New Rule Affects Transactions with Fixed Income Securities Issued Under Foreign Law

On October 6, 2021, the Argentine Securities and Exchange Commission (“CNV” after its acronym in Spanish) issued General Resolution No. 907 (the “Resolution”), which included certain measures to restrict financial arbitrages arising from securities purchases in foreign currency through the segment with concurrency of offers with price-time priority and then selling them through the bilateral trading segment (known as “SENEBI” after its acronym in Spanish).

The Resolution lifted the weekly restriction on sale transactions through the segment with concurrency of offers with price-time priority of fixed income securities issued by Argentina under foreign law, denominated in U.S. dollars and settled in foreign currency to a face value of no more than U$S 50,000 of the securities purchased and settled in that currency. However, the CNV maintains the weekly restriction relating to sale transactions through the segment with concurrency of offers with price-time priority of fixed income securities issued by Argentina under local law, denominated in U.S. dollars and settled in foreign currency, to a face value of no more than U$S 50,000 of the securities purchased and settled in that currency (the “Restricted Transactions”).

The Resolution was preceded by Resolutions No. 878 (https://www.marval.com/publicacion/reduccion-del-parking-para-las-operaciones-de-ccl-13896) and No. 895, issued on January 12 and July 12, 2021, respectively. Through these, the CNV established different restrictions for the purchase and sale of fixed income securities denominated and payable in U.S. dollars issued by Argentina under local law and foreign law.

Pursuant to the Resolution, to execute transactions with securities settled in foreign currency that do not entail Restricted Transactions, as well as the transfer of securities to or from foreign depositaries, the client must submit an affidavit stating that:

• no sale of securities issued by Argentina under local law settled in foreign currency has been made in the last 30 days through the segment with concurrency of offers with pricetime priority; and

• commits not to execute them for the next 30 days as of then.

Broker-dealers will be responsible for assessing compliance with the Resolution in connection with each investment account.

This article is a brief comment on legal news in Argentina; it does not purport to be an exhaustive analysis or to provide legal advice.