AIF and, if applicable, in the information systems of the authorized markets where the marketable securities are listed and/or traded, on the day the dissemination term begins,
   2. publish in the AIF the notice provided for in article 10 of Law 23576.

 

Listing obligation. Secondary trading of securities

Securities issued under this regime must be placed and listed in a CNV-authorized market, in a specific panel determined by such market.

Markets may not establish greater requirements than those the CNV requires to list the marketable securities authorized under this regime, nor demand greater requirements to withdraw them from the public offering regime. They must adapt the admission to the guidelines of this regime to not make the issuance more complicated. However, in the case of securities issued under the Guidelines for the Issuance of Thematic Marketable Securities in Argentina, the markets may establish additional requirements to guarantee transparency and their alignment with the ICMA (International Capital Markets Association) Principles, provided that such requirements are exclusively aimed at complying with such principles and/or for the purpose of verifying the SVS+ (social, green and sustainable) nature of the issue, without imposing excessive burdens on the issuers.

Investors may freely transfer the marketable securities to other qualified investors at any time, without restrictions.

 

Warning to investors

Issuers, those acting as placement and distribution agents, or any other intervening in the issuance must:
 

1. Inform in the prospectus, in any sales documentation, and/or any other document distributed:
   1. that the issuer is admitted to the public offering regime,
   2. that the offering has automatic public offering authorization due to its medium impact, clarifying that the issuance is subject to the CNV’s general and periodic information regime and that the CNV has not verified or issued any judgment on the issuance or regarding the data in the documents to be distributed,
   3. that the issuance is subject to the general and periodic reporting regime.
2. Obtain an affidavit signed by each investor evidencing their knowledge of this information.

 

SME CNV Regime

SMEs CNV may:
 

1. withdraw from the CNV SME Regime (provided that they do not have outstanding securities issued under the CNV SME Regime) and adhere to the Public Offering Regime with Automatic Authorization for its Medium Impact, complying with all the requirements of this section, or
2. Remain under the CNV SME Regime, since both regimes are compatible and non-exclusive. In any case, they will be exempted from paying the fee for this automatic authorization regime.

No CNV Guaranteed SME CNV Negotiable Obligations may be issued under this regime.

 

SME CNV. Automatic Authorization

Public offerings with automatic authorization due to their medium impact that comply with the requirements of this regime:
 

1. will have the CNV’s automatic authorization of public offering,
2. will be considered authorized for regular public offerings, and exempted from disciplinary sanctions related to irregular public offerings of marketable securities,
3. must enter the differentiated public offering regime and comply with the applicable differentiated information regime.

Further, negotiable securities will be considered placed by public offering if they are actually placed through duly accredited efforts.

 

Irregular public offering

If the public offering does not comply with the requirements corresponding to each of the regimes mentioned in this article, it will be considered irregular, unless issuers prove that it is covered by a safe harbor under the Private Offering Regime.

If any other requirement is not complied with, the offeror will be subject to disciplinary sanctions according to the Capital Markets Law and the CNV Regulations.

If issuers do not comply with the information required, or if they fail to place a public offering, they will be subject to the consequences included in the Negotiable Obligations Law and the CNV Rules.