CNV General Resolution No. 990: Modifications to the restrictions for operations with negotiable securities — Flexibility for BOPREAL
Banking & Financial Institutions Department Report | CNV General Resolution No. 990: Modifications to the restrictions for operations with negotiable securities — Flexibility for BOPREAL
General Resolution No. 990 of the National Securities Commission (“CNV” for its acronym in Spanish), published yesterday in the Official Gazette, modifies some restrictions applicable to operations with negotiable securities commonly called “cash with settlement” or “MEP”, and establishes flexibilities to carry out these operations with Bonds for the Reconstruction of a Free Argentina (BOPREAL).
Below, we summarize the Resolution’s main points that may have an impact on the functioning of the local exchange market.
1. Parking – Exception for BOPREAL
Through CNV General Resolution No. 988, a minimum parking period of 1 business day was established applicable to both sales operations of negotiable securities against foreign currency and transfers of securities to depository entities abroad (see our report on the subject).
Resolution 990 establishes that, whenever it concerns transfers abroad of BOPREAL subscribed in primary bidding (not sales), the aforementioned parking period of 1 business day must not be met.
2. Customer Operations with C.D.I. or C.I.E. and C.U.I.T.
(a). Background.
Under CNV General Resolution No. 981 (as amended), certain conditions were established that must be met to complete operations with securities related to the operations included in Points 3.16.3.1 and 3.16.3.2 of BCRA’s Ordered Text of Foreign Currency and Exchange (the “Operations”) (see the latest Capital Markets Department report) (i.e. sale of negotiable securities against foreign currency, transfers of securities abroad, etc.).
Until now, to carry out the Transactions, the Settlement and Clearing Agents (“ALYCs”), Trading Agents (“ANs”), and the Negotiable Securities Brokerage Agents (together with the ALYCs and the ANs, the “Agents” ) were to verify the following daily limits and conditions:
(b). Current scheme.
Under CNV General Resolution No. 990, the requirements that Agents must verify to carry out Operations are modified. In particular:
• It was established that for customer operations with C.D.I. and C.I.E. not regulated by foreign securities commissions (i.e. non-residents in Argentina):
– The daily limit to carry out Operations will be AR$ 200MM;
– Transfers abroad of securities issued by residents will be subject to said daily limit. This is very important since previously these transfers could be made without any limitations (only the duty to inform the CNV applied previously).
The requirement remains in force for this type of clients who operate for their own portfolio and with their own funds.
• Clients with C.D.I. or C.I.E. Those who are regulated by securities commissions (or foreign financial entities) will have a daily limit of $200MM, both to complete Operations on behalf of third parties and for those who want to carry out their own portfolio. This is very important since previously there was no daily limit for self-employed operations of this type of client (only the duty to inform the CNV applied to them).
• It is established that clients with C.U.I.T. (i.e. residents) who carry out Operations for the account and order of third parties will now have a daily limit of $200MM. Clients with C.U.I.T. that operate with their funds must notify in advance only if they exceed the daily amount of $200MM.
• It is established that Operations carried out with BOPREAL subscribed in primary bidding are exempt from the daily limits, up to the subscribed nominal value of said species.
By virtue of the above, from now on the Agents must verify the following limits and conditions:
Notwithstanding the foregoing, before CNV General Resolution No. 990 (which introduces exceptions for Transactions with BOPREAL) there were already certain exceptions to these restrictions, which remain in force (see this Capital Markets Department report).
Please, do not hesitate to contact us should you require any further information on this matter.
Sincerely,
Pablo J. Torretta