A Q&A guide to equity capital markets law in Argentina.
The Q&A gives an overview of the main equity markets/exchanges, regulators and legislation, listing requirements, offering structures, advisers, prospectus/offer document, marketing, bookbuilding, underwriting, timetables, stabilisation, tax, continuing obligations and de-listing.
To compare answers across multiple jurisdictions visit the Equity Capital Markets Country Q&A tool.
This Q&A is part of the PLC multi-jurisdictional guide to capital markets law. For a full list of jurisdictional Q&As visit www.practicallaw.com/capitalmarkets-mjg.
The main equity exchange in Argentina is the Buenos Aires Stock Exchange (Bolsa de Comercio de Buenos Aires) (BCBA) (www.bcba.sba.com.ar), which works with an associated market, the Buenos Aires Securities Market (Mercado de Valores de Buenos Aires) (MERVAL) (www.merval.com.ar). The MERVAL is also the most significant Argentine market where equity securities issued by corporations are traded.
Each authorised market/exchange in Argentina, including the BCBA and the Electronic Open Market (Mercado Abierto Electrónico) (MAE) (www.mae.com.ar), a debt securities market, has its own regulations and requirements, including:
Reporting systems.
Administrative procedures.
Registry and customer information.
Transactions records.
The nature of the assets permitted to be traded.
The scope of the transactions.
The requirements to be fulfilled by each of the agents involved in market transactions.
As a general principle, a broker can act and operate within different authorised securities markets in Argentina, as long as that broker is duly registered and authorised with each relevant authorised securities market.
There were two new issuances of shares in 2011 (Socotherm Americas issued shares of ARS180 million and BBVA Banco Francés issued shares of ARS536,877,850). There was only one IPO (Ovoprot International, which issued shares of ARS13,314,793) (as at 1 February 2012, US$1 was about ARS4.32).
There are six foreign companies out of a total of 110 companies listing their shares on the BCBA. Argentine Depositary Certificates (Certificados de Depósito Argentino) (CEDEAR) and Securities' Certificates (Certificados de Valores) (CEVA), which can include underlying equity securities, are also listed on the BCBA (see Question 3, Foreign companies).
An IPO can be postponed at any stage, until the primary placement period of the shares on the market is closed and the transaction is settled. Even if the primary placement period has been initiated, the placement can be suspended and postponed, or cancelled, in which case it can be initiated again when market conditions are favourable. No IPOs were postponed in 2011.
The regulatory body responsible for regulating the equity markets/exchanges is the National Securities Commission (Comisión Nacional de Valores) (CNV) (www.cnv.gob.ar), a national entity that is separate from the Central government with jurisdiction over Argentina. The CNV supervises:
Companies authorised to issue and offer securities (including shares) to the public in Argentina.
The trading of securities (whether or not such securities are issued in Argentina) in the Argentine secondary market.
All individuals and legal entities involved by any means in the public offering of securities (including IPOs of securities) and secondary market transactions involving securities.
Law no. 17,811 is the main law regulating the activities performed in connection with the public offering of securities.
In its capacity as regulator, the CNV issues regulations (CNV Regulation), which together with Law no. 17,811, as amended, and other legal sources (the most relevant of which are Presidential Decrees no. 2284/91 and no. 677/01), constitute the regulatory framework for public offerings of securities (including shares) and the secondary market trading of securities.
In addition, each market/exchange issues its own regulations that, together with the CNV Regulation, applies to securities' transactions.
Corporations' Law no. 19,550 as amended also applies to shares.
A primary listing on the main markets/exchanges requires:
Prior authorisation by the CNV to both:
enter the public offer regime; and
issue and place shares on the market through a public offer.
Prior authorisation by the relevant exchange to list the shares, and by the relevant markets to trade the shares.
The requirements necessary to be authorised both by the CNV and the exchanges/markets are similar, and include the filing with the regulatory authorities of certain information related to the issuer and to the shares to be placed on the market, which must be evaluated by such authorities' staff of lawyers and accountants. This documentation includes the following:
The company must also pay a filing fee, and certain publications must be made, including for example, a summary of the prospectus and a notice announcing the placement period to investors. If securities are to be listed and traded in a local stock exchange or market like the BCBA and for MAE, similar notices and costs must be published and paid for.
