CIRCULAR LETTER/CVM/SEP/No. 1/2021

Rio de Janeiro, February 26, 2021.

SUBJECT: General guidelines on procedures to be observed by open companies, foreign companies, and incentivized companies

Dear Director of Investor Relations/Legal Representative,

In this Circular Letter, the Corporate Relations Superintendence (SEP) guides securities issuers on the procedures that must be observed in the sending of periodic and occasional information. Guidelines are also presented on interpretations given by the CVM Collegiate Board and by the SEP regarding relevant aspects of legislation and regulation that must be considered by issuers when carrying out certain operations.

Through this document, the SEP also intends to promote the disclosure of corporate information in a manner consistent with best corporate governance practices, aiming for transparency and equity in the relationship with investors and the market, as well as to minimize any deviations and, consequently, reduce the need for formulation of requirements and the application of penalty fines and sanctions.

This document consolidates the Circular Letters previously issued by the SEP, however, it does not dispense with the reading of applicable norms and the monitoring of decisions by the CVM Collegiate Board, and the update of corporate legislation and regulation must be observed, especially those that occurred after the present date.

Furthermore, it is worth noting that there are public hearings for proposals of amendments to CVM Instruction No. 358/02 (Public Hearing SDM No. 06/20), accessible via the link: http://conteudo.cvm.gov.br/audiencias_publicas/ap_sdm/2020/sdm0620.html; and No. 480/09 (Public Hearing SDM No. 09/20), accessible via the link: http://conteudo.cvm.gov.br/audiencias_publicas/ap_sdm/2020/sdm0920.html, and Public Hearing SDM No. 01/21, accessible via the link: http://conteudo.cvm.gov.br/audiencias_publicas/ap_sdm/2021/sdm0121.html.

In addition to reading this Circular Letter, it is recommended:

regarding accounting matters, the reading of Circular Letters/SNC/SEP:
http://conteudo.cvm.gov.br/legislacao/index.html?buscado=true&contCategoriasCheck=1&vi mDaCategoria=/legislacao/oficios-circulares/snc-sep/;
regarding other matters, consultation of Circular Letters issued by the other CVM superintendencies, especially those issued jointly with the SEP:
http://conteudo.cvm.gov.br/legislacao/oficios-circulares.html;
with respect to regulation issued by the CVM, consultation of the reports of the public hearings: http://conteudo.cvm.gov.br/audiencias_publicas/index.html;
regarding best corporate governance practices, consultation of the Brazilian Corporate Governance Code:
https://conhecimento.ibgc.org.br/Lists/Publicacoes/Attachments/21148/Codigo_Brasileiro_de _Governanca_Corporativa_Companhias_Abertas.pdf; and
with regard to issues of a socio-environmental nature: (i) Sustainability Guide for Companies, from the Brazilian Corporate Governance Institute (IBGC), available at https://conhecimento.ibgc.org.br/Paginas/Publicacao.aspx?PubId=22127; (ii) New Value Guide – Sustainability in Companies: How to start, who to involve and what to prioritize, from B3, available at: http://www.b3.com.br/data/files/1A/D7/91/AF/132F561060F89E56AC094EA8/Guia-paraempresas-listadas.pdf; and (iii) publication Capital Markets and SDGs in partnership with B3, CVM, GRI and UN Global Compact Brazil Network, available at http://www.b3.com.br/data/files/51/94/4D/DC/A4887610F157B776AC094EA8/Mercado_de_
Capitais_e_ODS.pdf.

Finally, it is clarified that the CVM is in the process of reviewing and consolidating its normative acts, as provided for in Decree No. 10.139, of 11.28.2019, and the Collegiate Board, in a meeting held on 08.05.2020, deliberated that acts issued to regulate the matters provided for in Law No. 6.385, of 12.07.1976, and in Law No. 6.404, of 12.15.1976, as well as in the exercise of other normative competencies, will be identified as "Resolution", replacing the previously used term "Instruction". For more information about the change in nomenclature of acts issued by the CVM, it is recommended to read CVM Resolution No. 1, of 08.06.2020.

Sincerely,

FERNANDO SOARES VIEIRA
Corporate Relations Superintendent

1 The Corporate Relations Superintendence .................................................................. 14
2 Issuer Registration .................................................................................................... 17
2.1 Issuer Categories......................................................................................................................17
2.2 Issuer Registration Request.............................................................................................................18
2.2.1..Obtaining login, password and code by new companies for use of the
Empresas.NET System............................................................................................................................19
2.2.2..Inclusion of the company in the Empresas.NET System .....................................................................19
2.2.3..Sending of documents.................................................................................................................19
2.2.4..Resubmission of documents.................................................................................................20
2.2.5..After the granting of open company registration...................................................................20
2.2.6..Additional guidelines .................................................................................................................21
2.3 Registration Update........................................................................................................................23
2.4 Issuers of depositary receipts of securities (BDR) .................................................24
2.5 Requests for conversion of categories...........................................................................................26
2.6 Consequences of non-delivery of information .................................................................................27
2.6.1..Penalty fines.....................................................................................................................27
2.6.2..Publication of the list of delinquent issuers....................................................................29
2.6.3..Ex officio suspension of issuer registration................................................................................29
2.6.4..Ex officio cancellation of issuer registration due to information delinquency ................30
2.6.5..Administrative sanction process..........................................................................................30
2.7 Other hypotheses for cancellation of registration ..................................................................................31
2.7.1..Voluntary cancellation of registration ..........................................................................................31
2.7.2..Ex officio cancellation of the issuer's registration due to its extinction.............................33
3 Periodic Information............................................................................................... 34
3.1 Management Report .................................................................................................................34
3.2 Financial Statements.................................................................................................................36
3.2.1..Financial institutions authorized to operate by the Central Bank of Brazil..........................39
3.2.2..Advance disclosure of financial information....................................................................42
3.2.3..Capital Budget...................................................................................................................42
3.2.4..Integrated Report – Start of Validity of CVM Resolution No. 14/20 ...........................................43
3.2.5..Relevant aspects to be observed in the preparation of Explanatory Notes and the
Management Report ....................................................................................................................43
3.3 Periodic Forms........................................................................................................................45
3.3.1..Registration Form.....................................................................................................................45
3.3.2..Reference Form..............................................................................................................46
a. Annual delivery of the Form...........................................................................................................46
b. Update of the Reference Form .......................................................................................47
c. Resubmission of the Reference Form due to public distribution registration .................49
3.3.3..Standardized Financial Statements – DFP........................................................................50
3.3.4..Quarterly Information – ITR......................................................................................................51
3.3.5..Securitization Company Report ..........................................................................................................53
3.3.6..Report on Brazilian Corporate Governance Code – Open Companies..............54
3.4 Ordinary General Meeting – OGM.......................................................................................................54
3.4.1..Notice of article 133 of Law No. 6.404/76............................................................................55
3.4.2..According to article 133, paragraph 5 of Law No. 6.404/76, the issuer is exempt from publishing the notices provided for in the caput of said article when the documents (notably the financial statements) are published up to 1 (one)
month before the date scheduled for the OGM..........................................................................56
3.4.3..Management Proposal for OGM .........................................................................................56
a. Issuers registered in Category A for which CVM Instruction No.
481/09 applies...................................................................................................................................................56
b. Issuers registered in Category B and in Category A for which CVM Instruction No. 481/09 does not apply .....................................................................................................................61
3.4.4..Notice of OGM Convocation ......................................................................................................61
3.4.5..Summary and minutes of the OGM ..................................................................................................64
3.4.6..Remuneration of administrators/fiscal councilors............................................................65
3.5 Report and communications of the fiduciary agent ..................................................................................66
4 Main Occasional Information................................................................................ 67
4.1 Material Act and Fact.............................................................................................................................67
4.1.1..Distinction between Material Fact and Market Notice ......................................................72
4.2 Extraordinary General Meeting (EGM), special assembly (AGESP), assembly of
debenture holders (AGDEB) and assembly of holders of agricultural receivables certificates
(AGCRA) or real estate (AGCRI)..................................................................................................................73
4.2.1..Notice of Convocation of EGM, AGESP, AGDEB, AGCRA or AGCRI ..............................................75
4.2.2..Management Proposal for EGM, AGESP, AGDEB, AGCRA or AGCRI..................................78
a. Management Proposal – Category A – companies authorized by a market administrator entity to trade shares on a stock exchange and having
shares in circulation..............................................................................................................................78
b. Management Proposal – Category B and companies in Category A for which
CVM Instruction No. 481/09 does not apply .................................................................................................82
4.2.3..Summary and minutes of the EGM, AGESP, AGDEB, AGCRA or AGCRI ..........................................................82

4.3 Projections.............................................................................................................................................83
4.4 Shareholder Agreement ...........................................................................................................................85
4.5 Group Convention............................................................................................................................86
4.6 Bankruptcy Petitions and Judgments..........................................................................................................86
4.7 Petitions and Judgments involving Judicial and Extrajudicial Reorganization ...............................................86
4.8 Negotiations by administrators, persons related to them and subsidiaries, affiliates and
the company itself with securities issued by the company...............................................................................87
4.9 Relevant Negotiations.......................................................................................................................89
4.9.1..Recipient of the obligation ............................................................................................................90
4.9.2..Object of the relevant participation ................................................................................................90
a. Shares...............................................................................................................................................90
b. Derivative financial instruments and other securities referenced in
shares.....................................................................................................................................................90
c. ADR, GDR and BDR ..............................................................................................................................91
d. Share lending......................................................................................................................92
e. Indirect participation .......................................................................................................................92
4.9.3..Calculation of increase or decrease in participation........................................................................93
4.9.4..Group of persons acting in concert or representing the same interest ..........................95
4.9.5..Responsibility of the administrator or manager............................................................................96
4.9.6..Time and form of disclosure.................................................................................................97
4.9.7..Content of the declaration of increase and decrease in participation..............................................98
4.9.8..Disclosure of the declaration by non-resident investor.............................................................99
4.10 Negotiation Policy.........................................................................................................................99
4.11 Investment Plan.......................................................................................................................100
4.12 Disclosure Policy........................................................................................................................101
4.13 Bylaws ...................................................................................................................................103
4.14 Meetings of the Board of Directors and the Fiscal Council ..........................................................103
4.15 Communication of auditor change...............................................................................................104
4.16 Communication on transactions between related parties ..............................................................104
4.17 Communication regarding indemnity contracts ............................................................................109
4.18 Share-based remuneration plans ....................................................................................109
4.19 Results Release........................................................................................................................109
4.20 Presentation material to analysts / market agents ...........................................................110
4.21 Market Maker.......................................................................................................................110
4.22 Installation of the Statutory Audit Committee and election of its members ....................................111

4.23 Communication regarding the holding of lives.......................................................................................111
5 Common Guidelines for Periodic and Occasional Information ......................................113
5.1 Cooperation Agreement CVM and B3 – Brasil, Bolsa, Balcão (B3).......................................................113
5.2 General Guidelines.............................................................................................................................114
5.3 Obligation to maintain a page on the worldwide computer network..........................................116
5.4 Confidentiality Request .............................................................................................................116
5.5 Documents in foreign language ..................................................................................................117
6 Special Rules on Issuers...............................................................................118
6.1 Issuers with high market exposure..................................................................................118
6.2 Issuers in special situation ........................................................................................................118
6.2.1..Issuers in extrajudicial reorganization ...................................................................................118
6.2.2..Issuers in judicial reorganization............................................................................................119
6.2.3..Issuers in bankruptcy ................................................................................................................120
6.2.4..Issuers in liquidation ............................................................................................................120
7 Relevant Corporate Events and Other Guidelines.................................................121
7.1 Common guidelines for ordinary and extraordinary general meetings.........................................121
7.1.1..Representation of shareholders in assembly ............................................................................121
7.1.2..Public requests for proxy ......................................................................................................122
7.1.3..Request for list of shareholder addresses (article 126, paragraph 3, of Law No.
6.404/76) ...............................................................................................................................................124
7.1.4..Installation of the Fiscal Council and election of its members.......................................................125
7.1.5..Election of members of the Board of Directors................................................................129
7.1.6..Remote Voting – CVM Instruction No. 481/09 ............................................................................134
7.2 Scope of CVM Instruction No. 481/09 ...............................................................................................134
7.3 Remote Voting Bulletin ..............................................................................................................136
7.4 Frequent filling doubts.............................................................................................140
7.5 CI.CORP System and integration with the Empresas.NET System...........................................................142
7.6 Remote voting exercised through service providers ........................................................142
7.7 Remote voting exercised directly .............................................................................................143
7.8 Calculation of votes in the general meeting...........................................................................................144
7.9 Presentation of documents – demonstrative table ..................................................................146
7.9.1..Abuse of voting rights and conflict of interest (article 115, paragraph 1, of Law No.
6.404/76) ...............................................................................................................................................146

7.10 Incorporation, merger, and spin-off...............................................................................................................147
7.11 Acquisition of a commercial company by an open company................................................................150
7.12 Conversion of shares...........................................................................................................................152
7.13 Right of withdrawal..............................................................................................................................152
7.14 Capital increase by private subscription......................................................................................154
7.14.1Surplus of shares in capital increase with credits.............................................................157
7.15 Capital reduction ............................................................................................................................157
7.16 Share grouping.......................................................................................................................158
7.17 Period of prohibition on trading.....................................................................................................158
7.18 Transactions between related parties...............................................................................................161
7.19 Indemnity commitments...........................................................................................................164
7.20 Trading in own-issued shares ......................................................................................166
7.20.1Competence for approval ....................................................................................................167
7.20.2Limitations...................................................................................................................................168
7.20.3Economic and political rights of treasury shares ........................................................170
7.20.4Monthly information on transactions carried out .........................................................................170
7.21 Preferred share dividends (article 203 of Law No. 6.404/76) .................................................170
7.22 Communication regarding non-payment of mandatory dividend due to the company's financial situation...........................................................................................................................170
7.23 Late, corrective, or supplementary declarations of dividends............................................171
7.24 Competence of the board of directors to deliberate on the issuance of debentures............171
7.25 Composition of the executive board ...................................................................................................171
7.26 Request for certificates of entries in the corporate books (article 100 of Law No. 6.404/76)..............................................................................................................................................172
7.27 Admission of shareholders in a wholly-owned subsidiary (article 253 of Law No. 6.404/76) .............................175
7.28 Acquisition of own-issued debentures .................................................................................176
7.29 Duties and Responsibilities of Administrators and the Controlling Shareholder..............................177
8 Complaints and Reports, Appeals, Consultations, Requests for Interruption or Suspension of General Meetings, Hearings, and Requests for Review of Processes, Proposals for Commitment Terms, Calculation of Deadlines, Requests for Access to Information, and LGPD
8.1 Complaints and reports involving companies .........................................................................177
8.2 Appeals against decisions or understanding manifestations of SEP ............................................178
8.3 Consultations by open, foreign, and incentivized companies.......................................................179

