The Securities and Exchange Commission of Brazil (CVM) updated its rules concerning the disclosure and use of information on relevant acts or facts to the trading of securities, applicable to public companies. The update is designed to improve market predictability.
Resolution n.º 44/2021 from the Securities and Exchange Commission of Brazil (CVM) revoked CVM Instruction n.º 358/2002, covering the disclosure and use of information on relevant acts or facts in the trading of securities, applicable to public companies and the trading of securities by insiders (e.g., direct or indirect controlling shareholders, directors, and members of the board of directors). The resolution stems from Public Audience n.º 6/2020, reported in the 16th edition of the Regulatory Report.
The new CVM resolution maintained most of the provisions from the aforementioned CVM instruction, but replaced articles 13 to 16, regarding the vetoes of negotiation. It replaced the prohibitive stance with regard to negotiation practices by insiders with the presumption of illicit acts assessed under specific conditions. Additionally, the 15-day prohibition period before the disclosure of the ITR (quarterly) and DFP (annually) reports remains valid.
According to CVM, the new resolution aligned the regulatory framework on the disclosure and use of inside information to CVM’s case law involving illicit use of information, while clarifying the conditions that may imply wrongdoing. The revision, therefore, is intended to improve market predictability.