The company is subject to ongoing reporting requirements, which include:
Quarterly and year-end financial statements (see Question 21).
Reports in relation to material events that may affect the value of its securities.
Reporting any changes in its corporate structure and authorities.
Foreign entities can file a request to the CNV to make a public offer of their securities (CNV Regulation). The documentation requested is similar to the one applicable to local companies.
Before filing its request with the CNV, the foreign entity must establish a branch, and register its offices with the Argentine General Inspection of Justice (Inspección General de Justicia) (IGJ) or the equivalent provincial (local) business companies' registration authority. Among other documents, the entity must file a copy of its:
Articles of incorporation and bye-laws.
Certificate of incorporation evidencing that the entity is duly registered and validly existing.
Corporate resolution appointing a legal representative and establishing a domicile in Argentina.
Where the foreign entity is carrying on business in Argentina on a continuous basis, it will be considered to have a permanent establishment or tax presence in Argentina, and will be subject to Argentine taxation.
Other vehicles to allow the sale and offer of equity issued by foreign entities, with or without the issuer's sponsorship or participation were created under CNV Regulation. In such cases, equity is deposited with a local custodian and offered in Argentina through structures similar to the US American Depositary Receipts (ADRs) (that is, CEDEAR and CEVA) (see Question 1).
There are no minimum size requirements.
There are no minimum trading record or working capital requirements.
Financial statements for listed companies must be prepared according to the requirements of the CNV Regulation, including that, except for certain limited cases, listed companies must follow the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) for fiscal years starting 1 January 2012.
There are two listing panels within the BCBA:
Special panel, where the leading companies list their shares.
General panel, that contains the rest of the companies.
The BCBA regulation sets out, as follows, the amount of shares that must be owned by members of the public in each panel:
Companies listing their shares with voting rights in the special panel must have:
at least 1,000 shareholders from the public; or
30% of its share capital must be owned by the public.
If the shares do not have voting rights, then the companies must have:
at least 1,200 shareholders from the public; or
40% of its share capital must be owned by the public.
Companies listing their shares with voting rights in the general panel must have:
at least 150 shareholders from the public; or
20% of its share capital must be owned by the public.
If the shares do not have voting rights, then the companies must have:
at least 200 shareholders from the public; or
30% of its share capital must be owned by the public.
There is no answer content for this Question, as it is a new addition to the template that did not exist at the time of writing.
As part of an IPO an issuer must first request from the CNV a general authorisation to publicly offer its shares to the market (see Question 3). The issuer must provide the CNV and the markets/exchanges with some general corporate and business information to give the markets/exchanges a clear understanding of its business. Once the issuer is authorised to make a public offer of its shares, such general information need not be provided by the issuer as part of the process of successive placing of shares (it is required only for purposes of updating).
An IPO can be made either:
Through the offer to the market of existing shares, in which case the funds raised will be collected by the shareholder selling/placing the shares on the market.
Through the offer to subscribe new shares to be issued by the company, in which case the funds raised will be collected by the company issuing the shares.
In a subsequent equity offering the issuer is already authorised to make a public offer of its shares. Consequently, the issuer must only:
Provide to the CNV and the markets/exchanges information related to the shares to be issued.
Update any relevant corporate or business information.
In addition, a subsequent equity offering can be made through the offer of existing shares or by subscription (see Question 5).
There is no answer content for this Question, as it is a new addition to the template that did not exist at the time of writing.
Companies applying for a primary listing of their shares must first obtain from the CNV an authorisation to publicly offer all of their shares to the market. They can then apply for a primary listing of one or more classes of shares on a stock exchange. All shares within a same listed class must be listed.
The main steps for a local company applying for a primary listing of its shares in the BCBA involve pre-filing and filing requirements.
The main steps and related documents in pre-filing include the following:
Preparation of documentation, including a prospectus and special financial statements, if necessary. Due diligence takes place at this stage.
Shareholders' meeting approving the request to enter the public offer regime, the modification of its bye-laws, to the extent required, and the appointment of the person responsible for dealing with the market (Responsable de las Relaciones con el Mercado). Selling shareholders must express their intention to sell their shares (if applicable) and must resign their pre-emptive rights (if applicable).
