Collective Investment Products Now Eased

The Argentine Securities Commission (CNV) has established new regulations for the public offering authorization regimes of Closed-End Credit Mutual Funds (Credit Funds) and financial trusts, to streamline the issuance process of securities within the framework of these collective investment products.

 

In this regard, and depending on the maximum nominal issuance amount, these financial instruments may be fully or partially exempted from complying with the obligations and requirements set forth in the general public offering regime applicable to each, thus establishing two new public offering regimes with automatic authorization.

 

This article analyzes CNV General Resolution 1042/2024, which submits to the Participatory Rulemaking Procedure a public offering regime with automatic authorization for Credit Funds, and CNV General Resolution 1051/2025, which establishes the automatic authorization regime for public offerings with low and medium impact for financial trusts.

 

Public Offering for Closed-End Mutual Funds

 

On December 30, 2024, the CNV issued General Resolution 1042/2024, which introduces a public offering regime with automatic authorization for closed-end mutual funds, subject to the Participatory Development of Standards procedure.

 

Under this new regime, mutual funds are allowed to issue shares aimed solely at qualified investors, with a maximum nominal amount of 7,000,000 Acquisition Value Units (UVA) or its equivalent in ARS or foreign currency.

 

The key provisions include:

 

1. Issuance and aggregation: Issuances by the managing company, depositary company, and loan originators are included in the calculation of the maximum issuance amount, with aggregation being considered over 12-month before approving the issuance terms and conditions. These issuances can be reissued if parts of the original issuance are repaid.
2. Regulatory compliance: the managing company must submit the prospectus and management regulations to the CNV two business days before the dissemination period starts. Importantly, under this differentiated authorization regime, these public offering documents are not subject to the CNV’s review or approval.
3. Disclosure and reporting: Once the CNV is notified and the mutual fund is registered, the managing company must publish the management regulations, issuance prospectus, and related corporate resolutions through the Information Reporting System (AIF). It must also publish the risk rating report, if applicable, and provide details on the placement results and remaining balances at the end of the offering period.
4. Listing and secondary trading: shares issued under this regime must be listed according to CNV standards for primary placements and must be authorized for listing on approved markets.
5. Ongoing reporting: mutual funds must provide annual and quarterly financial statements, along with reports on capital collections, loan interest payments, and any material deviations from expected financial outcomes.

 

Automatic Authorization for Financial Trusts

 

 

On January 15, 2025, the Argentine Securities Commission (CNV) published General Resolution 1051, previously submitted for public consultation under GR 1031, to streamline the process of issuing trust securities. 

 

The main aspects of the Resolution are:

 

Public Offering with automatic authorization due to its low and medium impact. General provisions for both regimes

A financial trust securities offering will be considered a public offering with automatic authorization due to their low or medium impact and will automatically qualify for public offering authorization if all these conditions are met:

 

1. The offering of trust securities is carried out within the framework of a financial trust, either as an individual issuance or as part of a series of a global program—approved or not—with the participation of an unlimited number of agents registered before the CNV. If the company chooses to create a specific global program for the issuance of trusts under the terms of this regime, this must be published in the Information Reporting System.

 

2. Only qualified investors may participate in the initial offering and secondary negotiation, with no limitation on their number.

3. Financial trusts classified as solidary financial trusts, closed real estate mutual funds, real estate financial trusts, closed infrastructure mutual funds, infrastructure financial trusts, venture capital mutual funds, venture capital financial trusts, and direct investment funds are not eligible. Similarly, trusts with underlying assets consisting of securities or virtual assets (as defined in Law 27739) convertible into shares or representing interests in these trusts are also excluded.
 

1. Compliance with the conditions regarding the calculation period for maximum issuance amounts and aggregation (detailed below).
2. Fulfillment of the requirements related to investor warnings (detailed below).
3. Payment of applicable fees, as per Chapter I, Title XVII of the CNV Rules, within five business days after the closing of the placement period for each issuance.