8.4 Requests for interruption or suspension of the deadline for convening a general meeting ..............................180
8.5 Communications with SEP ..................................................................................................................180
8.6 Requests for hearings by private individuals..........................................................................................181
8.7 Request for review of a process..............................................................................................................181
8.8 Commitment term.....................................................................................................................183
8.9 Calculation of deadlines..........................................................................................................................184
8.10 Request for access to information.........................................................................................................185
8.11 General Data Protection Law (LGPD)..............................................................................186
9 Empresas.NET System for the Preparation and Delivery of Information ..........................186
10 Guidelines for the Preparation of the Reference Form ......................................188
10.1Guidelines applicable to the entire Reference Form ..............................................................188
10.1.1General rules on the preparation and disclosure of information.............................................188
10.1.2Field "other information deemed relevant"....................................................................189
10.1.3Scope and content of information provided...............................................................190
10.1.4Information not applicable........................................................................................................190
10.2Guidelines for filling out the Reference Form ...................................................191
10.2.1Identification of persons responsible for the content of the Form (section 1) ...................191
10.2.2Auditors (section 2).....................................................................................................................192
a. Information on independent auditors (item 2.1) ..........................................................192
b. Remuneration of independent auditors (item 2.2)................................................................192
c. Other information deemed relevant (item 2.3) ......................................................................193
10.2.3Selected financial information (section 3) .......................................................................193
a. Selected financial information (item 3.1)..........................................................................193
b. Non-accounting measurements (item 3.2)...............................................................................................194
c. Events subsequent to the latest financial statements closing the social year (item 3.3) ...................................................................................................................194
d. Description of the policy for the allocation of results (item 3.4) .....................................................195
e. Distribution of dividends and profit retention occurring in the last 3 social years (item 3.5) .................................................................................................................................196
f. Level of the issuer's indebtedness (item 3.7) .............................................................................196
g. Issuer's obligations according to the nature and maturity date (item 3.8).................196
h. Other relevant information (item 3.9) ....................................................................................197
10.2.4Risk factors (section 4)...........................................................................................................197
a. Description of risk factors (item 4.1)......................................................................................197
b. Description of market risks (item 4.2)..................................................................................199
c. Judicial, administrative, or arbitral proceedings in which the issuer or its controlled companies are parties (item 4.3).........................................................................................................................199

d. Judicial, administrative, or arbitral proceedings in which the issuer or its controlled companies are parties and in which the opposing parties are administrators or former administrators, controllers or former controllers, or investors in the company or its controlled companies (item 4.4).............................................................................................................................................202
e. Information on relevant confidential proceedings in which the issuer or its controlled companies are parties that have not been disclosed in items 4.3 and 4.4 (item 4.5) .....................................203
f. Repetitive or connected judicial, administrative, or arbitral proceedings, which are not confidential and which are relevant collectively, in which the issuer or its controlled companies are parties (item 4.6)...................................................................................................................................203
g. Other relevant contingencies not covered by the previous items (item 4.7) .....................204
h. Foreign issuer (item 4.8) ......................................................................................................204
10.2.5Risk management and internal controls policy (section 5) ........................................204
a. Description of the risk factor management policy adopted by the issuer (item 5.1) 204
b. Description of the market risk management policy adopted by the issuer (item 5.2).............................................................................................................................................205
c. Internal controls (item 5.3) ........................................................................................................206
d. Internal integrity mechanisms and procedures adopted by the issuer (item 5.4) .........207
e. Comments on significant changes and expectations (item 5.5) ........................................207
10.2.6Issuer history (section 6)...................................................................................................208
a. Brief history of the issuer (item 6.3) ...........................................................................................208
b. Information on bankruptcy petition, if based on a relevant value, or on judicial or extrajudicial reorganization of the issuer, and on the current status of such requests (item 6.5).............................................................................................................................................208
10.2.7Issuer activities (section 7).................................................................................................208
a. Main activities developed by the issuer and its controlled companies (item 7.1) .........................208
b. Information related to mixed-economy companies ........................................................209
c. Information on the issuer's operational segments (item 7.2) .............................................209
d. Information on the products and services related to the operational segments disclosed in item 7.2 (item 7.3) .......................................................................................................210
e. Information on the effects of state regulation on the issuer's activities (item 7.5) 210
f. Information on socio-environmental policies (item 7.8)...............................................................210
10.2.8Extraordinary business (section 8)............................................................................................211
10.2.9Relevant assets (section 9).........................................................................................................212
a. Description of non-current assets relevant for the development of the issuer's activities (item 9.1).........................................................................................................212
10.2.10 Directors' comments (section 10) ....................................................................................212
a. Financial and equity conditions and Result of operations (items 10.1 and 10.2)..................213
b. Events with relevant effects, occurred and expected, in the financial statements (items 10.3) ..........................................................................................................................................214
c. Significant changes in accounting practices and Reservations and emphases present in the auditor's report (item 10.4)..........................................................................................................215

d. Critical accounting policies (item 10.5)..........................................................................................215
e. Other factors with relevant influence (item 10.9)....................................................................216
10.2.11 Projections (section 11)................................................................................................................216
a. Disclosure of Projection (item 11.1) ..............................................................................................216
b. Monitoring and alteration of disclosed projections during the last 3 social years (item 11.2)...............................................................................................................................................................217
10.2.12 General meeting and administration (section 12).........................................................................218
a. Description of the issuer's administrative structure (item 12.1).....................................................218
b. Description of the rules, policies, and practices relating to general meetings (item 12.2) .........................218
c. Description of the issuer's rules, policies, and practices relating to the board of directors (item 12.3)...................................................................................................................219
d. Identification of administrators and members of the fiscal council (item 12.5).............................220
e. Participation of members of the Board of Directors and the Fiscal Council in meetings held by the respective body (item 12.6).......................................................................221
f. Identification of members of statutory committees and of audit, risk, financial, and remuneration committees (item 12.7) ...........................................................................................221
g. Participation of committee members in meetings held by the respective body (item 12.8)221
h. Subordination, service provision, or control relationships (item 12.10)..................................222
i. Agreements, including insurance policies, for payment or reimbursement of expenses borne by administrators (item 12.11).................................................................................222
j. Other information deemed relevant (item 12.12) ..................................................................222
10.2.13 Remuneration of administrators (section 13) ......................................................................223
a. Description of the remuneration policy or practice of the board of directors, the statutory and non-statutory executive board, the fiscal council, statutory committees, and audit, risk, financial, and remuneration committees (item 13.1)..........................................223
b. Remuneration of the board of directors, the statutory executive board, and the fiscal council (item 13.2)...........................................................................................................................................225
c. Variable remuneration of the board of directors, the statutory executive board, and the fiscal council (item 13.3) ..................................................................................................................227
d. Share-based remuneration of the board of directors and the statutory executive board (item 13.5) .......................................................................................................................228
e. Open options of the board of directors and the statutory executive board at the end of the last social year (item 13.6).....................................................................................................230
f. Exercised options and shares delivered relating to share-based remuneration of the board of directors and the statutory executive board (item 13.7) ...................................................231
g. Information necessary to understand the data disclosed in items 13.5 to 13.7 (item 13.8) ..................................................................................................................................232
h. Information, by body, on the holdings held by members of the board of directors, the statutory executive board, and the fiscal council (item 13.9).........................................232
i. Pension plans in force granted to members of the board of directors and to statutory directors (item 13.10) ..........................................................................................233
j. Value of the highest, lowest, and average value of individual remuneration of the board of directors, the statutory executive board, and the fiscal council (item 13.11).......................................233

k. Contractual arrangements, insurance policies, or other instruments that structure remuneration or indemnification mechanisms for administrators (item 13.12) ....................234
l. Percentage of the total remuneration of each body attributed to members of the board of directors, the statutory executive board, or the fiscal council who are related parties to the issuer's controllers (item 13.13).................................................................235
m. Remuneration of members of the board of directors, the statutory executive board, or the fiscal council received for any reason other than the function they hold (item 13.14) ........235
n. Remuneration of members of the board of directors, the statutory executive board, or the fiscal council recognized in the results of the issuer's controllers, companies under common control, and controlled companies of the issuer (item 13.15) ......................................................235
o. Other information deemed relevant (item 13.16) ................................................................236
10.2.14 Human resources (section 14).................................................................................................237
a. Information on the issuer's human resources (item 14.1) ..............................................237
b. Description of the issuer's employee remuneration policy (item 14.3).......................237
10.2.15 Control and economic group (section 15).................................................................................237
a. Identification of the controlling shareholder or group of controlling shareholders (item 15.1)............................237
b. Identification of shareholders, or groups of shareholders acting in concert or representing the same interest, with a participation equal to or greater than 5% of the same class or species of shares (item 15.2)..............................................................................................238
c. Capital distribution (item 15.3)...............................................................................................240
d. Organogram of the issuer's shareholders (item 15.4) ..................................................................241
e. Information on shareholder agreements regulating the exercise of voting rights or the transfer of shares issued by the issuer (item 15.5) ...........................................................241
f. Information on relevant changes in the participations of the control group members and administrators of the issuer (item 15.6)..........................................................................242
10.2.16 Transactions with related parties (section 16) ....................................................................242
a. Information on the issuer's rules, policies, and practices regarding the conduct of transactions with related parties (item 16.1)...............................................................................242
b. Information on the transactions (item 16.2)..............................................................................242
c. Treatment of conflicts and commutativity (item 16.3) ..............................................................243
d. Other information that the issuer deems relevant (item 16.4)..............................................244
10.2.17 Share capital (section 17)...........................................................................................................244
10.2.18 Securities (section 18).................................................................................................246
a. Description of the rights of each class and species of issued share (item 18.1) ............................246
b. Description of statutory rules that limit the voting rights of significant shareholders or that require the realization of a public offer (item 18.2)......................................246
c. Volume of transactions as well as the daily average and highest and lowest quotes of the traded securities (item 18.4) ........................................................................................246
d. Description of the other securities (item 18.5)..................................................................247
e. Number of holders of each type of security described in item 18.5 (item 18.5-A).........247
f. Other information deemed relevant (item 18.12) ..................................................................247
10.2.19 Buyback plans and treasury securities (section 19)....................................248
a. Information on buyback plans for the issuer's shares (item 19.1).................................248

b. Movement of securities held in treasury (item 19.2) ...........................248
c. Provide other information that the issuer deems relevant (item 19.3) ...............................249
10.2.20 Securities trading policy (section 20) ......................................................249
10.2.21 Information disclosure policy (section 21)..................................................................249
11 General Guidelines for Incentivized Companies................................................................250
11.1 Registration..............................................................................................................................................250
11.2 Registration update......................................................................................................................250
11.3 Periodic documents.....................................................................................................................251
11.3.1 Financial statements........................................................................................................251
11.3.2 Convening notice for Shareholders' Meeting ....................................................................................................251
11.3.3 Minutes of the Shareholders' Meeting..................................................................................................................................252
11.3.4 Registration Data of Incentivized Companies........................................................................252
11.4 Coercive fine.............................................................................................................................253
11.5 Suspension of registration .......................................................................................................................253
11.6 Cancellation of registration ex officio ..................................................................................................253
11.7 Request for voluntary cancellation of registration...............................................................................253
11.8 Simplified registration .........................................................................................................................253
11.9 Debt remission..........................................................................................................................254
11.10 Special auctions of securities..............................................................................................................254
12 Risk-Based Supervision Plan – SBR.............................................................255
13 Corporate Governance Best Practices for Open Companies..........................256
13.1 Disclosure policy........................................................................................................................256
13.2 Trading policy.......................................................................................................................258
13.3 Risk management policy..........................................................................................................259
13.4 Policy for contracting transactions with related parties....................................................260
13.5 Dividend policy / Result allocation policy...........................................................260
13.6 Corporate calendar......................................................................................................................260
13.7 Preparation of the Reference Form..........................................................................................260
13.8 Timing for disclosure of relevant information........................................................................260
13.9 Shareholders' meeting..........................................................................................................261
13.9.1 Convening deadline..................................................................................................................261
13.9.2 Agenda and documentation...............................................................................................................262

13.9.3 Shareholders' proposals ..................................................................................................................262
13.9.4 Meeting organization........................................................................................................263
13.10 Adoption of CVM Orientation Opinion No. 35/08 ..........................................................................263
13.11 Audit committee ........................................................................................................................264
13.12 Monthly submission of the form for traded and held securities provided for in
article 11 of CVM Instruction No. 358/02 .....................................................................................................265
13.13 Open companies' website on the worldwide web.............................................265
13.14 Accounting policies manual........................................................................................................266
13.15 Board of Directors..........................................................................................................................................266
13.16 Conduct and conflicts of interest ....................................................................................................267
13.16.1 Code of conduct...................................................................................................................267
13.16.2 Policy for prevention and detection of illicit acts ................................................267
13.17 Remuneration of administrators..................................................................................................268

1 Company Relations Superintendence
The Company Relations Superintendence (SEP) is responsible for registration, supervision, guidance, sanctioning, and support for standardization activities concerning open companies, foreign companies, and incentivized companies.
The SEP carries out its activities through a division of labor into 6 organizational components: Company Monitoring Management-1 (GEA-1), Company Monitoring Management-2 (GEA-2), Company Monitoring Management-3 (GEA-3), Company Monitoring Management-4 (GEA-4), Company Monitoring Management-5 (GEA-5), and the SEP itself.
Currently, the main responsibilities of each of the organizational components are as follows:
Company Relations Superintendence:

Coordinate the work of the company monitoring management teams;
Analyze requests for granting and cancellation of registration of incentivized companies;
Supervise the timely provision of periodic information by companies, application of coercive fines, and semi-annual publication of the list of delinquent companies;
Analyze appeals against the application of coercive fines; and
Suspend and cancel ex officio (for failure to provide information) registrations of open, foreign, and incentivized companies.
Company Monitoring Management Teams 1 and 2 (GEA-1 and GEA-2):
Analyze initial registration requests for securities issuers, as well as registration updates for companies in public distribution offers of securities;
Analyze company inquiries and voluntary cancellations of registration; and
Analyze compliance with standards for the disclosure of periodic and occasional documents and information by companies, their administrators or shareholders, as well as the regularity of the allocation of companies' results.
Company Monitoring Management Teams 3 and 4 (GEA-3 and GEA-4):
Analyze the regularity of administrative proposals and decisions, deliberations in general assemblies, and the conduct of business by controllers and administrative bodies;
Analyze complaints involving companies;
Analyze requests for interruption or suspension of the convening period for general assemblies; and
Presentation of Accusation Terms (ordinary and simplified procedures).
Company Monitoring Management Team- 5 (GEA-5):
Analyze financial statements with audit reports containing modified opinions, as well as perform analyses focused on specific themes based on risks identified during the supervision work;
Analyze annual and interim financial statements disclosed by companies, when there is a public distribution of securities;
Determine republication of financial statements;
Analyze inquiries and complaints involving financial statements; and
Presentation of Accusation Terms involving financial statements.
The identification of the holders of the organizational components that make up the SEP is available on the Securities and Exchange Commission (CVM) website, accessible at https://www.gov.br/cvm/pt-br/composicao/orgaos-especificos/superintendencia-derelacoes-com-empresas.
Service to open and foreign companies is provided by GEA-1 and GEA-2, according to activity sectors, as shown in the table below.
Activity Sector Management Team
Agriculture (sugar, alcohol, and sugarcane) GEA-2 Food GEA-2 Leasing GEA-1 Banks GEA-1 Beverages and tobacco GEA-2 Stock/commodity exchanges and futures GEA-1 Toys and leisure GEA-1 Trade (wholesale and retail) GEA-2 Foreign trade GEA-2 Communication and information technology GEA-2 Civil construction, construction materials, decoration GEA-1 Cooperatives GEA-2 Real estate credit GEA-1 Education GEA-2 Packaging GEA-2 Electric energy GEA-1 Mineral extraction GEA-2 Factoring GEA-1 Pharmaceuticals and hygiene GEA-2 Printing and publishing GEA-1 Accommodation and tourism GEA-1 Financial intermediation GEA-1 Machinery, equipment, vehicles, and parts GEA-1

Metallurgy and steelmaking GEA-2
Paper and pulp GEA-2
Fishing GEA-2
Oil and gas GEA-1
Private pension GEA-1
Chemical, petrochemical, fuels, and rubber GEA-1 Reforestation GEA-2 Sanitation and water and gas services GEA-2 Securitization of receivables GEA-1 Insurance companies and brokers GEA-1 Transport and logistics services GEA-2 Medical services GEA-2 Telecommunications GEA-2 Textile and clothing GEA-2 Participation management companies – Agriculture (sugar, alcohol, and sugarcane) GEA-2 Participation management companies – Food GEA-2 Participation management companies – Leasing GEA-1 Participation management companies – Banks GEA-1 Participation management companies – Beverages and tobacco GEA-2 Participation management companies – Toys and leisure GEA-1 Participation management companies – Trade (wholesale and retail) GEA-2 Participation management companies – Foreign Trade GEA-2 Participation management companies – Communication and information technology GEA-2 Participation management companies – Civil construction, construction materials, and decoration GEA-1 Participation management companies – Cooperatives GEA-2 Participation management companies – Real estate credit GEA-1 Participation management companies – Education GEA-2 Participation management companies – Packaging GEA-2 Participation management companies – Electric energy GEA-1 Participation management companies – Mineral extraction GEA-2 Participation management companies – Factoring GEA-1 Participation management companies – Pharmaceutical and Hygiene GEA-2 Participation management companies – Printing and publishing GEA-1 Participation management companies – Accommodation and tourism GEA-1 Participation management companies – Financial intermediation GEA-1 Participation management companies – Machinery, equipment, vehicles, and parts GEA-1 Participation management companies – Metallurgy and steelmaking GEA-2 Participation management companies – Paper and pulp GEA-2 Participation management companies – Fishing GEA-2 Participation management companies – Oil and gas GEA-1 Participation management companies – Private pension GEA-1 Participation management companies – Chemical, petrochemical, fuels, and rubber GEA-1 Participation management companies – Reforestation GEA-2 Participation management companies – Sanitation, water, and gas services GEA-2 Participation management companies – Securitization of receivables GEA-1 Participation management companies – Insurance companies and brokers GEA-1 Participation management companies – No main sector GEA-1

Participation management companies – Medical services GEA-2 Participation management companies – Transport and logistics services GEA-2 Participation management companies – Telecommunications GEA-2 Participation management companies – Textile and clothing GEA-2 Service to incentivated companies is provided by the SEP component; the table above does not apply.
It is worth noting that the same division among activity sectors applies to GEA- 3 and 4, with GEA-3 responsible for the same companies supervised by GEA-1 and GEA-4 for those supervised by GEA-2. GEA-5, in turn, is responsible for all activity sectors.
2 Issuer Registration
2.1 Issuer categories
In accordance with article 2 of CVM Instruction No. 480/09, there are two categories of registration for securities issuers, according to the types of securities admitted to public trading:

Category A, which authorizes the trading of any of the issuer's securities in regulated securities markets; and
Category B, which authorizes the trading of the issuer's securities in regulated securities markets, except for those identified below:
a) shares and depositary receipts of shares; or b) securities that confer on the holder the right to acquire the securities mentioned in letter “a”, as a result of their conversion or the exercise of the rights inherent to them, provided they are issued by the issuer of the securities referred to in letter “a” or by a company belonging to the group of the aforementioned issuer. Note that Chapter III (Issuer Obligations) of the Instruction establishes in Sections II and III, which deal respectively with mandatory periodic and occasional information, specific rules for each category of issuer regarding information provision discipline. As provided for in article 2 of CVM Instruction No. 480/09 and in item I of articles 1 and 2 of Annex 3 of the aforementioned regulation, securities issuers must indicate, at the time of registration, in which category they wish to register, according to the types of securities they intend to have publicly traded. Thus, it is up to the issuer to choose the regime of obligations to which they wish to submit. Finally, attention is called to the fact that, in accordance with article 2 of Annex 32-I of CVM Instruction No. 480/09, foreign companies must obtain registration in Category A or B, according to the classification contained in items I and II of the aforementioned article.

