Argentine Central Bank Mandates Companies to Refinance Debt
Pursuant to Communication “A” 7106 dated September 15, 2020, the Argentine Central Bank tightened currency controls.
According to the new regulation, private sector companies and financial institutions shall reprofile at least 60% of any payment of principal scheduled between October 15, 2020 and March 31, 2021 on any external financial debt (other than intercompany debt) and dollar-denominated local securities offerings.
A refinancing plan shall be filed with the Argentine Central Bank based on the following standards:
a) Argentine debtors shall be granted access to the foreign exchange market to purchase foreign currency to make payments of services of principal for up to 40% of the principal amount due on such period only; and
b) at least 60% of the principal amount due on such period shall be refinanced with a new external indebtedness with an average life of at least 2 years.
This shall not apply to: (a) indebtedness with international organizations or their associated agencies or guaranteed by them; (b) indebtedness granted by official credit agencies or guaranteed by them; or (c) payments of principal for an amount no exceeding USD 1,000,000 per calendar month.
The refinancing plan shall be filed before the following deadlines: (a) September 30, 2020, with respect any payment due before December 31, 2020; and (b) at least 30 calendar days before the relevant payment, with respect to any payment due between January 1, 2021 and March 31, 2021.
For more information, do not hesitate to contact Marcelo R. Tavarone, Federico Salim, Julieta De Ruggiero or Francisco Molina Portela.
Changes Regarding Foreign Currency Held by Open-end Funds
On April 23, 2020, the Securities and Exchange Commission (“CNV”) issued General Resolution No. 835/2020 (the “Resolution”), making changes to the restrictions regarding liquidity and cash management applicable to open-end funds (the “Funds”) (with the exception of money market funds):
1) In general, all Funds may keep up to a 100% of their net worth in Argentine Pesos or invested in money market open-end funds.
2) Funds in foreign currency may keep up to a 100% of their net worth in the fund’s currency, both in local or foreign accounts.
3) Funds in foreign currency with shares that may be subscribed in Argentine Pesos, are allowed to keep up to the 25% of their net worth in the fund’s currency, both in local or foreign accounts. This restriction does not apply to those Funds authorized under Law No. 27,260 nor to amounts of shareholders not reached by the maturity extensions imposed by Decrees No. 596/19 and No. 141/20 (cuotapartistas no reperfilados).
Furthermore, the Funds in Argentine Pesos investing in foreign currency will only be able to invest up to 25% of their net worth, having to deposit the amounts both in local or foreign accounts. This restriction does not apply to amounts of shareholders not reached by the maturity extensions imposed by Decrees No. 596/19 and No. 141/20 (cuotapartistas no reperfilados).
Funds’ managers must comply with these new restrictions according to a schedule ending on May 15, 2020.
For more information, do not hesitate to contact Marcelo R. Tavarone, Federico Salim, Julieta De Ruggiero and/or Matías Otero.
In the following link, you can access the Firm’s statement on COVID-19.
For information concerning COVID-19 legal implications, please refer here.
COVID-19: Argentine Securities and Exchange Commission Extends Deadlines for Filing Annual and Quarterly Financial Statements
Due to the preventive and compulsory social isolation set forth by Decree No. 297/2020, and extended by No. 325/2020, the Argentine Securities and Exchange Commission (“CNV”) issued its General Resolution No. 832/2020, dated April 7, 2020 (the “Resolution”) extending the deadline for filing the annual and quarterly financial statements of: (i) corporate issuers of shares and securities listed under CNV’s control; (ii) closed mutual investment funds; (iii) financial trusts under the public offering regime; and (iv) small and mediumssized enterprises registered before CNV (“PyMES CNV”).
The Resolution stated that all of the abovementioned must submit their financial statements on the following dates:
- For annual statements ending on January 31, 2020, February 29, 2020 and March 31, 2020: within 90 calendar days as from its ending, or within 2 days of its approval by the management body, whichever occurs first; and
- For quarterly statements ending on February 29, 2020 and March 31, 2020: within 70 calendar days as from the end of the applicable quarterly period, or within 2 days of its approval by the management body, whichever occurs first.
Finally, the Resolution established that banks and other financial entities authorized by Law No. 21,526 and registered with the CNV for capital market activities must file their financial statements for the quarterly periods ending on December 31, 2020 and March 31, 2020, within 60 calendar days of its respective ending.
The Resolution’s provisions shall be enforceable as from April 8, 2020.
For further information, please do not hesitate to contact Juan Pablo Bove, Federico Salim, Julián Razumny, Julieta De Ruggiero, or Agustín Griffi, or corporate@trsym.com.
In the following link, you can access The Firm’s statement on Coronavirus.
For additional information regarding legal consequences on the COVID-19 crisis please refer here.
