On December 6, 2011 the General Resolution No. 596/2011 of the Argentine Securities Exchange Comission (“SEC”) was published in the Official Gazette. It creates a special regime for the formation of close-end investment funds (“Technology Funds”) whose focus shall be to finance the mass production and distribution of products and services with a high level of scientific and technological innovation.
Technology Funds must meet the general provisions applicable to mutual closed investment mutual funds, and the following specific requirements:
- They must invest and finance projects of technological innovation (as defined by Law No. 23,877).
- At least seventy-five percent (75%) of the assets of the Fund shall be allocated to investments in technological innovation projects that are in the stages of production and marketing of products or processes developed.
- At least twenty five percent (25%) of the Fund’s assets must be invested in technological innovation projects that are or have been recipients of stimulus programs provided by public institutions of science and technology.
- It will be allowed to invest temporary and exceptionally up to twenty five percent (25%) of the Fund’s assets outside of the scope of technological investments.
- In addition to the provisions of the SEC, the prospectus must include, among others: (a) the investment, production and strategic plan, which must be concrete and aimed at achieving the special investment purpose, (b) the characteristics and conditions of eligibility of projects to be financed by the Fund, and (c) the criteria, methods and procedures to be used in the valuation of the Fund’s investment portfolio.
- The Fund must have a minimum term of two years.
- Original acquisition or trading of participations in the Fund is reserved only to those qualified investors that fall within the categories set forth in Article 25 of Chapter VI of the Rules (NT, 2001 and mod.), among which are (a) the Federal Government, the Provinces and Municipalities, autarchic entities, Banks and Financial Entities, State Corporations, State Owned Corporations, Companies and Public Law Legal Entities, (b) limited liability companies and corporations, (c) cooperative, mutual entities, social security entities, civil associations, foundations and unions, (d) brokers, affiliates of over the counter markets, and (e) the National Social Security Agency (ANSES).
- Denomination “Close-end mutual investment fund for technological innovation projects” shall be included in the name of the Fund.
The Resolution came into force on December 7, 2011.