Open-End Mutual Investment Funds: Extension of Shares’ Distribution and Placement Channels

On June 26, 2018 the Argentine Securities and Exchange Commission (“CNV” after its acronym in Spanish) published General Resolution No. 748/2018 (“Resolution No. 748”), which updates the legal regime applicable to Mutual Funds in order to expand the channels of distribution and placement of Open-End Funds shares.

After the “Participative Rule-Making” procedure (Executive Order No. 1172/2003), Chapter II of Title V of the CNV Rules (N.T. 2013 as amended) was modified, to expand the channels of distribution and placement of the shares of Open-End Funds.

Among other important modifications, the functions of the Integrated Placement and Distribution Agents ( “ACDI” after its acronym in Spanish) are extended. Resolution No. 748 enables them to offer Open-End Funds shares within an authorized market, following a framework agreement signed by the governing bodies of the fund and the respective market. The registration systems developed by the market through its compensatory chamber should be used.

In the event that the ACDI are also registered as Settlement Agents ( “ALyC” after its acronym in Spanish) and have membership of the corresponding market, they may participate in the placement of shares without subscribing specific agreements with the governing bodies of the Fund whose shares are intended to be placed.

On the other hand, in cases where the shareholders request the payment of the redemptions directly to the ACDI, it is possible that the necessary funds to attend said operations are transferred by the Depositary Company directly to the ACDI. In those cases the Depositary Company must immediately notify the entity that keeps the Registry so that it makes the appropriate update.