CVM and TCU entered into a cooperation agreement for exchange of strategic information
New DREI’s Normative Instructions applicable to Brazilian Commercial Registries are now in force
_CVM and TCU entered into a cooperation agreement for exchange of strategic information
On April 7th, 2017, the Brazilian Securities and Exchange Commission (CVM) and the Federal Account Court (TCU) announced that they had entered into a technical cooperation agreement for exchange of knowledge, information and database between the institutions in order to combat insider trading in the Brazilian securities market.
The Agreement, which is part of CVM’s Strategic Plan launched in 2013, is valid for 5 years. Both institutions selected servant with technical and IT skills who will work on the analysis of the databases accessed as a result of this agreement. Moreover, a specific team was created to work on a project called Insider, which aims to strengthen research capacity regarding insider trading cases.
ACCORDING TO CVM’S PRESIDENT “THE ACCESS OF THE TCU DATABASE AND THE SELECTION OF EMPLOYEES TO FOCUS ON THE ANALYSIS OF THESE DATA WILL BE A PROGRESS TO CVM, ESPECIALLY WITH REGARD TO THE USE OF TECHNOLOGY IN SUPERVISION ACTIVITIES. INITIALLY, THE EXCHANGE OF INFORMATION SHALL BE USED IN CASES RELATED TO INSIDER TRADING. ADDITIONALLY, WE HOPE THAT THERE IS A SHARING OF EXPERTISE BETWEEN THE EMPLOYEES OF BOTH INSTITUTIONS, SINCE THE ANALYSIS OF THE MATTERS BY THEM IS OFTEN RELATED.”
Through the exchange of databases, CVM will have access to the following TCU data:
- Relevant shareholders of Brazilian publicly-held companies;
- Related parties of publicly held companies;
- Managers of Brazilian publicly-held companies, including officers, directors and members of the fiscal council, and their average compensation;
- List of Brazilian investment funds; and
- Registration of market participants involved in the registration and sale of Securities (portfolio managers, securities analysts, independent auditors, brokers and distributors, investment banks, multiple banks with investment portfolios, independent investment agents, securities advisors, Non-resident Investors).
On the other hand, CVM will periodically provide TCU with information on securities market participants. Such data will be used by TCU to support the exercise of its external activities control.
The Cooperation Agreement is available in Portuguese at the CVM’s website below: http://www.cvm.gov.br/export/sites/cvm/convenios/anexos/TCU.pdf
_New DREI’s Normative Instructions applicable to Brazilian Commercial Registries are now in force
On May 2, 2017, the new Normative Instructions of the Department of Business Registration and Integration (DREI), which shall be observed by Brazilian Commercial Registries, came into force. The changes are part of DREI’s project to revise the Normative Instructions in order to standardize the procedures adopted at national level, simplifying and reducing bureaucracy of the services provided by the local commercial registries.
ACCORDING TO THE DIRECTOR OF THE DREI, “THE REVISION OF THE REGULATORY INSTRUCTIONS OF THE DREI, ESPECIALLY OF THE REGISTRATION MANUALS OF COMPANIES, IS VERY RELEVANT TO THE BRAZILIAN SOCIETY, PRIMORDIALLY, TO PROMOTE AGILITY, SIMPLICITY AND LEGAL SAFETY TO THE PROCEDURES OF THE COMMERCIAL REGISTRIES”.
The new Normative Instructions address the following matters:
(i) Filing of documents in which foreign investors hold equity interest (Normative Instruction nº34);
(ii) Filing of transformation, merger, consolidation, and spin-off documents (Normative Instruction nº35);
(iii) Classification, reclassification and disqualification of micro-enterprises and small enterprises (Normative Instruction nº36);
(iv) Incorporation, amendment, and dissolution of groups of companies and consortiums (Normative Instruction nº37); and
(v) Amendment of the manuals for registration of individual entrepreneurs, limited liability companies, individual limited liability company (“EIRELI”), cooperatives, and corporations (Normative Instruction nº38).
Among the most relevant changes brought by the Normative Instructions listed above, we highlight the following points:
- Mandatory filing regarding power of attorney with indefinite term for individual, Brazilian or foreign, resident abroad, and legal entities with headquarters abroad, that hold equity interest in enterprises, company or cooperative.
- Description of the procedures to transform business entities or individual entrepreneur into EIRELI and vice versa.
- Possibility of incorporation of EIRELI by an individual or a national or foreign legal entity.
- Possibility of adoption, by limited liability companies, of any specific characteristic of corporations, such as: treasury quotas, preferred quotas, and board of directors and auditing committee.
- Simplification of certain filings of corporate documents of limited companies, such as withdrawal of members made only by amendment of the articles of association and waiver of publication of term of resignation of the managing director.
The new Normative Instructions are available in Portuguese at the DREI’s website below: http://drei.smpe.gov.br/legislacao/instrucoes-normativas/titulo-menu/revisao-das-instrucoes-normativas