2.2 Issuer registration request
Since 02.04.2018, the issuer registration request, as well as all documents related to open company registration requests, provided for in CVM Instruction No. 480/09, must be submitted exclusively electronically via the Empresas.NET System. New companies can download the Empresas.NET System to fill out and send structured documents, through the CVM website (http://gov.br/cvm, section REGULATED ENTITIES INFORMATION, Companies, Information Submission, Empresas.NET System) or via the Systems Center, Company Information, Document Submission Programs – Downloads – Empresas.NET Program), as well as via the B3 website (http://www.b3.com.br/pt_br/produtos-e-servicos/solucoes-para-emissores/sistema-empresas-net/). After installing the Empresas.NET System, the use of a provisional login and password is required to send documents. In cases of initial registration request with simultaneous request for registration of public distribution of securities, the requirements to be fulfilled within the initial registration process will be carried out by a Joint Letter with the Securities Registration Superintendence (SRE), in accordance with CVM Instruction No. 400/03. As provided for in CVM Deliberation No. 809/19, the initial issuer registration applicant for category A may request that the analysis of their request be carried out by the SEP in a reserved manner. In these cases, the registration request must:
a) indicate the period during which such information must remain reserved in case of withdrawal or denial; and b) declare the justification for the confidentiality of the requests, including the reasons why its disclosure may represent a competitive advantage to other economic agents or put the legitimate interest of the company at risk.
Furthermore, the initial issuer registration request made together with a request for reserved analysis of registration of public distribution of shares, as well as all documents related to open company registration requests, provided for in CVM Instruction No. 480/09, must be presented exclusively electronically via the Empresas.NET System, as guided in the following sections of this Circular Letter. It is emphasized that, if the registration request under reserved analysis escapes control, it is the issuer's responsibility for its immediate disclosure, in accordance with CVM Instruction No. 358/02.

2.2.1 Obtaining login, password, and code by new companies for use of the
Empresas.NET System
The request for provisional login, password, and code for the submission, via the Empresas.NET System, of documents related to open company registration requests must be made by the Investor Relations Director (DRI) or their appointed attorney, by sending the following information to the email suporteexterno@cvm.gov.br:

Reference: Request for authorization to send documents via the Empresas.NET System (company requesting open company registration)
Company registration data:
Company Name / CNPJ
Applicant registration data:
Name of the DRI or attorney / CPF / Email / Contact phones
Attention is called to the fact that companies that have login and password for companies exempt from registration for the purpose of fulfilling periodic and occasional information submission obligations, provided for in CVM Instruction No. 476/09, must request a provisional login and password for a new code, adequate for companies requesting registration.
The login and password of a company exempt from registration are not valid for a company requesting registration.
2.2.2 Inclusion of the company in the Empresas.NET System
The company must access the menu function “New issuer” and select, in the ‘Company’ field of the ‘New Form’ tab, the option “Include New Company”.
The “New Issuer” screen will be displayed, where the company's data, as well as the provisional code provided by the CVM, must be filled in.
Once the data is filled in and the content saved, the company name will appear in the Empresas.NET System so that the applicable documents can be created (Registration Form, Reference Form, Quarterly Information, and Standardized Financial Statements).
2.2.3 Document submission
Once the documents related to the open company registration request are created in the Empresas.NET System, they must be sent using the “Send” function, requiring the use of the provisional login provided by the CVM.
It is stressed that the Empresas.NET System must be used only for sending information related to the initial registration of open companies. Information and documents to be directed to the SRE must be sent in accordance with the procedures and guidelines established by that Superintendence.
It is requested that the last document to be presented for the purpose of open company registration request, among those provided for in Annex 3 of CVM Instruction No. 480/09, be the registration request, provided for in paragraph 1, item I, of the aforementioned annex, signed by the Investor Relations Director, preferably mentioning each document uploaded (joint descriptions should not be made; for example: instead of citing minutes of general assemblies of the last 12 months, each minute uploaded to the Empresas.NET System must be identified one by one). It is emphasized that paragraph 1 of article 4 of CVM Instruction No. 480/09 provides that the counting of the registration request analysis period provided for in the caput will only begin on the date of protocol of the last document that completes the set of documents necessary for the instruction of the registration request, as indicated in Annex 3 of this Instruction. It is also requested that the issuer does not make partial protocols. In this sense, the issuer should start the protocol of documents when all documents are already finalized and available for sending, and should send the registration request after sending all other necessary documents. Documents must be uploaded in the appropriate associations (category, type, and species), as the protocol of documents incorrectly categorized invalidates their recognition and subsequent availability on the CVM website. See Manual for Submission of Periodic and Occasional Information (http://conteudo.cvm.gov.br/export/sites/cvm/menu/regulados/companhias/Manual-Sistema-deEnvio-de-Informacoes-Periodicas-e-Eventuais.pdf). It is emphasized that the category “Documents for company registration at the CVM”, type “Other documents (CVM)”, should only be used if there is no specific category or type. Furthermore, the issuer must use a specific category, which indicates whether the document is directed to the CVM or to B3.
2.2.4 Re-presentation of documents
During the analysis process of the open company registration request, documents may be re-presented via the Empresas.NET System to eventually fulfill requirements or improvements.
It is worth clarifying that re-presented documents will not be versioned within the Empresas.NET System.
2.2.5 After the grant of open company registration
Once the open company registration is granted, the CVM will send a letter informing the grant and its definitive code with the CVM.

The company must replace the provisional code with the definitive code in the Empresas.NET system and resubmit the Reference and Registration Forms with the updated data of the open company's registration.

The company must also send the form of Article 11 of CVM Instruction No. 358/02. The information must be sent via the structured electronic form available in the Empresas.NET system. Once the individual form for each director, member of the board of directors, audit committee, and any bodies with technical or advisory functions created by statutory provision is completed, the consolidated form will be generated automatically. Similarly, when sending the individual form, the system will also automatically send the consolidated form.

2.2.6 Additional Guidelines

The other mandatory documents for the instruction of the registration request must be sent in ".pdf" format without being digitally blocked and, if they have been digitized, that Optical Character Recognition (OCR) technology has been used, which allows recognizing text characters in the files, and the appropriate resolution must be applied to the file to especially preserve the clarity of the characters. When digitizing physical documents using OCR technology, the company must ensure the correct convertibility of text characters.

It is reinforced that SEP does not require that documents filed in the Empresas.NET system be manually signed and subsequently digitized. Preferably, originally digital documents should be filed.

The financial statements required for the analysis of the registration request of the issuer, in accordance with Annex 3 of CVM Instruction No. 480/09, are as follows:

a) Financial statements specifically prepared for registration purposes, in accordance with Articles 25 and 26 of the Instruction, referring to: (i) the last fiscal year, provided that such statements adequately reflect the issuer's capital structure at the time of filing the registration request; or (ii) a subsequent date, preferably coinciding with the closing date of the last quarter of the current fiscal year, but never earlier than 120 (one hundred and twenty) days counted from the date of filing the registration request, if: (i) a relevant change has occurred in the issuer's capital structure after the closing date of the last fiscal year; or (ii) the issuer was incorporated in the same fiscal year as the registration request. It is emphasized that the presentation of financial statements specifically prepared for registration purposes with a reference date subsequent to the closing of the fiscal year should only occur in cases where there has been an actual change in the issuer's capital structure. In the cases provided for in Article 1, item VIII, letters "a" and "b.1" of Annex 3 to CVM Instruction No. 480/09, the management comments referred to in item IX of the mentioned article must be presented;

b) Financial statements referring to the last 3 (three) fiscal years, prepared in accordance with the accounting standards applicable to the issuer in the respective fiscal years. These are historical financial statements prepared according to the rules and deadlines applicable at the time of their preparation; and

c) Quarterly Information Form – ITR, in accordance with Article 29 of the Instruction, referring to the quarters of the current fiscal year, provided that more than 45 (forty-five) days have elapsed from the closing of each quarter.

Regarding the concept of "relevant change in the issuer's capital structure after the closing date of the last fiscal year" referred to in item (a.ii.i) above, any significant change, in absolute or percentage terms, of its capital structure is understood, such as its share capital, equity, capital structure index (current liabilities plus non-current liabilities, divided by total assets) or leverage index (current liabilities plus non-current liabilities, divided by equity).

It is worth clarifying that the financial statements specifically prepared for registration purposes provided for in letter a of item VIII of Article 1 of Annex 3 of CVM Instruction No. 480/09 must refer to the last fiscal year immediately preceding the date of the registration request.

It is emphasized that, if the financial statements specifically prepared for registration purposes refer to a date subsequent to the last fiscal year, the Reference Form must reflect the information from these financial statements (FS) in all relevant sections.

Additionally, it is highlighted that the company must present, in its registration request, the reasons why it believes that the financial statements at the end of the last fiscal year do not reasonably reflect the issuer's capital structure at the time of filing the registration request, in accordance with item IX of Article 1 of Annex 3 of CVM Instruction No. 480/09. The Standardized Financial Statements Form – DFP and the quarterly information form – ITR will correspond to the dates of the respective financial statements, according to the criteria mentioned above. The financial statements closing the fiscal year must serve as the basis for filling out the DFP, and the interim financial statements for the ITRs.

According to item XIII of Article 1 of Annex 3 of CVM Instruction No. 480/09, the DFP Form to be presented within the scope of the registration request must refer to the last fiscal year, prepared based on the financial statements for registration purposes (referring to item VIII).

Thus, if the company presents financial statements for registration purposes referring to a date subsequent to the last fiscal year due to a "relevant change in the issuer's capital structure after the closing date of the last fiscal year", or because the issuer was incorporated during the fiscal year, there is no need to present a DFP Form.

Also regarding the presentation of financial statements and quarterly reports by financial institutions and other entities authorized to operate by the Central Bank of Brazil, see item 3.2.1 (Financial institutions authorized to operate by the Central Bank of Brazil).

2.3 Registration Update

In public distribution offers of securities, in the primary or secondary markets, registered in accordance with CVM Instruction No. 400/03, SEP verifies the registration update and makes, if necessary, requirements through a Joint Letter with SRE. CVM Instruction No. 480/09 provides, in paragraph 2 of Article 24, that, in case of a public distribution registration request, issuers must resubmit the fully updated Reference Form on the same date that the request is filed with CVM.

It is emphasized that the reply letter to the requirements formulated by SEP, when requesting the registration of public distribution offers of securities by already registered companies, must be sent via CVM's Digital Protocol.

CVM's Digital Protocol has been fully automated to allow for the agile and efficient processing of documents filed with the Agency. In the current version, it is possible to track the progress of requests during all stages. For more information, one must access the link:
http://conteudo.cvm.gov.br/menu/atendimento/protocolodigital.html.

In accordance with CVM Deliberation No. 809/19, the applicant for the registration of a public distribution offer of shares by issuers already registered in Category A may request that the analysis of their request be carried out by SEP in a reserved manner.

In these cases, at the time of requesting the protocol, an electronic form called "Digital Document Protocol" is filled out, with the data of the request object and indication of the filed documents. The reserved nature of the request must be signaled at this moment, in the following fields:

i) In item 1. "Document Data": in the field "Request Description", after specifying the registration request for the offer and, if applicable for registration, the applicant must insert the phrase "under reserve, in accordance with CVM Deliberation No. 809/19"; and

ii) In item 2. "Files": the "Confidential" check box must be marked. (Confirm in the system)

It is emphasized that, if the registration request presented under reserved analysis escapes control, it is the issuer's responsibility for its immediate disclosure, in accordance with CVM Instruction No. 358/02.

In the case of registration requests for public distribution offers of shares by issuers already registered with CVM, carried out under the reserved analysis regime provided for in CVM Deliberation No. 809/2019, of 02/19/2019, the initial petition, the Reference Form (although prepared in the Empresas.NET system), and the other documents of the already registered issuer must be sent via CVM's Digital Protocol, and not via the Empresas.NET system.

It is emphasized that the companies are subject to the provisions of paragraphs 3, in the case of Category A, and 4, in the case of Category B, of Article 24 of CVM Instruction No. 480/09, which determines that the Company must update the corresponding fields of the reference form within 7 (seven) business days of the occurrence of a set of facts.

In this sense, despite the change in the Reference Form not being related to a requirement formulated within the scope of the registration update process resulting from the public distribution offer, it is a normative imposition of CVM Instruction No. 480/09, which is applicable to the company.

Therefore, in case of need to update the Reference Form due to the hypotheses provided for in Article 24, the Company must update the Reference Form within the determined deadline, emphasizing that: (i) the updated fields must be restricted to those strictly necessary due to the triggering fact; and (ii) SEP must be notified by email of the update, informing the sections and fields of the FRE that were updated and the normative reasons that led to such update.

It is emphasized that, in these situations, the modification in the counting of the analysis deadline provided for in Joint Circular Letter No. 1/2020/CVM/SEP/SRE does not apply, maintaining, in principle, the CVM's analysis deadlines unchanged.

2.4 Issuers of depositary receipts of securities (BDR)

Depositary receipts of securities or Brazilian Depositary Receipts (BDR) are, according to the definition contained in Article 1, item I, of CVM Instruction No. 332/00, certificates issued by a depositary institution in Brazil and representative of securities issued by an open or similar company whose headquarters is located in Brazil or abroad.

Such titles can have as collateral, according to the conditions set forth in Article 1 of Annex 32-I to CVM Instruction No. 480/09: (i) shares issued by issuers that have their headquarters outside Brazil (foreign), which are registered and subject to supervision by the regulatory entity of the capital market of their main trading market; or (ii) securities representing debt listed or admitted to trading on a stock exchange or on an electronic trading platform.

Foreign issuers must also meet at least one of the criteria highlighted below:

a) possess assets and revenues in Brazil that correspond to less than 50% (fifty percent) of those contained in the individual, separate, or consolidated financial statements, prevailing the one that best represents the economic essence of the business for the purposes of this classification; or

b) present a stock exchange as its main trading market and, cumulatively:

i. have headquarters outside Brazil and in a country whose regulatory body has signed with CVM an agreement on consultation, technical assistance, and mutual assistance for the exchange of information, i.e., signatory of the multilateral memorandum of understanding of the International Organization of Securities Commissions – IOSCO; and

ii. be classified as a "recognized market" in the regulation of the entity administering an organized market for securities approved by CVM.

In case of a subsequent public distribution offer of BDR, the percentage provided for in item I, "a", of the caput of Article 1 of Annex 32-I of CVM Instruction No. 480/09 is raised to 65% (sixty-five percent), as provided for in paragraph 6 of the mentioned Article 1. The classification in the condition of "issuer authorized to issue BDR" will be verified at the time of (i) issuer registration with CVM, (ii) realization of a public distribution offer of depositary receipts of shares, and (iii) registration of a BDR program.

The compliance with such condition must be declared by the issuer, through a document signed by its legal representative and, in the case of a public distribution offer of BDR, by the lead intermediary, together with the presentation of the calculation memo made by the issuer to verify the requirements provided for in Article 1 of Annex 32-I to CVM Instruction No. 480/09.

Issuers registered with CVM as foreign before 12/31/2009 are exempt from proving the classification in the condition of foreign issuer at the time of carrying out a public distribution offer of depositary receipts of securities – BDR or the registration of a BDR program.

