Securities and Exchange Commission releases annual circular on public offerings

On March 5, 2020, the Brazilian Securities and Exchange Commission ("CVM") published Circular Letter No. 1/2020-CVM/SRE ("Annual Circular Letter") with the guidelines of the Brazilian Securities and Exchange Commission ("SRE") on the procedures to be observed by issuers/offerors and intermediaries in public offerings of securities, with the main purpose of guiding them on how to better comply with the rules governing public offerings of securities.

The SRE inserted in the Annual Circular Letter guidelines on the conditions for conducting offerings for distribution of securities abroad. This issue was recently analyzed by CVM in Circular Letter No. 4/2020/CVM/SIN, released on February 27, 2020, confirming the possibility of acquisition, by open-end investment funds governed by CVM Instruction No. 555, of financial assets abroad that are in the process of public offering in other jurisdictions.

The Annual Circular Letter also contains guidelines concerning the deadlines and procedures to be observed in case of submission of advertising material to SRE, as well as recommendations for the preparation of advertising material and exemplary models of the advertising materials considered by SRE as adhering to the provisions of CVM Instruction 400.

The SRE clarified, through the Annual Circular Letter, the doubts of market participants with respect to the registration of the acts that resolve on the public offering of distribution of quotas, guiding that the acts that do not result in changes to the regulations should remain registered in the public registry office.

In addition to the aforementioned guidelines, the Annual Circular Letter provides guidelines on (i) the procedures related to the sanctioning proceedings filed by SRE; (ii) the dynamics related to the voluntary modification of registered distribution offerings; (iii) the allocation of proceeds from offers of shares of structured funds in a conflict of interest situation, among other additional guidelines in relation to the annual circular letter published last year.

CVM intends that the guidelines will contribute to minimize the need for the formulation of requirements by SRE, so that the actions of market participants are carried out in an efficient and agile manner, in favor of investor protection and market integrity.

For further information, please contact our Capital Markets team at our office([email protected]).