The new regulation of trusts in Argentina set by the General Inspectorate of Justice (the IGJ) is another setback and advance by the regulator over the private sector in this new phase of the agency that began in 2020.
In recent times there have been several new regulations issued by the IGJ that imply a return to previous situations and, in practice, the comeback of old resolutions. In all cases, it is a matter of leaving aside the regulations enacted during the period 2016/2019, which are marked by a criterion opposed to that of the current Inspector General.
Since the beginning of this year, the IGJ has been moving backward. In its regulatory zeal, the agency has not hesitated to extend its arguments and justifications for the amendments it has implemented, deeming the abrogated provisions of being erroneous or bordering on illegality. These arguments, at least with regard to the core norms of the IGJ, are, at the very least, debatable. This, of course, without ignoring the fact that the new rules in themselves could imply the affectation of rights already incorporated into the patrimony of registered entities and even an impossibility of exercising constitutional rights for those who wish to form new organizations under the Igj’s registry.
Concerning the new regulation of the IGJ on trusts in Argentina, as a preliminary issue that quickly draws attention, it comes up the extensive rationale that the regulator considered necessary to state to issue the rule: 13 points of justification for 3 articles anticipate that this is a controversial issue and that it may generate disputes when analyzed in depth.
General Resolution No. 33/2020, effective as of August 6, 2020, requires the registration of trust agreements in several cases:
1. When at least one of the trustees has a domicile, real or special, in the jurisdiction of the City of Buenos Aires; or,
2. When the trust estate includes:
a) Shares (including those of Simplified Corporations), or quotas issued by companies registered with the IGJ; or
b) Going concerns, governed by Law No. 11,867, located in the Autonomous City of Buenos Aires; or
c) Movable or immovable property located in the Autonomous City of Buenos Aires.
When the trust agreement involves registrable assets other than corporate shares, its registration shall be complied with before recording the transfer of such assets to the trustee in the relevant registries (for example, the Real Estate Registry).
If the trust agreement established that the rendering of accounts would be done through the issuance of accounting statements, the rules of the IGJ on their formulation and filing will apply.
Financial trust contracts that make public offerings (the control of which is in charge of the National Securities Commission) should not be registered.
When registering trust agreements, the IGJ will carry out a legality control, verifying compliance with all the substantive and formal requirements of the National Civil and Commercial Code.
In its regulatory efforts, the IGJ has once again expanded its jurisdiction and powers, and now requires the registration of trust agreements not only when the trust estate includes corporate shares of companies registered with the agency, but also when the domicile of the trustee or the places where the going concern or assets are located in the City of Buenos Aires.
Mario E. Castro Sammartino
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