Registration of bye-laws' amendment before the Superintendency of Corporations.
Board of directors' meeting deciding, on delegation of the shareholders' meeting, the request to submit the company to the public offer regime, and the issuing, placing by public offer and listing of company shares.
The main steps and related documents in filing include the following:
Filing before the BCBA of a single request to be admitted to the public offer regime in connection with its share capital, to be decided by the CNV, and to list one or more classes of shares, to be decided by the BCBA, together with a draft prospectus and other information. The BCBA forwards such request to the CNV after it conducts a preliminary analysis (with satisfactory results) (under a convention entered into between the BCBA and the CNV (Agreement for the Procedure Applicable to Simultaneous Public Offer and Listing Requests dated 1 July 1992)).
Filing of a letter before the CNV informing the filing made before the BCBA.
Filing of documentation with the market carrying the electronic platform where the primary placement will take place.
Pre-marketing of the placement.
Amendments to the preliminary prospectus and clarifications to the BCBA, and so on.
Courtesy visit to the company by BCBA officers. Verification of the company's administrative capacity to be admitted to the public offer regime.
Risk rating report. The CNV Regulation allows the issuer not to have its shares evaluated by a risk rating company. However, in that case a specific warning must be included in the prospectus.
The BCBA authorises the company to list its shares in the BCBA, conditional on the prior authorisation of the CNV to make the public offer of the shares. The BCBA then delivers the file to the CNV.
Filing of definitive prospectus with the CNV and the BCBA.
Authorisation to enter the public offer regime and place the shares through public offer by the CNV.
Execution of contracts related to the transaction.
Publication of prospectus in the BCBA bulletin.
Placement period and receipt of subscription offers.
Price determination and confirmation of offers received.
Publication of placement result.
Settlement.
The procedure applicable to foreign companies when listing shares is similar.
The advisers and agents in an equity offering do not differ from those used in an IPO. However, the advisers and agents in an equity offering may vary, depending on the needs of the transaction:
Arranger/lead manager. Hired by the issuer for structuring and co-ordinating all the activities included in the transaction.
Financial advisor. Hired by the issuer for assisting it in determining the subscription price of the shares.
Legal advisor. The lawyer or law firm hired by the issuer gives legal advice in all the legal and regulatory aspects of the issuing, drafts the transaction documents and performs the necessary filings before the regulatory authorities. Frequently, the arranger and the issuer have their own legal advisors. If the shares are placed outside Argentina, then the issuer hires a foreign law firm practising law in that jurisdiction.
Placement agent. Hired by the issuer to market the offer and co-ordinate the placement of the shares.
Risk rating company. Hired by the issuer to make the risk rating evaluation of the shares to be placed on the market. The CNV Regulation allows the issuer not to have its shares evaluated by a risk rating company. However, in that case a specific warning must be included in the Prospectus. Risk rating companies are regulated and monitored by the CNV. A risk rating evaluation is necessary if the shares are to be distributed among certain institutional investors, such as insurance companies.
Auditor. The accountant or accountant firm hired by the issuer to audit the financial statements and other accounting information related to the transaction.
The prospectus is the main document produced in an equity offering. There are also other ancillary documents such as shareholders' minutes and notices that must be published (see Question 3).
A prospectus is always required in a public offer of shares unless an exemption exists (see Question 11).
Sufficient copies of the prospectus must be printed to cover the demand of potential investors and published in the news bulletins of the exchanges/markets where the shares will be listed or offered. The prospectus must also be available at the issuer's and placement agents' registered addresses.
A prospectus is not required when issuing shares (CNV Regulation):
By capitalisation of reserves, accounting adjustments or profits or other special accounts registered in the financial statements.
Where the shareholders' pre-emptive rights were suspended.
By conversion of shares or exchange by other securities, when these are performed in accordance with their original terms and conditions.
The publication and delivery of a definitive prospectus can be made only if the CNV has issued a definitive authorisation to make a public offer of the shares (CNV Regulation). Before this stage, the company can only perform limited marketing actions, which includes distribution of a preliminary prospectus on a limited and restricted basis.
