Prohibition of Unauthorized Intervention in the Public Offering Regime: When Does It Apply?

On May 16, 2024, the Argentine Securities Commission (CNV) issued General Resolution 1002, prohibiting the offer of financial advice in connection with securities without authorization, detailing the acts that are excluded from this restriction, and forbidding the diffusion and promotion of securities and/or client referral activities for registered agents without the corresponding CNV authorization.

The CNV justified this modification on the importance of financial advice services within the framework of the public offer regime, particularly for retail or unsophisticated investors, who often lack the level of financial education necessary to make decisions in a rational and efficient manner.

According to the Resolution, financial advice is defined as the provision of personalized recommendations to a client, considering the client's personal circumstances, with respect to transactions involving securities.

In light of this definition, the Resolution expressly states that the prohibition does not include:

1. opinions of a generic nature on investments, or the mere disclosure of information or explanation of the characteristics and risks of a transaction or security,
2. the writing of reports, statements, or analysis of a general nature, even if they include a recommendation to buy or sell securities.

Finally, pursuant to section 117(c) of Law 26831, the CNV has established that issuers, clearing houses, trading agents, and any other person or legal entity involved in the public offering of securities, or offering itself or its services within the public offering regime, must refrain from engaging in activities of dissemination and promotion of securities, and/or from referring or linking clients to registered agents without the CNV’s prior authorization.