Capital Market Newsletter – February

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Posted: 03/19/2021

Madrona News – Newsletter Capital Market

CVM launches public hearing on disclosure of corporate claims

The Brazilian Securities and Exchange Commission (“CVM”), on February 11, 2021, placed in public hearing the proposal to amend CVM Instruction 480, whose objective is to create a new communiqué on judicial and arbitration claims of corporate nature.

According to the CVM, the purpose of the new communiqué is to give greater visibility to claims capable of affecting, directly or indirectly, the rights of shareholders of the companies involved in such disputes. CVM mainly expects that, with the change, shareholders will be in a better position to exercise rights related to the claims or facts involved in it.

News link: https://www.gov.br/cvm/pt-br/assuntos/noticias/cvm-lanca-audiencia-publica-sobre-divulgacao-de-demandas-societarias

CVM guides Investment Fund Managers

CVM/SIN Circular Letter 01/2021 was published on February 18, 2021 by the Superintendence for Supervision of Institutional Investors of the Brazilian Securities and Exchange Commission (“SIN/CVM”).

The document clarifies questions raised by administrators and managers of Investment Funds regulated by CVM Instruction 555 on the interpretation of its technical area regarding the definition of an asset as foreign or domestic.

News link: https://www.gov.br/cvm/pt-br/assuntos/noticias/cvm-orienta-administradores-de-fundos-de-investimento

CVM publishes new Resolutions of service providers in the market

On February 25, 2021, the CVM issued five new resolutions that are part of the project for the consolidation and review of normative acts, provided for by Decree 10,139/19, as follows:

(i) CVM Resolution 19: systematizes securities consulting activity and revokes CVM Instructions 592 and 619 and CVM Resolution 783;

(ii) CVM Resolution 20, regulates securities analysis activity and revokes CVM Instruction 598 and CVM Resolution 633;

(iii) CVM Resolution 21: provides for the professional management of securities portfolios and revokes CVM Instructions 426, 557, 558 and 597 and CVM Resolutions 51, 740 and 764;

(iv) CVM Resolution 22: provides for the management of the securities portfolios of the Savings and Investment Plans (PAIT) and revokes CVM Instructions 61 and 87; and

(v) CVM Resolution 23: provides on the work of independent auditors, replacing CVM Instruction 308.

The resolutions will take effect on April 1, 2021, with the exception of CVM Resolution 21, which will take effect on July 1, 2021. For more information, see the report of SDM Public Hearing 07/20.

News link: https://www.gov.br/cvm/pt-br/assuntos/noticias/cvm-publica-novas-resolucoes-de-prestadores-de-servico-no-mercado.

CVM discloses Annual Circular Letter to Companies

The Superintendence of Corporate Relations (SEP) released, on February 26, 2021, CVM/SEP Circular Letter 01/21, which gathers guidelines from SEP‘s technical area for issuers of securities on procedures that must be adopted for compliance with rules corresponding to the sending of periodic and occasional information.

The Circular Letter also provides guidance on interpretations given by the CVM Board and SEP on relevant aspects of legislation and regulation that must be considered by companies when carrying out certain transactions.

According to the technical area, the purpose is to encourage the disclosure of corporate information in a coherent and aligned manner, aiming at transparency and equity in the relationship with investors and the market.

News link: https://www.gov.br/cvm/pt-br/assuntos/noticias/cvm-divulga-oficio-circular-anual-para-companhias

BC Regulatory Sandbox open for registration

Registration for Cycle 1 of the Central Bank’s Regulatory Sandbox started on February 22nd. The projects chosen for analysis by the Central Bank of Brazil (“BC”) within the scope of Cycle 1, which will last for 1 year and may be extended for an equal period, will be analyzed between March 22 and June 25, 2021.

In this cycle, the BC Regulatory Sandbox has as a priority proposals for the following themes:

(a) solutions for the foreign exchange market;

(b) fostering the capital market through mechanisms of synergy with the credit market;

(c) fostering credit for microentrepreneurs and small businesses;

(d) Solutions for Open Banking;

(e) Solutions for Pix;

(f) Solutions for the rural credit market;

(g) Solutions to increase competition in the National Financial System (SFN) and the Brazilian Payment System (SPB);

(h) Financial and payment solutions with potential effects to stimulate financial inclusion; and

(i) Fostering sustainable finance.

At the end of Cycle 1, the BC may authorize and even regulate the supply of products and services on a permanent basis, if the projects have demonstrated benefits for the National Financial System and for the Brazilian Payment System.

News link: https://www.gov.br/pt-br/noticias/financas-impostos-e-gestao-publica/2021.

Central Bank autonomy is sanctioned

On February 24, 2021, President Jair Bolsonaro sanctioned Supplementary Law 179/2021, which establishes the autonomy of the Central Bank of Brazil and entered into force on the date of its publication.

Among other provisions, Supplementary Law 179/2021 provides:

– that the President and Directors of the BC will have 4-year fixed terms, not coinciding with that of the President of the Republic;

– there will be a Collegiate Board of Directors with 9 members, including the respective president, all appointed by the President of the Republic, observing the criteria provided for in the rule;

– that the fundamental objective of the BC is price stability and, its secondary objectives are the stability and efficiency of the financial system, smoothing fluctuations in the level of economic activity and fostering full employment.

News link: https://www.bcb.gov.br/detalhenoticia/517/noticia