The disclosure of information before the public offering authorisation is conditional on the following, among other things:
A special legend must be included in the first page of the preliminary prospectus, in red ink and bold characters, announcing that the authorisation is still pending.
At the time of applying for the public offering authorisation, the issuer must:
disclose if the issue will be publicised through the distribution of a preliminary prospectus; and
submit a copy of the preliminary prospectus to the CNV.
The preliminary prospectus must be replaced by the final prospectus once the public offering of the shares is authorised. It must then be made available to the interested parties or intermediaries with any and all amendments introduced to it at the request of the CNV, removing the special legend. In no event can the distribution of the preliminary prospectus be made before the application for the public offering authorisation of the relevant issuing.
The main categories of information that must be contained in a prospectus include (CNV Regulation):
Mandatory legends related to the responsibility of the issuer for the information contained in the prospectus.
Information on directors, senior management, advisors, auditors and members of the supervisory board (statutory controllers).
Statistical data and estimated schedule of the offering, including:
number of shares to be offered;
subscription price or method to establish the subscription price;
expected issue amount;
percentage represented by the placement of the issue in the capital stock after the offering and price/book value ratio; and
the offering method and schedule.
Key information on the issuer, including:
accounting and financial information, which will be provided on a consolidated, summarised and comparative basis for the previous three fiscal years and as of the closing date, or as from its incorporation in the case of a shorter life;
indices, which must be shown for the previous three fiscal years, or from its incorporation in the case of a shorter life including, among other things, those related to liquidity, financial position, fixed assets and profitability;
capitalisation and indebtedness;
reasons for the offering and use of proceeds;
risk factors.
Other information of the issuer, such as:
history and development of the issuer;
description of business;
issuer's structure and organisation; and
economic group, and fixed assets.
Operating and financial summary information and prospects, which consists of an analysis of the issuer's financial position and results of operations for each fiscal year and intermediate periods for which financial statements have been required, including the causes for any significant changes made from one year to another in the accounts of the financial statements, as thoroughly as necessary in order to comprise all of the issuer's businesses. In this regard, the following information must be provided together with any other information necessary for the investor to understand the issuer's financial position, the changes in such financial position and the result of its operations:
operating income;
liquidity and capital resources;
research and development, patents, licences, and so on;
trend information.
Principal shareholders and transactions with related parties.
Accounting information, including financial statements for the previous three fiscal years and for the last interim period subsequent to the closing of the previous fiscal year, and other accounting information and material changes. Financial statements for listed companies must be prepared according to the requirements of the CNV Regulation, including that, except for certain limited cases, listed companies must follow the IFRS, issued by the IASB for fiscal years starting 1 January 2012.
Details of the offering and listing, distribution plan, the markets where the shares will be listed and traded, the selling shareholders (if any), dilution and issuing expenses.
Additional information, including information related to the company's capital stock, bye-laws, relevant contracts, exchange controls, tax burdens, dividends and paying agents, among others.
The issuer's directors and statutory controllers are responsible for the information contained in the prospectus (CNV Regulation). Also, the arrangers and placement agents participating in a share issuing must diligently review the information contained in the prospectus. The experts or third parties giving their opinion about certain sections of the prospectus, will be responsible for those sections.
Any purchaser of the shares offered through a prospectus can initiate legal actions before a civil or a commercial court against these persons. Proof of any damages suffered as a consequence must be evidenced.
The Argentine Congress passed Law no. 26,733 in January 2102, which introduced certain white-collar crimes into the Argentine Criminal Code for:
Financial intermediation and securities intermediation.
Other financial and capital markets activities, such as:
insider trading;
manipulation of prices; and
other illegal activities.
Persons offering securities or financial instruments, dissimulating or hiding or providing deceptive facts or circumstances, including in the offering documents, may now also be subject to imprisonment penalties.
Equity securities may be marketed either through a public or a private offer.
A "public offer" of securities is defined as the invitation to the general public in Argentina or to specific groups of persons (either individuals or legal entities) in Argentina to participate in any type of transaction with securities, whether made by the issuer of the securities or by individuals or entities that are dedicated exclusively or non-exclusively to trading in securities through (Section 16, Law No. 17,811):
Personal offerings.
Publications in writing (for example, newspapers, magazines).
