On March 30, 2006, the authorities of the Buenos Aires Stock Exchange (hereinafter "BASE"), issued Resolution Nª 1/2006 (hereinafter, the "Resolution") adopting new regulations to foster new companies to enter in the Argentine capital market. This Resolution is a consequence of the lack of initial public offers (IPOs) in the country during the last years. The last IPO seen in the Argentine market took place in 2000, six years ago.

The Resolution sets the following benefits/incentives for the companies going public:

  1. there will be no fees for the study of the petition. The fee for the study of the petition is a mandatory non refundable fee charged to companies filing their first request of public quotation and its amount is equal to a one year Listing fee.
  2. there will be a reduction in the Listing Fee of 60%, 40% and 20% for the first, second and third year respectively as from the approval of the public offering granted by the BASE to the company involved;
  3. the Stock Exchange fee paid by the company will be deducted from the listing fee, besides and after the reduction mentioned in (2) herein. The Stock Exchange fee may be charged by the BASE for each transaction performed over the shares quoted in the market.

These benefits shall apply to those companies that as from January 1st 2,006 have already applied for public quotation of its shares and for all those that shall do so before December 31, 2006.

The legal framework for capital markets in Argentina is regulated by Law Nº 17,811. By said law, the BASE is authorised to charge fees to the companies that quote its shares in the market of the city of Buenos Aires.

It is clear that with these new regulations the BASE is trying to open the capital markets of the city of Buenos Aires to a mayor number of companies by lowering the costs involved in public offerings. Moreover, these benefits apply not only to medium and small size companies (PYMES) but also to big companies, some of which are now analysing the possibility of listing their shares in the BASE (i.e. Aeropuertos 2000, the operator of the largest airports in Argentina and some in Latin-America and Aerolineas Argentinas, the largest Argentinean airline carrier).

The reactions to these regulations in the markets have been contradictory and many players claim that they are insufficient to reduce the still high costs involved when going public. Nevertheless, these new regulations show a clear awareness of the need to facilitate the access to the capital markets to small and medium size companies.

1 The Listing fee is composed by a fixed amount and by a variable one, depending on the corporate capital of the issuer, and is paid on a yearly basis.