Argentine Securities Commission Authorizes Trading Index Options

On June 12, 2024, the Argentine Securities Commission (CNV) issued General Resolution 1005, incorporating the possibility of carrying out index options transactions based on assets regulated by the CNV.

 

The initiative stems from the need to update the current regulations on derivative instruments and to achieve a modern and transparent framework that contributes to the development of the capital market and Argentina's economy.

 

The authorization and regulation the transactions is subject to certain parameters, conditions, and requirements that must be fulfilled before the CNV approves it.

 

The Resolution also readjusted and simplified all the provisions regarding forward transactions, such as futures and options contracts.

 

1)Options contracts

 

The categories of direct and indirect options have been unified under “option contracts.” Option contracts may be made on any of the following underlying assets:

 

(i)         securities,

(ii)        futures contracts, or

(iii)       an index based on Assets Regulated by the CNV, meaning those securities included in the definition of securities established in the Capital Markets Law, except for derivative contracts or instruments.

 

2)Futures contracts

 

The Resolution lists the underlying assets that may be committed to exchange (buy and sell):

 

(i)         securities,

(ii)        financial assets, interest rates, or indexes

(iii)       non-financial assets (agricultural products, raw materials, metals, minerals, or other commodities).

 

3)Requirements for the authorization of Futures Contracts and Options Contracts

 

The markets will determine the terms and conditions of each futures contract and options contract to be traded within their scope. The Resolution readjusts and incorporates the following information, to be submitted before the CNV, in the list of requirements for the approval of such contracts:

 

(i)         the characteristics of the series to be authorized must be indicated,

(ii)        for index contracts or options contracts on indexes based on assets regulated by the CNV, details of the methodology of their construction, composition, and calculation of the proposed index,

(iii)       for futures or options contracts without physical delivery of the underlying asset, the method for determining the settlement price at maturity

(iv)       detailed information on the parameters, analysis, and verifications carried out by the corresponding market to conclude that the price data to be used are of high quality and reliable and, if not, the adjustments used in the calculation procedures and the corresponding validations carried out to guarantee the use of market prices, their reliability and integrity.