New Regulation for Exchanging Checks and Promissory Notes

The Argentine Securities Commission (CNV) issued General Resolution 1041 on December 30, 2024, introducing additional requirements for issuers, agents, and markets involved in the exchange processes of deferred payment checks and promissory notes in registered markets.

The Resolution establishes that markets where secondary trading of these instruments is permitted must update their regulations to include at least:

 

1. An informative regime where the issuer must notify, through a designated agent, the exchanges to be carried out at least five days before beginning the exchange, with the following details:
    
   1. information of the instruments to be exchanged,
   2. details and conditions of the exchange (including those related to the new instruments the participating investors will receive),
   3. the risk analysis of the issuers conducted by at least one of the intervening agents,
   4. any event that, due to its importance, could substantially affect the course of trading of the new instruments.

2. A mechanism for disseminating information and giving permanent access to consultation on ongoing exchanges and/or the history of completed exchanges.

3. A procedure for issuers who have subaccounts with more than one agent.

4. The measures and/or controls the market will implement regarding:
    
   1. the risk analyses of the issuers performed by the agents before being admitted to trade the new instruments,
   2. the agents’ permanent monitoring of their credit situation,
   3. the re-determination of the operating duly assigned quotas,
   4. the grounds for suspending the trading of said instruments and/or prohibiting the admission and/or trading of any other instrument issued by such issuers.

 

Requirements for Intervening Agents

1. Agents may only accept trading new deferred payment checks and/or promissory notes issued in exchanges if they have previously conducted a risk analysis of the issuers, the buyers are qualified investors, and the instruments are traded in a special segment.
2. They must notify buyers, in advance and in a reliable manner, about the status of such instruments and their redemption within the exchange framework.

Markets will have until January 31, 2025, to update their regulations to comply with these rules and submit them for the CNV’s approval.