CNV Amends the Legal Framework Applicable to Guarantee Entities

On July 29, 2022, the Argentine Securities Commission (CNV) issued General Resolution No. 937, modifying the regime applicable to mutual guarantee companies established by law No. 24467 (SGR), to financial institutions established by Law No. 21526, and to public guarantee funds created by national or provincial regulations registered before the Argentine Central Bank (the "Guarantee Funds") guaranteeing securities with public offering traded in markets authorized by the CNV (Guarantee Entities).

 

Among the most important modifications to the regime, the following stand out:

(i)         The risk ratings of the Guarantee Entities must be updated and include the last annual or intermediate statements issued. It must not be older than 90 calendar days as from the date of publication of the issuer's prospectus.

 

(ii)        Notwithstanding the fact that the Guarantee Entities will continue to be subject to the oversight of the corresponding competent authorities, they must request their inclusion in the "List of Companies Qualified to Guarantee Capital Market Securities" (the “List”), to guarantee securities with public offering and trading in markets authorized by CNV.

 

(iii)       Guarantee Entities must comply with all the provisions in the CNV regulations from the moment they request their inclusion in the List. If SGRs or Guarantee Funds fail to comply with the CNV information regime (or the CNV authorized markets regime), they can be removed from the List.

 

(iv)       The markets authorized by the CNV cannot accept guarantees from any Guarantee Entity not included in the List.

 

It should be noted that the CNV stated an adaptation period of 45 calendar days counting from the effective date of the Resolution for Guarantee Entities that are guaranteeing securities with public offering and trading in markets authorized by the CNV but not authorized to guarantee notes issued under the special regime “PYME CNV Garantizada”’, to obtain their inclusion in the List.

 

This does not apply to Guarantee Entities already authorized by the CNV under the “PYME CNV Garantizada” special regime, which were automatically incorporated to the List.

 

Finally, the Resolution updated the maximum permissible amounts to be issued by CNV SMEs, taking as a reference the Units of Acquisitive Value (UVA) adjustable by the Reference Stabilization Coefficient (CER).

 

Thus, the amounts went from ARS 1,500,000,000 to UVA 19,000,000 for issuers registered under the "PyME CNV" regime, and from ARS 800,000,000 to UVA 10,000,000 for issuers registered in the "PyME CNV Garantizada" regime.