 

Calculation period for maximum issuance amounts and aggregation

 

All offerings of trust securities by the same settlor (regardless of the trustee) will be considered part of the same offering, regardless of the underlying asset. If multiple settlors participate in the same financial trust, the total nominal amount issued will be attributed to each participating settlor, regardless of their contribution percentage to the trust's assets.

 

The aggregation period will cover the 12 months preceding the start date of the corresponding dissemination period under this regime. Reissuance within the maximum amount will be allowed once the initial issuance has been fully or partially amortized.

 

Automatic authorization

 

Public offerings with automatic authorization due to their low or medium impact that meet the requirements in this regime will:
 

1. receive the CNV' automatic public offering authorization, 
2. be deemed authorized and regular public offerings, exempt from penalties for irregular public offerings of securities,
3. not be subject to additional reporting requirements beyond those established in the regime,
4. be considered public offerings, provided that their placement efforts are duly substantiate.

 

Placement efforts

 

The trustee must have documentation of the placement efforts available for the CNV to review within five business days after the placement period ends.

 

Information

 

When requesting authorization for the public offering of a financial trust under the terms of the general regime, the prospectuses and prospectus supplements must include information related to the history of issuances under the regime of public offering with automatic authorization due to its low or medium impact. These must indicate the name, amount, historical information in relation to assets assigned, and repayment of the trust securities issued, among others.

 

Financial trust agreement. Publishing obligation

 

The trustee must publish the signed financial trust agreement through the CNV’s Information Reporting System (AIF) and the information systems of authorized markets where the trust securities are listed and/or traded before the dissemination period starts. Accordingly, the document must include—in addition to what is established in the Argentine Civil and Commercial Code and in the CNV Rules—a special legend as determined in each of the sections applicable to this automatic offering system.

 

Listing obligation and secondary negotiation of trust securities

 

Trust securities issued under this regime must be listed and negotiated on a CNV-authorized market within 30 calendar days from the day the dissemination period starts.

 

Markets may not impose additional requirements for listing and/or negotiating trust securities authorized under this regime.

 

In this sense, they must adapt the access to their digital platforms to the guidelines of this section so as not to detract from the simplicity of issuance provided for in the public offering regime with automatic authorization. However, markets may establish additional requirements for financial trusts issued under the Guidelines for Thematic Securities Issuance in Argentina, to ensure transparency and alignment with International Capital Markets Association (ICMA) principles.

 

Investors may freely transfer trust securities to other qualified investors, at any time.

 

Investor warnings

 

The trustee, placement and distribution agents, and any other parties involved in the issuance must:

 

1. Include in the prospectus, sales materials, and/or any other distributed documents, if such documents exist:

                     a. an affidavit stating that the offering has automatic public offering authorization,
                     b.   a clarification stating that, although the trustee is registered as a financial trustee before the CNV, the specific trust issuance is not subject to the general or periodic reporting regime.
                     c.   a disclaimer stating that the CNV has neither reviewed nor issued an opinion on the issuance or the accuracy of the financial, economic, accounting, or other information in the offering documents, which remain the sole responsibility of the trustee, settlor, and other accountable parties.
 

2. Alternatively, they may obtain a signed affidavit from each investor, including by electronic means, proving their knowledge of this information.

 

Irregular public offering

 

Failure to meet the requirements outlined in the common provisions of the Resolution, the limits on maximum issuance amounts, or the aggregation or accumulation timelines will render the offering irregular, unless it falls within a safe harbor under the Private Offering Regime outlined in the CNV Rules.

 

If any other requirement is breached, except as provided in the following paragraph, the trustee will be subject to disciplinary sanctions under Law 26831 and the CNV Regulations. If the public offering requirements are breached, the trustee will also be subject to the consequences outlined in article 83 of Law 24441 and the in the CNV Rules.

 

Any other non-compliance will subject the trustee to disciplinary sanctions under the Capital Markets Law and the CNV Rules.