The foreign issuer that sponsors a depositary receipts of securities – BDR Level II or Level III program must obtain registration:

I. in Category A, if the securities that serve as collateral for the BDRs are:

a) shares and depositary receipts of shares; and

b) securities that confer on the holder the right to acquire the securities mentioned in letter "a", as a result of their conversion or the exercise of the rights inherent to them, provided that they are issued by the same issuer of the securities mentioned in letter "a" or by a company belonging to the group of said issuer; or

II. in Category B, in other cases.

Article 3 of Annex 32-I of CVM Instruction No. 480/09 provides that the persons indicated below must designate legal representatives domiciled and resident in Brazil, with powers to receive citations, notifications, and summonses related to actions proposed against the issuer in Brazil or based on Brazilian laws or regulations, as well as to represent them broadly before CVM, being able to receive correspondence, summonses, notifications, and requests for clarification:

a) the foreign issuer that sponsors a depositary receipts of shares – BDR Level I, Level II, or Level III program;

b) directors or persons who perform functions equivalent to those of a director in the foreign issuer that sponsors a depositary receipts of securities – BDR Level II or Level III program; and

c) members of the board of directors, or equivalent body, of the foreign issuer that sponsors a depositary receipts of shares – BDR Level II or Level III program.

Legal representatives must accept the designation in writing, in a document indicating knowledge of the powers conferred upon them and the responsibilities imposed by Brazilian laws and regulations. In case of resignation, death, interdiction, impediment, or change of status that disqualifies the legal representative from exercising the function, the issuer has a deadline of 15 (fifteen) business days to promote its replacement.

In the event of resignation, if the issuer fails to promote the replacement, the legal representative will remain responsible for the attributes inherent to the function for a period of 60 (sixty) days from the resignation, without prejudice to other measures that the entity administering the market in which the BDRs are traded establishes in its regulations, as provided for in paragraph 3 of Article 3 of Annex 32-I of CVM Instruction No. 480/09.

It is also alerted that paragraph 2 of Article 44 of CVM Instruction No. 480/09 provides that the legal representative of foreign issuers is equated to the Investor Relations Director (IRD) for all purposes provided for in the legislation and regulation of the securities market.

Information regarding the Legal Representative must be included in item 5 of the registration form (IRD or person equated). Furthermore, minutes of Board meetings, Board of Directors meetings, assemblies, or other documents dealing with the election or dismissal of the Legal Representative must be sent, via the Empresas.NET system, within the deadlines provided for in CVM Instruction No. 480/09.

It is worth highlighting, furthermore, that foreign issuers are subject to Law No. 6.385/76, even though Brazilian corporate law (Law No. 6.404/76) is not applicable to them. Therefore, their corporate operations, as well as the performance of their administrators, are subject to the corporate rules of their country of origin and their bylaws, with such foreign issuers being subject to the supervision of the regulatory body of that country.

On 11/10/2020, within the scope of process 19957.005751/2020-01, the Collegiate Body understood, by majority, that, in the analysis of the initial registration request of a foreign issuer, Law No. 6.385/76 authorizes the technical area to consider, in a broader sense, the protection rules offered to the investor, being able to examine, in the face of a registration request for a foreign issuer, if there are minimum elements that ensure its protection, notably regarding provisions that are in blatant contrast with the principles and guidelines that guide the care for investors' rights and the regular functioning of the capital market and its integrity. This is not, therefore, to give undue application to Brazilian corporate law, but to exercise a judgment of compatibility between the corporate law applicable to the issuer and that existing in Brazil to verify the existence of essential guarantees.

Thus, with regard to the performance of CVM, without prejudice to the previous paragraph, it is incumbent upon this Agency notably to regulate and supervise the disclosure of information by foreign companies, especially with regard to CVM Instructions No. 358/02 and 480/09. It is also remembered that the rules contained in CVM Instruction No. 481/09 are not applicable to foreign companies.

2.5 Requests for conversion of categories

Once registered, issuers may request, through the Digital Protocol, accessible on the CVM website, and not through the Empresas.NET system, the conversion of one registration category to another, through a request sent to SEP, whose procedures and requirements are regulated in Articles 8 to 12 of CVM Instruction No. 480/09.

In accordance with CVM Deliberation No. 809/19, the applicant for conversion from Category B to Category A with concomitant registration of a public distribution offer of shares may request that the analysis of their request be carried out by SEP in a reserved manner.

In these cases, as provided for in Circular Letter No. 02/2019/CVM/SEP, of 02/19/2019, at the time of requesting the protocol, an electronic form called "Digital Document Protocol" is filled out, with the data of the request object and indication of the filed documents. The reserved nature of the request must be signaled at this moment, including in item 1. "Document Data", in the field "Request Description", after specifying the registration request for the offer and, if applicable for registration, the phrase "under reserve, in accordance with CVM Deliberation No. 809/19".

It is emphasized that, if the category conversion request presented under reserved analysis escapes control, it is the issuer's responsibility for its immediate disclosure, in accordance with CVM Instruction No. 358/02.

In the case of registration requests for public distribution offers of shares by issuers already registered with CVM, carried out under the reserved analysis regime provided for in CVM Deliberation No. 809/19, the initial petition, the Reference Form (although prepared in the Empresas.NET system) and the other documents of the already registered issuer must be sent via CVM's Digital Protocol System, and not via the Empresas.NET system.

2.6 Consequences of non-delivery of information

Issuers must pay attention to compliance with the legal and regulatory requirements imposed, with regard to the delivery of periodic and occasional information provided for, especially in CVM Instructions No. 358/02, 480/09, and 481/09. Non-compliance with the delivery of information subjects the issuer to the procedures commented below.

2.6.1 Coercive Fines

Initially, it is worth clarifying that, on 01/01/2020, CVM Instruction No. 608/19 entered into force, which provides for coercive fines and revoked CVM Instruction No. 452/07.

The aforementioned Instruction provides that the superintendencies responsible for monitoring the delivery of information must publish by December 15 of each year, on the CVM page on the worldwide computer network, a list of periodic information that must be disclosed by participants in the following exercise, indicating their respective delivery deadlines and normative bases, and alerting that non-disclosure of the information within the indicated deadlines subjects to the application of the daily fine provided for in Annex 3 of the Instruction.

Regarding issuers of securities, Annex 3 of the Instruction provides for the following values of daily coercive fine for those who fail to comply with the established deadlines for delivery of periodic information, applicable until the date when the obligation is fulfilled or for a maximum period of 60 (sixty) days:

a) Issuers registered in Category A:

(i) R$ 1,000.00 (one thousand reais): for the Reference Form, the quarterly information form – ITR, the standardized financial statements form – DFP, and the financial statements accompanied by the documents required in specific regulation; and

(ii) R$ 500.00 (five hundred reais): for other documents.

b) Issuers registered in Category A in judicial or extrajudicial reorganization:

(i) BRL 500.00 (five hundred reais): for the Reference Form, the quarterly information form – ITR, the standardized financial statements form – DFP, and the financial statements accompanied by the documents required by specific regulation; and (ii) BRL 250.00 (two hundred and fifty reais): for the remaining documents. c) Issuers registered in Category B:
(i) BRL 600.00 (six hundred reais): for the Reference Form, the quarterly information form – ITR, the standardized financial statements form – DFP, and the financial statements accompanied by the documents required by specific regulation; and (ii) BRL 300.00 (three hundred reais): for the remaining documents. d) Issuers registered in Category B in judicial or extrajudicial recovery:
(i) BRL 300.00 (three hundred reais): for the Reference Form, the quarterly information form – ITR, the standardized financial statements form – DFP, and the financial statements accompanied by the documents required by specific regulation; and (ii) BRL 150.00 (one hundred and fifty reais): for the remaining documents.
In accordance with paragraph 2 of article 58 of CVM Instruction No. 480/09, as amended by CVM Instruction No. 609/19, the fine will not be applied to an issuer that is in bankruptcy or liquidation.
It should be noted that, in accordance with article 11 of CVM Instruction No. 608/19, the application of a coercive fine does not preclude the eventual assessment of responsibility under article 11 of Law No. 6.385/76.
It should be observed that against the decision to apply coercive fines, an appeal may be filed with the CVM Collegiate Body within 10 (ten) days, in accordance with article 16 of CVM Instruction No. 608/19.
It is emphasized that the allegation that the document was submitted via the Empresas.NET System within the deadline established by regulation, but using the incorrect association (Category/Type/Species), may not be grounds for granting the appeal by the SEP, hence consultation of Chapter 3 of this Circular Letter is recommended, where the correct associations to be used in the case of sending periodic documents are listed. In this sense, the need to maintain updated registration data, especially the addresses of the company and the DRI, as recommended in this circular (see item 3.3.1 and Chapter 9) is highlighted. Appeals must be filed through the CVM website (www.gov.br/cvm), at the link “Matters”/“Regulated”/“Coercive Fine”/“Appeal against Coercive Fine”:
(https://www.gov.br/cvm/pt-br/assuntos/regulados/multa-cominatoria-recurso).
In line with paragraph 12 of article 11 of Law No. 6.385/76, no suspensive effect applies to the appeal.

It is emphasized, in accordance with article 20 of CVM Instruction No. 608/19, that at the request of the Appellant, the Collegiate Body may review, within the scope of the reconsideration request, the allegation of existence of omission, obscurity, contradiction, or material or factual error in the decision.
The reconsideration request must be submitted within 5 (five) business days counted from the communication referred to in article 19 of said Instruction and must be addressed to the superintendency that analyzed the appeal.
It is further clarified that CVM Deliberation No. 447/02 provides for the installment payment of applied coercive fines and that CVM Deliberation No. 501/06 provides for the incidence of late payment interest on debts arising, including, from coercive fines.
In this sense, it is recommended that issuers contact the CVM Collection Management to verify if they are up to date with the payment of supervision fees and coercive fines, avoiding registration in the Defaulters Registry (CADIN) and in the Active Debt.
It is also emphasized that the coercive fines provided for in article 58 of CVM Instruction No. 480/09 (with legal provision in article 11, paragraph 11, of Law No. 6.385/76) do not confuse with the penalties provided for in the caput of article 11 (and respective items I to VIII) of said Law, which will only be imposed with observance of the procedure provided for in paragraph 2 of article 9 of Law No. 6.385/76 (administrative proceeding preceded by an investigative stage). Finally, it is emphasized that only penalties applied by the CVM may be subject to appeal to the Council of Resources of the National Financial System (“CRSFN”), hence the cited appeal is not admissible in the case of application of coercive fines.
2.6.2 Publication of the list of delinquent issuers
Article 59 of CVM Instruction No. 480/09 provides that the SEP will publish semi-annually, on the CVM website, a list of issuers who are in default for at least 3 (three) months in fulfilling any of their periodic obligations.
It should be noted that the published list refers to a specific date, hence there is no question of updating or correcting the list, except in the case of undue inclusion.
2.6.3 Ex officio suspension of issuer registration
Article 52 of CVM Instruction No. 480/09 provides that the SEP may suspend the registration of issuers who fail to comply with their periodic obligations for a period exceeding 12 (twelve) months.
As provided for in the sole paragraph of article 52 of CVM Instruction No. 480/09, the SEP will inform the issuer about the suspension of their registration through a letter sent to their headquarters, according to the data in their registration form (see item 3.3.1), and through a communication on the CVM website.

An issuer whose registration has been suspended may request the reversal of the suspension through a reasoned request, sent to the SEP, accompanied by documents proving compliance with periodic obligations and any outstanding obligations, including those with delivery deadlines subsequent to the suspension of registration.
The deadlines and procedures to be observed in this request are listed in article 53 of CVM Instruction No. 480/09.
It should be remembered that, in accordance with article 60 of CVM Instruction No. 480/09, the repeated non-observance of the deadlines established for the presentation of periodic and eventual information provided for in that instruction constitutes a serious offense for the purposes of paragraph 3 of article 11 of Law No. 6.385/76, subjecting those responsible to the penalties provided for in said article 11, observing the procedure provided for in paragraph 2 of article 9 of Law No. 6.385/76. It is emphasized that, in accordance with article 55 of CVM Instruction No. 480/09, the cancellation and suspension of registration do not exempt the issuer, its controlling shareholder, and its administrators from responsibility arising from any infractions committed before the cancellation of registration.
2.6.4 Ex officio cancellation of issuer registration due to information delinquency
Article 54 of the Instruction provides for two hypotheses for the ex officio cancellation of issuer registration:
a) the extinction of the issuer; or b) the suspension of its registration for a period exceeding 12 (twelve) months.
As in the cases of registration suspension, the SEP will inform the issuer about the cancellation of their registration through a letter sent to their headquarters, according to the data in their registration form (see item 3.3.1), and through a communication on the CVM website, in accordance with the sole paragraph of article 55 of CVM Instruction No. 480/09.
It is emphasized that, in accordance with article 55 of CVM Instruction No. 480/09, the cancellation and suspension of registration do not exempt the issuer, its controlling shareholder, and its administrators from responsibility arising from any infractions committed before the cancellation of registration.
2.6.5 Sanctioning administrative proceeding
As provided for in article 60 of CVM Instruction No. 480/09, it constitutes a serious offense, for the purposes provided for in paragraph 3 of article 11 of Law No. 6.385/76:
a) the disclosure to the market or delivery to the CVM of false, incomplete, inaccurate, or misleading information; b) the repeated non-observance of the deadlines established for the presentation of periodic and eventual information provided for in the instruction; and c) the non-observance of the deadline established in article 132 of Law No. 6.404/76, for the holding of the ordinary general assembly.

Regarding the delay in providing information, as provided for in article 11 of CVM Instruction No. 608/19, the application of a coercive fine does not preclude the eventual assessment of responsibility under article 11 of Law No. 6.385/76.
For its part, in accordance with article 18 of CVM Instruction No. 358/02, it constitutes a serious offense, for the purposes provided for in paragraph 3 of article 11 of Law No. 6.385/76, the transgression of the provisions of that Instruction, and the CVM must communicate to the Public Ministry the occurrence of the events provided for in said Instruction that constitute a crime. Thus, the CVM may investigate through an administrative proceeding the eventual responsibility of the administrators (and when applicable, the receiver, the trustee, the judicial administrator, the judicial manager, or the liquidator), members of the fiscal council, and shareholders of open companies for non-compliance with the provisions contained, notably, in CVM Instructions No. 358/02 and 480/09 (article 9, item V, of Law No. 6.385/76). In this sense, and in accordance with article 11 of Law No. 6.385/76, the penalties provided for in items I to VIII of the same article will only be imposed with observance of the administrative proceeding mentioned in the previous paragraph, observing also the provisions of CVM Instruction No. 607/19.
2.7 Other hypotheses for cancellation of registration
2.7.1 Voluntary cancellation of registration
CVM Instruction No. 480/09 establishes differentiated rules for the voluntary cancellation of registration, according to the category in which the issuer is registered.
Article 47 of the Instruction conditions the cancellation of registration of Category B issuers to the proof of compliance with one of the following conditions:
a) absence of securities in circulation; b) redemption of securities in circulation; c) maturity of the deadline for payment of securities in circulation; d) consent of all holders of securities in circulation regarding the cancellation of registration; or e) any combination of the hypotheses indicated in the previous items, provided that the total amount of securities is reached. If the redemption of securities in circulation or the maturity of the deadline for payment of securities in circulation has occurred, without the total amount of investors having been paid, the issuer must deposit the due amount in a commercial bank and leave it at the disposal of the investors. The issuer who has made this deposit must also disclose a Relevant Fact stating:
a) the decision to cancel the registration with the CVM;

b) the making of the deposit, mentioning the amount, banking institution, branch, and checking account; and c) the procedures that should be adopted by holders who have not yet received their credits to receive them.
As provided for in paragraph 3 of article 47, the consent of all holders of securities in circulation regarding the cancellation of registration may be alternatively proven by:
a) declaration of the fiduciary agent, if any; b) declaration of the holders of securities attesting that they are aware and agree that, due to the cancellation of registration, the issuer's securities can no longer be traded in regulated markets; or c) unanimous deliberation in an assembly in which all holders of securities are present.
Securities in circulation are understood to be all securities or shares of the issuer, except those owned by the controlling shareholder, persons affiliated with them, the issuer's administrators, and those held in treasury, in accordance with article 62 of CVM Instruction No. 480/09.
As for the cancellation of registration in Category A, it will be conditioned, as established in article 48 of CVM Instruction No. 480/09, to the proof that:
a) the conditions of article 47 have been met regarding all securities in circulation, except shares and depositary receipts of shares; and b) the requirements of the public offering of acquisition of shares for cancellation of registration for trading of shares in the market have been met, in accordance with CVM Instruction No. 361/02.
It should be commented that CVM Instruction No. 361/02 determines that the cancellation of registration of an open company must be preceded by a Public Offering of Acquisition of Shares (OPA), formulated by the controlling shareholder or by the open company itself, with the object of all shares issued by said company, as provided for in paragraph 4 of article 4 of Law No. 6.404/76 and according to the procedure stipulated therein. As provided for in article 34 of said Instruction, exceptional situations justifying the acquisition of shares without public offering or with differentiated procedure will be reviewed by the CVM Collegiate Body, for the purpose of dispensing or approving procedure and formalities to be followed, including regarding the disclosure of information to the public, when applicable. It is emphasized that the cancellation of registration of a foreign issuer that sponsors a depositary receipt program – Level II or Level III BDR – depends on compliance, by the issuer, of the requirements for the cancellation of the BDR program provided for in specific regulation (currently, CVM Instruction No. 332/00), as provided for in article 48-A of CVM Instruction No. 480/09.

