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On 11 May, the Productive Financing Law No. 27,444 was published (PFL). The purpose of the PFL is to encourage the development of the capital markets and productive financing in Argentina. The main items of the PFL are the following:

  • It modifies the Capital Markets Law No. 26,831. Among the main modifications, the PFL:
    • establishes that the takeover bid shall be mandatory only in those cases in which 50% or more of voting stocks of a listed company are acquired, or a participation inferior to 50% is reached but the purchaser acts as a controller;
    • gives the National Securities Commission (CNV) the right to determine if an offer is public or private (public offer vs. private placement) through specific regulation to be issued, such as the means and mechanisms for marketing the same and the number and type of investors to which the offer is made;
    • eliminates the CNV’s ability to remove members of the administrative body of an issuing company and the right to appoint an individuals with veto powers, without prior intervention of the Judicial Branch;
    • restricts the ability of the Argentine Central Bank to intervene in the capital market and limit the public offer of new issuance of negotiable securities without intervention of the CNV;
    • increases the minimum amount of fines and penalties from 5,000 ARS to 100,000 ARS and the maximum amount from 20,000,000 ARS to 100,000,000 ARS; and
    • empowers foreign legal entities to participate in shareholders' meetings of public companies without the requirement to register with the public registry of commerce.
  • The regime of "MiPyMEs Electronic Credit Invoice" is introduced. Such electronic invoices shall be issued by small and medium companies and shall be entitled to a fast track proceeding for collection purposes, provided that they comply with certain requirements set forth by the PFL. Moreover, they may be negotiated in the markets authorized by the CNV;
  • The regulation eliminates the differences between Open and Closed Investment Funds (Investment Funds) in order to promote the registration of new Closed Investment Funds. Under the new regulatory framework, the Managing Company (administrator of the Investment Fund’s estate) and the Depositary Company (custodian of the Investment Fund’s securities) are individually and separately responsible for the damages that each company may cause to investors of the Investment Funds.
  • Derivatives contracts are regulated in accordance with international standards allowing early termination of such contracts upon reorganization proceeding or bankruptcy of the counterparty and the offsetting of positions.
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