Social, Green, and Sustainable Securities

On March 22, 2019, the Argentine Securities and Exchange Commission ( the “CNV” after its acronym in Spanish) published General Resolution No. 788/2019 (the “Resolution”) in the Official Gazette, which includes guidelines for the Issuance of Social, Green, and Sustainable Securities in Argentina (the “Guidelines”) to the CNV Regulations (New Text 2013, as supplemented) (the “CNV Regulations”).

The Guidelines are the result of the “Participative Rule-Making” procedure (Executive Order No. 1172/2003) established by General Resolution No. 764, which include some of the suggestions received to modify its original text. We described the terms of General Resolution No. 764 in Marval News article “Social Bonds, Green Bonds, and Sustainable Bonds” (see Marval News 189: https://www.marval.com/publicacion/bonos-sociales-bonos-verdes-y-bonos-sustentables-13260&lang=en ).

Below, we describe the main modifications incorporated in the final version of the Resolution as compared to the version that had been proposed by General Resolution No.764.

Firstly, the term “securities” will be used instead of “bonds” to refer to the instruments issued to finance projects with social and/or environmental purposes (the “SVS Securities”). This is in line with the possible structures mentioned in Section 3.2 of the Guidelines, which are not limited to bonds (the Resolution incorporates bonds of CNV SME and guaranteed CNV SME programs) but are also extended to mutual funds and financial trusts.

Secondly, the Resolution grants markets the authority to control green, social and/or sustainable characteristics of issuances when they wish to establish negotiation segments, panels or issue thematic labels. In this sense, markets have to create regulations for this purpose and may withdraw the thematic label if issuers fail to comply with them.

Finally, it includes recommendations to prepare a post-issuance report, which should detail impact of the issued security during its term and up to the total allocation of the proceeds. Such recommendations are based on voluntary guidelines developed by the International Capital Market Association (ICMA).

The Guidelines with these modifications were included in Annex III of Chapter I of Title VI of the CNV Regulations.