Argentina’s CNV focused on reforms for the good time

Despite the economic crisis facing Argentina, the government continues to push a reform agenda to improve the functionality of the capital markets.

“We haven’t seen a relevant impact from these reforms yet, due to the crisis, but we are fostering an environment that will lead to much better growth when the economy improves,” says Marcos Ayerra, chairman of the country’s securities and exchange commission, the Comisión Nacional de Valores (CNV).

Ayerra points to a wide range of reforms to securities laws that are designed to remove frictions in capital markets activity – particularly those related to the participation of international investors.

“There was a 13.5% withholding tax on the sales proceeds for any foreigner selling shares in Argentina, regardless if the trade had made a profit or loss – this was an incredible inhibitor,” Ayerra tells Euromoney.

“Because of this tax and FX restrictions, 90% of the trading of Argentine issuers took place abroad. Now that these inhibitors have been removed, we expect local volume to grow significantly.”

The corporate governance regime has also been changed to enable foreign investors to vote in shareholder meetings, and the creation of onshore accounts has been streamlined and can be established in 15 days.