New Simplified Regime for Mortgage-Backed Financial Trusts

In accordance with the mandate and provisions of Necessity and Urgency Decree 1017/2024, which promotes real estate credit, on February 12, 2025, the Argentine Securities Commission (CNV) issued General Resolution 1053, which established a special regime for the public offering of mortgage-backed financial trusts. This regime applies to financial trusts whose underlying assets consist of mortgages, mortgage bonds, mortgage loans, or similar instruments. The new regulation aims at promoting and consolidating a solid and sustainable mortgage credit market in the long term.

Among its key provisions is the possibility of reducing the dissemination period to only one day when the offer is addressed to qualified investors, as opposed to the three days required under the general regime.

In addition, the Resolution allows reopening the placement for a term of up to two years from the initial placement, which is not possible under the general regime, where the auction results are definitive. Thus, if a portion of the authorized amount remains unsubscribed, the placement may be reopened.

For reopening the placement period, the following requirements must be met:

1.    The possibility of reopening must be provided for in the prospectus or prospectus supplement and approved in the public offering authorization.
2.    Each reopening must comply with the deadlines established by the regulation in force for the dissemination and auction periods.
3.    The CNV must be informed of each reopening at least two business days in advance.
4.    A subscription notice must be published at each reopening, specifying the amount allocated and the remaining balance.
5.    Upon publication of the subscription notices, the financial information on the Reporting System will be updated to include:
 
a)    the latest available financial information,
b)    any modification to the information in the prospectus or authorized supplement.

Another key aspect of the Resolution is the possibility of issuing additional trust securities through an automatic public offering, a feature not permitted under the general regime. Beyond the authorized amount, new trust securities may be issued under the trust without additional formalities, and—if the requirements imposed by the Resolution are complied with—there is no requirement to obtain the consent of beneficiaries of the outstanding trust securities for the issuance of new ones.

In such cases, an updated copy of the prospectus or supplement must be provided, indicating that it is an issuance of additional trust securities within an already constituted financial trust. It must also include an addendum to the trust agreement detailing the terms and conditions of the new issuance. The prospectus or supplement will not require the CNV’s approval or review. It must include, at least, the information related to the new assignment of trust assets and issuance of the trust securities, as well as any relevant update. The information provided will not alter the rights of existing beneficiaries.

Regarding the reporting regime, the financial trusts constituted under the present regime shall comply with the general reporting regime for financial trusts.