Amendments to Public Credit Operations and the Capital Markets Law in the Bill ‘Bases y Puntos de Partida para la Libertad de los Argentinos’

On December 27, 2023, the Federal Executive Branch sent to the Congress the Bill ‘Bases y Puntos de Partida para la Libertad de los Argentinos’, which proposes amendments to public credit, the consolidation of the national public sector debt, and the Capital Markets Law.

 

The main amendments are:

 

Public Credit and Debt Consolidation

 

1. Maximum limit for issuing public securities in foreign currency and under foreign law and jurisdiction: the Law for the Strengthening the Sustainability of the Public Debt states that the Budget Law of every year must establish a maximum percentage of issuance of public securities in foreign currency and under foreign law and jurisdiction. To exceed such limit, a special law is required. If the Bill is passed, this requirement will be eliminated.

 

2. Consolidation and cancellation of public debt securities of the federal public sector. Transfer to the Treasury of the Sustainability Guarantee Fund: the Bill establishes the consolidation in the Federal Government of the holdings of public debt securities the entities of the federal public sector and the Sustainability Guarantee Fund own, except for the holdings of the Argentine Central Bank and the entities regulated by the Insurance Law and the Financial Entities Law. The consolidated public debt securities will be transferred to an account the Argentine Treasury owns, where they will be cancelled by equity confusion. The Bill also establishes the transfer of the assets of the Guarantee and Sustainability Fund to the Argentine Treasury.

 

Amendments to the Capital Markets Law

 

1. MiPyMe Electronic Credit Invoices: currently, only financial entities and non-financial credit providers may purchase invoices in the MiPyMe Electronic Credit Invoice platforms. If the Bill becomes law, this restriction will no longer be in effect.

 

2. Board of Directors of the Argentine Securities Commission: certain incompatibilities to be a Director of the Argentine Securities Commission are eliminated.

 

3. Closed-end Mutual Funds and Financial Trusts for Real Estate Developments: to encourage the development of housing construction, the Bill extends the preferential tax treatment—currently limited to investments in real estate for social housing and low and middle income sectors—to all Closed-End Mutual Funds and Financial Trusts whose investment purpose is real estate developments.