Underwriting publicly offered securities via the “book building” method

On February 23, 2007 the Argentine Tax Authority (“AFIP”) and the Argentine Securities and Exchange Commission (“CNV”) issued Joint Resolution AFIP No 2222 and CNV No 500 (the “Resolution”) which amended Section 57 of Chapter VI of the Regulations of the Argentine Securities Exchange Commission (N.T. 2001- according to Joint Resolution AFIP No 1738 and CNV No 470) referred to underwriting debt and trust securities via the “book building” method. The Resolution was published in the Official Gazette on March 1, 2007.

Among the necessary requirements for underwriting securities via the “book building” method, the Resolution extended the obligation of keeping a registry of subscription offers received, to all those authorized agents of self-regulated entities that intervene in any type of primary underwriting process, in their capacity as underwriters or sub-underwriters.

The purpose of the CNV on extending the obligation of carrying out a registry not only to the lead underwriter or to a determined agent, but also to all entities intervening in the underwriting process, is aimed at achieving a stricter control with respect to the registry of the offers received. These regulations will enable the CNV to supervise the information included in the registry of each of the underwriters and sub-underwriters, which shall reflect the same information as that contained in the registry of the lead underwriter or the registration agent, in which all the subscription offers shall be consolidated. 

The Resolution also establishes that the underwriters and sub-underwriters shall implement internal procedure guidelines regarding the underwriting of securities. Although the Resolution does not provide for the term to comply with such obligation, the CNV is enabled to demand compliance therewith, considering that the Resolution has been in force since March 9, 2007.

Finally, the Resolution provides that self-regulated entities shall authorize a special book for the registration of the subscription offers received, which shall be kept by the underwriters and/or sub-underwriters. To date, neither the CNV, nor the AFIP or the Buenos Aires Stock Exchange have ruled or clarified the extension of this Resolution, specially with respect to the formal requirements that the special book must comply with, the necessary requirements for the approval of the special book and the standards which electronic systems implemented to register subscription offers shall comply with.