Children Can Now Invest in Money Market Mutual Funds

On September 20, 2023, the Argentine Securities Commission (CNV) issued General Resolution No. 977, which establishes a special regime for children from the age of 13 to be able to buy money market mutual funds shares.

Following the Resolution, children will be able to place orders to buy money market mutual funds shares, placing the orders through the internet, and with the authorization of their legal representatives, who will hold the ownership of the quotas in the registry of quota holders.

The requirements for this are:

1. To the place the orders, it will be necessary to link a bank account or a payment account owned by the child with one their legal representatives own.
2. The depositary agent and placement agents must adopt the necessary measures to identify the orders the authorized children place and the routing of their redemption orders to the linked account.
    

Once the child becomes an adult, the ownership of the shares will be immediately transferred to them, without any fee or expense.

The regime provides the possibility for children to buy the shares without their legal representatives’ intervention. The funds for the purchase will come from savings accounts for children opened under the terms of the Argentine Central Bank Communication "A" 6700. In this way, the children will be the shareholders.

The Resolution also establishes that the promotion and marketing of the money market mutual funds cannot be specifically or exclusively directed at children: they must have identical content and information all investors receive.

Further, the main characteristics of the money market mutual funds must be informed, together with the potential risks this type of investments involve, and the financial education content on investments in open-end mutual funds and money market mutual funds, aimed at and adapted to children within this age.