| |
 | |
| ARGENTINA
|
| Updated as at: February 22, 2013 - 12:00:00 EST |
|
| |
MARKET STATISTICS: |
| |
| |
| Currency: | Argentine Peso (ARS) |
|
|
| Time Zone: | GMT - 3 |
|
|
| Bolsa de Commercio de Buenos Aires (BCBA) |
| Market Capitalisation | USD 436.9 billion (equity capitalisation) |
| |
| Number of Listed Issues | 105 |
| |
| Average Daily Share Volume | Stock trading volume - USD 9.3 million |
| |
| Average Daily Trade Value | Volume - ARS 645 millions or USD 145 million |
|
| |
| |
|
|
| |
| |
MARKET INFRASTRUCTURE |
|
|
| Exchange(s) | Bolsa de Comercio de Buenos Aires (BCBA) or Buenos Aires Stock Exchange is the main stock market. Both equities and fixed income instruments trade on the exchange, although the majority of the fixed income instruments trade in the over-the-counter (OTC) market. All transactions executed on the BCBA must be done by an exchange member. Currently, there are 105 companies listed on the exchange. The BCBA is a non-profit, civil association owned by its members.
There are other stock exchanges in some main cities around the country, like in Rosario, Tucumán and Córdoba but the volumes are not significant.
Mercado Abierto Electrónico (MAE) - is a self-regulated over the counter market and is controlled by the Comisión Nacional de Valores (SEC). The MAE started its operation in 1988, and currently has 90 members.
The MAE is an electronic exchange where both public and private issues are listed. Securities Listed includes Government Bonds, Corporate Bonds, Treasury Bills and Mutual Funds. Equities are not listed as per the agreement between the MAE and the stock Exchange in May 1993. At MAE all trades are not guaranteed and done electronically.
Salta Stock Exchange
The Salta Stock Exchange commenced operations on October 22, 2009. The province of Salta is located in the Northwest of Argentina. The opening of the Salta exchange is part of the stock exchange regional development programme to facilitate the access of different regional companies to the Capital Market. |
|
|
| Trading System | Equity Market:
Shares are traded in the Buenos Aires Stock Exchange (BCBA), where 95% of transactions are executed (the majority of fixed income instruments trade in the OTC market). Mercado de Valores de Buenos Airesoperates a trading system for corporate securities and government bonds called Concurrent Market, where trades are executed either screen-based, or in the traditional open out-cry mode on the floor of the Bolsa in an automated order-matching system. Merval guarantees the settlement of all trades executed in the Concurrent Market. Trades on government and corporate bonds may also be executed on the Continuous Trading Session (with or without Merval's Settlement guarantee).
1) Concurrent Market
In the Mercado de Concurrencia, there are two distinct trading methods:
(a) The automatic trade execution, which is based on offers input through either workstations installed in brokers' offices or those available at the floor of the exchange. These workstations allow trading through the Sistema Integrado de Negociación Asistida por Computadora (SINAC), an electronic trading system, and are connected to the Stock Exchange Market System (Sistema Bursátil), which records all bids and offers. Bids and offers are registered according to the "time-price" priority, which prioritises bids and offers according to the best price and time that they are input into the system.
(b) The open outcry execution, which involves the registration of trades through tickets (minutas) completed by the broker and then input into the Merval System. The negotiations made by this method are commonly referred as those "trades executed on the floor of the exchange."
Both SINAC and open outcry trading produce the registration of trades in a unique price and volume structure that feed a single structure of offers by securities. Bids and offers are matched based on Merval's "best offer" policy. According to this policy, trades are matched at the lowest market price (in the case of a purchase) and at the highest market price (in the case of a sale).
The Mercado de Valores S. A.
Mercados primary functions are:
- Sets forth trading requirements.
- Guarantees fairness of executed transactions and settlement thereof. It can also establish which trades take performance - guarantee and which do not.
- As a self-regulatory institution, it sets forth and regulates trades executed by brokers and brokerage firms. Furthermore, it dictates the rules to which Brokers and Brokerage firms are subject, and controls enforcement thereof.
Merval acts as the clearing agent for trades executed on the BCBA by its members on a net basis for both cash and securities. Those financial institutions that are not members of Merval do their own clearing directly between counterparties.
