Argentine Securities Commission: delegation of powers

The Argentine Securities Commission (“CNV”) is a self-sufficient entity (entidad autárquica) with jurisdiction throughout the Argentine territory whose duties are performed by a Board consisting of 5 members appointed by the Executive Power.

Decree No 2041/2006 approved a new organizational structure for the CNV in which a General Division, with the main objective of managing the CNV’s activities according to the Board’s guidelines and instructions, was created.

The CNV, in the whereas clauses of General Resolution No 558 (the “Resolution”), set forth that most of the executive activities are concentrated on the Board, and that a delegation, as a mere transfer of competence, would de-centralize management, thereby making it more efficient.

Therefore, the CNV decided to delegate the following powers:

1.    Powers delegated to the General Division

a) Authorization of one time extensions for submitting Financial Statements.

b) Approving the applicable Procedure Manuals for the entity’s areas.

c) Authorization to issue Single Code Certificates by the Certifying Authority.

d) Authorization of early redemption in kind, pursuant to Section 18 of Decree No 174/1993.

e) Administrative consent regarding by-law modifications due to a change in corporate name.

f) Administrative consent regarding by-law modifications due to a change in the company’s existence period.

g) Administrative consent regarding by-law modifications due to a change in the fiscal year’s closing date.

h) Administrative consent regarding by-law modifications due to a change in company’s domicile.

2.    Powers delegated to the Issue Division

a) Authorization of public offer transfer because of a change in corporate name.

b) Authorization of public offer transfer from one class to another, when the procedure is set forth in the by-laws.

c) Imposing one time warnings to agents under supervision in connection with formal infractions.

3.    Powers delegated to the Collective Investment Product Division

a) Granting of one time extensions for the launching of mutual funds.

b) Approval of the amount of quotas finally underwritten in closed mutual funds.

c) Approval of modifications of Regulations of Mutual Funds Operations due to a change in corporate name.

d) Approval of modifications of Regulations of Mutual Funds Operations due to a change of name in the managing company and/or the depositary.

e) Authorization for the operation of mutual funds quotas’ underwriting agents.

f) Requesting net worth adequacy from managing companies, mutual funds depositary companies, financial trustees, and public ordinary trustees.

g) Imposing one time warnings to agent under supervision, in connection with formal infractions.

Also, in Section 10 of the Resolution, the CNV replaced the sixth section in chapter XXX of the rules, titled “GENERAL DISPOSITIONS”, for a new one under the title “DELEGATION”. It set forth that the Issue Division and the Collective Investment Products Division may declare the expiration of the proceedings, approve relinquishing private proceedings, decide the filing of the docket and cancel the public offer amount when the underwritten amount is inferior to the authorized amount.

Pursuant to Section 13, the Issuing Companies Sub-Division may approve the prospectuses to be published by the participating companies that wish to merge according to Laws No 19,550 and No 22,169.

Section 14 sets forth the procedure for the appointment of persons in charge of conducting summaries.

Lastly, the Resolution provides that authorized officials exercising delegated powers must inform the Board on a monthly basis.