The procedures to be observed in requests for voluntary cancellation are regulated in articles 49 and 50 of CVM Instruction No. 480/09, it being emphasized that the Instruction determines that requests for cancellation formulated by issuers registered in Category B should be addressed to the SEP, while requests formulated by issuers registered in Category A should be addressed to the SRE. It should be remembered that article 51 of CVM Instruction No. 480/09 provides that the issuer is responsible for disclosing the information of approval or denial of cancellation of registration to investors, in the same manner established for the disclosure of relevant facts. It is alerted that the constitution of a wholly-owned subsidiary does not bring as a consequence the cancellation of the issuer's registration. In these cases, it is necessary to send a request for cancellation of registration, in the case of Category A companies to the SRE and in the case of Category B companies to the SEP, in accordance with articles 49 and 50 of CVM Instruction No. 480/09, formalizing the request, without which the company, although a wholly-owned subsidiary, will continue to be subject to all obligations and penalties provided for in the current regulation, including those regarding the update of the registration maintained at the CVM. It should be noted that it is mandatory to send the documents and periodic information whose delivery deadline is prior to the date on which the CVM promotes the cancellation, even if with retroactive effects. It is clarified, finally, that the issuer is indebted for the supervision fee regarding the quarter in which the cancellation of their registration occurs. Thus, if the issuer has their registration cancelled in the 1st quarter and does not present the DFP form relating to the previous fiscal year, they must inform the CVM of the previous fiscal year's net equity (which will serve as the basis for calculating said fee) through supporting documentation, such as, for example, the publication of financial statements.
2.7.2 Ex officio cancellation of issuer registration due to its extinction
According to article 219 of Law No. 6.404/76, the company is extinguished by the closure of liquidation, as well as by merger or consolidation, and by spin-off with transfer of all assets to other companies.
In cases of merger, consolidation, or spin-off, the cancellation of the company's registration results from its extinction and is independent of the date of homologation by a government body, with the company being removed from the list of open companies from the date of the EGA that deliberated the merger, consolidation, or spin-off. In addition to the mandatory submission of the Minutes of the respective EGA via the Empresas.NET System, the company or its successor is requested to formally communicate the extinction to the SEP. It should be noted that it is mandatory to send the documents and periodic information whose delivery deadline is prior to the date on which the CVM promotes the cancellation, even if with retroactive effects. It is further clarified that the company is indebted for the supervision fee regarding the quarter in which its extinction occurs in full, with no pro-rata calculation possible. Thus, if the company is extinguished in the 1st quarter, it must inform the CVM of the previous fiscal year's net equity (which will serve as the basis for calculating said fee) through supporting documentation, such as, for example, the publication of financial statements.

It should be emphasized that, in view of article 223, paragraph 3, of Law No. 6.404/76, if the merger, consolidation, or spin-off involves an open company, the succeeding company will also be open, obtaining the respective registration and, if applicable, promoting the admission of trading of the new shares in the secondary market, within a maximum period of 120 (one hundred and twenty) days, counted from the date of the assembly that approved the operation, observing the relevant norms issued by the Securities and Exchange Commission. In accordance with paragraph 4, non-compliance with the provisions of article 223, paragraph 3, gives the shareholder the right to withdraw from the company, through the reimbursement of the value of their shares (article 45), within 30 (thirty) days following the end of the period referred to therein, observing the provisions of paragraphs 1 and 4 of article 137. CVM Instruction No. 480/09, in its article 54, item I, provides that one of the hypotheses for the ex officio cancellation of the issuer's registration is its extinction. The SEP will inform the issuer about the cancellation of their registration through a letter sent to their headquarters, according to the data in their registration form (see item 3.3.1), and through a communication on the CVM website, in accordance with the sole paragraph of article 54 of CVM Instruction No. 480/09. 3 Periodic Information
3.1 Administrative report
Article 133 of Law No. 6.404/76 establishes that, in addition to the financial statements and other documents cited, open companies must publish the administrative report on social business and main administrative events occurring in the last fiscal year. This document must be sent to the CVM included in the financial statements and in the DFP form (see items 3.2 and 3.3.3).
It is worth noting that, regardless of the publication provided for in paragraph 3 of article 133 of Law No. 6.404/76, the caput of the same article requires that documents pertinent to matters included in the agenda of the OGA be made available to shareholders, at the company's headquarters, up to one month before the date scheduled for the holding of the OGA. For issuers registered in Category A, to which CVM Instruction No. 481/09 applies, it is also required, by articles 6 and 9 of said Instruction, that, on that date, the documents and information be available on the CVM website. The administrative report must be prepared by issuers in line with the information disclosed by them in section 10 of the Reference Form (Directors' Commentary).

The administrative report should cover information regarding decisions made based on guidance received from the controlling shareholder regarding the Company's activities – investments, conclusion of contracts, pricing policy, among others –, as well as the effects of such decisions, quantifying whenever possible, in the Company's performance. If applicable, it is also important to describe the main investments made as a result of the exercise of public policies. Finally, the Report should address the perspectives and plans for the current and future fiscal years, especially those related to the goals the company should pursue in compliance with its social object, based on premises and objective grounds, and, if applicable, in light of what is defined in Multi-Year Plans. It is emphasized that article 2 of CVM Instruction No. 381/03 determines that issuers must disclose in the administrative report the following information regarding the provision, by the independent auditor or by parties related to them, of any service that is not external audit:
a) the date of contracting, the duration period, if greater than one year, and the indication of the nature of each service provided; b) the total value of contracted fees and its percentage in relation to fees related to external audit services; c) the policy or procedures adopted by the company to avoid the existence of conflict of interest, loss of independence, or objectivity of its independent auditors; and d) a summary of the justification presented by the auditor to the issuer's administration regarding the reasons why they understood that the provision of other services did not affect the independence and objectivity necessary for the performance of external audit services (article 3 of the Instruction). Even in the event that independent auditors have not provided other services besides external audit, the company must make this information clear in the Administrative Report. It is emphasized that paragraph 2 of article 2 of CVM Instruction No. 381/03 allows issuers to omit the information required in letter “b” above, when the total value of contracted fees represents less than 5% (five percent) of the fees related to external audit services. Attention is drawn to the fact that even in this case, the issuer's obligation to provide the other information demanded in article 2 of CVM Instruction No. 381/03, cited above, remains in the Administrative Report. It is remembered that CVM Instruction No. 381/03 also requires that the information provided in the Administrative Report on the subject be updated in the ITR Forms when there is an alteration resulting from the conclusion, cancellation, or modification of a service provision contract that is not audit (item II of paragraph 1 of article 2 of the Instruction). The required update must be performed in the ITR Forms in the field designated for “Performance Commentary”. If the company uses calculated financial metrics, such as, for example, EBITDA – Earnings Before Interest, Taxes, Depreciation, and Amortization, it must present the reconciliation with the accounting items expressed in the financial statements, in accordance with CVM Instruction No. 527/12.

3.2 Financial Statements

As provided for in paragraph 2 and the main text of Article 25 of CVM Instruction No. 480/09, the issuer must deliver the financial statements and, if applicable, the consolidated statements to the CVM via the Empresas.NET System (see Chapter 9) on the same date they are made available to the public, a date that must not exceed, in the case of:
a) national issuers, 3 (three) months from the end of the fiscal year; and b) foreign issuers, 4 (four) months from the end of the fiscal year.

It is noted that paragraph 1 of Article 25 of CVM Instruction No. 480/09 determines that the financial statements of national or foreign issuers must be accompanied by the following documents:
a) management report; b) report from the independent auditor; c) opinion of the statutory audit committee or equivalent body, if any, accompanied by any dissenting votes; d) capital budget proposal prepared by management, if any; e) declaration by the directors responsible for preparing the financial statements, in accordance with the law or the company's bylaws, stating that they reviewed, discussed, and agreed with the opinions expressed in the "opinion of the independent auditors" (report of the independent auditors), informing the reasons, in case of disagreement; f) declaration by the directors responsible for preparing the financial statements, in accordance with the law or the company's bylaws, stating that they reviewed, discussed, and agreed with the financial statements; g) summary annual report, if the issuer adopts the statutory audit committee provided for in specific regulation; h) if any, opinion or report of an audit committee addressing the financial statements, even if such committee is not adherent to CVM Instruction No. 308/99 or is not statutory.

The presentation of the summary annual report of the Statutory Audit Committee is mandatory for all companies that avail themselves of the prerogative established in the main text of Article 31-A of CVM Instruction No. 308/99, with the wording given by CVM Instruction No. 611/2019, as they meet, among other things, the requirements established in that article and in Articles 31-B and 31-C of CVM Instruction No. 308/99.

Not having a Statutory Audit Committee for the purposes of Article 31-A of CVM Instruction No. 308/99, the company will only be obliged (in the form of Article 25, paragraph 1, item IX, of CVM Instruction No. 480/09 and the sole paragraph, item III, of Article 9 of CVM Instruction No. 481/09) to present an opinion on the financial statements issued by an audit committee (statutory or not) or an equivalent body to the statutory audit committee, if that committee or body has issued such opinion.

It is emphasized that, if a statutory audit committee or equivalent body is in operation (in the case of foreign companies), the company must, in any case, send, together with the financial statements, the opinion issued by that body, accompanied by any dissenting votes.

In this regard, notwithstanding the obligation to send said opinion along with the financial statements, it must also be presented in the DFP (Standardized Financial Statements Form), for now, in "Other Information that the Company Deems Relevant", as also explained in item 3.3.3 of this Circular Letter.

In this sense, it is worth remembering that, through the SNC/SEP Circular Letters, the CVM issues guidance on relevant aspects to be observed in the preparation of Financial Statements.

In this regard, it is recommended that companies report debts in local currency and debts in foreign currency separately. In this sense, the Company can take as a basis the items provided for in the DFP and ITR forms (item codes nos 2.01.04.01.01, 2.01.04.01.02, 2.02.01.01.01 and 2.02.01.01.02).

As provided for in Article 27 of CVM Instruction No. 480/09, the financial statements of foreign issuers must be prepared in Portuguese, in national current currency, and these issuers may opt to prepare them according to:
a) Law No. 6.404/76 and CVM standards; or b) international accounting standards issued by the International Accounting Standards Board – IASB.

Given that the standards issued by the CVM are fully convergent with international standards, the consolidated financial statements must be prepared in accordance with these rules.

It is worth remembering that foreign issuers whose headquarters are in a Mercosur member country must prepare and disclose financial statements in accordance with the international accounting standards issued by the IASB, according to MERCOSUR Decision No. 31/10 incorporated through CVM Deliberation No. 659/11. This decision was incorporated into CVM Instruction No. 480/09 through the changes arising from CVM Instruction No. 552/14.

The financial statements of foreign issuers must be audited by an independent auditor registered with the CVM or in a competent body in the issuer's country of origin (item II of Article 27). In the latter case, the report issued must be accompanied by a special review report prepared by an independent auditor registered with the CVM, as required in the sole paragraph of Article 27 of CVM Instruction No. 480/09.

For open companies, Article 133 of Law No. 6.404/76 provides for the need to publish financial statements up to 5 (five) days before the holding of the Ordinary General Assembly (AGO), noting that, in accordance with Article 295, paragraph 1, item "c" of the same law, consolidated financial statements must also be published.

In this case, the publication of a Notice to Shareholders, 1 (one) month before the AGO, informing of the availability of the financial statements at the company's headquarters, is also necessary.

According to Article 133, paragraph 5 of Law No. 6.404/76, the issuer is exempt from publishing the notices provided for in the main text of said article when the documents (notably the financial statements) are published up to 1 (one) month before the date scheduled for the holding of the AGO.

Article 289 of Law No. 6.404/76 determines that financial statements must be published in the official gazette of the Union, State, or Federal District, depending on where the company's headquarters is located, and in another newspaper of large circulation edited in the locality where the company's headquarters is located.

The publications will always be made in the same newspaper, chosen in a meeting of the Board of Directors, and any change must be preceded by a notice to shareholders in the excerpt of the minutes of the AGO, in accordance with paragraph 3 of Article 289 of Law No. 6.404/76.

National and foreign issuers must send the financial statements prepared according to the criteria mentioned above to the CVM, via the Empresas.NET System, category "Economic-Financial Data", type "Complete Annual Financial Statements".

It should be noted that the financial statements and the other documents listed in Article 25 of CVM Instruction No. 480/09 must be presented in a single file, in .doc or .pdf format, in the form of a "complete set of statements", and the sending of the digitized version of the newspaper publication, or other formats that hinder reading or printing, is not admissible.

Still in this sense, attention is drawn to the fact that sending a PDF version of the Standardized Financial Statements Form (DFP Form) does not fulfill the purpose of delivering the financial statements required by virtue of Article 25, main text and paragraph 2, of CVM Instruction No. 480/09.

When sending the financial statements, the fields referring to the dates and newspapers of the publications must be filled in, and in the case of publication in accordance with paragraph 3 of Article 133 of Law No. 6.404/76, the expected date of publication must be indicated.

Given the importance of the document, in line with the provisions of Article 5 of CVM Instruction No. 358/02, the company must disclose its Financial Statements, whenever possible, before the start or after the closing of trading on the stock exchange or organized over-the-counter market where the securities issued by it are admitted to trading.

It is highlighted that the sending of the DFP Form does not exempt the sending of the financial statements that served as the basis for its completion.

It is emphasized that Article 176 of Law No. 6.404/76 establishes that the responsibility for preparing the financial statements of an open company lies with its board of directors.

CVM Instruction No. 480/09, in items V and VI of paragraph 1 of its Article 25, determines that the financial statements must be accompanied by declarations by the directors responsible for preparing them, in accordance with the law or the bylaws, in which they inform that (i) they reviewed, discussed, and agreed with the opinions expressed in the report of the independent auditors, informing the reasons, in case of disagreement; and (ii) they reviewed, discussed, and agreed with the financial statements.

The SEP has observed that, in certain cases, the aforementioned declarations are not signed by all the company's directors to whom such competence is attributed. In this sense, it is emphasized the need for said signatures in compliance with items V and VI of paragraph 1 of Article 25 of CVM Instruction No. 480/09.

On 02.05.2013, CVM Deliberation No. 709 was issued, which approved Technical Orientation OCPC 06 – Presentation of Pro Forma Financial Information.

Pro forma financial information can only be presented when so qualified and provided that the purpose is duly justified, such as in cases of corporate restructuring, acquisitions, sales, mergers, or spin-offs of businesses.

We have observed that this financial information has been sent in various different ways in the Empresas.net System ("Market Communication", "Economic-Financial Data" or "Management Meeting", for example).

The SEP understands that the disclosure of pro forma financial information must be standardized, allowing the user of accounting information to access it quickly and accurately.

Therefore, it is recommended that the sending of this pro forma financial information via the Empresas.Net System be done through the category "Economic-Financial Data", type "Additional Financial Statements".

Meeting on 01.11.2016, the CVM Collegiate Body 1 understood that the revocation of CVM Instruction No. 207/94 removed the act of publishing summary statements from the minimum mandatory informational set, but did not prohibit it from occurring spontaneously and additionally to this set.

According to this understanding, there would be no prior prohibition on the disclosure of financial statements in a summarized form in newspapers of large circulation, observing the content and form requirements established by Articles 14 to 19 of CVM Instruction No. 480/09 and it is recommended to indicate the newspapers and the dates of publication of the complete financial statements, according to Article 289 of Law No. 6.404/76.

It is recalled that these summarized financial statements do not confuse with the possibility of summarized publication, provided for in Article 19 of Law No. 13.043/14, for those companies that meet the requirements present in the list of Article 16 of said Law.

It is worth highlighting that, according to Article 25, Item VIII of CVM Instruction No. 308/99 (with wording given by CVM Instruction No. 591, of 26.10.2017), independent auditors must communicate the main audit matters in the audit reports of financial statements of all entities regulated or supervised by the CVM, in accordance with the professional standards of independent audit approved by the Federal Council of Accounting – CFC.

