Public offering of securities in Argentina is governed by Law No. 17,811 and CNV regulations. Decree No. 2,284, issued by the executive branch in November 1991 and as ratified by the national Congress, deepens the deregulation process though removal of stamp and transfer taxes, the elimination of fixed broker commissions, and the reduction of stock market fees on transactions.
Regarding protection of investors and market transparency pursuant to CNV Chapter XVII of General Resolution No. 290, the CNV may conduct procedures against issuers, agents, investors, or any other participants in the securities and commodities markets who manipulate the price or volume of the securities or commodities traded or acquire securities through practices which mislead the general public through false information or omissions in reporting material facts. Insider trading is defined as the breach of the fiduciary duty imposed on directors, officers, syndics, auditors, consultants and attorneys who must refrain from using privileged information obtained in the course of their activities to obtain any advantage for themselves or for third parties. Further, this fiduciary duty extends to employees of the CNV and stock exchanges as well as to all persons that, due to an incidental relationship with the issuing corporation, may obtain privileged information.
In order to protect investors against hostile take-overs, CNV Resolution No. 290 sets forth the requirements for any person who directly or indirectly intends to acquire a controlling share through public offering. The prospective purchaser must (i) submit to the CNV a complete report of the terms of the offer, subject to adequate and sufficient publicity; (ii) determine the duration of the offer, which may be neither less than 10 nor greater than 20 stock exchange business days counted as of the announcement of the offer; (iii) submit an irrevocable acquisition commitment except with respect to the offered price which may be subject to an increase of not less than 5%; and (iv) accept pro rata acquisition where the proposals of prospective sellers exceed the number of shares the purchaser intends to purchase.
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