CEVA Regulations

Certificados de Valores

Securities Commission
Buenos Aires, September 7th, 2005

HAVING SEEN THESE PROCEEDINGS under file Nr. 85/2005 related to the records of this Securities Commission (Comisión Nacional de Valores), and

CONSIDERING

THAT results of interest the introduction of new instruments into the local markets that could be attractive for the retail investors as well as for the institutional ones.

THAT Article 3 of the Decree Nr. 677/01 Annex establishes the right for any legal entity to create and issue tradable instruments issued or grouped in series for their negotiation in the securities markets type that they shall choose, including the rights given to the entitled people and other conditions established in the issuance

THAT it is a practice in the international markets the use of securities negotiation that represents the behavior of specific index which is being negotiated independently from the underlying securities.

THAT the result of grouping several securities under a single certificate offers to the potential investor the possibility to diversify risks.

THAT notwithstanding the above mentioned, and considering the product’s components, it is convenient that the regulator determines if it is appropriate that new issuances are going to be offered to qualified investors in accordance with the current ruling in the regulator’s rules as a manner of ensuring enough information for the investors.

THAT it results necessary, in order to allow an ordered performance, the regulation of the manner in which the instruments could be implemented in the Argentine Market.

THAT the new instruments existence is related to a modern tendency that prevails in the financial market law in an extensive sense that values positively existence of the diversity of institutions and institutions

THAT as a consequence of the foregoing it results appropriate to incorporate into the rules of the Securities Commission a Chapter that rules the requirements for the creation and performance of the “Certificados de Valores” - CEVA.(certificates of instruments)

THAT these presents is issued pursuant to the powers vested by Sections 6 and 7 of Law 17.811

THEREFORE, THE ARGENTINE SECURITIES COMMISSION RESOLVED

 

SECTION 1

Modify Chapter VII of RULES of the ARGENTINE SECURITIES COMMISSION, New Text 2001, (the “RULES”) for the following: “CHAPTER VII: “Foreign Issuers , Cedears and CEVA”

 

SECTION 2

Incorporate to Chapter VII of the RULES of the ARGENTINE SECURITIES COMMISSION , New Text 2001, (the “RULES”) as sections 24 to 35 thereof

Section 24

The below entities mentioned in the following Section shall ask for the approval for the issuance of “CERTIFICADOS DE VALORES – CEVA”, representing:

Different types of tradable instruments; and /or Negotiable or Tradable Instruments that at the same time represent different types of securities: The securities that shall be deposited and/or represented are characterized, categorized, systematized and/or indexed according to criteria that reflect their value in the way or under the lineaments that shall be timely informed and approved by the ARGENTINE SECURITIES COMMISSION. The instruments that shall be deposited in order to be represented by the CEVA will have to be issued exclusively for the people mentioned in Section 26. The CEVA will be authorized for purposes of their public offering subject to the provisos hereof and to the rules applicable to the listing thereof established by the stock exchanges within their jurisdiction

Section 25

CEVAs may be issued by:

  1. permitted custodians of the Republic of Argentina, and
  2. commercial or investment banks and financial institutions licensed to carry on business by the CENTRAL BANK OF THE REPUBLIC OF ARGENTINA.

The issuer of the CEDEARs shall, in all cases, have a networth equal to or higher than THIRTY MILLION PESOS ($30,000,000).

Section 26

The securities whose deposit is represented by CEVAs ,according to what was defined in Section 24, shall be freely available (except for the restrictions exclusively stemming from the terms and conditions of the CEVA) and shall grant equal rights to the holders thereof. The securities whose deposit is represented by CEVAs shall be issued by an issuer:

  1. authorized to make public offerings and to list on any exchange of ARGENTINA; or
  2. authorized to make public offerings and to list on any exchange supervised by a governmental regulatory entity with which the ARGENTINE SECURITIES COMMISSION has signed a Memorandum of Understanding providing for their mutual cooperation and information; or
  3. authorized to make public offerings and to list on any of the stocks or securities exchanges of BRAZIL, URUGUAY, PARAGUAY or CHILE; or
  4. whose securities, though not admitted for purposes of their public offering and listing on any of the above referenced stocks or securities exchanges, are accepted as underlying assets through a grounded resolution of this commission
  5. whose securities, though not admitted for purposes of their public offering and listing on any of the above referenced stocks or securities exchanges, are accepted as underlying assets through a grounded resolution of this commission.