Radio or television transmissions.
Posting or signs.
Pamphlets.
Communications or any other means of diffusion.
Argentine securities laws do not provide for exemptions or exclusion of certain type of transactions from the public offering regulation (Law no. 17,811). Whenever a transaction is performed within the frame of the public offering definition, such transaction will be subject to the Argentine securities laws. The Argentine securities laws do not include exemptions or safe harbours such as those that are set out, for example, under US securities laws.
Although there is no specific regulation governing the nature and type of communication with the public, in some cases, such as in the case of telephone calls, whether or not the activity constitutes a public offer is subject to evaluation. In most cases, specific calls or one-to-one visits to Argentine residents does not constitute a violation of the law, while the establishment of automatic call systems to a variety of prospective or existing clients or toll-free lines may constitute restricted activity.
A transaction with securities will not be deemed a public offer and will not be subject to Argentine securities laws and regulations to the extent the offer is not made to the public or to specific groups of persons, but to individuals or legal entities on a one-to-one limited basis, regardless of the nature of such persons (that is, a private offer).
On 30 November 2011 the CNV modified the legal framework applicable to the placing of securities through public offers (CNV New Regulation).
The main changes were the following:
The CNV New Regulation also applies to placements of shares, commercial papers (short-term bonds) and closed investment funds (fondos comunes de inversion cerrados). Previously, the CNV New Regulation only imposed certain requisites for placement of certain securities, that is, trusts and negotiable obligations.
A bidding or auction is required. Previously, placements could be made through a bookbuilding process or similar.
The placement must be made exclusively through an electronic platform carried by an exchange/market. Previously, book runners would use forms and lists to register subscription orders.
Investors must make their offers exclusively through an authorised broker in the country. Previously, investors could make their offers directly to the placement agent.
Discrimination between investors is not allowed, since the acceptance of subscription offers is only as a result of price and rate competition between investors. Previously, the rules for accepting the subscription offers were tailor-made by the issuer.
The offering must be made exclusively through a bid or auction (for example, a Dutch auction, a modified Dutch auction or an English auction), within an electronic platform that can only be accessed by authorised brokers throughout the country. Such a platform must be carried by an exchange/market, and must have the prior approval of the CNV. This new placement system is effective from 1 March 2012.
However, other existing regulations provide that the issuer, acting by itself or through its placement agents, must perform genuine public marketing efforts, so that the offer effectively reaches the market in general. Among other actions, such marketing can include:
Informative meetings held with potential investors.
Publications in newspapers and exchanges' or markets' bulletins.
Distribution of a prospectus.
Electronic publications for four days in the electronic platform where the offer is to be made.
Other means of mass media or personal communications to potential investors.
The marketing requirements set forth above do not apply in case of public offerings of securities issued by the federal government, the provinces, the municipalities, self-governing entities and governmental corporations (section 18, Argentine Law no. 17,811).
Until the CNV issues its final authorisation for the company to a make public offer of its securities, the company can only perform certain limited marketing activities, which include distribution of a preliminary prospectus (see Question 11), and holding informative meetings, on a limited and restricted basis. Informative meetings can only be held before the public offering authorisation if the relevant application to the CNV has been submitted.
The notice and the holding of informative meetings must fulfil the following requirements:
Calls can only be issued in a personalised fashion by the issuer, and/or by any authorised intermediaries in charge of co-ordinating the placement.
The calls must include a paragraph indicating that the CNV has not yet made a decision about the application for public offering authorisation of the marketable securities.
The meetings must be held in locations guaranteeing exclusive access by the persons being invited.
The meetings must be held with the sole purpose of submitting information, which must be consistent with the information included in the preliminary offering circular.
During the period going from the distribution of the preliminary offering circular and the authorisation for the public offering of the marketable securities by the CNV, the issuers and/or institutions chosen by the issuer to place the issue within the country may receive indications of interest to purchase shares. Such indications will not be binding.
The issuer and/or the institutions chosen to place the issue must send a copy of the final offering circular to each of the attendants of the informative meetings within five days following the granting of the applicable authorisation for public offering. If information of a general character was disclosed based on the preliminary offering circular, the issuer and/or the institutions chosen for the placement must ensure (sufficiently prior to the placement of the issue through public offering) the disclosure of the information of the final offering circular is in the same conditions as those granted to the preliminary offering circular. The offering circular cannot include any references to the placement price when the price has not been established as of the date of distribution.
