Liability Regime of the Management and Depositary Companies of Mutual Funds

On August 17, 2018, the Argentine Securities and Exchange Commission (the CNV after its acronym in Spanish) published General Resolution No. 759/2018 in the Official Gazette, which adapts the CNV Regulations (New Text 2013, as supplemented) to the changes in the liability regime of the Management and the Depositary Companies of Mutual Funds introduced by the Productive Financing Law No. 27,440 to the Mutual Funds Law No. 24,083.

The previous regime of Law No. 24,083 established the joint liability of the Management and the Depositary Companies. This regime was repealed by Law No. 27,440.

As a result, the CNV also updated its regulations establishing that both Companies are individually and separately liable for the damages that could be caused to the funds’ investors for the breach of the inherent obligations to each of them that arise from the applicable rules, the management regulation (“reglamento de gestión”), and the public offering prospectus.

In addition, among other points, the CNV states that the excesses that occur in the administration of Mutual Funds must be informed immediately to it through the CNV’s online information system (“Autopista de la Información Financiera”). The causes of such excesses must be described in the same communication and a  plan  preparing the mentioned legal and regulatory limitations for the portfolio must be also filed, which must not exceed 10 calendar days from the occurrence thereof. In the event that the CNV does not accept the filed plan, the excesses must be adjusted immediately.