CVM adds the public offerings of shares to the list of securities that can be traded with restricted placement efforts
After gathering opinion of the market in a public hearing that took place between January 21 and March 24, 2014, Brazil’s Securities and Exchange Commission (local acronym CVM) published on September 25, 2014, Ruling No. 551 (the ‘ICVM 551’) changing Ruling No. 476 (the ‘ICVM 476’), which governs public offerings with restricted placement efforts.
The enactment of ICVM raised the market’s expectations. First, because it includes shares, debentures convertible in shares and subscription warrants in the list of securities that can be publicly traded with restricted placement efforts pursuant to ICVM 476. Second, because it raises to 75 from 50 the number of investors that can be offered the placement and to 50 from 20 the number of investors acquiring the securities.
On the other hand, ICVM 551 determines that the leader of the offering keeps a list with the following information: (i) name of the investors that were offered the securities; (ii) Ministry of Finance registration number for individuals (CPF) or legal entities (CNPJ); (iii) the date on which such investors were contacted; and (iv) their decision about the offering.
It is important to mention that ICVM 551 is part of a range of initiatives developed by the Small Offerings Technical Committee (a group created in 2012 by the Brazilian Industrial Development Agency (ABDI), the Brazilian Development Bank (BNDES), Brazil’s Stock, Mercantile and Futures Exchange (BM&FBOVESPA), CVM, and Brazil’s Innovation Agency (FINEP)) to improve the regulatory environment in an effort to facilitate access to the capital market by small and medium sized companies.