3.2.1 Financial institutions authorized to operate by the Central Bank of Brazil

The CVM, through CVM Instruction No. 457/07, determined that open companies must, from the fiscal year ending in 2010, present their consolidated financial statements adopting the international accounting standard, according to the pronouncements issued by the International Accounting Standards Board – IASB.

1 See http://conteudo.cvm.gov.br/decisoes/2016/20161101_R1/20161101_D0368.html.

Regarding issuers that are financial institutions, it is worth noting that Article 22 of Law No. 6.385/76 establishes, in its paragraph 2, that the standards issued by the CVM regarding management report and financial statements, as well as accounting standards, apply to financial institutions and other entities authorized to operate by the Central Bank of Brazil, insofar as they are not conflicting with the standards issued by it.

The Central Bank of Brazil, through Resolution No. 3.786/09, established the following:

Financial institutions and other institutions authorized to operate by the Central Bank of Brazil, constituted as open companies or that are obliged to constitute an audit committee in accordance with current regulation, must, from the base date of December 31, 2010, prepare and disclose annually consolidated accounting statements adopting the international accounting standard, according to the pronouncements issued by the International Accounting Standards Board (IASB), translated into Portuguese by a Brazilian entity accredited by the International Accounting Standards Committee Foundation (IASC Foundation).

Thus, there is a convergence between the standards issued by the CVM and the standards issued by the Central Bank of Brazil regarding the accounting standard to be adopted, in the consolidated financial statements, by entities authorized to operate by the Central Bank of Brazil. It is worth noting that the exceptionalities of criteria and deadlines provided, respectively, in Circular Letter No. 3.435/10 2 and Circular No. 3.516/10 3, applied only to consolidated financial statements, prepared based on the international accounting standard issued by the IASB, referring to the base date of December 31, 2010.

In view of the above, issuers that are institutions authorized to operate by the Central Bank of Brazil must prepare and make available to their shareholders, within the period mentioned in Article 133 of Law No. 6.404/76 (i) individual financial statements of fiscal year-end prepared in observance of the standards issued by the Central Bank and the standards issued by the CVM, insofar as they do not conflict with standards issued by the Central Bank regarding the same matter; and (ii) consolidated financial statements prepared according to international accounting standard, according to the pronouncements issued by the International Accounting Standards Board – IASB.

If the Companies prepare and publicly disclose consolidated financial statements in a different accounting standard (for example, in observance of the standards issued by the Central Bank), they must send them, via the Empresas.NET System, on the same date of their disclosure to the public, through the category "Economic-Financial Data", type "Additional Financial Statements".

2 Circular Letter No. 3.435/10 established that, for the purpose of preparing the opening balance sheet of consolidated accounting statements, according to the pronouncements issued by the IASB, the following opening dates should be observed:
I - January 1, 2010, for institutions that do not present consolidated accounting statements in a comparative manner; II - January 1, 2009, for institutions that opt to make the comparative presentation of consolidated accounting statements for the years 2010 and 2009; or III - January 1, 2008, for institutions that opt to make the comparative presentation of consolidated accounting statements for the years 2010, 2009 and 2008. 3 Circular No. 3.516/10 extended to up to one hundred and twenty days the period provided for in Article 1 of Circular No. 3.472, of October 23, 2009, for the disclosure of consolidated accounting statements, prepared based on the international accounting standard issued by the International Accounting Standards Board (IASB), referring to the base date of December 31, 2010.

Regarding quarterly information, the Central Bank of Brazil, through CMN Resolution No. 3853/10, determined that "financial institutions [...] constituted as open companies [...] that disclose intermediate consolidated accounting statements, must observe the pronouncements issued by the International Accounting Standards Board (IASB), translated into Portuguese by a Brazilian entity accredited by the International Accounting Standards Committee Foundation (IASC Foundation)".

It is verified that the standards issued by the Central Bank of Brazil do not prohibit, but make optional, the disclosure of intermediate consolidated accounting statements prepared in the international accounting standard.

Item I of Article 29 of CVM Instruction No. 480/09 establishes that the ITR Form must be filled in with the data of the quarterly accounting information prepared in accordance with the accounting rules applicable to the issuer.

In 2013, the Brazilian Federation of Banks – FEBRABAN presented a consultation to the SEP, through which it requested that the understanding be adopted that the preparation of consolidated interim financial statements in IFRS would not be mandatory for financial institutions. For this reason and in view of the provisions of Article 22 of Law No. 6.385/76, the SEP submitted the matter to the appreciation of the Central Bank of Brazil, which has been maintaining contact with the CVM and remains analyzing the issue. Notwithstanding, the SEP informs that, in the event of an initial registration request for an open company in Category A, financial institutions and other entities authorized to operate by the Central Bank of Brazil must fill in the quarterly information forms (ITRs) making their consolidated interim financial statements in the IFRS standard appear.

On 12.08.2020, BCB Resolution No. 02/2020 was issued, which in its Article 7 establishes that "in the preparation of interim financial statements, consortium administrators and payment institutions must apply the same criteria, procedures, practices and accounting policies applied to semi-annual and annual statements".

For its part, Article 10 of this Resolution establishes that "consortium administrators and payment institutions that are registered as open companies or leaders of an economic group integrated by an institution registered as an open company must prepare consolidated annual financial statements, adopting the international accounting standard according to the pronouncements issued by the International Accounting Standards Board (IASB), translated into Portuguese by a Brazilian entity accredited by the International Financial Reporting Standards Foundation (IFRS Foundation)".

And finally, Article 49 provides that "financial institutions and other institutions authorized to operate by the Central Bank of Brazil must apply the provisions of this Resolution, prospectively, in the preparation, disclosure and remittance of financial statements carried out from the date of its entry into force", explicitly in its sole paragraph that the provisions of Articles 10 and 11 will produce effects only from January 1, 2022, its retroactive application being prohibited, except in the case of voluntary disclosure or publication.

3.2.2 Early disclosure of financial information

The early disclosure of financial information, which will be made public later in the financial statements, must be carried out exceptionally. If the company opts for the early disclosure of certain data, it must do so in an equitable manner and emphasize that they are preliminary information, informing, even, if they were, or were not, audited or reviewed by independent auditors.

It is worth remembering that, in accordance with Article 14 of CVM Instruction No. 480/09, the information disclosed must be true, complete, consistent, and must not induce investors to error.

This exceptional disclosure must be made, in principle, through a Relevant Fact. In the understanding of the SEP, it is presumed that financial statements contain information considered relevant, in accordance with CVM Instruction No. 358/02. It is observed that the CVM Collegiate Body has already expressed understanding that the relevance of the content of financial statements must be appreciated in each concrete case.

Finally, it is worth remembering that, in the event of early disclosure of financial information, the period of prohibition on trading provided for in Article 13, paragraph 4, of CVM Instruction No. 358/02 is also advanced.

3.2.3 Capital Budget

Article 196 of Law No. 6.404/76 provides that the capital budget to be approved in a general assembly must comprise all sources of resources and applications of capital, fixed or current, and will be submitted by the management bodies to the assembly, with the justification of profit retention proposed.

Regarding issuers registered in Category A to which CVM Instruction No. 481/09 applies, it is alerted that said Instruction requires, through item II of paragraph 1 of Article 9 and item 15 of Annex 9-1-II, that, if there is a proposal for profit retention provided for in a capital budget, the company must make available to shareholders, up to one month before the date scheduled for the holding of the AGO, information on the amount of the proposed retention, as well as a copy of the capital budget prepared in accordance with Article 196 of Law No. 6.404/76, comprising all sources of resources and applications of capital, fixed or current.

The other issuers, although not subject to the form and content of the information required by CVM Instruction No. 481/09, must make available to shareholders, up to one month before the date scheduled for the holding of the AGO, information on the amount of the proposed retention, as well as a copy of the capital budget prepared in accordance with Articles 133 and 196 of Law No. 6.404/76, comprising all sources of resources and applications of capital, fixed or current.

The capital budget must be sent to the CVM, via "IPE Online" of the Empresas.NET System, category "Assembly", type "AGO" or "AGO/E", species "Management Proposal", subject "Capital Budget", without prejudice to its sending accompanying the financial statements, as provided for in Article 25, paragraph 1, item IV, of CVM Instruction No. 480/09 (see item 3.2).

It is highlighted, finally, that the capital budget must also be inserted in the Capital Budget Proposal table of the DFP form.

3.2.4 Integrated Report – Start of Validity of CVM Resolution No. 14/20

CVM Resolution No. 14, of December 9, 2020, makes it mandatory for open companies, when deciding to prepare and disseminate the Integrated Report, to follow Guidance CPC 09 – Integrated Report, issued by the Accounting Pronouncements Committee – CPC. Additionally, it determines that the Integrated Report must be subject to limited assurance by an independent auditor registered with CVM, in accordance with standards issued by the Federal Council of Accounting.

It should be noted that, according to Article 3 of the aforementioned Resolution, it enters into force on January 1, 2021. Therefore, it will have effects regarding Integrated Reports referring to fiscal years starting from such date.

3.2.5 Relevant aspects to be observed in the preparation of Explanatory Notes and the Management Report

In 2020, the Company Monitoring Management-5 analyzed financial statements in various registration requests for open companies.

In 84 analyses carried out until the end of 2020, several requirements related to the disclosure of financial information were observed, and to a lesser extent, to the measurement or recognition of financial items.

The chart [1], below, presents the requirements observed in these analyses, in order of frequency of occurrence:

[Chart 1]

NOTE: Other requirements: Goodwill on the issuance of shares, debentures, directors' declaration, statement of changes in equity, Statement of contribution to the result, Depreciation of fixed assets, Derivatives (options), Disclosure of leverage index, Issuance of promissory notes for the payment of dividends, FRE 2019, Statement on unaudited information, Participations and main accounting accounts of investments, Provision for well abandonment, Operating revenues, Non-recurring results, Government subsidies, Disclosure of participations in other entities, Difference between Financial Statements (DF) and Financial Position Statement (DFP), Difference between ITR and DFP, Calculation of dividends, Article 176, 2 of Law 6.404/76, Item iii of paragraph 2 of article 178 of Law 6.404/76, and item 115 OCPC 02, Disclosure of authorized share capital, Retained earnings, Opinion of the statutory audit committee, Dependence of investees on the single client, Circular Letter CVM/SNC/SEP No. 01/2020.

It is verified that the 5 (five) most frequent requirements are related to:
a) deficient disclosure of accounting policies applied to the Company, notably when it is verified that the Company mostly focused on transcribing or paraphrasing accounting standards, thus without compliance with CPC 23 and OCPC 07; b) deficient disclosure of information on Related Parties, without compliance with CPC 05 (R1), notably regarding the disclosure of interest rates and terms of loans between related parties;

c) absence of disclosure of information on the Relationship with Independent Auditors in the Management Report, without observing article 2nd, items I to IV, c/c the same article 2nd, §1st, item I, of CVM Instruction 381/2003; d) failures in the disclosure of the reconciliation of non-accounting nature information (Ebitda or adjusted Ebitda) with accounting information, thus without compliance with CVM Instruction No. 527/12; and e) deficient disclosure of premises in impairment tests, thus without compliance with CPC 01 (R1), mainly regarding the disclosure of discount rates and growth rates and premises.

In this regard, attention is drawn to the need for registered issuers to dedicate special attention to the standards related to the preparation of Financial Statements and Interim Financial Statements regarding the aforementioned themes, as well as to the guidelines contained in Circular Letter No. 01/2021/CVM/SNC/SEP (and circular letters from previous years, according to topic 1 of the cited Circular Letter).

Issuers in the registration process should pay special attention to the list of requirements observed in 2020, in order to avoid adverse impacts on offering schedules, as well as to avoid costs related to meeting the requirements.

3.3 Periodic Forms

3.3.1 Registration Form

The registration form is an electronic document, of periodic and occasional submission, provided for in article 22 of CVM Instruction No. 480/09, whose content reflects Annex 22 of the cited Instruction.

Its objective is to gather in a single document information about the main data and characteristics of the issuer and the securities issued by it, which were previously made available to the market in a dispersed manner.

According to article 45 of CVM Instruction No. 480/09, the Investor Relations Director is responsible for providing all information required by the legislation and regulation of the securities market. In this sense, all notifications sent by CVM will be addressed to the IRD, and, consequently, to the email indicated by him in the registration form.

However, in principle, nothing prevents the IRD from indicating in the registration form a box in which other people have access. Another existing option, which can be verified with the company's IT area, is the configuration of automatic forwarding of messages received in the IRD's email.

It is emphasized that these options are the exclusive responsibility of the IRD, being certain that they do not remove his responsibility.

The registration form must be filled out and sent to CVM through the Empresas.NET System, available for download on the CVM website, at the link http://conteudo.cvm.gov.br/menu/regulados/companhias/prog-empnet.html.

The issuer must proceed to update the registration form whenever any of the data contained therein is altered, within 7 (seven) business days counted from the fact that caused the alteration, as determined in article 23 of CVM Instruction No. 480/09.

It is also alerted that, regardless of this update, annually the issuer must confirm, until May 31 of each year, that the information contained in the registration form remains valid, as provided for in the sole paragraph of article 23 of CVM Instruction No. 480/09.

This confirmation must be made by delivering the first version of the registration form of the current year, until May 31, its filling out being carried out completely and appropriately to what is required by CVM Instruction No. 480/09, observed, including, article 14 of the said Instruction.

Finally, it is alerted that letter "c" of item 2.1 of the registration form also requests the trading code of each species or class of shares admitted to trading.

3.3.2 Reference Form

a. Annual Submission of the Form

The Reference Form is an electronic document, of periodic and occasional submission, provided for in article 24 of CVM Instruction No. 480/09, whose content reflects Annex 24 of the cited Instruction.

In the case of issuers registered in Category B, the fields marked with "X" are optional to fill out.

According to the aforementioned article 24 of CVM Instruction No. 480/09, the Reference Form must be delivered fully updated annually, within a period of up to 5 (five) months counted from the date of closing of the fiscal year.

The annual presentation of the Reference Form should occur, preferably, after the holding of the Shareholders' General Meeting. With this procedure, it will already be possible to include in the document, for example, information on the eventual election and remuneration of administrators.

In addition, it is necessary to always include the information contained in the financial statements of the previous fiscal year that are discussed and voted on at that meeting.

In this sense, it is alerted that all updated information that has been provided due to the update rules provided for in paragraphs 3rd and 4th of article 24 of the Instruction must be reflected in the Reference Form when of its annual presentation, regardless of the existence of a command in Annex 24 regarding the provision of information relating to the current fiscal year.

After the holding of the Shareholders' General Meeting and before the end of the period for annual submission of the Reference Form provided for in article 24 of CVM Instruction No. 480/09, if any of the events that impose the update of the document occurs, the issuer may opt for (i) to resubmit the Reference Form of the previous fiscal year; or (ii) to present the document referring to the current fiscal year.

In this case, the issuer must pay attention to (i) not resubmitting the document referring to the previous fiscal year as if it were the Reference Form updated with all the information of the current fiscal year; or (ii) not presenting the Reference Form updated with all the information of the current fiscal year as if it were the resubmission of the document referring to the previous fiscal year.

In the annual submission of the Reference Form, the "FRE Reference" should be indicated as the end date of the fiscal year to which the Form to be delivered refers.

The Reference Form must be filled out and sent to CVM through the Empresas.NET System (see Chapter 9), available for download on the CVM website, at the link http://conteudo.cvm.gov.br/menu/regulados/companhias/prog-empnet.html. The guidelines for the preparation of the Form can be consulted in this circular (see Chapter 10).

b. Update of the Reference Form

CVM Instruction No. 480/09 provides, in paragraph 3rd of article 24, certain events that impose the obligation of issuers registered in Category A to update, within 7 (seven) business days counted from the date of occurrence of the event, the fields of the Reference Form whose information are affected by the incidence of the events described below:
a) change of administrator, member of the fiscal council, member of a statutory committee, or member of the audit, risk, financial, and remuneration committees, even if such committees or structures are not statutory, provided that such committees or structures participate in the decision-making process of the administration or management bodies of the issuer as consultants or auditors; b) change in share capital; c) issuance of new securities, even if subscribed privately; d) change in the rights and advantages of the issued securities; e) change in controlling shareholders, direct or indirect, or variations in their shareholdings that lead them to exceed, upwards or downwards, the thresholds of 5% (five percent), 10% (ten percent), 15% (fifteen percent), and so on, of the same species or class of shares of the issuer; f) when any natural or legal person, or group of people representing the same interest, directly or indirectly, exceeds, upwards or downwards, the thresholds of 5% (five percent), 10% (ten percent), 15% (fifteen percent), and so on, of the same species or class of shares of the issuer, provided that the issuer is aware of such alteration; g) incorporation, share incorporation, merger, or spin-off involving the issuer; h) change in projections or estimates or disclosure of new projections and estimates;

i) celebration, alteration, or termination of a shareholders' agreement filed at the issuer's headquarters or from which the controller is a party regarding the exercise of voting rights or control power of the issuer; j) declaration of bankruptcy, judicial reorganization, liquidation, or judicial homologation of extrajudicial reorganization; and k) communication, by the issuer, of the change of the independent auditor in accordance with specific regulation.

