Initial Offering of Securities

Author:Mr Roberto Silva, Jr.
Profession:Marval O'Farrell & Mairal

The Argentine Securities Commission issued General Resolution CNV No. 662 amending the regulations for placement of securities.

On May 5, 2016, the Argentine Securities Commission (Comisión Nacional de Valores or "CNV"), issued General Resolution CNV No. 662 (the "Resolution"), modifying the rules regarding the placement of securities. The Resolution states that the initial placement of publicly offered securities authorized by the CNV may now be carried out either through book building, or through auction or public tender, both of which shall be carried out through a computer network system. Consequently, General Resolution No. 597, which abrogated the book building system in use at that time for the initial placement of shares and notes, is now itself abrogated (for further details regarding General Resolution CNV No. 597, please refer to issue # 112 of Marval News, in which we analyzed such resolution). The Resolution was published in the Official Gazette on May 9, 2016.

The Resolution maintains the requirement that the initial placement be made through the computer network systems made available by the Markets authorized by the CNV, after prior fulfillment of the requirements set forth in the General Resolution No. 622/2013 of the CNV, as amended and restated, (the "CNV Regulations").

The main aspects of the Resolution are as follows:

  1. Within 15 days of placing the securities, placement agents must assure the issuers of the efforts made in the initial placement of the securities through the mechanisms provided for this end by CNV Regulations.

    Likewise, the Resolution states that the execution of a placement agreement shall be considered sufficient towards the fulfillment of the public offer requirement if the placement agent made all the placement efforts provided for by the CNV Regulations.

    In debt restructurings, the requirement of public offering shall be deemed fulfilled when the subscribers of the new offer are the current holders of the notes being exchanged.

  2. The Resolution increases the minimum subscription amount of the initial offering. The minimum, previously set at AR$ 10,000, is now raised to AR$ 20,000. The Resolution maintains the exception to the minimum in cases in which the issue is made under the terms of Communication "A" 3046 of the Argentine Central Bank, or in cases when it is aimed at qualified investors.

  3. The Resolution states that, notwithstanding the Market selected for the initial placement, in the frame...

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