Securities Commission publishes new regulatory framework for public offerings

Rules aimed at streamlining capital market transactions come into effect in January 2023

On July 14, the Securities and Exchange Commission of Brazil (“Comissão de Valores Mobiliários” - CVM) published Resolutions No. 160, 161, 162 and 163, establishing a new framework for public offerings of securities. Aimed at bringing more flexibility and expanding access to the capital market, the new rules revoked Instructions No. 400 and 476, which governed the system then in force.

The new developments saw the introduction of the "offer sheet" (“lâmina de oferta”), a new document conveying the main information about the transactions in a brief and summarized manner. The preliminary prospectus, a document heavily criticized for being too long, also underwent a few changes, resulting in a format that is more concise and investor-friendly.

Another innovation is the implementation of a new registration for public offering coordinators, opening up the possibility for other market agents to register themselves as coordinators. At present, practically only investment banks perform this role, greatly limiting the market. Among other changes is the reduction of the quiet period from 60 to 30 days and the introduction of the concept of “safe harbor” for offerings exempt from registration.

With such far-reaching amendments, it is essential that those investing or operating in capital markets get acquainted with the new rules and adapt to them as soon as possible, as the new provisions will come into effect on January 2, 2023.