Consultation Procedure for Private Placement of Securities

On March 31, 2023, the Argentine Securities Commission (“CNV”, after its acronym in Spanish) issued General Resolution No. 955, submitting to public consultation a new regulation applicable to the private offering of securities. The aim of the resolution is to regulate the specific cases in which an offering of securities is a private placement, considering the means and mechanisms of publication, offering, and distribution, and the number and type of investors to whom the offering is aimed.

The resolution establishes that the offering of securities will be considered a “Private Placement” and will not need the authorization of the CNV if:

• The invitation targets specific sectors or groups of a maximum of 15 qualified investors, as defined in the CNV regulations.
• The offering is carried out by contacting the potential investor directly, exclusively through email and/or any other electronic or printed means of direct and personal communication.
• The maximum amount of marketable securities offered does not exceed Units of Acquisitive Value (UVA) 7,000,000 or its equivalent in other currencies.

Likewise, the resolution states that a warning must be included in a prominent place to inform potential investors that this is a private placement, not authorized by the CNV, and not subject to the general and periodic information and control regime established in the CNV regulations. Further, these securities may not be publicly traded in authorized markets, and only qualified investors can acquire them.

Additionally, the resolution states that within 5 days of the placement, offerors must inform and file evidence before the CNV showing they complied with the requirements above, and the identity, number, and quality of the investors; the amount placed, and the parties involved in the placement, custody, registration, and payment of the marketable securities.

The resolution does not seem to be a "safe harbor" type rule (the kind of regulation that establishes certain behaviors that assure the regulation is complied with), as it states that not complying with the conditions may cause the offering to be considered an irregular public offering of securities.

The proposed regulation is very restrictive, so it is expected that multiple market participants (including our Firm) will submit comments during the consultation to give greater clarity on certain aspects of the resolution.