New Public Offering Regime with Automatic Authorization

By means of General Resolution 1028 of October 30, 2024, the Argentine Securities Commission (CNV) submitted to public consultation the regulation of a public offering regime with automatic authorization. This regime would initially be limited to notes issued under Law 23576, including short term securities issued through notes and virtual assets (as defined in the Criminal Code Law 27739), if they are securities.

 

The CNV points out that, within the framework of the deregulation the Federal Government promotes, it has worked to present two simplified regimes for those companies that are taking their first steps in the capital market and that intend to issue small amounts.

 

The main aspects of the Resolution are:

 

1. Public Offering with Automatic Authorization for its Low Impact

 

Definition

 

An offer of securities will be considered a Public Offering with Automatic Authorization due to its Low Impact and will have automatic authorization of public offering when it meets these conditions (among others):

 

1. The offer is made by one or more issuers, although an unlimited number of registered agents acting as placement and distribution agents may participate. The issuers may also be SME CNV or SME CNV Guaranteed.
2. Only qualified investors, regardless of their number, may participate in the primary placement and in the secondary market.
3. Securities must be:

a) Notes, including Short Term Securities,

b) Virtual assets that are not convertible into shares and not issued under the “Guidelines for the Issuance of Thematic Negotiable Securities in Argentina.”

4. The issuer may choose to make individual issuances, or issue within the framework of global programs (authorized or not).

 

Maximum amount

 

The total nominal amount of the marketable securities issued at the time of making the calculation for the issuance of a new class or series must not exceed 1,000,000 Unidades de Valor Adquisitivo (UVA), or its equivalent in ARS or in foreign currency.

 

Calculation period of the maximum amounts. Aggregation

 

To calculate the established maximum nominal amount, all the placements of negotiable securities made by the same issuer under this regime will be considered part of the same offer. The accumulation or aggregation will be for the previous 12 months, counted from the last date of issuance of marketable securities under this regime. These may be reissued within this maximum amount once they have been totally or partially amortized.

 

Corporate control

 

The issuer under this regime will be exempt from the obligations applicable to issuers or from the periodic information regime and will not be required to:

 

1. Carry out procedures to register in the public offering regime.
2. Prepare, file, or publish—if any—prospectuses, prospectus supplements, or similar documents for the CNV to approve. If any document is prepared, it must be published at the beginning of the dissemination period in the information systems of the authorized markets where the securities are listed and/or traded.
3. Comply with the obligations to submit information through the CNV reporting system.

 

Further,

 

4. The CNV’s administrative control will apply to legal entities making public offerings of their securities, except to CNV Guaranteed SMEs, if applicable from the date of placement and until the cancellation of the public offering.
5. Issuers that are admitted under another public offering regime shall continue to comply with the obligations applicable to such regime, and the provisions of the present regime shall not be applicable to them.

 

Notification

 

The issuer under this regime must, among others:

 

1. Notify through the Remote Procedure Platform (TAD) the details and relevant information about the issuance.
2. Publish on the CNV's website the notice in article 10 of Law 23576.
3. Comply with the information requirements.

 

Secondary market

 

Securities issued under this regime must be placed and listed in a market authorized by the CNV within 30 calendar days from the deadline for notification through the TAD.

 

Markets may not establish more requirements for listing and/or trading the marketable securities authorized under this regime, nor demand other requirements to withdraw from the public offering regime than those the CNV requires.

 

Investors may freely transfer the marketable securities to other qualified investors at any time, without restrictions.

 

Warning to investors

 

The issuer and those acting as placement and distribution agents, or any other intervening in the issuance, must:

1. Inform in the prospectus, in any sales documentation, and/or any other document distributed:
   1. Whether the issuer is admitted to the public offering regime.
   2. That the offering has Automatic Public Offering Authorization due to its Low Impact, clarifying that the issuance is not subject to the CNV's general and periodic information regime, and that the CNV has not verified nor issued judgment on the issuance or regarding the data in the documents to be distributed.
2. Obtain an affidavit signed by each investor evidencing their knowledge of this information.

