(Reuters) - Argentina's securities regulator said on Wednesday it had approved a rule allowing licensed advisers to invest citizens' funds in overseas assets, a move seen as key to attracting private banks to set up shop in the South American country.
The National Securities Commission (CNV) said in a statement it would create a licensed "Global Investment Advisor" role authorized to make decisions on behalf of clients both domestically and internationally.
The change would provide legal assurance to private banks, which manage investments for mostly wealthy individuals. Several private banks left the country and served Argentine clients from overseas offices during the populist administration of former President Cristina Fernandez.
"This role, which exists in various countries in the region, will favor the competitiveness of local actors," the CNV said.
Since replacing Fernandez in December 2015, President Mauricio Macri has issued a number of market-friendly reforms, including ending foreign exchange restrictions and reducing a holding period for foreign capital.
But proposed legislation to reform the country's capital markets has stalled in the opposition-controlled Congress. That proposed bill includes a provision creating a Global Investment Advisor role, the same change the CNV made unilaterally on Wednesday.
The change comes after Argentines declared more than $100 billion in previously hidden wealth in a tax amnesty program this year, broadening the pool of assets that can be invested.
The chief executive of Julius Baer, Switzerland's third-biggest private bank behind UBS and Credit Suisse (SIX:CSGN), told Reuters earlier this year that the company would consider a move to Argentina if the legislation changed.
Baer currently covers Argentina from an office in neighboring Uruguay, a business it inherited from a 2012 acquisition of Merrill Lynch's international wealth management division.
Even before Fernandez, licensed investment advisors in Argentina were prohibited from investing their clients' money in overseas assets, though many private banks operating in the country employed wealth managers who did just that, albeit without licenses.
A 2011 financial crimes law made the practice a criminal offense punishable by up to four years in prison and a big fine. Many private banks responded by setting up offices in Uruguay, Chile or Florida to serve Argentine clients.