The main features of the open out-cry mechanism carried out on the Floor are as follows:
- trades are executed open out-cry
- they are perfected through the operation of order slips
- the best offer rule applies in the open out-cry Merval settlement guarantee.
The following features of the Electronic System are:
- trades are executed based on bids and offers entered in work stations, i.e. computers are linked to the Stock Exchange information network
- trades are executed automatically
- offers are recorded as per price-time priority, privileging the best of them.
- these trades have the Merval guarantee.
2) Continuous Trading Session
Brokers and brokerage firms may trade in this segment, either by buying or selling government and corporate bonds for their own account, or by executing trades with another broker/brokerage firm, or any other intermediary, by means of direct negotiations. Unlike the open out-cry, in this system the best-offer rule does not apply and traders´ compensations as well as stock market and stock exchange fees are implicit in the price agreed upon.
Trades must be reported in real-time for their dissemination, registration and publication. Counterpart trades are settled by Mercado de Valores de Buenos Aires, and may be channelled through the guaranteed or the non-guaranteed segment.
Fixed Income Market
Both primary and secondary market transactions executed at the MAE are done electronically through its trading systems: SIOPEL (Sistema de Operaciones Electrónicas), the Electronic Transaction System and MAESOP, (Mercado Abierto Electronico Sistema de Operaciones Primarias), which is used for the primary market. While government and corporate bonds may be traded on either the BCBA or the MAE, bonds, including government securities, are generally traded on the MAE.
Trading Software - SIOPEL
During 1996 and 1997, Mercado Abierto Electrónico S.A. developed a specialised software package for the trading of securities, namely SIOPEL or Sistema de Operaciones Electrónicas (Electronic Transaction System).
SIOPEL is operated from the mainframe computer and distributed through direct links to MAE’s Broker/Dealers. Under its client/server architecture, applications are distributed to each Broker/Dealer’s workstation on TCP/IP-connected Windows terminals. |
|
|
| Trading Hours |
| Monday to Friday: | Floor Trading | SINAC | Continuous |
| Bonds (Public debt and Corporate bonds): | 11:00 - 17:00 | 11:00 - 17:00 | 11:00 - 17:00 |
| | | |
| Equities: | 11:00 - 17:00 | 11:00 - 17:00 | |
| | | |
| MAE Trading: | 09:30 - 17:00 | | |
|
|
|
| Security Identifiers | ISIN: Yes
Other: Each issue is assigned two local codes, a numeric code and an alphanumeric code, which are interrelated. The numeric code has four digits and a different number is assigned when the issue grants different rights. This code is used by the Caja de Valores (CDV), the central depository, for all transactions. The alphanumeric code, used by the BCBA, has five digits and is used for electronic board display. |
|
|
| Regulatory Bodies | Banco Central de la República Argentin (BCRA) - Republic of Argentina Central Bank: is the national monetary authority, acting as a credit and liquidity regulator in the local market.
Comisión Nacional de Valores (CNV) - Argentine Securities and Exchange Commission: is the governmental agent dependant on the Executive National Power that rules all the securities market including public offering and agents, with similar functions to those of other Markets Regulators such as the SEC in the United States.
