Brazil’s Securities and Exchange Commission improves transparency rules in the capital market with the innovations brought by Rule No. 552/14
By Luciana Burr and Bruna Fernandes Caravela Flor Silva
On October 9, 2014, Brazil’s Securities and Exchange Commission (local acronym CVM) published Rule No. 552 (the ‘ICVM 552’) changing CVM Rule No. 480/09, which governs securities’ issuers in the capital market (the ‘ICVM 480’).
One of the purposes of the ICVM 552 was to set the deadlines that will apply to procedures already established in ICVM 480. One example is the deadline for submitting to CVM documents related to voting rights: they must now be submitted one month in advance of the annual shareholders meetings. However, one of the most significant innovations was that the list of information which must be submitted to CVM is now longer and more detailed.
In relation to this topic, one example we highlight is that the minutes of the shareholders meetings and of the company’s boards must now be submitted together with statements of any votes, dissenting votes, objections and comments voiced or made by the attendees. CVM’s purpose behind this type of rule is to give the market the opportunity to make a better informed critical analysis of the decisions made by companies and of the trends in the company’s management and business conduction. Also on this topic, the ‘Reference Form’ was reviewed to cover more detailed information of companies.
Another highlight is that any capital increase and related-party transactions must now be informed to CVM under ICVM 552 (as per ICVM 408’s new Schedules 30-XXXII and 30-XXXIII).
The new rules will come into force on January 1, 2015, except for the new ‘Reference Form,’ which will only come into force on January 1, 2016.