At the result of their lawful holder, the CEVAs may be freely exchanged for the securities represented by the CEVAs to be so exchanged. Upon delivery of the securities the relevant CEVAs shall be cancelled and (as applicable) destroyed. Delivery of the securities may be either physically certificated or duly registered according to the nature thereof and/or to the characteristics of the deposit. Pursuant to subsection (g) of Section 28 hereof, on the Program’s expiration date all CEVAs then outstanding shall be exchanged and, accordingly, cancelled, the pertinent securities being then delivered .

New CEVAs may be issued against deposit of the equivalent securities, provided the maximum permitted amount under the Program is not exceeded.

Issuers of CEVAs shall at all times have, as from the issue thereof, as many unencumbered, unrestricted and freely available securities as CEVAs of those securities are then outstanding (not having been cancelled by reason of the exchange).

Section 27

The securities may be deposited with:

  1. the issuer of the CEVAs or;
  2. an eligible and permitted Custodian in the returns of Law 20.643, or
  3. the common depositary of securities acting in the country of issue of the securities; or
  4. a bank or custodian acting within the country of issue of the securities having a minimum networth of TWO HUNDRED MILLION PESOS ($200,00,000) or its equivalent in the currency of the country of issue.

In all cases a provision shall be included to the effect that the depositary may not acquire any interest in not use the deposited securities, which shall be immobilized to the same extent of a regular deposit, only for purposes of counterbalancing the CEVAs.

The depositary of the securities may not be changed without the approval of the absolute majority of the holders of the CEVAs of the relevant issue, prior notice thereof to the Commission evidencing the approval so obtained. Such approval may be given at a meeting of holders or, else, individually, provided it can be proved beyond any reasonable doubt the approximate simultaneity of the consultation to the holders of the CEVAs. The meeting shall be governed by the rules established in the relevant CEVAs issue agreement and, supplementally, by the Rules of Law 19.550 applicable to extraordinary meetings.

The anticipated and general approval of a changed depositary will in no case be permitted. The approval shall be in all cases expressed in respect of a specific proposal and upon identification of the prospective successor depositaries.

Section 28

The CEVAs will be freely transferable and may be issued in registered non endorsable or book-entry form and it will evidence a reasonable and representative plural number of negotiable instruments according to the Securities Commission criteria. In exceptional cases, the ARGENTINE SECURITIES COMMISSION may authorize the issue of CEVAs evidencing fractions of securities, provided the relevant agreements reasonably guarantee the exercise of the rights stemming therefrom and the redemption contemplated under Section 26 by the participants in each unit security

The general provisos governing registered or book-entry securities, as the case may be, as current on each occasion, will apply.

The registered CEVAs shall contain at least:

  1. the name and main domicile of the issuer of the represented securities;
  2. the place of authorization of the issue of the securities represented by the CEVAs, with the relevant identification of the said authorization by the applicable regulatory authority;
  3. the number of securities represented by each CEVA;
  4. the name and main domicile of the issuer of the CEVA;
  5. the number of authorization of the issue or program under which the CEVA was issued;
  6. the conspicuous legend to the effect that the said instrument does not evidence securities but a certificate of the existence of the deposited securities therein referred to in favor of the issuer of the CEVA; and
  7. the place of deposit of the securities so represented.

Records kept in respect of book-entry CEVAs shall contain the data indicated in subsections (a), (b), (d), (e), and (g), as applicable.

The CEVAs will grant their holders the benefit to all rights inherent in the securities represented by the said CEVAs, without prejudice to the exercise thereof according to the CEVAs issue agreement.

The issue of a CEVAs in respect of the same security will not be permitted if there already exists an authorized an outstanding program of the said security by an issuer other than the initially authorized issuer, with such exception as the Commission may grant under a grounded resulution.

Section 29

The reporting requirements shall be limited to the issuer of the CEVAs and will exclusively establish:

  1. that the issuer of the CEVA shall file with the ARGENTINE SECURITIES COMMISSION and at the same time make available to the investors through the stocks or exchanges where the CEVAs are traded:
    1. within TEN calendar (10) days from its publication, a copy of any information and documentation filed by the issuer of the securities whose deposit is represented by the CEVAs vis à vis the stocks or exchanges where same are traded and any information and documentation published by any of same or by the issuer itself, when the information is not included in subsection (iii) of this Section; being required, within like term, to submit all publicly available even though not yet published data and documents theretofore filed with the regulatory authorities, in which case the term will be computed as from the relevant filing with the regulatory authority;
    2. Upon the Issuer of the CEVAs being informed thereof in its capacity as shareholder (and in no case after TWENTY FOUR (24) hours as from receipt from the Issuer or published in the country where the issue of the represented securities was authorized or where the said securities are traded) any information or documentation relevant to the Issuer of the securities whose deposit is represented by the CEVAs;
    3. within TEN (10 calendar days as from the filing vis-à-vis the regulatory authorities or exchanges or stocks where the securities are traded, the financial, accounting and/or income statements whether annual, quarterly or interim, as well as any other accounting information about the issuer of the securities represented by the CEVAs. If the information so filed is not reconciled as required by the current accounting standards of this Commission, such omission shall be conspicuously notified in the Information made available to investors. The notice to be so included shall specify the bases used to prepare the information and, as applicable, shall also indicate that, if applied to those statements the rules of this Commission, certain differences could result in respect of the Information being furnished.
    4. the Commission will considered as accomplished by the CEVAs issuer the information requirements established in subsection a) of the present section through the creation of a Webpage that indicates the electronic address in which the underlaying securities information is available for the Commission, self-regulative entities, the stocks or exchanges where the securities are traded, foreign supervision and control organisms that the CEVA issuer shall timely inform to the Commission
    Furthermore, that the issuer of CEVAs is subject, whenever applicable, to the provisos of Chapter XXI "Transparency in the contour of the Public Offer" in respect of facts or acts that effect or are connected with the Issuer of the CEVAS or of facts or acts that effect or are connected with the issuer of the securities represented by the CEVAs, of which it might have become aware either in its capacity as shareholder or upon their publication by the regulatory authority of the country of origin of the issuer of the securities represented by the CEVAs or by the stocks or exchanges where same are tradedThe submission by the issuer of the CEVAs of the information and/or documentation about the issuer of the securities represented by the CEVAs, shall qualify as an affidavit to the effect that it is true and accurate information published by or received from the issuer of the securities represented by the CEVAs and that no other information has been obtained by the Issuer of the CEVAs in its capacity as shareholder.
Section 30

In addition to the provisions of Section 29 hereof, the issuer of the CEVAs shall in all cases inform the ARGENTINE SECURITIES COMMISSION and the stock or exchange where the CEVAs are being then traded

  1. within THIRTY (30) days as from the close of each clendar quarter;
    1. the number of outstanding CEVAs on the first day of the reported quarter under each program in which the issuer is participating;
    2. the number of securities corresponding to each program which have been exchanged for CEVAs and withdrawn from the deposit during the reported quarter
    3. the number of CEVAs issued against deposit of the new securities under the program during the reported period;
    4. the number of outstanding CEVAs per each program at the close of the last day of the reported quarter;
    5. the number of securities represented per each CEVA under each program that are deposited in the name of the issuer at the close of the last day of the reported quarter and the place of deposit. Whenever applicable, if the place of deposit were changed, the reasons that justified and authorizations granted to make any such change shall be duly informed;

Moreover, the issuer shall file with the ARGENTINE SECURITIES COMMISSION and with the stock exchange or market where the CEVAs are traded:

  1. within SIXTY (60) days of the close of each fiscal quarter, its interim financial statements accompanied by a limited revision of an Argentine chartered accountant; and
  2. within ONE HUNDRED AND TWENTY (120) days of the close of each fiscal year, its complete financial statements, audited and approved by the relevant shareholders meeting.
  3. The issuer of the CEVAs will be likewise required to inform without delay upon becoming aware of its occurrence, any fact or ___ likely to affect the issuer, the depositary of the represented securities (if other than the issuer) or the represented securities, as well as any other change to the compensation structure thereof or to that of the depositary.

If and to the extent the issuer and depositary are the same person, any changes to the compensation structure of the issuer or to that of the depositary shall only be effective THIRTY (30) days after being reported. All the mentioned information shall be input according to the established in Section 10 of Chapter XXVI of the RULES of the ARGENTINE SECURITIES COMMISSION, New Text 2001, (the “RULES”).

Section 31

The request for approval of the CEVAs’ program and the admission thereof into the public offering regime shall be filed by the proposed issuer of the CEVAs.

