BUENOS AIRES, Jan 15 (Reuters) - Argentina will allow short-selling in its capital markets, according to a resolution published by the securities regulator in the country's official gazette on Monday, part of PresidentMauricio Macri's efforts to open the country to investment.
"Short-selling, in normal market conditions, plays an important role in ensuring financial markets function correctly, especially with regards to market liquidity and efficient price formation," the National Securities Commission (CNV) wrote in the resolution.
Short-selling refers to borrowing securities in order to sell them in a bet their value will decline.
Since taking office in December 2015, Macri has enacted a number of reforms aimed at bolstering the country's capital markets, which are small compared with regional peers. Last year, the government ended a required holding period for foreign capital, and the CNV approved a rule to allow advisers to invest citizens funds' abroad.Argentines declared more than $100 billion in previously hidden wealth in a tax amnesty program last year, broadening the pool of assets that can be invested.
Still, a sweeping capital markets reform bill that would undo some of former populist President Cristina Fernandez's interventionist policies has stalled in the opposition-controlled congress. Index provider MSCI surprised investors by not upgrading Argentina to its emerging markets index last year, a move that likely would have spurred investment inflows. (Reporting by Luc Cohen; Editing by Matthew Lewis)
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.