Bolsa de Comercio de Buenos Aires (BASE) - Buenos Aires Stock Exchange - is a private non-profit, self-regulatory organisation supervised by the Comisión Nacional de Valores (CNV). It covers various exchanges of commodities and services including the Buenos Aires Stock Market - Mercado de Valores de Buenos Aires(MERVAL). BASE authorises and supervises the quotation of private securities in the MERVAL, as well as being a well-reputed arbitrator for business issues or disputes. As compensation for its services, it collects a fee from the issuers seeking quotation and on each transaction carried out on MERVAL’s floor. |
|
|
| Instruments |
| Equities: | Ordinary and Preferred Shares, Warrants, Depository receipts |
| Fixed Income: | Government Bonds, National, Provincial and Municipal bonds, Corporate Bonds, Commercial Papers. |
| Money Market: | Treasury Bills and Notes |
| Other: | Derivatives, futures and forwards, equity and bond futures |
|
|
|
| Form of Securities | The majority of securities are dematerialised and issued and settled in book-entry form (approximately 99%). There are a few securities that are in physical, registered, non-endorsable form. |
|
|
| Board Lots |
| Equities: | A trading lot is typically the smallest certificate denomination issued for a particular security. |
| |
| Debt: | Not applicable |
|
|
|
| Price Variations | For equities, the minimum price variation is:
- ARS 0.001 when the price is lower or equal to ARS 1
- ARS 0.01 when the price is between ARS 1.01 and ARS 10
- ARS 0.05 when the price is higher than ARS 10
|
|
|
| |
| |
SETTLEMENT AND REGISTRATION |
|
|
| Settlement Cycles |
| Equities: | T+0 or T+1 or T+2 or T+3 (agreed between participants) |
| Debt: | T+0 or T+1 or T+2 or T+3 (agreed between participants) |
| LETTERS | T+1 |
| Other Debt | T+3 |
| OTC: | T+0 or T+1 or T+2 or T+3 (agreed between participants) |
| Money Market: | Not applicable |
|
|
|
| Over-the-Counter (OTC) | Debt instruments, approved by the NSC, are available over-the-counter. |
|
|
| Settlement Procedures | Equity: Securities trading cycle can be T+0, T+1, T+2 or T+3 as arranged with the counterparty at the time of closing the transaction. No inter-broker pre-matching is performed by the stock exchange or clearinghouse.
Fixed Income: Fixed income trading cycle can be T+0, T+1, T+2 or T+3. Transactions generally settle on a T+3 basis. Fixed income instruments are settled via book entry transfer at the depository and physically outside the depository environment. Physical bearer bonds can settle outside the depository. Book-entry and registered non-endorsable bonds and equities normally settle at the depository.
On the MAE, the settlement is arranged between counterparties and may be done through Argenclear, CRYL, Clearstream or Euroclear.
NB local brokers are required to ensure that customer delivering securities to an international depositories account locally or abroad maintain the securities for three business days in customer account before delivering. |
|
|
| Short Selling | In the Argentine market short selling can only be performed by local brokers provided that they borrow the shares from Merval’s (Argentine Stock Market) securities lending program on trade date (three days prior to settlement date). |
|
|
| Turn-around Trades | For equities and book entry bonds, same day turnarounds are possible by using the Immediate Transfers of the Electronic Transfer System or, if the delivering broker presents a certified transfer slip (transferencia conformada) from the CDV with sufficient time for the custodian to take the shares in and make delivery to the other party before market cut-off times.
Turnarounds can also be done if the delivering counterparty has a custody account with RBC Investor Services' subcustodian and has sufficient position within cut-off times.
Turnarounds for physical bonds are difficult and must be reviewed on a case-by-case basis. |
|
|
| Clearing Agents | Caja de Valores (CV): is the Central Depository, the only institution authorised to receive joint deposits of securities. The CV only receives transfers and physical securities and that it does not perform transactions in pesos or dollars.
Central de Registración y Liquidación de Instrumentos de Endeudamiento Público (CRYL): As an alternative to C.V., the Central Bank can also act as a depository for new Public fixed income instruments issues. In order to deposit in “CRYL” the express authorisation from the client is required.
Argenclear: The clearing and settlement agent for the OTC bond market Mercado Abierto Electrónico (MAE) was launched on August 30, 2000. Argenclear provides a real delivery-against-payment environment for OTC transactions executed by members of the MAE. It should be noted that this institution allows clearing for both securities and cash on a net multilateral basis. Once the counterparties’ cash availability has been verified, the securities are transferred through Caja de Valores. |
|
|
| Depositories | Caja de Valores (CV): Although the BCBA and the MAE have different trading practices, securities can be settled at the same Central Depository, Caja de Valores. At CV, securities are deposited, and movements are done on a book-entry form. Most Argentine securities (99%) are either in book-entry form or immobilised at CV vaults. |
|
|
| Bank for International Settlements (BIS) Settlement Model | BIS is an international organisation which fosters cooperation among central banks and other agencies in pursuit of monetary and financial stability. The BIS Committee on Payment and Settlement Systems (CPSS) uses three common structural approaches, or models, to categorise the links between delivery and payment in a securities settlement system.
