General Resolution No. 1041 by the Argentine Securities and Exchange Commission (CNV): New Regulation on the Exchange of Negotiable Promissory Notes and Deferred Checks
Capital Markets Department Report | General Resolution No. 1041 by the Argentine Securities and Exchange Commission (CNV): New Regulation on the Exchange of Negotiable Promissory Notes and Deferred Checks.
On December 30, 2024, the Argentine Securities and Exchange Commission (“CNV”) issued General Resolution No. 1041, introducing key modifications to ensure transparency and efficiency in the refinancing and exchange processes of deferred checks and promissory notes in authorized markets.
Thus, for both instruments, General Resolution No. 1041 establishes that the markets where such instruments are authorized for negotiation must adjust their regulations, including:
1-An information regime whereby the issuer, through a designated agent, provides advance notice of the refinancing at least five days before the start of the exchange, detailing: a. The data of the instruments to be exchanged; b. The transaction details (including, for example, the conditions of the new instruments to be received by participating investors); c. The risk analysis carried out by at least one of the participating agents; d. Any fact that, due to its significance, could substantially change the course of the negotiation of the new instruments.
2-A information-sharing system that provides access to details on refinancing and exchange processes carried out.
3-The measures to be implemented by the markets concerning:
-The risk analyses of issuers conducted by the agents prior to the entry of the new instruments for negotiation;
-The ongoing monitoring of their credit situation as provided by the agents;
-The reassessment of operational limits previously assigned; and,
-The grounds for suspending the negotiation of said instruments and/or prohibiting the entry and/or negotiation of any other instrument from such issuers.
In this context, intervening agents, as a general rule:
1-May only accept to negotiate the new deferred payment checks and/or promissory notes issued under the mentioned exchanges if they have carried out the issuers’ risk analysis in advance, the buyer clients qualify as qualified investors, and such instruments are negotiated in a special segment.
2-Must provide prior and reliable notification to buyer clients regarding the status of such instruments and their issuance within the framework of an exchange.
Finally, General Resolution No. 1041 establishes that markets must submit their new regulations for CNV approval by January 31, 2025.
For any questions or additional information, do not hesitate to contact our team.
Sincerely,