11 Abr 25 New development in the capital markets: new tokenization regime for tradable securities

By Agustín L. Cerolini, Martín Chindamo, Valentina Circolone and Tomás Mingrone

By means of Resolution No. 1,060 (hereinafter, the «Resolution«), the Argentine Securities Commission (hereinafter, the «CNV«, by its acronym in Spanish) has launched a public consultation aimed at incorporating a specific tokenization regime applicable to the digital representation of marketable securities within the framework of public offerings.

In this regard, the Resolution proposes the creation of an innovative regulatory framework that allows marketable securities to be digitally represented through distributed ledger technologies (“DLT”) or other equivalent technologies. The objective is to ensure the functional equivalence of these digital representations with traditional forms, thereby constituting an additional form of representation.

The Resolution allows for the digital (total or partial) representation of the following instruments: shares (including those with dual listings), notes, units of closed-end mutual funds under Law No. 24,083, debt securities or participation certificates of financial trusts with public offering under Law No. 26,831, and CEDEARs. However, issuances under automatically authorized public offering regimes are excluded.

It is worth highlighting that tokenization under this framework entails a digital representation that is additional to and coexists with the marketable security issued in traditional form and duly deposited. Consequently, it does not require a separate public offering authorization, provided that the digital representation has been foreseen and requested either at the time of issuance (initial representation) or subsequently (i.e., existing securities in circulation may be digitally represented with the issuer’s consent and the CNV’s authorization).

These instruments may be traded through digital platforms and/or mobile applications operated by Virtual Asset Service Providers (hereinafter, the “PSAV”, by its acronym in Spanish) registered with the CNV. The issuer must prepare a technical document outlining the terms and conditions applicable to the digital representation.

Tokenization may be carried out by entities specialized in DLT, whether or not registered as PSAV, while PSAV will be responsible for the commercialization, administration, and digital custody of the digitally represented instruments. Additionally, the holder of the digital representation may at any time request its replacement with a traditional format.

The regime will be implemented under a controlled regulatory environment (sandbox) for an initial period of one year. Securities issued within this period will remain valid thereafter, although no new issuances will be allowed once the period expires. It is also noted that authorized issuances that are not digitized within two years will lose their eligibility under this regime.