Not currently applicable to this market. |
|
|
| Registration Process | Book Entry: Securities are lodged in the subcustodian’s depository account. Each member of CV (Central Depository) maintains a master account (depositante number), under which it establishes sub-accounts (comitente number) in the name of its clients. Depository records constitute official registration. Transfers are affected through book-entry on settlement date. Argentina is not a final beneficiary market.
Physical: To re-register physical securities, the CVSA directs the company’s registrar to transfer ownership. The physical registration process may take three to seven days, during which time securities are blocked from trading. Shares are registered to the beneficial owner. Registration in nominee name is not permitted.
Corporate bonds held physically are registered through the Registering Agent, the register agent functions can be performed by the company itself or they may appoint a third party for those services, such as local banks or CV. This represents a small percentage of the market.
Some unlisted equities may be issued in physical form, since physical securities are rare should be reviewed on a case-by-case basis. These are registered directly with the company’s registrar, the registration process in these cases will take approximately seven days, and a special Power of Attorney is needed in order to perform the transfer. This process, however, is rare in the market since the Argentine market is highly dematerialised and almost 99% of securities are held in Caja de Valores. |
|
|
| Registrar | Caja de Valores (CV), Central Securities Depository. |
|
|
| Registration Period | Securities are automatically registered in the name of the sub account at CV at the time of settlement. |
|
|
| |
| |
RISK |
|
|
Disclosure
Requirements | Share holdings may be required to be disclosed by the beneficial owner, particularly when holdings reach or exceed prescribed disclosure limits. Investors must ensure that they comply in full by reporting such holdings to the appropriate organisations for this market, within the timeframe required. If you have any questions regarding this issue we encourage you to consult your legal counsel.
Failure to comply with reporting requirements may lead to penalties and/or other sanctions.
Purchases or sales representing more than 5% of the voting rights of a company must be reported to the CNV within five days, as per Decree 677/2001: Transparency Regime. The same procedure is to be followed each time there is a subsequent change that represents multiples of 5% of the voting rights of the company, until the shareholder acquires the condition of controlling party, where they will be subject to the specific requirements for such shareholders. |
|
|
| Buy-Ins | Buy-in options exist, however it is only available for brokers trading at Mervals floor. If a broker must deliver shares, and for any reason does not have them, it can lend the shares for two days. After that period, if the shares are still owed, the Merval will buy the shares on the broker’s behalf. Even if there is no established penalty, brokers do not want to be bought-in, as this could affect their reputation.
For trades outside Merval there is no official buy-in or established penalties. However, failure to complete transactions may result in high interest claims. |
|
|
| Compensation Fund | No fund available |
|
|
| Anti-Money Laundering | Money laundering is an especially sensitive issue in Latin America. Every country has a dedicated team, usually part of a compliance area that is dedicated exclusively to the money laundering risk control complying with the local legislation.
There are Central Bank regulations that outline the guidelines for Anti Money Laundering to which local banks have to adhere to. The main regulations are: Communications A3094, A3217, A3779, A3831, A3863, A3867. These communications are available at the Central Bank website.
Furthermore, the Financial Information Unit (UIF) sets forth additional guidelines.
All the above require to report any suspicious activities involving possible money laundering activities.
Please note that the opening of accounts in Argentina does not require the approval of local regulators, but does need to comply with the market account opening documentation package and Anti-Money laundering requirements established by the authority.
Effective on February 4, 2011 the UIF issued resolution 33/2011 related to documentation that will be required by local brokers, agents, mutual funds, hedge funds, or any intermediary agent acting in the purchasing of securities (including short selling and
lending) in the local market whenever a transaction surpasses certain threshold limits:
- Local brokers / agents will require an affidavit to their clients if a purchase of securities is made from AR$ 40.000 Argentinean Pesos on.
- Whenever the purchase of securities will be equal or above AR$ 200.000 Argentinean Pesos limit, local brokers / agents must also require supporting documentation of the statement made in the respective affidavit.
Additionally, brokers should require further information on all wire transfers executed to pay for the securities purchasing. The new requirement applies to the broker / agent, in respect to their relationship with their clients, in order to comply with the authority request.
