19 Sep 24 The CNV introduces modifications to its transitional regulations on capital market laundering and settlement of securities in foreign currency

By Agustín L. Cerolini, Martín Chindamo, and Maria Agustina Martín Triscali

Asset regularization regime in the capital market

The National Securities Commission (“CNV”), through General Resolution No. 1017, has introduced changes to the regulations concerning laundering in the capital market, amending Article 2, Chapter XVIII of Title XVIII of the CNV Rules.

With the issuance of this resolution, the CNV complements the provisions of the Asset Regularization Regime in the Capital Market, establishing guidelines regarding the treatment of liquid balances available in the Special Asset Regularization Accounts.

This new resolution stipulates that, once the ten-business-day period for settling transactions involving eligible assets has expired, any uninvested funds, whether in full or in part, must be transferred and credited by the intervening Clearing and Settlement Agents to the bank account designated as the Special Asset Regularization Account in the name of the respective client.

Furthermore, it clarifies that the provision regarding the disbursement of funds will apply when such funds exceed the equivalent of: (i) three percent (3%) of the total funds owned or co-owned by the client, or (ii) 1,500 Adjustable Value Units (Unidades de Valor Adquisitivo), considering the lesser of the two amounts.

Flexibilities in the settlement of foreign-currency-denominated securities

The CNV, through General Resolution No. 1018, has implemented several modifications to the regulations concerning the settlement of foreign-currency-denominated securities, affecting Articles 2 and 6 TER, Chapter V of Title XVIII of the CNV Rules. These modifications aim to relax the limitations on the settlement of sales transactions of foreign-currency-denominated securities, both in local jurisdiction and foreign jurisdiction, when clients hold foreign currency positions related to repurchase agreements, passes, or other forms of financing in the capital market.

Additionally, this resolution eliminates the scheduling regime, removing the requirement for a five-day advance notice for transactions exceeding AR$200 million, applicable to both residents and non-residents, thus allowing investors to conduct these transactions without prior notification.

Finally, the regulations that limited the purchase of dollars through securities lending have been revised. Now, investors holding repos and/or passes may operate with MEP dollars and blue chip swaps (contado con liquidación).