 

Public offering with automatic authorization due to its low impact

 

1. Maximum issuance amount

 

The total nominal amount of trust securities, issued within the 12 months prior to the starting date of the dissemination period, at the time of the calculation, shall not exceed 1,000,000 Acquisition Value Units (UVA), or its equivalent in ARS or foreign currency calculated at the Reference Exchange Rate Communication “A” 3500 of the Central Bank of the Argentine Republic (“BCRA”) or, in the case of a foreign currency other than the U.S. Dollar, at the currency seller exchange rate of the Banco de la Nación Argentina, in both cases as of the date of the beginning of the period of dissemination of the trust securities. 

Notification

 

Under this regime, before the start date of the dissemination period, the trustee must:

 

1. upload the structured data required for this regime,
2. publish the notification form for public offerings with automatic authorization due to its low impact on the AIF
3. in the case of securities issued under the Guidelines for Thematic Securities Issuance in Argentina, include an external review certifying the thematic label of the security.
4. Timely submit information on the corresponding payment events to the markets where the trust securities are listed and/or traded, as well as to the Central Depository Agent for Negotiable Securities.

 

This notification will not be subject to the CNV’s control or oversight.

 

Prospectuses, approvals, reporting regime, and Title XV obligations of CNV rules

 

The trustee issuing under this regime will be exempt from the reporting obligations established in the CNV Rules for such issuances. Only the reporting requirements outlined in this section will apply.

 

The trustee will not be required to prepare, submit, or publish on the CNV website any prospectuses, prospectus supplements, or similar documents (if they exist) for approval. Should any such documents be prepared, they will not be subject to the CNV’s approval or review but must be published at the start of the dissemination period on the information systems of authorized markets where the trust securities are listed and/or traded.

 

Public offering with automatic authorization due to its medium impact

 

Maximum issuance amount

 

The total nominal amount of trust securities issued within the 12 months prior to the starting date of the dissemination period, at the time of calculation for the issuance of a new class or series, must not exceed 7,000,000 UVAs, or its equivalent in ARS or foreign currency calculated at the Reference Exchange Rate in Communication “A” 3500 of the Argentine Central Bank or, in the case of a foreign currency other than the USD, at the currency seller exchange rate of Banco de la Nacion Argentina, in both cases as of the date of the beginning of the trust securities dissemination period.

 

Prospectus

 

The trustee must write a prospectus with the minimum content the CNV requires for this regime. The prospectus will not be subject to the CNV’s approval or review, but it must be published at the start of the dissemination period through the AIF and on the information systems of authorized markets where the trust securities are listed and/or negotiated.

Notification

 

Under this regime, no later than the date the dissemination period starts, the trustee must:

 

1. upload the structured data required for this regime to the AIF, 
2. publish the prospectus on the AIF, 
3. in the case of securities issued under the Guidelines for Thematic Securities Issuance in Argentina, include an external review certifying the thematic label of the security,
4. timely submit information on the corresponding payment events to the markets where the trust securities are listed and/or traded, as well as to the Central Depository Agent for Negotiable Securities.

 

Reporting Regime

Every year, the trustee must present the following financial statements:

 

1. balance sheet
2. statement of changes in equity
3. income statement
4. cash flow statement

 

The trustee must publish, control, and review reports quarterly through the AIF.

 

Other relevant matters

 

The trustee must report relevant matters exclusively under the following circumstances:

 

1. Initiation of negotiations to formalize an out-of-court settlement agreement; request for opening preventive bankruptcy proceedings; rejection, withdrawal, ratification, compliance with, and annulment of the agreement; request for group bankruptcy proceedings; ratification of out-of-court settlement agreements; request for bankruptcy by the entity or third parties; declaration of bankruptcy or its rejection; specifying the reasons or conversion into bankruptcy proceedings; mode of conclusion: payment, settlement, closure, requests for extension of bankruptcy, and resulting liabilities.
2. Events of any nature and unforeseen circumstances that hinder or may seriously hinder the development of any of the trustees.
3. Events of any nature and unforeseen circumstances that may seriously affect the assets comprising the trust’s estate.