Since December 2011, Local Authority has reinforced the importance of obtaining a local tax identification code (CDI) with the aim to align Anti-Money Laundering controls: customers must obtain a CDI for registering customer’s financial activity being performed in the market.
Additionally, the BCRA, in order to increase Anti-Money Laundering controls and to prevent Terrorism Financing aligning with international standards, has requested specific information to be populated when funds are transferred in the market due to an RVP or free cash transfer though the Electronic Payment System (MEP) of the Central Bank. |
|
|
| |
| |
FOREIGN OWNERSHIP |
|
|
| Market Entrance Requirements | For clients serviced out of certain locations this is an FII market. Please refer to the Terms & Conditions for Global Custody or contact your RBC Investor Services client Manager before making portfolio investments. |
|
|
Investment
Restrictions | Foreign investment in Argentina is regulated by Foreign Investment Law No. 21,382, as amended. Certain filings and formalities must be taken care of when purchasing assets of certain industries (broadcasting, banks, insurance companies, privatised companies).
Media and Communication
Under Argentine laws there are applicable limits for foreign investments regarding media and communication sector companies.
Foreign investors can invest in up to 30% of the capital and votes of an Argentine media and communications entity. Such percentage may be increased if, and to the extent to which, the country of origin of the foreign investor permits an Argentine investor to participate in media companies in excess of that limit.
Media and communication companies comprise newspapers, magazines, publishing companies, broadcasting services, production of visual and digital contents, advertising companies, and internet providers. In the particular case of broadcasting companies, no foreign individual can directly purchase stock. If the purchaser is an entity, specific advice should be sought.
Gas and Energy
Some limits are applicable on gas and energy sector companies for local and foreign investors (i.e. a gas generator cannot have controlling interest in a gas transportation or distribution company).
Financial Services
When a foreign or local investor wants to acquire shares of a local bank, depending on whether or not securities of such bank quote in an exchange and other aspects, certain formalities should be taken care of with the Central Bank of Argentina.
With respect to insurance companies, transactions being either mergers or acquisitions, as defined on Section 46 of law 20.091, must be authorised by the Superintendence of Insurance Companies.
Privatised companies
When referring to privatized companies, depending on what was established in the terms and conditions of the bidding process, certain restrictions may be imposed on the acquisition of assets of the privatised companies (e.g. that a percentage of the shares be owned by the State). However, this process must be analysed on a case by case basis. |
|
|
| Repatriation Policy | Through Communication “A” 5241, issued by the Central Bank of Argentina on November 1, 2011, repatriations of funds up to USD 5,000 per month, within the whole financial system, are no longer permitted effective immediately.
Foreign Institutional Investors wishing to open savings accounts must open Special Current Accounts in Argentine Pesos for Legal Entities, which do not require a legal domicile in Argentina , however proper documentation and requirements must be presented before opening special current account.
Communication A 5068 states that effective from May 1, 2010, no credit interest can be paid to clients in special current accounts.
Communication A 4129 allows foreign residents access to the FX Market up to USD 500,000 in the case of proceeds from financial investments, subject to certain conditions:
- Demonstrate the original entrance of funds into the country through the official FX market.
- Funds must be kept in the market for 365 calendar days, which will be considered from the date of closing the foreign currency ticket into the foreign exchange market.
- Demonstrate the flow of funds while invested in Argentina.
The above limits are non-cumulative monthly limits established at the customer level.
Since December 2011 the Central Bank of Argentina requires that customer demonstrate that FX repatriation belong to a final beneficiary non resident for processing the FX.
According to Communication A 4940, effective from May 13, 2009, any FX repatriation up to the USD 500,000 limit received from investors residence, domicile or constituted in a country, territory or jurisdiction included in the Tax Haven countries list (published as per decree nº 1344/98), must obtain previous approval from Central Bank for the FX to be processed. In addition Communication A 4949 was published, which complements Communication 4940 by reinforcing that any foreign exchange transaction being executed in the market, which does not fulfil the requirements established by the authority, is subject to Foreign Exchange Penal Regime.