 

SME CNV Guaranteed Regime

 

Any SME CNV Guaranteed will be eligible for the Public Offering regime with Automatic Authorization Due to Its Low Impact if it complies with the conditions above, with these modifications:

 

1. The maximum aggregate nominal amount of the marketable securities acquired by qualified investors may not exceed 10,000,000 UVAs or its equivalent in ARS or foreign currency.
2. The issuance may be under this regime or under the CNV Guaranteed SME Regime, both being compatible and non-exclusive.

 

 

Automatic Authorization

 

Public Offerings with Automatic Authorization due to their Low Impact that comply with the requirements of this regime:

 

1. will have with the CNV’s automatic authorization of public offering,
2. will be considered authorized and regular public offerings, exempted from disciplinary sanctions related to irregular public offerings of marketable securities,
3. will not be subject to additional requirements for their entry into the public offering regime, nor to the compliance with the information regime in the CNV's rules,
4. its securities will be considered placed by public offering if they are effectively placed by means of duly accredited placement efforts.

 

2. Auction of Securities

 

Auctions of securities, judicial or extrajudicial, arising from the enforcement of security interests or guarantee trusts, will be automatically authorized for public offering if these conditions are met:

 

1. The auction includes securities that are not shares or securities representing the capital stock of companies admitted to the public offering regime.
2. At least one Broker-Dealer (ALyC) or Market Agent (AN) is involved in the auction process. Before carrying out the auction, this ALyC or AN must inform the bidders:
   1. whether the issuer is admitted to the public offering regime,
   2. that the offering has Automatic Authorization, clarifying that the issuance is not subject to the CNV's general and periodic information regime, and that the CNV has not verified nor issued a judgment on the issuance or with respect to the data contained in the documents to be distributed.

 

An affidavit signed by each investor evidencing its knowledge of this information may be obtained.

 

Tariff

 

Auctions conducted under this regime are exempt from the fees in the CNV Regulations.

 

Public Offering Regime

 

Auctions of negotiable securities that comply with the provisions of this regime:

 

1. will have automatic authorization of public offering,
2. will be considered authorized and regular public offerings,
3. will not be subject to compliance with the informative regime,
4. will not require or imply the entry into the public offering regime by the issuer of these marketable securities or by any participant in the auction.

 

3. Public Offering with Automatic Authorization for its Medium Impact

 

Definition

 

An offer of securities will be considered a Public Offering with Automatic Authorization due to its Medium Impact when these conditions (among others) are met:

 

1. The issuer must enter the public offering regime or already be in it.
2. The offering is made by one or more issuers, as an individual series or class, or issued within the framework of a global program, or under the frequent issuer regime, and an unlimited number of registered agents acting as placement and distribution agents may participate.
3. Only qualified investors, without limitation in number, may participate in the primary placement and secondary trading.
4. Negotiable securities must be negotiable obligations, including short-term securities or virtual assets. They: (a) are not convertible into shares, and (ii) are not issued under the “Guidelines for the Issuance of Thematic Negotiable Securities in Argentina.”

 

Maximum amount

 

The total nominal amount of the marketable securities issued at the time of the calculation for the issuance of a new class or series must not exceed 7,000,000 UVAs or its equivalent in ARS or in foreign currency.

 

Calculation period of the maximum amounts. Aggregation

 

To calculate the established maximum nominal amount, all the placements of negotiable securities made by the same issuer under the current regime will be considered part of the same offer. The accumulation or aggregation will be for the previous 12 months counted from the last date of issuance of marketable securities under the current regime. They may be reissued within this maximum amount once they have been totally or partially amortized.

 

Automatic authorization

 

Issuers must be admitted to the Public Offering Regime with Automatic Authorization for its Medium Impact or, alternatively, in any other regime the CNV admits.

 

Issuers admitted to the present regime:

 

1. If they qualify as a CNV SME or are under the Simplified and Guaranteed Regime for Issuances of Negotiable Obligations with Social Impact, they must have at least one regular and one alternate trustee. Such requirement will be optional if issuers adopt the legal form of a limited liability company.
2. Only annual financial statements must be submitted, applying the technical resolutions in force that make up the Argentine Professional Accounting Standards (NCPA) and their interpretations (issued by the Argentine Federation of Professional Councils of Economic Sciences, Federación Argentina de Consejos Profesionales de Ciencias Económicas).

