New Regulations Regarding the Registration of Trust Agreements

Resolution No. 7/2015 of the Public Registry of Commerce of the City of Buenos Aires (“Resolution No. 7/2015” and the “PRC”) dated July 31, 2015 includes the rules regarding the obligation to register trust agreements in the corresponding Public Register for the City of Buenos Aires as per the new Civil and Commercial Code.

Resolution No. 7/2015 is effective as of August 3, 2015.

Trust Agreements under the jurisdiction of the PRC

Resolution No. 7/2015 rules on two situations where trust agreements come under its jurisdiction:

1. The first situation takes place when a trustee has a real or special domicile in the City of Buenos Aires.
2. The second one is when the trust agreement underlying assets are shares of corporations under the jurisdiction of the PRC, irrespective of the domicile of the trustee.

The Resolution also establishes the obligation to register contractual amendments, the expiry of the trustee’s position, any substitution, cessation of legal status or any other pertinent registration.

Only trust agreements that are celebrated after August 3, 2015 need to be registered.

Trust Agreements excluded from the jurisdiction of the PRC

Trust agreements that do not fall under the scenarios above are excluded from the effects of Resolution No. 7/2015. This is either when the trustees are not domiciled in the City of Buenos Aires or trusts whose underlying assets are shares of a corporation that is not subject to the regulation of the PRC. It is expected that each provinces public registries will issue similar regulations.

In addition, article 284 of Resolution No. 7/2015 states that “the registration of financial trust agreements are excluded from the jurisdiction of the Public Registry of Commerce as a result of article 1671 of the new Civil and Commercial Code”. The reference to article 1671 is incorrect and should be read as article 1691.

This provision seems to exclude financial trust agreements in general from the jurisdiction of the PRC, without providing further detail on such issue.

Effects of the registration

Resolution No. 7/2015 follows the same approach as the new Civil and Commercial Code and does not provide the effects of the registration of trust agreements before the PRC nor the consequences that may arise from lack of registration.

Based on this scenario, there are only two possible solutions: the registration of the agreement could either have constitutive or declaratory effects. For reasons that are beyond the scope of this article, we believe that the registration has declaratory effects.

Registry of Trustees

Resolution No. 7/2015 also sets up a new Registry of Trustees, an issue not considered in the provisions of the new Civil and Commercial Code.

The Registry of Trustees shall record the appointments and resignations of trustees only in trust agreements subject to registration by the PRC. Judicial and administrative communications would also be recorded.

Other issues

Resolution No. 7/2015 also describes the documentation that should be filed in order to obtain the registration of the trust agreement, its amendments and the resignation of the trustee.

The following documentation should be filed: form; public or private deed, as appropriate, in which the agreement was formalized; legal opinion; and affidavit about the status of the trustee as a Political Exposed Person.

Finally, Resolution No. 7/2015 obligates trustees to file an annual affidavit on the status of the compliance of regulations on Anti-Money Laundering and Financing of Terrorism.