Argentina's CNV Lifts Currency Restriction on Stockbrokers

Argentina's National Securities Commission (CNV) has further eased restrictions on the local financial market by revoking a rule that hampered stockbrokers' ability to trade securities. The removed regulation had prevented brokerage firms and negotiation agents from selling dollar-denominated securities from their own portfolios if they held peso financing. This measure was initially introduced during last year's legislative elections amidst heightened currency exchange tensions.

Through General Resolution N°1152, the CNV nullified Interpretive Criterion N° 99, thereby relaxing controls established during periods of significant currency pressure. The regulatory body explained that this decision aligns with its ongoing strategy to normalize and liberalize the capital markets, taking into account the prevailing economic and financial conditions. This operational change directly impacts the daily activities of financial intermediaries.

Previously, brokerage firms faced limitations in selling dollar-denominated bonds or stocks if they simultaneously maintained short positions in peso-denominated instruments like repos or other short-term financing tools, even if these were part of their own portfolios. The intention behind the original restriction was to curb the practice of operators obtaining cheap peso financing to acquire dollars, which could then exert upward pressure on financial exchange rates. The rule, enacted in September of the previous year during a financial crisis triggered by the legislative elections, caused considerable disruption among market participants.

Nine months later, with the currency market now calmer, this criterion has been definitively repealed. In addition to confirming an intraday exception that already existed, the CNV has introduced a new provision. This allows brokerage firms and negotiation agents to sell assets for dollar settlement to rebuild their foreign currency positions. This new flexibility is capped at 15% of their net worth, calculated after deducting the minimum required equity, and will be subject to specific daily volume limits.

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in the framework of the normalization and flexibilization process of the capital market that it promotes and in accordance with the prevailing economic and financial context