The National Securities Commission (NVC) decided to modify the Private Offering system of negotiable securities. Through General Resolution 1,009, the entity repealed the current regulation governing this type of operations, General Resolution 955, and called for public consultation to approve new regulations. The measure seeks to establish the requirements which must be fulfilled from now on so that these transactions are not considered “irregular public offering” and determine that those who do not comply are not automatically sanctioned but rather that it is analyzed on a case-by-case basis.
According to the organization he presides, Roberto SilvaGeneral Resolution 1.009 It incorporates for the first time the mechanism known as “safe harbor”through which “it is intended to provide legal certainty to those offers of negotiable securities that meet certain requirements outlined in the Resolution.”
The private offer of negotiable securities (for example, shares) are those that They are carried out on a limited number of people or institutions with which a price was previously negotiated and which are not accessible to the general public. The CNV indicated that, with the initiative, “a more comprehensive and encompassing rule” is proposed for its regulation. Meanwhile, public offers are those that require authorization from the organization and notification after their placement.
The regulations are now subject to public consultation It establishes that any private offer that does not comply with the requirements defined in the proposal “will not be automatically considered an irregular public offer and, therefore, subject to sanctions”. Instead, he points out that should be evaluated “case by case” to determine whether it can be considered a private or extraterritorial offer, even if it does not meet all the assumptions contemplated in the safe harbor.
What operations will be covered by the new CNV regulation?
RG No. 1009 covers, on the one hand, the private offers (either because they are directed to a limited circle of investors or employees), and regulates specific assumptions and taking into consideration, for this purpose, the means and mechanisms of dissemination, offering and distribution, and the number and type of investors to whom the offer is intended; and, on the other hand, the offshore offers exempt from CNV oversight, as they are carried out outside the territory of the Argentine Republic and do not have sufficient points of contact with it.
“Both private offers and extraterritorial offers do not require the authorization of this CNV.nor any notification after its placement,” the entity clarified.
According to the initiative, private offers are divided into two sub-regimesintended to regulate the two most common situations under the same. These are “proper private offers”, which are directed to a restricted group of investors and do not use mass media; and “offers directed to employees”, which must be directed only to certain eligible persons, and must have means that restrict access to persons outside that category.
Article 3 of the proposed regulation provides that in private offers the invitations to carry out operations with negotiable securities They may be received by a maximum of 35 people per broadcast. However, Operations may be carried out with a maximum of 20 investors per issueof which no more than 10 may be “unqualified investors”. “This maximum limit of Qualified Investors or Unqualified Investors will apply during the existence of the Negotiable Security, including secondary trading,” it clarifies.
Likewise, the measure “seeks to establish a clear framework that provides certainty for the private issuance of fiduciary securities “among a limited number of investors,” the CNV said. This includes those issues of financial trusts that are structured with the aim of pre-financing these issues until obtaining authorization for public offering.
Furthermore, it regulates the case of extraterritorial offers which, under certain requirements related to the means of contact and the destination of the offer, will be completely outside the control of the CNV.
“The sanction of regulations with the characteristics described above does not in any way imply the renouncement of this CNV to its power and obligation of control, as well as of protection of public savings and the investing public. Therefore, the CNV will retain broad powers to guarantee compliance with the requirements established in the aforementioned regulations,” the agency said in a statement.
The CNV clarified that The inclusion of a special regime for “low-impact” public offerings continues to be analyzedas established by General Resolution 955, now repealed. For this reason, it was not included in the new regulations subject to public consultation. “It will be regulated in due course,” the institution stated.
Source: Ambito
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