There are certain exemptions to the above mentioned limit for repatriation of:
A) Interest from National Government Bond in local currency & dividend income payments – as long as the resident that paid the non-resident would have had access to the FX market, while dividends belong to stock with quotation in self-regulated market. As per Central Bank communication 4167 the interest from non-national government bonds such as corporate bonds, provincial bonds, municipal bonds, Central Bank notes and bills, etc, cannot be repatriated under the income exemptions, therefore the above mentioned limit (5,000 limits) and conditions apply.
B) Income and Principal Repatriation from National Government Bonds denominated in USD dollars, if documentation proving the genuineness of the transaction are in place.
Funds that fall under the exemption rules (not only under the exemption rule, funds which are not are under the exceptions as well) can be repatriated provided that the foreign investor can demonstrate that from the date in which funds were collected, up to the date of accessing the foreign exchange market for repatriation, the non-resident has not applied such funds to other investments in the country. This information should also be verified by the local custodian who must have copies of all the relevant information that prove the conditions required to repatriate fund from the country, which can be requested at any time by the Central Bank. Both the purchase and sale of ARS are subject to detailed reporting requirements imposed by the Central Bank. In order to comply with this information requirement, the local Custodian required each client to complete a sworn statement to be sent via free format message (SWIFT MT599) for each foreign exchange instruction with detailed info of the FX repatriation.
Please find below details of requirements set by Communication A 4129:
A certification from a financial or exchange entity will be needed to certify that the funds that are being repatriated from the country were entered to the market through the official FX market. This entrance can be proved either by the forex transaction when the money arrived to the country or by the original credit into a USD account.
The Ministry of Economy has implemented additional capital controls under Presidential Decree 616/2005, whereby foreign investors are required to establish a cash reserve of 30% of the total funds entering the country through the foreign exchange market under specific transactions, as detailed below.
- Purchases of primary issuances of non-listed equity of local companies, which do not constitute a direct investment fund.
- Portfolio investments to constitute deposits in local currency accounts and purchases of assets and liabilities (e.g. equities and debt). Exception: Primary subscription of debt instruments (except for cases 4 and 5 below) and equities (except for case 5 below) with public offering and quotation in self-regulated markets.
- Portfolio investments to purchase rights in secondary markets with respect to instruments issued by the public sector (e.g., transactions related to public debt).
- Purchases of primary issuances of monetary regulation instruments issued by the Central Bank of Argentina. Non-residents will not be able to acquire new instruments LEBACS and NOBACS to be issued from the Central Bank of Argentina. Current positions of LEBACS and NOBACS are not impacted and can be negotiated by non-residents.
- Purchases of primary subscriptions of securities, bonds or certificates of participation issued by the trustee of a trust fund, whether or not they have a public offering and quotation on self regulated markets.
Exemptions to the 30% cash reserve requirement:
- Primary subscription of certificates of participation, bonds or debt instruments issued by trusts whose purpose is the development of energy infrastructure and whose underlined assets are totally or partially compound by the specific charges created by Act 26.095 as long as they are cancelled in at least 365 calendar days.
- Funds entering the country by Multilateral and Bilateral Credit Organisations directly or through their related agencies aimed for the purchase of primary subscriptions of securities, bonds or certificates of participation issued by the Trustee of a Trust Fund.
- Inflow of funds executed by Multilateral or Bilateral Credit Organisations or by their related agencies, as long as the funds are tied to operations conducted in accordance with Multilateral and Bilateral Credit Organisations’ activity.
The cash reserve is to be made in USD (USD physical bills) and will have the form of a nominative, non-interest bearing and non-transferable fixed time deposit at 0% interest rate. It is to be constituted at 30% of the total amount of funds entering the country for a period of 365 calendar days. This amount can not be used as collateral or guarantee for credit transactions of any kind. |
|
|
| |
| |
CASH |
|
|
| FX Regulations | Please refer to the Repatriation Policy section. |
|
|
| Payment Systems | For versus payment transactions, if the transaction settles using the Electronic Transfer System, payments are effected once the securities are received through the system. For settlements done via paper-based forms, there is an exchange of the CDV transfer form against payment at the local custodian’s window at their designated branch. As the shares are blocked for delivery to the receiving party, a certified transfer form ensures timely credit of securities and the earliest possible payment.
