On November 25th, 2022, the Argentine Securities and Exchange Commission (the “CNV” for its Spanish acronym) has issued the General Resolution N° 942/2022 (the “Resolution”) by which, in its role as the authority in charge of the control of the “Crowdfunding Platforms” (“CP”) responsible for establishing its requirements in order to obtain its authorization and registration, and having as background the General Resolutions No. 822 and 922 issued by CNV, that has submitted for consideration of the interested parties, under the procedure of Participative Elaboration of Rules, according to Decree No. 1172/2003, the non-binding opinions have been received and resulted in the present Resolution which establishes:
- All CP must permanently have a minimum net equity -integrated and net of investments in Crowdfunding Projects – equivalent to seventy-five thousand three hundred and fifty Acquisitive Value Units (“UVA”), updated by the Reference Stabilization Coefficient (“CER”), which shall arise from its annual financial statements. Both the audit commission in its report, as well as the independent auditor in its opinion, must specifically state the adequacy of the minimum net equity.
- At the time of submitting its annual financial statements, one of its Note or Annex shall expressly detail all the Crowdfunding Projects published through the CP during the fiscal year, including the final amount of each one of them and the nominal and percentage value corresponding to the participation of the CP.
- It is incorporated within the obligations of the CP to inform the Investor a description of the process to complete the transaction or to cancel it, letting him/her know that he/she will have up to ten days after the date of making his/her investment commitment to retract it or until the end of the subscription period, whichever occurs first.
- One of the obligations of the CP is to direct the Investors where to transfer the funds with respect to the investment in each Project. For such purpose, in order to manage, custody and administer the subscribed funds, the CP shall hire the services of a Financial Fiduciary registered before the CNV or of a Payment Service Provider duly authorized by the Argentine Central Bank.
- The prohibitions of the acts that may not be performed by the CP are reformed by the Resolution.
- CP are required to publish on their website links with access to the investments in crowdfunding projects published in the same crowdfunding platform or other crowdfunding platform registered before the CNV, with the details of the amount and percentages invested.
- The Resolution establishes that the maximum amount of cumulative issuances among all the instruments issued during a twelve-month period by a Project may not exceed the amount of one million five hundred thousand UVA updated by the CER.
- In the event that a Project chooses to make successive placements, it must notify its intention to the CP at least ten days prior to the proposed date for initiating the subscription.
- The subscription period of a Project shall not be less than thirty calendar days nor more than one hundred and eighty calendar days.
- In the event of any change in the Project, the CP may extend the subscription period by no more than 20% of the originally planned time frame, provided that, the notice to the Investors of the material change has been given before 80% of the period initially considered to achieve the financing of the Crowdfunding Project has elapsed. Moreover, in the event that a Project achieves a subscription of funds for a percentage equal to or greater than 80%, but less than 100% of the amount originally foreseen, the Entrepreneur may opt for the continuity of the Crowdfunding Project without requiring the prior approval of the participating Investors, provided that this condition has been duly informed to the Investors prior to the beginning of the subscription period, and must informed a New Business Plan adjusted to the final effective amount of the subscription of funds.
- No investor may participate in more than 10% of the subscription of a Crowdfunding Project, or in an amount greater than 150,000 UVA, updated by CER, whichever is lower.
- In the event that the Investor is a Qualified Investor the limit of the investment is increased to 20% of the Project.
- All Crowdfunding Projects must have a minimum participation of five Investors.
Access the complete text of the Resolution here
This publication does not constitute a legal opinion on specific issues. If necessary, specialized legal advice should be sought.
For further information, please contact:
Sebastián Luegmayer – LuegmayerS@eof.com.ar
Catalina Iglesias Paiz – IglesiaspaizC@eof.com.ar