The Brazilian Securities Commission (CVM) has enacted
Regulation 480 of December 7 2009. This new regulation has
enhanced the requirements that companies have to fulfil to
issue securities in Brazil. The new regulation has replaced
rules in effect for more than 15 years and its key developments
focused on: (i) enhancing the level and quality of disclosure;
(ii) creating two different levels of disclosure requirements
for issuers, according to the type of securities; (iii) making
offering procedures faster and simpler; and (iv) harmonising
the rules applicable to listed companies. Investment funds are
still under specific regulations and are not affected by the
Regulation 480 was based on the shelf registration system as
defined by the Iosco, whereby all information regarding the
securities issuer will be disclosed through a single document,
registered with the CVM and updated either on an annual basis
or whenever a public offering takes place. In turn, the
document presented to investors in order to disclose the
relevant conditions of securities offerings will be shorter and
simpler (the offering note), highlighting the main features and
conditions of the specific public offer.
Broadly, two registry categories were created for the listed
companies under the new regulation: equity issuers and debt
issuers. According to the new regulation, debt issuers may
disclose a lower level of information.
Moreover, some specific securities issuers have received
special treatment under the new regulation. Among others, the
category of well-known seasoned issuers has been created,
allowing them to conduct public offerings more rapidly.
For the issuance of Brazilian Depositary Receipts, it is no
longer where the issuer is headquartered that alone defines if
the issuer is national or a foreigner. A the foreign issuer
must have fewer than 50% of its assets located in Brazil.
José Eduardo Carneiro Queiroz and Alexei