Payment is generally effected in one of two ways: payment through the electronic payment system from Central Bank of Argentina called Método Electrónico de Pagos (MEP), or book transfer between Internal bank accounts. The most common forms of payment are through the MEP system and book transfer payments. The central bank form 4090 is used only as a contingency measure.
If payment is effected through the MEP system, the party delivering the securities will either transfer the securities via the Electronic Transfer System or present the certified transfer form to the receiving party’s financial institution.
The financial institution paying the funds will issue a confirmation letter to the broker stating that the funds will be transferred to the specified account and will execute the transfer through the MEP system.
Funds transferred through MEP have same day value and availability, and the risk incurred in the period between receipt of certified transfer and wire of funds is assumed by the investor. Participants in the system have on-line access and are able to see intra-day credits and debits. The majority of financial institutions in Argentina presently use the MEP system. |
|
|
| Overdraft Permitted | As per Credit Policy of the Argentina Central Bank, foreign investors are not allowed to get credit facility for financial activity in the market. |
|
|
| |
| |
ENTITLEMENTS |
|
|
| Dividends Process | The dividend amount is announced and approved at the annual general meeting and is not official until published officially. Dividend must be paid within 30 days of the ordinary general meeting.
Entitlement is based on Ex-date position and investor is entitled to the dividend if the position is traded on Ex-date -1.
Ex-date is three days before pay date and two days before record date.
Record date is one day before pay date. |
|
|
| Dividend Payment Frequency | Annual |
|
|
| Interest Payment Frequency | Monthly, quarterly or semi-annually depending on the issue.
Entitlement is based on settled and registered position as at record date.
Ex-date is three days before pay date.
Record date is 30 days before pay date (for most issues). |
|
|
| Interest Accrual Rate | Usually 30/365-day basis |
|
|
| Corporate Actions |
| Common Events: | Cash and stock dividends, stock splits, mergers, exchange and acquisition offers. |
| Rights Tradeable: | Yes for some events |
| New Shares from exercised rights: | The rights are negotiated in BASE and the fractions thereof are settled in cash |
Subscription periods are, in general, 15 to 20 days. Payment is due by the last day of the period and the new shares rank pari passu upon issuance. New shares are received seven to fifteen days after the subscription period. |
|
|
| Additional Information | Shares are issued at par value. Certain companies have issued shares with the right to cast multiple votes in any shareholder’s meeting. In such circumstances, it is common for the shares with a single vote to be sold to the public, while shares possessing the right to five votes per share remain in the hands of the controlling shareholders. Once publicly listed, companies cannot issue additional multiple vote shares. By law, shareholders are always entitled to pre-emptive rights with respect to new issues of shares. |
|
|
| Protection of Rights | Entitlement is based on settled, registered positions as of record date. A claim may be arranged when a trade is failing as of record date. |
|
|
| |
|
PROXY VOTING |
|
|
| Foreign Investor Restrictions | Unrestricted voting rights
Foreign Residents must be registered at the Inspección General de Justicia in order to be able to participate in Shareholder Meetings.
Participation by foreign shareholders in local shareholder meetings may be impeded by the issuers. |
|
|
| Shares Blocked | Blocked on receipt of voting instructions until the day after the meeting |
|
|
Meeting Notices/
Agendas | Provided in English. Annual general meetings and extraordinary general meetings are announced seven to 14 days in advance.
By law, all corporate actions announcements must be published in at least one major local newspaper in the company’s state of domicile. According to the Stock Exchange’s listing requirements, the Bolsa de Comercio de Buenos Aires must be notified of all corporate action events for those companies listed on the exchange in order to establish an official ex-date in the market. |
|
|
| Meeting Outcome | On request |
|
|
| Company Reports | On request, subject to availability |
|
|
| Power of Attorney | Standard voting certificate, duly notarised and consularised (or Apostilled) Power of Attorney (one time PoA is requested) and Affidavit duly notarised and consularised (or Apostilled) in case of split voting. |
|
|
| Other | None |
|
|
| |
|
TAXATION |
|
|
| Dividend Tax Rate | Presently, cash dividends in Argentina are not taxable as long as they do not exceed the taxable income. |
|
|
| Interest Tax Rate | There is a 35% withholding tax on the portion that exceeds the taxable income. The portion of cash dividends that exceed the taxable income will be distributed proportionally among the beneficiaries and the tax to be withheld will be calculated accordingly to its participation over the total income distributed.
