To date, Brazilian Depositary Receipts (BDRs) have not been used
in Brazil. This is mainly due to the high cost of company
registration, given the great number of CVM (Brazilian Securities
Commission) requirements that must be complied with for BDR issue
approval.
Although the CVM has, in the past, approved the BDR programmes
submitted by Brazil Fast Food Corporation (level II) and Rhodia
(level I), the first BDR to be actually traded in Brazil was that
of the Spanish company Telefónica. At the present time, only the
Telefónica BDRs are traded in São Paulo Stock Exchange.
CVM Ruling No. 331 deals with company registration at the
Securities Commission. CVM Ruling No. 332 expressly revokes CVM
Rulings Nos. 255 and 321, and exclusively regulates the BDR
programmes.
The CVM wants to encourage companies to use BDRs. Its initial
aims were: (i) to make it possible for internet companies to issue
BDRs; and (ii)...