Any research made by brokers/dealers participating in a particular placement of shares that is published for the acknowledgement of the public in general, may carry liability for potential investors. Brokers/dealers may avoid any liability arising from their performing research reports by diligently reviewing the information contained in it checking that, as requested by the CNV Regulation, the information is in line with and does not go beyond the prospectus.
Public placements in Argentina through the bookbuilding system is no longer permitted under the CNV New Regulation (which is effective from 1 March 2012) (see Question 14). Only offerings made through a bid or auction following the requirements of the CNV New Regulation are permitted. Orders are placed and confirmed through an electronic platform that can only be accessed by authorised brokers throughout the country.
Although it is still unclear how the underwriting process will work within the new bidding or auction process implemented by the CNV New Regulation (see Question 14), the underwriting agreement will be likely to have to be entered into before the initiation of the placement period, the underwriter will have to place a purchase order through an authorised broker/dealer during the placement period, and will affect only the shares that were not subscribed to by the investors (through a stand-by underwriting).
Other classes of underwriting (for example, firm underwriting) will have to be analysed by the CNV and consulted with between the CNV and the entities carrying the electronic platforms.
There are no typical underwriting fees. Fees must be agreed on a case-by-case basis.
The timetable ranges from two to three months, including drafting of the prospectus and other related documentation, calling and holding a shareholders' meeting and obtaining the authorities' approval. If the offering takes place for the first time (IPO), then additional time must be allowed for the preparation of documentation and obtaining of the corresponding authorisation from the CNV and the BCBA. IPO transactions can take four to six months.
The CNV Regulation currently imposes fines for market manipulation. Law no. 26,733 introduced certain white-collar crimes into the Argentine Criminal Code for certain financial and capital markets activities, such as manipulation of prices (see Question 13). Persons increasing or decreasing the price of merchandises or securities through the release of false news, pretended negotiations or coalition of the main holders of a merchandise, for price fixing, or enhancing liquidity (in the case of securities), are also subject to imprisonment penalties.
The CNV Regulation expressly authorises price stabilisation activities, when made by broker/dealers in primary placements, and as long as the following requirements are met:
Price stabilisation must not be made beyond 30 days from the first trading day of the securities.
The prospectus must warn investors about the possibility of performing price stabilisation, its duration and conditions.
Price stabilisation will be made by only one broker/dealer participating in the placement and distribution.
Price stabilisation must be oriented to mitigate the decrease of the trading price, with respect to the initial price.
Price stabilisation must not be made for prices higher than the price traded between parties unrelated to the distribution and placement, or to the price of the initial offer.
The exchanges/markets must identify and publish the stabilisation transactions.
Price stabilisation can also be made in the secondary markets, with the prior authorisation of the CNV. The exchanges/markets can issue additional regulations to price stabilisation transactions.
In principle, dividends paid on equity securities issued by Argentine companies are not subject to income tax. However, the Argentine Income Tax Law provides that for payment of dividends that exceed the gains determined by the Argentine Income Tax Law, accumulated at the end of the immediately preceding fiscal year at the date of the payment, the issuer can withhold 35% above such surplus. This withholding is not applicable if the issuer pays dividends through the delivery of bonus shares.
Gains derived from the sale or exchange of ordinary shares of an Argentine issuer made by resident individuals who do not sell shares on a regular basis, are not subject to income tax.
Gains derived from the sale or exchange of ordinary shares of an Argentine issuer made by resident individuals selling shares on a regular basis, are subject to income tax.
Capital gains obtained by non-residents or foreign companies for the sale or exchange of ordinary shares are exempt from income tax (Decree no. 2,284/91).
Capital gains obtained by Argentine companies from the sale or exchange of ordinary shares are subject to income tax.
The continuing obligations of companies listing their shares are basically of the three following types:
Disclosure of corporate information, all of which must comply with specific regulatory requirements, such as:
appointment of new members of the board of directors and statutory controllers;
approval of annual financial statements;
modification of bye-laws, and so on.