The application shall be accompanied by the following documents and data:

  1. the contracts relevant to the program and of interest for the investors, between the issuer of the CEVA and the issuer of the securities represented by the CEVA,
  2. the determination of the stock(s) and/or exchange(s) vis-à-vis which an authorization to list the CEVA will be applied for;
  3. a description of the form of the securities (including a facsimile thereof) and, in the case of book-entry securities, the agreement executed with the Registrar, as applicable;
  4. a legal opinion to the effect of
    1. the legality of the securities represented by the CEVAs
    2. the enforceability by the lawful holder of the CEVAs of the exchange referred to in Section 26 hereof;
  5. the commissions and/or fees to be received by the issuer of the CEVAs and, as applicable, those to be received by the depositary of the securities represented by the CEVAs. The evidence of the authorization given for the securities represented by the CEVAs to be publicly tendered in the country of origin. This submission shall import (no evidence to the contrary being admitted) the affidavit from the issuer of the CEVAs and as applicable, from the issuer of the securities represented by the CEVAs, to the effect that the said authorization is in force and fully effective on the filing date;
  6. Prospectus that will have to include the following data:
    1. Characteristis of of the new securities, nominal value and form.
    2. New instruments components, including the mechanisms forseen for its modification in case of suspension or cancellation of the listing of any of the represented instruments.
    3. Reasons and mechanism in which works the anticipated redemptions of the new instrumentsnsion or cancellation of the listing of any of the represented instruments.
    4. Detailed description of the new issue
    5. Information about the represented instruments.
    6. Proxy Voting procedure
    7. Depositary Information
    8. Issuer Information
    9. Brief description related to the main contracts clauses between the issuer of the CEVAs and the depositary of the
    10. Terms and conditions of the contract that shall govern the relationship between the issuer of the CEVAs and the holders thereof.
    11. Self-regulative entities where the listing shall be requested
    12. Commissions and/or fees to be received by the issuer of the CEVAs and, as applicable, those to be received by the depositary of the securities represented by the CEVAs. Once the Prospectus shall be authorized by the Commission it will have to be input in the Commission Webpage through the “Autopista de la Información Financiera”
  7. Issuance term, which may not exceed three (3) years term , being able to be extended by the Commission.
  8. There shall be provided the information and documentation indicated in subsections a) through g) hereof, any other information and/or documentation to be filed, submitted, produced or otherwise disclosed to the investor community within the framework of the CEVAs placement procedures.
Section 32

For all purposes of Section 6 of Law 24.083 the CEVAs shall be deemed securities issued within the country. However, there shall be applied the diversification rules and portfolios integration established in the Section 8° Subsection c) and 14 of Decree Nr. 174/93 related to the underlying securities of the CEVAs and not related to their issuer.

Section 33

The stocks and exchanges where the CEVAs are trades shall provide for the appropriate mechanisms that will ensure full disclosure of each programs’s terms and of the underwriting agreement governing the relationship between the investor community to be informed, within the shortest possible term, of the quotations and traded volumes of the securities evidenced by the CEVAs in the relevant exchanges where same are marketed and, as applicable, publish same in the bulletins or newspapers habitually used to report such market information.

Section 34

The filing of the program shall import the submission of the applicants to the proviso of Law 17.811 and to the regulatory rules thereof. In addition, the CEVAs issuer , when it shall be related to its legal address, it will be submitted to what established in Law 22.169

Section 35

The ARGENTINE SECURITIES COMMISSION will determine on each presentation occasion if the CEVA shall be acquired and transmitted by qualified investors

 

SECTION 3

Renumber Section VII.5 by the following: “VII.6 Suppletory Application.

Section 36

Suppletory, in respect of the non contemplated issues in this Chapter, there shall be applicable the dispositions estasblished for the rest of the issuers in the Chapter VI “Primary Public Offering”.

 

SECTION 4

Be it informed, published, delivered to the NATIONAL BUREAU OF OFFICIAL RECORDS and filed thereat.

Signatures follow.

Terms and Conditions

The following Terms and Conditions of Use apply to use of the "Deutsche Bank AG CEDEAR Website" (the "Website"). more

FAQ
The following questions and answers were developed based on the most common inquiries received at Deutsche Bank as CEDEAR Issuer and Custodian. The answers should increase the understanding of the CEDEAR as a new Argentine security. more

Glossary

This glossary of terms is provided as an attachment for additional assistance in understanding the CEDEAR structure and dynamics. more

Contacts

Deutsche Bank CEDEAR/CEVA professionals will be pleased to discuss with investors and their brokers the material contained herein and to answer any questions that may arise related to CEDEARs/CEVAs, their features, uses and requirements. more

Agente de Liquidación y Compensación Integral y Agente de Negociación – Integral registrado bajo el N° 38 de la Comisión Nacional de Valores
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