GR 1151 introduces the definition of “Restricted Person”, which includes: (i) entities belonging to the National Public Sector referred to in subsections (a) through (d) of Section 8 of Law No. 24,156 (as amended and supplemented) [1], as well as non-state public entities, excluding corporations with majority state ownership whose shares are traded on markets subject to CNV oversight; (ii) entities of the provincial, municipal or City of Buenos Aires governments that would qualify as National Public Sector entities if they belonged to the national jurisdiction; and (iii) pension funds (cajas previsionales) and other entities administering mandatory non-state pension funds. Financial institutions governed by the Financial Institutions Law and the Sustainability Guarantee Fund (Fondo de Garantía de Sustentabilidad) are expressly excluded from the definition of Restricted Person.

With the objective of strengthening transparency, competition, traceability and proper price formation in transactions involving negotiable securities conducted by entities managing public funds or mandatory pension contributions, while promoting open and competitive trading mechanisms, GR 1151 establishes, as a general rule, that transactions carried out by Restricted Persons must be executed exclusively through CNV-authorized electronic trading systems, in trading segments that ensure price-time priority and order interaction, with the guarantee of the relevant Market and/or Clearing House. Market participants may only execute transactions on behalf of Restricted Persons through such guaranteed trading segments and may not enter orders on behalf of Restricted Persons during the first and last 30 minutes of each trading session.

In addition, prior to executing such transactions, market participants must verify that: (i) the aggregate daily trading volume for the relevant security does not exceed 25% of the average daily trading volume during the preceding five trading days; and (ii) in the case of public fixed-income securities, the daily trading volume does not exceed 5% of the outstanding amount of the relevant security. These limits apply both on a per-customer sub-account basis and on an aggregate basis across all customer sub-accounts held or co-held by the same Restricted Person. Market participants are responsible for verifying compliance with these thresholds and for maintaining the supporting documentation in the relevant client files.

Notwithstanding the foregoing, the CNV preserves its authority, on an exceptional basis, to authorize markets to establish non-guaranteed bilateral trading segments for public or private fixed-income securities between proprietary trading agents, or between agents and Qualified Investors, provided that such Qualified Investors do not qualify as Restricted Persons. Markets may not establish reference prices for such trading segments based on prices recorded in the price-time priority and order interaction trading session, and must determine minimum trade sizes, price bands or ranges, as well as the circumstances under which out-of-range transactions may be permitted.

GR 1151 also replaces the definition of proprietary portfolio (cartera propia) to incorporate clarifications previously introduced through CNV Interpretative Criteria Nos. 48 and 59. Under the new definition, proprietary portfolio transactions include those carried out by Settlement Agents and/or Trading Agents for their own account, as well as transactions involving group companies, members of management and supervisory bodies, statutory auditors, supervisory board members, managers, employees, representatives, attorneys-in-fact, partners, shareholders, directors, and certain of their immediate family members.

1. It includes entities forming part of the National Public Sector, namely: (i) the National Administration, consisting of the Central Administration and Decentralized Agencies, including the Social Security Institutions; (ii) state-owned companies and corporations; (iii) public entities expressly excluded from the National Administration; and (iv) trust funds (fondos fiduciarios) funded, in whole or in substantial part, with assets and/or funds of the National Government.