Disclosure of annual and quarterly financial statements, which must comply with specific regulatory requirements from the CNV and the relevant exchange (for example, the BCBA).
Disclosure of any fact or situation that, due to its magnitude, can substantially affect the placement of the company's shares or their trading (hechos relevantes (material events)). Specifically, the CNV requires the issuers to disclose, among other things, the following:
facts of any nature that affect or can affect substantially the economic, financial situation or assets of the controlled or controlling entities of the company listing its shares, including any sale or encumbrance of any relevant part of its assets;
syndication agreements between shareholders; and
any contract that is economically relevant entered into directly or indirectly, by directors, statutory controllers or managers, or with entities controlled by the same.
The continuing obligations applicable to listed local companies also apply to listed foreign companies (see Question 21). For financial information, the CNV can allow foreign companies to exclusively provide to the local authorities the same information that has been submitted to authorities from its country of origin. In some cases, certain accounting information must also be provided in accordance with Argentine general accepted accounting principles and according to other local requirements, such as the conversion of certain monetary information into pesos.
Foreign companies must also provide information about the trading of the shares in foreign markets, such as trading volumes and share prices.
Issuers of depositary receipts (CEDEAR) must provide copies of all information submitted by the issuer of the deposited shares, as well as copies of all relevant public information related to the issuer of shares. In addition, issuers of depositary receipts must:
Provide information related to the depositary receipts, issued and redeemed.
Prepare and submit annual and quarterly financial statements.
Depositary receipts programmes can also be sponsored by the issuer of the shares deposited under the programme. The issuer of the shares must request to the CNV and to the relevant market/exchange its authorisation to make a public offer of the depositary receipts and listing of the depositary receipts. Certain financial and corporate information must also be submitted.
The penalties for breaching the continuing obligations depend on the materiality and nature of the breach. Penalties for dissimulating, hiding or providing deceptive facts or circumstances to the authorities range from an administrative sanction (from warnings to monetary fines) to imprisonment (Law no. 26,733) (see Question 13).
There is no answer content for this Question, as it is a new addition to the template that did not exist at the time of writing.
Voluntary de-listing is possible in the following cases:
By a majority shareholder owning at least 95% of the share capital, through a process that enables it to enforce the acquisition of 100% of the company's shares at a fair price.
Under the BCBA regulation, by decision of a shareholders' meeting, provided that:
at least shareholders representing 75% of the share capital are present at the meeting; and
the votes against the decision to de-list the company do not exceed 10% of the share capital.
The CNV can order the compulsory loss of authorisation to make public offers. An exchange like the BCBA can order the de-listing of a company.
These events occur in the following cases:
Extinction of the company by: merger, decision of its shareholders, expiration of term, expiration of corporate purpose or impossibility to comply with it.
Loss of legal authorisations to conduct business, if applicable.
Bankruptcy or administrative liquidation.
Material breach of the stock exchange's listing regulation.
Two companies performed voluntary de-listings in 2011 (Electricidad Argentina SA in January and American Plast in June). The BCBA compulsorily de-listed one company (Sniafa in July).
There were several amendments to the securities laws and the CNV Regulation in 2011, which the authorities stated were aimed at improving the Argentine markets and exchanges' transparency and preventing money laundering. The governing party has a majority in the Congress, which can provide for speed and lack of discussion in the approval of legislative initiatives proposed by the Federal Executive.
Qualified. City of Buenos Aires, 1992
Areas of practice. Banking; finance; capital markets.
Partner in charge of the Finance and Capital Markets Department.
T +5411 4346 1042
F +5411 4341 8496
E fernandezn@estudio-ofarrell.com.ar
W www.estudio-ofarrell.com.ar
Qualified. City of Buenos Aires, 1995
Areas of practice. Banking; finance; capital markets.
Senior associate with the Finance and Capital Markets Department.
T +5411 4346 1045
F +5411 4341 8496
E luegmayers@estudio-ofarrell.com.ar
W www.estudio-ofarrell.com.ar
Qualified. City of Buenos Aires, 2001
Areas of practice. Banking; finance; capital markets.
Senior associate with the Finance and Capital Markets Department.
Most recent disclosable transactions in which the contributors participated:
