CNV Approves a New Special Dual Listing Regime for Foreign Companies

Aiming to promote access of foreign issuers to the Argentine capital market while providing investors with new portfolio diversification alternatives, the Argentine Securities Commission (CNV, after its acronym in Spanish) issued General Resolution No. 930 (the “GR”) establishing a special regime for foreign companies listed abroad, which is called “Special Regime of Dual Listing for Foreign Companies” (the “Special Regime”).

The GR approved with some modifications the draft regulation proposed under the “Participative Rule-Making” procedure, issued on September 30, 2021 by General Resolution No. 906 (the “Draft”) (see our article here).

Through the issuance of the GR, CNV creates a special regime for foreign entities are listed in one or more foreign markets (which must be duly authorized by the acting regulatory body) and requesting admission to the public offering regime for their current capital stock in Argentina or for new shares to be issued

The main requirements for accessing the Special Regime include:

1. certifying the registration of the issuer under the terms of Article 118 of Law No. 19,550, as amended;
2. establishing an electronic address in Argentina;
3. demonstrating that the shares are listed or traded in at least one foreign market; and
4. maintaining the requirements for making public offerings under the law applicable to the foreign market or markets where the shares are listed or traded, during the entire time of registration under the Special Regime.

In order to remain under the Special Regime, CNV requires:

1. maintaining the conditions for admission to the public offering regime of the market or markets where the shares are listed abroad;
2. complying with the Special Regime’s regulations;
3. that the issuer is not incorporated in jurisdictions considered by the Financial Action Task Force (FATF) to be deficient in the prevention of money laundering and financing of terrorism, labelled as high-risk or non-cooperative jurisdictions;
4. that the issuer is not subject to any restriction or legal prohibition in the country of registration that would prevent it from carrying out the activities provided in its by-laws or organizational documents.

In addition, within the framework of the provisions of article 80 of Law No. 26,831 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 as a requirement to be authorized under the Special Regime. 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.     

Lastly, the following changes can be highlighted from the Draft:

• A requirement to describe the procedure for withdrawal or cancellation in the foreign markets where the issuer is listed was added to the sworn statement that must be issued by the legal representative in the country (or attorney-in-fact) for purposes of requesting admission to the Special Regime;
• In cases of withdrawal from the Special Regime, in which the provisions of Title III of the CNV Regulations applies, the obligation to carry out a public offering of acquisition will not apply when the requirements set forth in article 32(c), of Chapter II of the aforementioned Title are met. In cases of withdrawal or cancellation in the foreign market or markets where the issuer's shares are listed, the applicable procedure in those markets for those cases must be followed;
• Public translation of documents drafted in a different language than Spanish will not be required, and a simple translation will be enough for the uploading of documentation to the CNV's Financial Information Reporting System.