What’s at the Essence of the Special Dual Listing Regime for Foreign Companies?

To help foreign issuers access the Argentine capital market while providing investors with new portfolio diversification alternatives,  the Argentine Securities and Exchange Commission (CNV) submitted to public consultation a special regime for foreign companies listed abroad. The regime is to be called the “Special Regime of Dual Listing for Foreign Companies” and the public consultation process was opened on September 30, 2021 via General Resolution No. 906.

The bill, which seeks to partially amend Section II, Chapter VIII, Title II of the CNV Rules, aims to create a special regime for foreign entities requesting admission to the public offering regime for offering their shares in the country, provided that such shares are already authorized abroad.

The main requirements for accessing the dual listing regime include: (i) certifying the registration of the issuer under the terms of Article 118 of Law No. 19,550, as amended; (ii) incorporating an electronic address in the country; (iii) demonstrating that the shares are listed or traded in at least one foreign market; and (iv) maintaining the requirements for making public offerings under the law applicable to the foreign market or markets where the shares are listed or traded. In order to remain under the special regime, in addition to maintaining the conditions for admission and compliance with the new regime’s regulations, the issuer must not be incorporated in jurisdictions considered by the Financial Action Task Force (GAFIFATF) as demonstrating strategic deficiencies in the prevention of money laundering and financing of terrorism, labelled as high-risk or non-cooperative jurisdictions.

One of the bill’s novelties at this stage is the need for the foreign issuer to obtain a pre-qualification opinion from a local market duly authorized by the CNV where the issuer intends to list or trade the shares and as a precondition for CNV authorization. Likewise, authorized markets are subject to a series of obligations on the dissemination of trading prices and volumes of such securities in other markets, warnings for investors, among others.      

The bill was submitted to public consideration pursuant to the “Participatory Elaboration of Regulations” procedure approved by Decree No. 1172/2003, for which the regulation sets a period of thirty (30) days for receiving opinions and proposals through the following website: www.argentina.gob.ar/cnv.

This article is a brief comment on legal news in Argentina; it does not purport to be an exhaustive analysis or to provide legal advice.