On 28 August 2024, the National Securities Commission (“CNV”) published in the Official Gazette General Resolution 1016 (the “Resolution”), with this new regulation, any offering that does not comply with the established requirements will not be automatically considered as an irregular public offering nor will it be automatically sanctioned. Each case will have to be evaluated on an individual basis to determine whether it can be classified as a private or offshore offering, even if it does not meet all of the safe harbour criteria. If the requirements are met, there will be certainty that an irregular public offering is not taking place and an infringement is not being committed.
The Resolution covers:
- Private offerings targeted at a limited group of investors or employees, with specific regulations on the means of dissemination and the type and number of investors.
- Offshore offerings, exempt from CNV control, as they take place outside Argentina and do not have sufficient links with the country.
Private offerings are divided into two sub-regimes:
- Private offerings, targeting a restricted group of investors without using mass media.
- Private offerings to employees, with access limited to eligible persons only.
The Resolution also regulates offshore offerings, which will be outside the control of the CNV if certain requirements are met.
Safe Harbour for Private Offerings of Marketable Securities
An offering will be considered private under this regime if it meets the following conditions:
- That the offer is made by the issuer or an authorised person, or in the case of secondary trading, by whoever has acquired the securities.
- The marketable security offered is not authorised for public offering or required by law to be so authorised.
- The number of potential investors and purchasers is limited as detailed:
.Unlimited offer to financial institutions, non-financial credit providers, authorised agents, mutual guarantee companies and insurers.
.Offer to a maximum of 35 qualified investors and 15 non-qualified investors.
.Transactions with a maximum of 35 investors, of which no more than 10 may be non-qualified. - If qualified brokers are involved, they must refrain from making a public offering.
Safe Harbour for Employee Offers
Offers to employees under this scheme must comply with these conditions:
- Be part of a work incentive scheme.
- Target employees or officers of the employer.
- Offer securities issued by the employer or entities of the same group.
Safe Harbour for Offers without Sufficient Contact with Argentina
Offers made by non-resident foreign persons that do not generate sufficient contact with Argentina, such as advertising in media with no local contact address or meetings outside the country, will not be under the CNV’s oversight.
Transparency and Confidentiality
In order to qualify for any of the “safe harbours”, issuers must comply with the transparency and confidentiality rules, unless expressly waived. Offers that comply with the requirements will not be considered public offers and will not be subject to automatic sanctions for irregularities, although offerors may be sanctioned if they are found to be in breach of the provisions.
The Resolution came into force on 29 August 2024.
