The National Securities and Stock Market Commission (NSSMC) announced during its meeting on Friday that it plans to prohibit the signing of new contracts for participation in the Construction Financing Fund (CFF) with citizens if bankruptcy proceedings have been initiated against the developer (insolvency).
"Unfortunately, according to the results of ongoing monitoring activities conducted by the NSSMC, there has been an increase in cases of developer bankruptcies lately. As a result, we face not only heightened risks of market destabilization but also an increase in social tension among citizens who are losing their funds," the commission explained.
According to information on the regulator's website, changes have been developed to address this issue, which require the management company, with which citizens have contracts for participation in the CFF, to post information on its own website about the initiation of bankruptcy proceedings (insolvency) against the developer and the results of such proceedings.
Additionally, it is proposed to obligate management companies to cease financing construction and grant citizens the right to refuse to transfer funds according to the signed contract during the bankruptcy proceedings (insolvency) against the developer (such a refusal will not be considered a breach of contract).
It is noted that the draft of the corresponding decision has been published on the regulator's website, and within 10 days, the NSSMC team is expecting comments and suggestions for further approval of the document.