Argentine Securities and Exchange Commission Authorizes Long-distance Corporate Meetings
As anticipated in our newsletter dated March 25, the Argentine Securities and Exchange Commission (the “CNV”) issued, on April 3rd, 2020, General Resolution No. 830/2020 (the “Resolution”), whereby corporate Issuers of shares and notes that are under CNV’s control are authorized to hold long-distance shareholders’ and board of directors’ meetings during the time that social, preventive and mandatory lockdown regulations under Decree No. 297/2020 are in force.
The CNV established certain minimum requirements that Issuers must comply with, which are incorporated to Chapter XII, Tittle VXII of the CNV regulations.
Long-distance shareholders’ meetings during the sanitary emergency
Issuers are allowed to hold long-distance shareholders’ meetings even if their by-laws do not expressly authorize them, provided the following minimum requirements are met:
- Grant free access to the meetings to all shareholders with voting rights.
- The meeting shall be hold through means that allow the transmission of sound, image and words as well as digital recording.
- The call of a meeting as well as its legal notices must contain in a clear and easy way the elected mechanism to communicate, its access and the procedure to cast long-distance votes by digital means. Moreover, an email address must be provided.
- The shareholders’ notice of assistance must be sent to the email address provided to that extent. In the case of legal representatives, they must send the power of attorney five (5) business days in advance, sufficiently authenticated for this matter.
- The shareholders’ meeting minute must identify the attendants, capacity of the long-distance participation, place where the shareholder is located and the electronic system elected to participate.
- Digital copy of the shareholders’ meeting must be kept by the Issuer for five (5) years and remain at disposal of any shareholder.
- The supervisory committee shall be able to act in accordance with its faculties to ensure full compliance with all legal, regulatory and statutory regulations, especially with the minimum requirements contained in the Resolution.
For Issuers the by-laws of which do not authorize long-distance shareholders’ meetings, the Resolution also allows holding these types of meetings if these additional requirements are met:
- Communication of the calling of the meeting shall be made by all reasonable and necessary means in order to ensure the exercise of the shareholders’ rights.
- Quorum required to hold extraordinary shareholders’ meetings shall be met and, as a specific item on the agenda, the long-distance mechanism shall be approved with a majority required to approve an amendment to the by-laws.
Moreover, for those Issuers that have already called for shareholders’ meetings before the approval of the Resolution, the Resolution allows holding long-distance shareholders’ meetings, in which case the Issuer must publish a complimentary notice through the legal and statutory means in compliance with the requirements under the Resolution (which may vary in case the Issuer has already provided for long-distance shareholders’ meetings under its by-laws).
Long-distance management’s meeting during the sanitary emergency
During the period mentioned in the Resolution, long-distance management’s meetings might be held even if the by-laws do not expressly provide for, provided the requirements under Section 61 of the Argentine Capital Markets Law No. 26,831, as amended, are met. Moreover, and due to the sanitary regulations applicable, it is provided that once social restrictions have been lifted, the first on-site shareholders’ meeting held must ratify the decisions adopted by the management, with the quorum required to hold extraordinary shareholders’ meetings and with approval of the majorities required to approve an amendment to the by-laws.
Finally, it is important to mention that the Resolution does not provide for any specific mechanism to hold long-distance meetings in the case of the Audit Committee in the event the Issuers’ by-laws do not provide for these types of meetings for this body.
For further information do not hesitate to contact Juan Pablo Bove, Federico Salim, Julián Razumny, Julieta De Ruggiero, and/or Agustín Griffi, or corporate@trsym.com.
For additional information regarding legal consequences on the COVID-19 crisis please refer here.
Argentine Securities Commission Issues Resolution on Digitalization of Corporate and Accounting Books
On October 25th, the Argentine Securities Commission (“CNV”) issued General Resolution No. 813/2019 (“GR CNV 813/19”), which authorizes certain companies subject to CNV´s regulatory compliance (issuers of debt and shares publicly offered) to keep all of their corporate and accounting books digitally; a possibility that already existed but only for the Registry of Attendance to Shareholders’ Meetings book.
GR CNV 813/19 was issued following the guidelines of Law No. 27,444 (Simplification and De-Bureaucratization for the Productive Development of the Nation) and establishes the requirements to request such authorization, including the need to digitally sign corporate and accounting books, for which company signatories need to obtain a digital certificate issued by a licensed certifier.
In order to avoid problems with the digital signature verification software, companies must choose between the following alternatives:
- hire an online verification and signature verification service with a licensed certifying authority; or
- develop the signature verification and time stamp software and have an external auditor's opinion regarding its correct operation.
Furthermore, companies must keep support documentation of their accounting operations and their management. In case of entrusting the deposit of such documentation to third parties, they must state in a note to their financial statements the place where it is stored, and identify the subject in charge of the deposit and its address.
RG CNV 813/19 entered into force last Monday, October 28th.
For further information, do not hesitate to contact Juan Pablo Bove, Federico Otero, Julián Razumny, Pablo Tarantino, and/or Agustín Griffi.