Interest earned by a foreign beneficiary is tax exempt if it originates from negotiable instruments falling within the provisions of Obligaciones Negociables Law 23,576, or from government securities.
Interest arising from privately placed debt instruments is subject to a 15.05% withholding tax, to be withheld directly by the issuer of the paying agent.
Interest on time deposits, current accounts, and accounts in dollars is tax exempt, provided that there is no transfer of income to foreign governments, for which a certification is required. If there is a transfer of income to a foreign government, it is subject to a 15.05% withholding tax. Transfer of income to a foreign government is generally defined as the investor subject to income tax by the country of their domicile. |
|
|
| Capital Gains Tax Rate | There are no capital gains taxes for foreign investors. |
|
|
| Tax Treaties |
| Australia | Denmark | Norway |
| Belgium | Finland | Sweden |
| Bolivia | France | Switzerland |
| Brazil | Germany | United Kingdom |
| Canada | Italy | |
| Chile(*) | Netherlands | |
(*) the local authority has been analyzing the cancelation of the DTT with Chile while cancelled the DTT with Spain, please refer to latest Marketwatches issued from the market for any additional information on this subject |
|
|
| Stamp Duty | Stamp duty tax applies to any contracts/agreements signed in the city of Buenos Aires, or outside of the city but that cover services rendered within Buenos Aires. Therefore, for an investor who invests directly in Argentina (and not through RBC Investor Services), upon the execution of any Service Agreement a stamp duty rate of 1% will be applied over the estimated fees to be collected by the local service provider for the service rendered during the subsequent five years. Foreign Investors will be required to provide an estimate of their assets and transaction volume to be performed/held in the market for the upcoming five years. This will be reviewed by local tax area with the Financial Entity to determine the Tax amount to be paid.
|
|
|
| Other Taxes | Through Law 23.966, amended through Law 25.585, the Argentine government created the Tax on Personal Assets. This tax is assessed on specific assets belonging to individual persons, whether domestic or foreign domiciled, as of December 31 of each calendar year. The tax rate is 0.5% of the value of the assets calculated based on the proportional net worth value based on the issuer 's balance sheet as of the closing of the previous calendar year or taking the public value (if this exist). The company can take up to 10 years to take back funds from their initial recipient of the dividends. At that point they will pro-rate the personal assets tax they wish to recover and request funds back from each company/holder.
Law 25.585 designated local companies that issue stock as the responsible paying party for the tax owed on the shares which are owned by local and/or foreign individuals and entities. To this effect the law presumes – without admitting evidence to the contrary – that shares held by entities, corporations, and establishments which are domiciled abroad indirectly belong to individuals. The issuer who has to pay the tax is entitled to recover the expense from the foreign investors (e.g. withholding the tax from dividend distributions or claiming the shareholder to pay them back the tax burden faced by the issuer). Professional and financial services, including custodial services and brokerage house commissions are subject to a 21% VAT. |
|
|
| |
|
SECURITIES LENDING |
| |
| There is a securities lending program at Merval, but it is available only for local brokers to ensure delivery in the guaranteed market. The regulations governing securities lending emphasise that the securities lending program is designed only for covering fails.
Equity lending is rare and occurs only between brokers.
|
|
|
|
MARKET HOLIDAYS |
|
|
|
|
| |
|
LOCAL WEBSITES |
|
|
|
|
| |
RBC Investor Services Limited is a holding company that provides strategic direction and management oversight to its affiliates, including RBC Investor Services Trust, which operates in the UK through a branch authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. All are licensed users of the RBC trademark (a registered trademark of Royal Bank of Canada) and conduct their global custody and investment administration business under the RBC Investor Services™ brand name.
This information is provided for the general information of RBC Investor Services™ clients from sources reasonably believed to be reliable. However, RBC Investor Services accepts no responsibility or liability of any kind for the accuracy, reliability or completeness of the information, or for any action taken, or results obtained, from the use of the information. |