Amendments to the Regime for Negotiating Promissory Notes

On May 17, 2024, the Argentine Securities Commission issued General Resolution 1003, approving a new regulatory framework applicable to the current regime of public offering and secondary trading of promissory notes.

 

There, the CNV stated that it is advisable to modify the current regime to promote its use as a guarantee scheme for the operations known as “microcredits” and to adapt its negotiation to the needs and productive cycles of agricultural and agro-industrial companies. The goal is to facilitate the financing for acquiring inputs, materials, and services, as well as its consequent use by SMEs and other participants in the capital market. In this sense, the changes seek to:

 

1.         incorporate into the regulations that, if promissory notes are issued in foreign currency, the drawer may determine it must be paid in a specific currency (foreign currency cash payment clause),

2.         update the minimum amount for which they may be issued,

3.         repeal the requirement to set a maximum term for maturity.

 

 The markets may establish—according to their respective regulations and with the CNV’s prior approval—that any of the following exchange rates will apply to promissory notes issued in foreign currency and admitted for trading:

 

•           Banco Nacion’s selling exchange rate,

•           the exchange rate set in Communication “A” 3500 of the Argentine Central Bank,

•           any other exchange rate that may be established.

 

Promissory notes traded in markets will not have a maximum maturity requirement, and their minimum amount must be ARS 20,000.

 

Likewise, both promissory notes and deferred payment checks traded may be subject to issuing transfers from the corresponding acquirer's principal sub-account to another receiving principal sub-account with different ownership if the holder of the receiving sub-account is:

 

1.         an intermediary located abroad and acting as custodian of such acquirer, within the framework of global custody agreements of negotiable securities, through a depositary authorized in the Central Depository Agent of Negotiable Securities,

2.         a financial trustee acting in such capacity within the framework of a financial trust, with public offering authorization, for the securitization of such deferred payment checks.