Regarding this, for the purposes of article 24, paragraph 3rd, item II of CVM Instruction No. 480/09, a change in share capital is considered not only increases and decreases, but also splits, consolidations, and cancellations of shares.

Similarly, issuers registered in Category B, under paragraph 4th of article 24 of the said Instruction, must also update, within 7 (seven) business days, counted from their occurrence, the fields of the form whose information are affected by the incidence of the following events:
a) change of administrator; b) issuance of new securities, even if subscribed privately; c) change in controlling shareholders, direct or indirect, or variations in their shareholdings that lead them to exceed, upwards or downwards, the thresholds of 5% (five percent), 10% (ten percent), 15% (fifteen percent), and so on, of the same species or class of shares of the issuer; d) incorporation, share incorporation, merger, or spin-off involving the issuer; e) change in projections or estimates or disclosure of new projections and estimates; f) declaration of bankruptcy, judicial reorganization, judicial or extrajudicial liquidation, or judicial homologation of extrajudicial reorganization; and g) communication, by the issuer, of the change of the independent auditor in accordance with specific regulation.

In the case of the election of administrators, it is also remembered that the Reference Form must be updated, within the regulatory period, even if in the election the administrators were reappointed, given the change in mandates.

In the update of a Reference Form already delivered, which implies the delivery of a new version, issuers must inform, in the "Type of Presentation" field, if the update refers to a "Spontaneous Resubmission" or "Resubmission by CVM/B3 Requirement".

In addition, in the "Object of the last change/Reason for Resubmission" field, the issuer must clearly state all sections and items of the form that have been altered, including a brief description of the reason for each change. Issuers must also inform if the resubmission is due to a request for registration of public distribution of securities.

Category B issuers who opt to present information indicated in Annex 24 as optional for their category must: (a) maintain the optional information that was provided in all updates of the Reference Form that are presented by the company; and (b) update the optional information provided in the manner provided for in paragraphs 3rd and 4th of article 24 of CVM Instruction 480/09. There is no impediment, however, for the issuer to cease presenting the optional information when delivering the Reference Form of the subsequent fiscal year.

In the case of variations in share positions around the percentages of 5%, 10%, 15%, and so on, it is highlighted that the need to update the Reference Form is triggered exclusively by the investors' position in shares, and not in derivative contracts referenced in these shares.

Thus, although the investor's obligation to make the communication provided for in article 12 of CVM Instruction No. 358/02 takes into account positions in derivatives, the update of the Reference Form by the issuer will be necessary only in cases where the aforementioned percentages are exceeded due to the investor's position in shares.

In addition, the form must record the quantity and percentage of shares held by investors, disregarding, for these purposes of updating the Reference Form, the shares referenced in derivative contracts held by the investor.

Under article 24-A of CVM Instruction No. 480/09, if there is a change in the president or the investor relations director after the submission of the Reference Form, the new officeholder is responsible for the information in this document that are updated, after the date of their assumption, due to the hypotheses provided for in paragraphs 3rd and 4th of article 24 of this Instruction, observed the registration category of the issuer.

In the updates resulting from paragraphs 3rd and 4th of article 24, the declaration must have the content provided for in item 1.2 of Annex 24 of CVM Instruction No. 480/09.

It is important to alert, finally, that the general guidelines contained in Chapter 10 of this Circular Letter regarding updatable fields of the Reference Form do not constitute and should not be understood as an exhaustive list, being the issuer's obligation to verify and update all fields of the Form that, in their specific case, are impacted by the occurrence of the events provided for in paragraphs 3rd and 4th of article 24.

c. Resubmission of the Reference Form due to registration of public distribution

CVM Instruction No. 480/09 provides, in paragraph 2nd of article 24, that, in case of a request for registration of public distribution, issuers must resubmit the Reference Form fully updated on the same date that the request is filed with CVM.

In the case of a request for registration of public distribution, the issuer may opt to resubmit the Reference Form of the previous fiscal year or to present the Reference Form of the current year, provided that the information relating to the previous fiscal year is filled in.

In the resubmission of the Reference Form, issuers must indicate as "FRE Reference" the end date of the same fiscal year to which the Form to be resubmitted refers. In addition, the sections and items altered must also be indicated in the "Reason for Resubmission" field, including a brief description of the reason for the alteration.

As stated in the declaration signed by the IRD and the President of the company, the Reference Form must be a true, accurate, and complete portrait of the issuer's economic-financial situation, and the information contained therein must be useful, true, complete, and consistent, as provided for in articles 14 and 17 of CVM Instruction No. 480/09.

Thus, issuers are alerted that the persons responsible for the content of the Reference Form must ensure the permanent quality of the document, and it is not expected that in the resubmission resulting from a request for registration of public distribution the information contained therein undergo substantial alterations, beyond those that necessarily would have to be made to update the document in this situation, including in cases expressly provided for in Annex 24 of CVM Instruction No. 480/09.

In the case of the resubmission of the Reference Form due to a request for registration of public distribution of securities, the new officeholders of the president and investor relations director must sign the declaration provided for in item 1.1 of the Reference Form, as provided for in paragraph 2nd of article 24-A of CVM Instruction No. 480/09.

In the case of requests for registration of public offering of distribution of shares for issuers already registered with CVM, carried out under the reserved analysis regime provided for in CVM Deliberation No. 809/19, of 19.02.2019, its initial petition, the Reference Form (although prepared in the Empresas.NET System), and the other documents of the already registered issuer must be sent through the CVM Digital Protocol System, and not through the Empresas.NET System, in accordance with Circular Letter No. 02/2019/CVM/SEP.

The CVM Digital Protocol was fully automated to allow the agile and efficient flow of documents filed with the Autarchy. In the current version, it is possible to follow the progress of requests during all stages. For more information, one must access the link http://conteudo.cvm.gov.br/menu/atendimento/protocolodigital.html.

3.3.3 Standardized Financial Statements – DFP

The Standardized Financial Statements (DFP) Form is an electronic document, of periodic submission provided for in article 21, item IV, of CVM Instruction No. 480/09, whose submission to CVM must be done through the Empresas.NET System (see Chapter 9).

According to article 28 of CVM Instruction No. 480/09, the DFP form must be filled out with the data from the financial statements prepared in accordance with the accounting rules applicable to the issuer, under the terms of articles 25 to 27 of the Instruction, and delivered:

a) by the national issuer, within 3 (three) months after the closing of the fiscal year or on the same date as the submission of the financial statements, if this occurs on an earlier date; b) by the foreign issuer, within 4 (four) months of the closing of the fiscal year or on the same date as the submission of the financial statements, if this occurs on an earlier date. In this sense, according to a decision by the CVM Board, dated 15.07.2014 (Reg. No. 8620/13), in the analysis of a consultation submitted by IBRACON, there is no obligation to fill in the information relating to the penultimate fiscal year in the DFP forms, in cases where the financial statements relating to the same period do not contain this data. It is emphasized that the submission of the DFP form is mandatory and its delivery does not dispense with the submission of the financial statements that served as the basis for its completion and vice versa. In the case of issuers that are financial institutions, attention is called to the understanding set out in this Circular Letter (see item 0). If projections are disclosed, the issuer must confront in the DFP form, in the field “Commentary on the behavior of business projections”, the projections disclosed in the Reference Form with the results actually obtained in the quarter, indicating the reasons for any differences, as determined in paragraph 4 of article 20 of CVM Instruction No. 480/09. It is further emphasized that, according to the provisions of item 3.2 of this Circular Letter, notwithstanding the obligation to submit the summary report of the Statutory Audit Committee provided for in article 31-D, item VI, of CVM Instruction No. 308/99 together with the financial statements, it must also be presented in the DFP, for now, in “Other Information that the Company Deems Relevant”. In the case of a Non-Statutory Audit Committee or a Statutory Audit Committee not adhering to CVM Instruction No. 308/99, the submission of the opinion, when issued, will be mandatory. Given the importance of the document, in line with the provisions of article 5 of CVM Instruction No. 358/02, the company must disclose its DFP Form, whenever possible, before the start or, preferably, after the closing of trading on the stock exchange or organized over-the-counter market where the securities issued by it are admitted to trading. The DFP Form must be disclosed simultaneously with the disclosure of the company's Financial Statements.
3.3.4 Quarterly Information – ITR
Article 29 of CVM Instruction No. 480/09 provides for the submission of forms relating to quarterly information (ITR) by registered issuers, whose forwarding to the CVM must be done through the Empresas.NET system (see Chapter 9).
According to article 29 of CVM Instruction No. 480/09, the ITR form must be filled in with the data from the quarterly accounting information prepared in accordance with the accounting rules applicable to the issuer, in accordance with articles 25 to 27 of the Instruction, and submitted within 45 (forty-five) days after the end of each quarter of the fiscal year, excluding the last, accompanied by a special review report, issued by an independent auditor registered with the CVM.

The count of the 45 (forty-five) day period after the end of each quarter of the fiscal year begins on the first day (business or not) following the closing of the quarter, adjusting the final date, if it is a holiday or weekend, extending it to the next business day.
Attention is called to the fact that, according to the request contained in Item II of paragraph 1 of the aforementioned article 29, the ITR Form must be accompanied by the special review report, issued by an independent auditor registered with the CVM, as well as by the directors' declarations provided for in items V and VI of paragraph 1 of article 25 of the aforementioned Instruction. The obligation of the Fiscal Council, if installed, regarding the ITR Form is provided for in item VI of article 163 of Law No. 6.404/76. Given the competence attributed by Law to the members of the Fiscal Council to analyze, at least quarterly, the balance sheet and other financial statements prepared periodically by the company and, mainly, in order to fulfill their duty of diligence, we understand that, at a minimum, the councilors must analyze the quarterly information in advance of its disclosure to the market and make the recommendations they deem appropriate. Members of the Fiscal Council cannot excuse themselves from acting diligently in the supervision of the company's business and the preparation of financial statements, under the justification that there is no legal provision to issue an opinion on the intermediate financial information. In concrete situations, the councilor must be diligent and adopt the best way of acting to fulfill their fiduciary duties. On the other hand, the CVM will not refrain from investigating responsibilities when faced with the non-compliance with these duties, it being certain that the fiscal councilor may be asked to demonstrate the formalization of the analysis of the financial statements prepared periodically by the company, that is, the Quarterly Information Form – ITR of the Company. Thus, in the understanding of the SEP, it is recommended, although not mandatory, the preparation and disclosure, together with the electronic ITR forms, of the Fiscal Council's Opinion. It should be clarified that the information from the last quarter will be included in the DFP form (article 28 of the Instruction), which includes the entire fiscal year. If there is a statutory alteration that results in a fiscal year greater or less than one year (sole paragraph of article 175 of Law No. 6.404/76), it may be the case that the company presents more or less than 3 (three) ITR forms. It is worth alerting that the ITR form of open companies registered in Category A must contain consolidated accounting information whenever such issuers are required to present consolidated financial statements, in accordance with Law No. 6.404/76, as determined by paragraph 2 of article 29 of CVM Instruction No. 480/09. In the case of issuers that are financial institutions, attention is called to what is stated in this Circular Letter (see item 3.2.1). If projections are disclosed, the issuer must confront quarterly, in the appropriate field of the ITR form and the DFP form (in the case of the last quarter), the projections disclosed in the Reference Form
with the results actually obtained in the quarter, indicating the reasons for any differences, as determined in paragraph 4 of article 20 of CVM Instruction No. 480/09.

Given the importance of the document, in line with the provisions of article 5 of CVM Instruction No. 358/02, the company must disclose its ITR Form, whenever possible, before the start or, preferably, after the closing of trading on the stock exchange or organized over-the-counter market where the securities issued by it are admitted to trading.
In the understanding of the SEP, corroborated by the Federal Specialized Prosecutor's Office at the CVM, it is not possible to require that the members of the Board of Directors expressly approve the quarterly financial information of the open company.
This understanding is based on the absence of legal or regulatory provision imposing this obligation on the Board of Directors and is reinforced by the difference between the requirements concerning the preparation and presentation of annual financial statements and quarterly information, being more rigorous in the first case.
On the other hand, given the competence attributed by Law to the members of the Board of Directors and, mainly, in order to fulfill their duty of diligence, we understand that the councilors must analyze the quarterly information in advance of its disclosure to the market and make the recommendations they deem appropriate.
In the understanding of the SEP, the company could not deny prior access to quarterly information (before its disclosure to the market), if there has been a request from any member of the Board of Directors. It is emphasized that the members of this body, as well as other administrators, have the duty to keep confidential the relevant information not yet disclosed (article 155, paragraph 1 of Law No. 6.404/76). The eventual prior access to quarterly information would be within this legal duty of confidentiality. Without prejudice to the above, members of the Board of Directors cannot excuse themselves from acting diligently in the supervision of the company's business and the preparation of financial statements, under the justification that there is no legal provision to express themselves on intermediate financial information. In concrete situations, the councilor must be diligent and adopt the best way of acting to fulfill their fiduciary duties. On the other hand, the CVM will not refrain from investigating responsibilities when faced with the non-compliance with these duties. In any case, companies must disclose the date on which authorization was granted for the issuance of the accounting statements and who provided such authorization, that is, they must inform which corporate body authorized its disclosure and on what date, in line with the requirement provided for in item 17 of Technical Pronouncement CPC 24, approved by CVM Deliberation No. 593/09.
3.3.5 Securitization Company Reports
According to Circular Letter No. 8/2019/SIN/CVM, published on 24.07.2019, and Circular Letter No. 10/2019/CVM/SIN, published on 09.09.2019, Securitization Companies must, since 01.10.2019, send the Reports with reference to CRA and CRI issuances, when the separate estate is constituted, exclusively, through the Fundos.NET System. These obligations are derived from CVM Instruction No. 600/18, which amended CVM Instruction No. 480/09.

3.3.6 Report on the Brazilian Corporate Governance Code – Open Companies
The report on the Brazilian Corporate Governance Code – Open Companies is the electronic document, available for completion in the Empresas.NET System, the content of which reflects Annex 29-A, of CVM Instruction No. 480/09.
The issuer registered in category A authorized by a market administrator entity to trade shares or depositary receipt certificates on a stock exchange must submit the report on the Brazilian Corporate Governance Code – Open Companies, within 7 (seven) months from the date of closing of the fiscal year.
It is emphasized that the information provided by the company through the completion of the Report on the Brazilian Corporate Governance Code must be consistent with that disclosed in its Reference Form. For example, in the case of an affirmative answer regarding the adoption of management evaluation procedures, the information must be consistent with the disclosure made in table 12.1 of the Reference Form. In the case of an affirmative answer regarding the existence of policies, duly approved by the management bodies, the company must make these Policies available through the Empresas.NET System, using the corresponding category. This guidance also applies to the Bylaws and Codes that integrate the governance practices provided for in the Brazilian Corporate Governance Code. Furthermore, attention should be paid to the obligation to present relevant justifications, instead of mere safeguards, in the cases of non-adoption or partial adoption of the practices provided for in the Report. The information to be disclosed in the Report on the Brazilian Corporate Governance Code must be updated until the date of submission of the document. If changes are made to the governance of issuers after the submission of the document, the Report does not need to be resubmitted.
3.4 Ordinary General Assembly – OGA
According to the statement of article 132 of Law No. 6.404/76, annually, in the first four months following the end of the fiscal year, there must be an ordinary general assembly (OGA) to take the accounts of the administrators, examine, discuss and vote on the financial statements, deliberate on the destination of the net profit of the year and the distribution of dividends and elect the administrators and, if applicable, the members of the Fiscal Council. In accordance with article 60, item III, of CVM Instruction No. 480/09, failure to observe the deadline established in article 132 of Law No. 6.404/76 for the holding of the ordinary general assembly is considered a serious offense. On 17.04.2020, CVM Instruction No. 622/20 was issued, which sought to perfect the provisions of CVM Instruction No. 481/09, considering Provisional Measure No. 931, of March 30, 2020, which, among other measures, created paragraph 2-A of article 124 of Law No. 6.404/76.

