A New Definition is Added to the FONDCE

Background: Law No. 27,349 established a special regime for the promotion and encouragement of entrepreneurial capital industry and its international expansion to support the local development of production activities. In pursuit of these objectives, the Fiduciary Fund for Entrepreneurial Capital Development (the “FONDCE,” after its Spanish acronym) was created as a financial and administrative trust funded both by public and private contributions for the granting of loans, non-reimbursable contributions, and direct or indirect capital contributions to support entrepreneurs and entrepreneurial capital institutions.

On December 17, 2021, the Secretariat of Entrepreneurial and Small and Medium-Sized Enterprises of the Ministry of Production passed Addendum No. 1 via Resolution No. 140/2021, modifying the FONDCE.

Modifications introduced by Addendum No. 1:

1. Definition of “Managed Assets”: the trustee's “Management Fees” are to be calculated as a percentage over the total Managed Assets, a newly defined concept that includes: (i) cash sums deposited in the special checking accounts owned by the trust, both in Argentine pesos and US dollars; (ii) residual capital of the investments and loans granted, plus generated interest and unpaid accrued returns; (iii) funds invested by the trustee in the eligible public investment instruments; and (iv) other funds transferred to the accounts of entrepreneurs, startups, entrepreneurial capital institutions and other beneficiaries of the trust (assigned through operations other than the loans mentioned in item (ii)), which must be accounted for within the period in which they were granted.

2. Modification of “Management Fees”: The trustee will now receive a sum of Argentine pesos equivalent to 0.5% per year over the total Managed Assets, billed and paid on a monthly basis.