New Regime for Entities Subject to Privatization

By means of General Resolution 1024, issued on October 15, 2024, the Argentine Securities Commission (CNV) introduced a temporary special accounting information regime for “entities subject to privatization.” This regime aims to ease their access to the public offering system by considering both the specific circumstances of privatized entities and the regulatory framework governing the public offering of shares.

 

This Resolution—inspired in General Resolution 209 of 1992, which addressed the entry of privatized entities to the public offering regime—aims to establish a special accounting information regime that facilitates entry to the public offering regime for companies that, having met eligibility requirements, wish to enter the market, Additionally, it allows for the transition of privatized companies to the public offering regime by shares.

 

The Resolution grants a two-year period for these entities to fully adapt before presenting their financial statements under International Financial Reporting Standards (IFRS). During this transition period, they are required to provide an informative review, with simplified data for interim periods.

 

A special informative regime is implemented for cases in which privatized companies lack full- audited financial statements. This includes the submission of a simplified financial review that enables an assessment of the company’s economic capacity and associated risks, along with an explanation of any limitations preventing immediate compliance with current regulations and the methodology used for preparing the information.

 

Additionally, the CNV requires these companies to submit a regularization plan to overcome existing limitations within a maximum of two years from their entry into the public offer regime

 

With this measure, the CNV aims to provide flexibility for companies undergoing privatization processes, thereby promoting a gradual adaptation that enables compliance with market standards and ensures transparency for future investors.

 

The following entities are eligible for this special regime:

 

1. Entities subject to privatization pursuant to the Bases Law (Law 27742).

 

2. Entities subject to privatization pursuant to the State Reform Law (Law 23696).

 

3. All those entities that in the future may be declared as “subject to privatization.”

 

4. Trust Funds integrated totally or in majority with assets and/or funds of the National State.

 

Entities undergoing privatization processes that apply for admission under this regime will be subject to the rules established by the CNV according to the regime they have applied for, which become enforceable upon submitting their applications.