Automatic Authorization Regime for Public Offering of Shares

Through General Resolution 1065 of May 8, 2025, the Argentine Securities Commission (CNV) released for public consultation a specific regulation for the public offering of shares with automatic authorization.

Common Provisions for Both Regimes

The CNV highlights that this will significantly reduce the costs involved in the process of equity capital access and simplify the procedure for entering the public offering regime. The provisions common to both regimes establish that an offering of shares will be considered as a public offering with automatic authorization due to its low or medium Impact depending on its amount, and will have automatic authorization of public offering when the following conditions, among others, are met:

1.    The offering is made and effectively placed by an issuer, which may involve an unlimited number of registered agents acting as placement and distribution agents.
2.    Only qualified investors, regardless of their number, may participate in the primary placement and secondary trading. Non-qualified investors may not participate, except for existing shareholders of the issuer prior to the offering.
3.    The share capital and the shares to be issued and listed through a public offering must be common shares with one vote per share.
4.    The decision to enter this regime and issue shares through subscription, as well as the resulting capital increase, must be approved by the issuer’s extraordinary shareholders’ meeting. All shareholders must waive their pre-emptive rights regarding the shares to be publicly offered.
5.    The issuer’s bylaws may not restrict the transferability of the shares to be offered under this regime. No preferred voting shares may be issued after the company is authorized to make a public offering of its shares, except in the case of capitalization of the capital adjustment account. 
6.    The following are excluded from this regime: privatized entities, companies with state ownership or FGS participation, financial or banking institutions, markets authorized by the CNV, and issuers engaged in public services or any other regulated activity.

Calculation period of the maximum amounts. Aggregation

To calculate the maximum nominal amount foreseen, all share issues by subscription made by the same issuer under both regimes during the previous 12 months—counted from the last date of shares issuance under this Regime, including also those cases of share issues by capitalization of debts or irrevocable contributions—will be considered part of the same offer. This provision does not apply to the issuance of shares as stock dividends, capitalization of capital adjustments, or other issuances of bonus shares.

Secondary market

The total share capital or any class of such must be listed on a CNV-authorized market. The initial subscription of shares must be carried out through the authorized market, which may establish a specific panel for shares offered under this regime. Markets may not impose additional listing or trading requirements, nor require further conditions for delisting than those set by the CNV. Shareholders may freely transfer shares to other qualified investors at any time and without restrictions.
 

Warning to investors

Issuers and any placement and distribution agents, or other parties involved in the offering, must include the following in the prospectus:

a.    Whether the issuer is already admitted to the public offering regime.
b.    A statement clarifying the offering is subject to automatic authorization due to low or medium impact, stating that it is not subject to the CNV’s general or periodic information regime, and that the CNV has not reviewed or made any judgment regarding the issuance or the information contained in the offering materials.
c.    All offering materials.
d.    Any distributed documentation.

Likewise, issuers under the regime of automatic authorization of public offering due to its medium impact must notify, under a sworn statement, that its members or its beneficial owners have not been convicted for money laundering and/or financing of terrorism offenses and/or are not included in the lists of terrorists and terrorist organizations issued by the United Nations Security Council, taking into account the creation of the Public Registry of Persons and Entities linked to acts of Terrorism and its Financing (RePET). Alternatively, they may obtain an affidavit signed by each investor evidencing their knowledge of this information.

Irregular public offering

Those offerings that do not meet the requirements of these regimes will be considered irregular, unless they qualifies under a safe harbor for private offerings. Any breach of the regime's other requirements will subject the issuer to disciplinary actions under the Capital Markets Law and the CNV regulations.

Provision Applicable to the Public Offering with Automatic Authorization Due to Its Low Impact

Definition

A share offering will be considered a public offering with automatic authorization due to its low impact and will receive automatic authorization for public offering when (among others):

Maximum amount

The nominal value of the shares to be issued under the initial subscription, plus any applicable share premium, must be less than 1,000,000 Acquisition Value Units (UVA), or the equivalent amount, as of the business day before the subscription date.

If payment is made in foreign currency, the calculation must be based on the reference exchange rate published in Communication “A” 3500 of the Argentine Central Bank. Once the total amount of 5,000,000 UVA is reached—calculated at the time of each issuance—no further issuance may be made under this regime.

Automatic authorization

Offerings that meet the above requirements will receive automatic public offering authorization from the CNV and will be considered duly authorized and regular public offerings. They will not be subject to disciplinary sanctions for irregular public offering of securities. These offerings will not be required to meet any additional requirements to enter the public offering regime (of any type), nor will they be subject to the periodic reporting regime.

Reporting obligations. Corporate control

Issuers under this regime are exempt from general reporting obligations and other rules applicable to publicly listed companies, with the following exceptions:

1.    Although considered part of the public offering regime, no additional procedures are required for admission.
2.    No prospectus or similar document needs to be prepared, filed, or published for CNV approval.
3.    Issuers are not subject to reporting obligations beyond those set forth in this regime.
4.    Issuers with a MIPYME certificate may operate without an audit committee or statutory auditor. Others must appoint both.
5.    Issuers already admitted to other public offering regimes must continue to comply with the obligations of those regimes; the provisions of this article will not apply to them.
6.    Annual financial statements must be filed applying the current Technical Resolutions comprising Argentine Professional Accounting Standards (NCPA) and their interpretations, issued by the Argentine Federation of Professional Councils in Economic Sciences.
7.    The public dissemination period may be reduced to one business day.

Notification

The issuer under this regime must, among others:

1.    Submit the relevant information through the Remote Procedures Platform (TAD).
2.    Comply with the information disclosure requirements the CNV has established.

Provision Applicable to the Public Offering with Automatic Authorization Due to Medium Impact

Maximum amount

The nominal value of shares to be issued plus share premium, if any, must be less than 7,000,000 UVAs or the equivalent as of the business day before the subscription date.  If payment is made in foreign currency, the calculation must use the exchange rate under Communication “A” 3500 of the Argentine Central Bank. Once 21,000,000 UVAs are reached, the issuer may no longer issue under this regime.

Automatic authorization

Offerings meeting the applicable conditions will:

1.    receive automatic public offering authorization,
2.    be deemed authorized and regular, exempt from penalties related to irregular public offerings,
3.    be subject to a simplified reporting regime,
4.    be deemed to have been publicly offered, if the placement was effectively made through verifiable efforts.

Prospectus

The issuer must prepare an issue prospectus that will not be subject to the CNV’s approval or review, but which must be published prior to the beginning of the dissemination period through the AIF and in the information systems of the authorized markets where the shares are listed and/or traded.

Reporting obligations. Corporate control

Issuers under this regime will benefit from a simplified reporting regime, including the following exemptions:

1.    Exemption from CNV’s public offering transparency rules, except for general provisions and the prohibition against unauthorized public offering activity.
2.    Law 22169 and related regulations will apply from the date of share placement until the cancellation of the offering.
3.    The public dissemination period may be reduced to one business day.

Material events

Issuers must report only the following material events:

1.    Initiation of negotiations to formalize an out-of-court reorganization agreement with all or part of its creditors, request for the opening of reorganization proceedings, rejection, withdrawal, approval, compliance and nullity of the agreement; request for reorganization proceedings by grouping, approval of the out-of-court reorganization agreements, bankruptcy petition by the entity or by third parties, bankruptcy declaration or its rejection explaining the causes or conversion into reorganization proceedings, mode of conclusion: payment, settlement, closure, requests for extension of bankruptcy and liabilities derived therefrom, 
2.    Any extraordinary event that could seriously impact the issuer’s operations.