On June 24, 2021, the Argentine Republic (“Argentina”) was reclassified as MSCI Standalone Market by Morgan Stanley Capital International (“MSCI“), consequently, Argentina will cease to have the Emerging Market status, category in which it had been classified by MSCI in 2018 and effectively incorporated in 2019.
The reclassification into the standalone market category places the argentine market within a small group (which also includes Jamaica, Panama, Trinidad & Tobago, Bosnia, Malta, Zimbabwe, Lebanon and Palestine) and was established due to the exchange controls set forth in Argentina as of September 1st, 2019, are not in line with the accessibility criteria for the MSCI Emerging Markets Index and MSCI Frontier Markets Index.
The MSCI indexes are composed of a series of Securities which serve as benchmarks reflecting the evolution of the markets to which they belong and are reviewed on a quarterly basis and their composition is rebalanced twice a year.
MSCI indexes function as an indicator to measure the performance of a market and are used by investors to compare the performance of different markets, and as an investment tool.
The change to the standalone market category may generate the obligation to report the change of shareholdings of investors who are forced to dismantle their investment portfolio in shares of Argentine issuers in accordance with the provisions of Section 99 of the Capital Market Law No. 26,831, as amended, and Section VI, Chapter I, Title XII of the Rules of the Argentine Securities Commission (Comisión Nacional de Valores).
This publication does not constitute a legal opinion on specific matters. If necessary, specialized legal advice should be sought.
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