The Argentina Securities Commission (CNV) has opened a public consultation, via General Resolution No. 1066, on a proposal to add a special regulatory regime for open-end mutual funds and financial trusts used to administer the Labour Termination System (Sistema de Cese Laboral). The framework would implement the mechanism set out in Annex II to Decree No. 847/2024 under Law No. 27.742, as an alternative to seniority-based severance pay under Article 245 of the Labour Contract Law and other compensation items calculated by reference to that severance. The Labour Termination Fund would be established through collective bargaining agreements and administered through either open-end mutual funds (Fondos Comunes de Inversión Abiertos, FCI) or financial trusts (Fideicomisos Financieros, FF). Units or trust securities could be structured on an individual, company or sector basis; the parties would be able to set contributions as a percentage of remuneration or as fixed amounts and determine their periodicity. The fund would be protected from attachment, and vehicles under the regime could only accept subscriptions funded by employer and/or worker contributions; where employers contribute, the units and trust securities would be assigned under a suspensive condition in favour of the worker, the company or the sector. For FCI, fund bodies could set investment policies, objectives and eligible assets within the diversification rules applicable to open-end mutual funds, with fund documentation adapted to the regime; workers could dispose of units once title transfers to them but could not make new subscriptions. For FF, the proposal would remove the requirement to prepare, file or publish a prospectus or supplement on the CNV website, require investment policies to align with the regime and the vehicle’s purpose, and allow additional settlors and the issuance of additional trust securities. The proposal is being consulted under General Resolution No. 1066.

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