Safe Harbors and Strict Limits: How the Private Offering of Negotiable Securities Is Changing – Barreiro

New CNV Regulation on Private Offerings: What Changes with General Resolution 1088/2025

Why it matters?

The Comisión Nacional de Valores (CNV) has entirely replaced Title XX of its Rules (N.T. 2013 and amendments) and updated the private offering regime. General Resolution 1088/2025 consolidates and refines the “safe harbor” framework introduced by RG 1016, clarifying quantitative limits, permitted dissemination methods, and resale restrictions. The goal: to provide regulatory certainty and operational predictability to issuers and intermediaries without blurring the line with public offerings.

Overview of the Regulation

The resolution reorganizes Title XX into three safe harbors, each with its own set of conditions:

1.- General Private Offering (Section I)

Who may offer: the issuer or an authorized party; also, secondary sales not made on behalf of or in the interest of the issuer.

Permitted channels:

In-person or virtual promotional meetings with up to 50 potential investors at a time (excluding Authorized Agents).
Delivery of documentation to Authorized Agents or potential investors upon specific request.
Personalized invitations via email, phone, or messaging.
Digital advertising on restricted-access platforms (passwords, access keys, etc.).

Prohibited channels: mass dissemination targeted at Argentine residents (national media, “web advertising directed to residents,” large-scale or automated campaigns, cold calling, etc.).

Quantitative limits per issuance:

Potential investors contacted:
- Unlimited for financial entities, non-financial credit providers, Authorized Agents, mutual guarantee societies, and insurers.
- Up to 50 other Qualified Investors.
- Up to 30 Non-Qualified Investors.
Purchasers per issuance: up to 35, of which no more than 15 may be non-qualified.
Exclusion from count: anyone already holding the issuer’s equity securities.
Temporal aggregation: multiple issuances within three months of a subscription closing are counted jointly as one.

Information and investor warnings: financial statements and key documents available upon request; explicit notice that this is not a public offering, scope of supervision, and resale restrictions.

Transparency and confidentiality: compliance with general duties (CCCN, art. 117 LMC); confidentiality obligation subject to waiver.

Resale (lock-up):

To qualified investors: not before 3 months.
To non-qualified investors: not before 6 months.
Not applicable for transfers outside Argentina; exceptions for conversions, exchanges, or redemptions.

Safe harbor effect: compliance ensures the offering is not deemed an irregular public offering. Non-compliance does not trigger automatic sanctions but may result in loss of safe harbor eligibility for 2 years.

2.- Private Offering to Employees and Officers (Section II)

Scope: employer or group retention/incentive plans.

Eligible instruments: from employer’s securities to equity-linked structures (options, SPVs, phantom stock), with specific conditions.

Communication: internal channels (intranet, circulars) and direct meetings with eligible persons.

Lock-up: 6 months from closing or acquisition (with exceptions).

Disclosure, warnings, transparency, and confidentiality: same logic as Section I.

Safe harbor and loss upon breach: same principles as Section I.

3.- Offerings Without Sufficient Contact with Argentina (Section III)

Extraterritorial scope: non-resident offeror and non-resident issuer securities.

No limits on the number of investors or total amount as long as there is no sufficient contact with Argentina.

Prohibited: online advertising directed to residents, dissemination through media clearly reaching Argentine residents, promotional meetings with residents in Argentina, or arrangements to receive funds/assets from residents in Argentina.

Examples of “no sufficient contact”: educational events without specific offers; institutional advertising with no local call-to-action or open access; sending reports/statements by foreign entities, etc.

Disclosure, warnings, and confidentiality: similar to other sections.

Sanctions and loss of safe harbor: case-by-case approach; 2-year exclusion upon breach.

Practical Changes (Compared to RG 1016)

Operational clarity in limits: precise numerical thresholds (50/30 contacted; 35/15 purchasers) and aggregation rules (3-month period; 365-day rolling window for evergreen or collective vehicles).
Promotional meetings: allowed with up to 50 potential investors per session (Authorized Agents not counted).
Digital dissemination: reinforced distinction between restricted-access channels (allowed) and mass advertising to residents (prohibited).
Explicit lock-ups: 3/6 months for general private offerings; 6 months for employee offerings.
Responsibility and verification: the seller must verify investor qualification and compliance with limits; a declaration from the issuer transfers liability for accuracy.

Opportunities and Risks

Opportunities

Legal certainty: well-structured transactions can close private rounds without triggering the public offering regime.
Controlled channels: direct marketing and segmented meetings to speed up private roadshows.
Employee equity plans: clear framework for stock/options/phantoms within corporate groups.

Risks / Challenges

Blurring the private offering boundary through mass dissemination or poor tracking.
Liquidity constraints: lock-ups limit resale and may affect valuations.
Traceability: critical to evidence what was sent, to whom, when, and upon whose request (to avoid exceeding contact limits).
Two-year exclusion: non-compliance carries a significant cost for future private placements.

Practical Compliance Checklist

Structure & Eligibility

Confirm the instrument is exempt from the public offering regime.
Identify applicable Section (general, employees, extraterritorial).

Dissemination

Design contact plans via permitted channels (restricted access; personalized invitations).
Ban mass campaigns targeting residents (ads, influencers, automated lists, etc.).
For meetings: max. 50 potential investors per session; record attendance.

Counts & Time Windows

Track contacted investors per issuance: 50 qualified / 30 non-qualified (plus unlimited categories).
Control purchasers: up to 35 per issuance; max. 15 non-qualified.
Apply 3-month aggregation across issuances; 365-day rolling window for evergreen/collective vehicles.

Investor KYC & Documentation

Verify and store evidence of investor qualification.
Prepare package: financials, memorandum/white paper/fact sheet, risk disclosure, issuer’s status.
Include mandatory disclaimers and signed acknowledgments.

Terms & Lock-ups

Include contractual clauses on resale restrictions (3/6 months; 6 months for employees) and exceptions.
Plan exit strategies (conversion/exchange/redemption) to mitigate illiquidity.

Governance & Audit

Appoint an internal officer responsible for counts, meetings, and records (data room).
Implement compliance controls and milestone checklists (pre-roadshow, pre-closing, post-closing).
Require issuer’s statement to sellers confirming limits (liability shift for accuracy).

Typical Use Cases

Seed/Series A round in a local company: personalized invitations to qualified and non-qualified investors within thresholds, private meetings (≤50 attendees), restricted-access data room, closing with ≤35 purchasers (≤15 non-qualified).
Executive incentive plan: internal communication via intranet, delivery of documentation, 6-month lock-up; options/phantoms channeled through a group vehicle.
Foreign issuer placement without “sufficient contact”: global institutional campaigns with no targeting of residents, no local meetings, no local payment gateways.

Conclusion

General Resolution 1088/2025 establishes a modern, transparent private offering regime in Argentina, with clear rules for dissemination, counting, and documentation. It offers a viable path to raise capital outside the public offering framework—provided compliance discipline is maintained.
The difference between leveraging the safe harbor and losing it for two years lies in meticulous execution: proper channels, robust documentation, and flawless recordkeeping.