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 new regulation.
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 Bonamin
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