CNV: New Regulation on the Public Trade of Electronic Credit Invoices Issued by Micro, Small and Medium-sized Enterprises

On January 4, 2019, the Argentine Securities and Exchange Commission (the “CNV” after its acronym in Spanish), issued the General Resolution N° 780 (the “Resolution”), to rule the public trade of the electronic credit invoices issued by the micro, small and medium-sized enterprises (the “SMEs” and the “Invoices”), adding new Part XX to Chapter V of Title VI of the CNV’s Rules (the “Rules”) which contains, essentially, the following provisions:

(i) the Markets under the jurisdiction of the CNV may issue regulations for the public trade of the Invoices, as long as they ensure that: (a) the trade will be performed under an offer-attendance system that ensures price-time priority, and (b) the Invoices will be deposited in a Depositary Agent (a “DA”);

(ii) the Markets should provide the applicable requirements for trade on guaranteed and non-guaranteed instruments;

(iii) the Invoices should be deposited in a DA for their custody. The property or use rights arising from the Invoices will not be transferred to the DA. The DA must keep the Invoices in custody and perform the corresponding registrations, including the obligation to control that the Invoices have been registered with the Argentine Tax Authority. In no event will the DA be obliged to guarantee the payment of the Invoices in case of default of the SME.

In addition, the Resolution has modified Section 37 of Part XII, Chapter I, Title VIII of the Rules, including in the list of authorized agents that may act as depositors, according to Section 32 of the Law No. 20.643 as amended, the entities considered in Section 13 of the Title I of the Productive Financing Law N° 27.440.

Prior to its enactment, the CNV submitted a proposal of the Resolution to market participants and the public in general, for review and consideration.