 

Admission to the public offering regime

 

Issuers complying with the conditions in the regime will benefit from a simplified informative regime, for which they will be exempted from complying (among others) with:

 

1. The provisions of the chapters on assemblies and statutory amendments and on administrative and supervisory bodies.
2. The provisions of the periodic information system.
3. If applicable, the administrative control of the CNV will apply to legal entities that make public offerings of their securities from the date of placement of the series or class issued and until the public offering is cancelled.
4. Issuers admitted to the general public offering regime must continue to comply with the obligations applicable to it, and the provisions of this regimen will not apply to them.

 

Relevant facts

 

Issuers will be limited in the scope of the relevant events they must report, and will only be required to report these relevant events:

 

1. initiation of negotiations to formalize an out-of-court reorganization agreement, request for the opening of reorganization proceedings, rejection, withdrawal, approval, compliance and nullity of the agreement; request for reorganization proceedings by grouping, approval of out-of-court reorganization agreements, bankruptcy petition by the entity or by third parties, declaration of bankruptcy or its rejection explaining the causes or conversion into reorganization proceedings, mode of conclusion: payment, settlement, closure, requests for extension of bankruptcy and derived liabilities,
2. facts of any nature and fortuitous events that hinder or may seriously hinder its activities.

 

Prospectus

 

Issuers under this regime must prepare an issuance prospectus that will not be subject to the CNV’s approval or review, but that must be published at the beginning of the dissemination period through the AIF and in the information systems of the authorized markets where the marketable securities are listed and/or traded.

 

Notification

 

Issuers under this regime must (among others):

 

(i) Publish the prospectus through the AIF and, if applicable, in the information systems of the authorized markets where the marketable securities are listed and/or traded, on the day the dissemination term begins.

(ii) Publish in the AIF the notice provided for in article 10 of Law 23576.

 

Listing obligation. Secondary trading of securities

 

Negotiable securities issued under this regime must be placed and listed in a market authorized by the CNV within 30 calendar days as from the expiration of the term for notifying the prospectus.

 

Markets may not establish greater requirements that those the CNV requires to list the marketable securities authorized under this regime, nor demand greater requirements to withdraw them from the public offering regime.

 

Investors may freely transfer the marketable securities to other qualified investors at any time, without restrictions.

 

Warning to investors

 

Issuers, those acting as placement and distribution agents, or any other intervening in the issuance must:

 

1. Inform in the prospectus, in any sales documentation, and/or any other document distributed:
   1. That the issuer is admitted to the public offering regime,
   2. that the offering has Automatic Public Offering Authorization due to its Medium Impact, clarifying that the issuance is subject to the CNV’s general and periodic information regime and that the CNV has not verified or issued any judgment on the issuance or regarding the data in the documents to be distributed,
   3. that the issuance is subject to the general and periodic reporting regime.
2. Obtain an affidavit signed by each investor evidencing their knowledge of this information.

 

SME CNV Regime

 

SMEs CNV may:

 

1. Adhere to the Public Offering Regime with Automatic Authorization for its Medium Impact, complying with all the requirements of this section, or
2. Under the CNV SME Regime, both being compatible and non-exclusive. If SMEs choose the Public Offering Regime with Automatic Authorization due to its Medium Impact, they will be exempted from paying the fee for this automatic authorization regime.

 

No CNV Guaranteed SME CNV Negotiable Obligations may be issued under this regime.

 

SME CNV. Automatic Authorization

 

Public Offerings with Automatic Authorization due to their Medium Impact that comply with the requirements of this regime:

 

1. will have the CNV’s automatic authorization of public offering,
2. will be considered authorized for regular public offerings, and exempted from disciplinary sanctions related to irregular public offerings of marketable securities,
3. must enter the differentiated public offering regime and comply with the applicable differentiated information regime.

 

Further, negotiable securities will be considered placed by public offering if they are actually placed through duly accredited efforts.

 

Irregular public offering

 

If the public offering does not comply with the requirements corresponding to each of the regimes mentioned in this article, it will be considered irregular, unless issuers prove that it is covered by a safe harbor under the Private Offering Regime.

 

If any other requirement is not complied with, the offeror will be subject to disciplinary sanctions according to the Capital Markets Law and the CNV Regulations.

 

If issuers do not comply with the information required, or if they fail to place a public offering, they will be subject to the consequences included in the Negotiable Obligations Law and the CNV Rules.