Money Market Funds Regime Now Modified

On December 23, 2024, the Argentine Securities Commission (CNV) issued General Resolution 1038, amending the regime applicable to Money Market Mutual Funds.

According to CNV, the regulation is based on the experience gained in managing these funds and aims to enhance investor protection through regulatory improvements. The initiative also seeks to ensure greater clarity and precision in disclosing the goals and investment policies that define these instruments, with particular emphasis on Classic Money Market Funds, where capital loss should be strictly minimized.

The Resolution establishes two distinct categories of Money Market Mutual Funds—classic and dynamic—each with specific requirements for portfolio composition:
 

• Classic funds
  • Up t 35% of net assets can be invested in accrual-valued assets.
  • A maximum f 35% can be allocated to term deposits pre-cancellable during the pre-cancellation period, valued at realization and/or market price.
  • Investments in debt securities with a final maturity f one year or less are capped at 20% of net assets.

• Dynamic funds
  • Up t 30% of net assets can be invested in accrual-valued assets.
  • A maximum f 20% can be allocated to term deposits pre-cancellable during the pre-cancellation period, valued at realization and/or market price.
  • There is n limit on the acquisition of debt securities with a final maturity of one year or less.

The CNV has repealed regulations applicable to Money Market Mutual Funds and other mutual funds regarding valuation criteria and holding limits for government debt securities acquired in primary offerings with maturities of 30 days or less, which are no longer available in the market.

Management Regulations must now include a dedicated section outlining specific risk considerations for each type of fund.
 

Transitional Provisions
 

The Resolution grants funds active at the time of publication 45 calendar days to align with the new requirements.