The legal text began to allow that the regulation of the Securities and Exchange Commission could except the rule provided for in paragraph 2 of article 124 of Law No. 6.404/76 for publicly held companies and, even, authorize the holding of a digital assembly.
In this sense, the norm issued established the conditions for companies to hold entirely digital assemblies. It was a series of targeted adjustments with the aim of providing a quick response to some of the challenges imposed by the current new coronavirus pandemic on open companies.
However, it is worth noting that since the 2015 reform (CVM Instruction No. 561/15) it was already possible for companies to make an electronic system available to their shareholders for (i) the sending of the remote voting ballot (article 21-C, I); or (ii) remote participation during the assembly (article 21-C, II).
Despite the regulatory provision, it was verified that open companies opted to hold their general assemblies only in person, with remote participation being done only through the remote voting ballot.
In the scenario of the Covid-19 pandemic, it became imperative to adopt measures that enable alternative ways of holding general assemblies, with the aim of reconciling the full exercise of shareholders' rights with high standards of safety and health protection.
Regarding the reform, the CVM opted for a technologically neutral regulation, so that the changes did not specify the access conditions and the way of functioning of the tools that would be used by open companies to hold their digital general assemblies, opting to list the minimum requirements for their functioning.
Among such aspects, the issued norm provided that the company must ensure that the electronic system referred to in the caput ensures the registration of the presence of shareholders and their respective votes, as well as ensures the possibility of manifestation and simultaneous access to documents presented during the assembly that have not been made available previously, the complete recording of the assembly and the possibility of communication between shareholders. Finally, it is recalled that, upon the conversion of the Provisional Measure into Law No. 14.030/20, the possibility for the CVM to regulate the possibility of holding an assembly in another place outside the municipality of the headquarters ceased to be in force, which is why CVM Resolution No. 5/20 was issued, which revoked paragraph 4 of article 4 initially introduced by CVM Instruction No. 622/20.
3.4.1 Notice of article 133 of Law No. 6.404/76
Article 133 of Law No. 6.404/76 establishes that administrators must communicate, up to 1 (one) month before the date scheduled for the holding of the OGA, by announcements published in the manner provided for in article 124 (see item 3.4.4), that they are at the disposal of shareholders the documents indicated below, specifying in the announcements the location or locations where shareholders can obtain copies of these documents:
a) the administration report on social business and the main administrative facts of the closed year; b) a copy of the financial statements; c) the report of independent auditors;

d) the opinion of the fiscal council, including dissenting votes, if any; and e) other relevant documents on matters included in the agenda.
At least 5 (five) days before the date scheduled for the holding of the OGA, the company must publish the documents cited in letters “a”, “b” and “c” above (paragraph 3 of article 133). It is worth highlighting that, regardless of this publication, the caput of article 133 of Law No. 6.404/76 requires that documents relevant to matters included in the agenda of the OGA be made available to shareholders, at the company's headquarters, up to one month before the date scheduled for the holding of the assembly. The OGA that brings together all shareholders may consider the lack of publication of the announcements or the non-observance of the deadlines referred to in article 133 of Law No. 6.404/76 and item VIII of article 21 of CVM Instruction No. 480/09 to be remedied, but the publication of the documents and their sending by the Empresas.NET System before the holding of the assembly is mandatory (paragraph 4 of article 133).
3.4.2 According to article 133, paragraph 5 of Law No. 6.404/76, the issuer is exempt from the publication of the announcements provided for in the caput of the aforementioned article
when the documents (notably the financial statements) are published up to 1 (one) month before the date scheduled for the holding of the OGA.
3.4.3 Administration's Proposal for OGA
a. Issuers registered in Category A for whom CVM Instruction No. 481/09 applies Regarding the minimum documents and information that must be made available to shareholders when convening the OGA, open companies registered in Category A that are authorized by a market administrator entity to trade shares on a stock exchange and have shares in circulation, thus considered the company's shares, with the exception of those owned by the controller, persons linked to him, the company's administrators and those held in treasury, must pay attention to the provisions of CVM Instruction No. 481/09, especially with regard to the provisions of articles 8 to 21 of this Instruction. It is worth highlighting that, regardless of the publication provided for in paragraph 3 of article 133 of Law No. 6.404/76, the caput of this article requires that documents relevant to matters included in the agenda of the OGA be made available to shareholders, at the company's headquarters, up to one month before the date scheduled for the holding of the OGA, and it is also required by article 21, item VIII, of CVM Instruction No. 480/09, that, within the same period, all documents necessary for the exercise of the right to vote at the OGA must be available on the CVM's Internet page. Furthermore, article 9 of CVM Instruction No. 481/09 provides, for issuers registered in Category A for whom CVM Instruction No. 481/09 applies, that, within the same period above, the following documents and information must be available on the CVM's Internet page:

a) administration report on social business and the main administrative facts of the closed year (included in Financial Statements and DFP form – see items 3.2 and 3.3.3); b) copy of financial statements (sent by Empresas.NET System – see item 3.2); c) administrators' comment on the company's financial situation, in accordance with item 10 of the Reference Form (“directors' comments”) (sent, by Empresas.NET System, in the “Assembly” category, type “OGA” or “OGA/E”, species “Administration's Proposal”, subject “Administrators' comment on the company's financial situation”); d) report of independent auditors (included in financial statements and DFP form – see items 3.2 and 3.3.3); e) opinion of the fiscal council, including dissenting votes, if any (included in financial statements and DFP form – see items 3.2 and 3.3.3, as well as sent by Empresas.NET System by virtue of item VI of article 30 of CVM Instruction No. 480/09, in the “Management Meeting” category, type “Fiscal Council”, species “Minutes”, subject “Opinion on financial statements”); f) DFP form (sent by Empresas.NET System – see Chapter 9); g) proposal for the destination of the net profit of the year that contains, at a minimum, the information indicated in Annex 9-1-II of the Instruction (sent by Empresas.NET System by the “Assembly” category, type “OGA” or “OGA/E”, species “Administration's Proposal”, subject “Destination of Results”); and h) opinion of the audit committee, if any (sent by Empresas.NET System by the “Management Meeting” category, type “Audit Committee”, species “Minutes”, subject “Opinion on financial statements” – see item 3.2). It should be noted that the administration's proposal for the destination of the net profit must contain, at a minimum, the information required in Annex 9-1-II of CVM Instruction No. 481/09, and should not be limited to the enumeration of the items to be submitted to the assembly deliberation, since such a procedure would make it a mere repetition of information already contained in the call notice. Regarding the information required in Annex 9-1-II of CVM Instruction No. 481/09, it should be clarified that the information to be provided in items 2 and 5 of the aforementioned annex have different objectives, namely:

in item 2, the company must inform the total amount and the value per share of dividends and/or interest on own capital, including values already advanced, that is, if the company has approved the distribution of dividend and/or interest on own capital in advance and still has a value to be declared, the information to be provided is the sum of both values (already advanced and to be declared);
In item 5, the company must inform about the proposal for the distribution of dividends and/or earnings on equity capital that will be submitted for approval by the shareholders' meeting, deducting any values already approved in advance, regardless of whether such values have been paid or not.

Additionally, it is worth noting that in item 5.d of Annex 9-1-II of CVM Instruction No. 481/09, the date to be used for identifying shareholders who will have the right to receive the dividend and earnings on equity capital to be declared in the meeting must be informed, and not the payment date of the said event. The date or payment period must be included in item 5.b of the same annex.

It is also recommended that companies disclose in the management proposal information on the eventual incidence of tax on the proposed dividends.

According to the decision of the Collegiate Board of 27.09.2011 (CVM Process RJ2010/14687) 4, companies that have recorded a loss in the fiscal year are not obliged to present the information indicated in Annex 9-1-II of CVM Instruction No. 481/09.

Companies that fall into this situation must inform in the Management Proposal that Annex 9-1-II of CVM Instruction No. 481/09 is not being presented due to the recording of a loss in the fiscal year.

Item V of article 133 of Law No. 6.404/76 establishes that the company must make available to shareholders, at the company's headquarters, up to one month before the date set for the holding of the OGM, in addition to the documents indicated in the Law, the other documents pertinent to matters included in the agenda.

The sole paragraph of article 6 of CVM Instruction No. 481/09, in turn, determines that the documents and information required therein shall be made available to shareholders by the date of publication of the first call announcement, unless Law No. 6.404/76, the Instruction, or another CVM norm establishes a longer period.

In view of this, issuers are alerted that, if the election of administrators or members of the fiscal council or the fixing of their remuneration are included in the agenda of the OGM, issuers registered in Category A to which CVM Instruction No. 481/09 applies must provide, at minimum, the documents and information required by articles 10 and 12 of CVM Instruction No. 481/09 within a period of 1 (one) month before the date scheduled for the holding of the meeting.

If the bylaws or any nomination or indication policy establish minimum requirements for the indication of members of the Board of Directors or the Fiscal Council, the Management Proposal must indicate the adherence of the candidates' profiles to these requirements, thus allowing the informed decision of shareholders.

It is also recommended to disclose the minutes of the meeting of the Board of Directors or the Nomination, Indication Committee or equivalent body, if any, in which the adherence of the indicated candidates to these requirements was analyzed.

Such information must be included in the Management Proposal, which shall be sent via the Empresas.NET System, category "Assembly", type "OGM" or "OGM/E", species "Management Proposal", subject "Election of members of the Boards of Directors and Fiscal Council" or "Remuneration of administrators and councilors".

See http://conteudo.cvm.gov.br/decisoes/2011/20110927_R1/20110927_D01.html.

To comply with the requirement of article 10 of CVM Instruction No. 481/09, companies registered in Category A to which CVM Instruction No. 481/09 applies must present the information required for items 12.5 to 12.10 of the Reference Form, in accordance with Annex 24 of CVM Instruction No. 480/2009.

To comply with the requirement of article 9, item III, and article 12, item II, of CVM Instruction No. 481/09, companies registered in Category A to which CVM Instruction No. 481/09 applies must present the information required for sections 10 and 13 of the Reference Form, in accordance with Annex 24 of CVM Instruction No. 480/2009. According to the understanding stated by the CVM Collegiate Board in a meeting held on 04.11.2014 (CVM Processes No. RJ2013/4386 and No. RJ2013/4607) 5, the definition of the number of members of the Board of Directors, when the bylaws provide for a minimum and maximum number, must be the subject of deliberation in the general shareholders' meeting.

Thus, without prejudice to the provisions of paragraph 7 of article 141 of Law No. 6.404/76 6, the most appropriate procedure is the disclosure, in the call notice, that in its agenda the number of members to compose the Board of Directors of the Company will be deliberated.

Furthermore, the CVM Collegiate Board understood, on the same occasion, that the management proposal should contain the possible scenarios regarding the number of members to be elected, either by means of cumulative voting or, if this is not requested, by majority voting. This is because this represents fundamental information for minority shareholders, in order to support their mobilization regarding the cumulative voting process.

In this sense, it is recommended that the controlling shareholder/management inform the number (fixed or minimum) of councilors for a certain term that would be elected by cumulative or majority voting (for example, 10 members), such number could be increased by up to 2 members due to separate elections (that is, reaching the number of 11 or 12 councilors).

In line with the provisions of article 6, item II, of CVM Instruction No. 481/09, companies must disclose information about candidates for the Board of Directors and Fiscal Council proposed by non-controlling shareholders, giving these candidates the same transparency and disclosure currently given to candidates proposed by the management or by controlling shareholders by virtue of article 10 of CVM Instruction No. 481/09.

In the case of companies with Depositary Receipts traded abroad (as is the case of ADRs), it is emphasized that, if it is possible for holders of DRs to exercise voting, it appears necessary that such prerogative be exercised to the maximum degree of equality possible with shareholders.

The suggested form of disclosure is via the Empresas.NET System, functionality "IPE Online", in the category "Notice to Shareholders", type "Other Notices", including in the subject that it is an indication of candidates for member of the board of directors/fiscal council presented by minority shareholders.

5 See http://conteudo.cvm.gov.br/decisoes/2014/20141104_R1/20141104_D16.html.
6 Article 141. (...) § 7º Whenever, cumulatively, the election of the board of directors takes place by the cumulative voting system and the holders of ordinary or preferred shares exercise the prerogative to elect councilors, it shall be ensured to a shareholder or group of shareholders linked by a voting agreement that hold more than 50% (fifty percent) of the shares with voting rights the right to elect councilors in a number equal to that elected by the other shareholders, plus one, regardless of the number of councilors that, according to the bylaws, compose the body.”

Furthermore, it is recalled that regarding the indications of candidates for member of the board of directors/fiscal council, companies that adopt remote voting either mandatorily or facultatively must pay attention to the provisions on this matter brought by CVM Instruction No. 481/09 (see item 7.1.6).

Attention is drawn to the fact that some companies already adopt this practice and allow in their Bylaws that non-controlling shareholders present candidates for the Board of Directors, provided that these shareholders present information about the candidates up to a certain deadline prior to the date set for the meeting.

These practices, however, must be regarded as faculties granted to shareholders to facilitate their articulation and the exercise of rights granted in Law No. 6.404/76. According to the understanding issued by SEP, requirements for the presentation of information about candidates prior to the meeting, even if provided in the Bylaws, cannot be used as an imposition to obstruct the right of shareholders provided for in Law No. 6.404/76 to indicate and elect members to the Board of Directors and the Fiscal Council at the very moment of the assembly.

In order to allow investors to better understand the remuneration proposal (item I of article 12 of CVM Instruction No. 481/09) and support the decision to be made by them, it is advised that issuers include, in the remuneration proposal, information on:

a) period to which the remuneration proposal refers (for example, from the current Ordinary General Meeting until the next one);

b) values approved in the previous proposal and values actually realized, clarifying the reason for any differences; and

c) any differences between the values of the current proposal and the previous proposal and those contained in item 13 of the company's Reference Form, clarifying, for example, if they are due to the non-correspondence between the period covered by the proposals (letter "a") and the period covered by the Reference Form (fiscal year).

Whenever the agenda of the meeting includes an item on the provision of indemnity commitment for administrators, it is recommended that the management proposal include the necessary information for shareholders to make a decision.

In this sense, we suggest consulting CVM Orientation Opinion No. 38, of 25.09.2018, Circular Letter No. 9/2018/CVM/SEP and item 7.11 of this Circular Letter.

The documents made available to shareholders must contain the necessary information for the understanding of the matters to be discussed in the meeting. As provided in CVM Instruction No. 481/09, the information and documents provided to shareholders must be true, complete and consistent, drafted in clear, objective and concise language and must not induce investors to error.

To facilitate reading by users, it is recommended that the document with the Management Proposal contain an index.

Whenever there is a need to re-present the Management Proposal due to compliance with CVM requirements or spontaneously, the Company must indicate in the "Reason for Re-presentation" field the fact motivating the re-presentation. In the case of compliance with a requirement formulated by the CVM, reference must be made to the letter issued.

Finally, it is highlighted that there is no possibility of dispensing with the delivery of the Management Proposal for issuers registered in Category A to which CVM Instruction No. 481/09 applies, since, at minimum, the company must provide up to 1 (one) month before the date set for the holding of the OGM the administrators' comment on the financial situation of the company, in accordance with item 10 of the Reference Form, as required by article 9, item III, of CVM Instruction No. 481/09.

It is also emphasized that, in accordance with paragraph 4 of article 133 of Law No. 6.404/76, the attendance of all shareholders in the OGM only allows the delivery of the Management Proposal outside the period provided in the caput of the article, if this document is published before the holding of the meeting.

Finally, it is important to emphasize that the Remote Voting Ballot document should not be part of the management proposal to the assembly or the participation manual, as it is a document with specific rules for presentation and submission.

b. Issuers registered in Category B and in Category A for which CVM Instruction No. 481/09 does not apply

With the entry into force, on 01.01.2020, of CVM Instruction No. 609/19, which amended CVM Instruction No. 480/09, Management Proposals for general meetings will be mandatory only for companies registered in Category A, authorized by a market administrator entity to trade shares on the stock exchange, and which have shares in circulation.

3.4.4 OGM Convening Notice

In accordance with item II of paragraph 1 of article 124 of Law No. 6.404/76, the convening of a general meeting of an open company shall be made by announcement published at least three times, containing, in addition to the location, date and time of the meeting, the agenda, with the advance period of the first convening being 15 (fifteen) days and that of the second convening being 8 (eight) days, except in the case of compliance with the provisions of paragraph 4 of article 124 of Law No. 6.404/76. However, SEP recommends that the OGM or OGM/E convening notice be published and disclosed in the Empresas.NET System with at least 1 month in advance of the holding of the meeting, simultaneously with the Management Proposal.

It is also recommended that the issuer of shares that serve as collateral for a sponsored DR program convene the general meeting with a minimum advance period of 30 (thirty) days, except in cases where the species or class of shares underlying the certificates does not have voting rights on any of the matters contained in the agenda of the respective meeting.

It is emphasized that for the holding of a meeting in second convening, the publication of a new Notice is required. It is considered irregular to include the second convening of the OGM already in the Notice of the first convening.

Thus, in the event that the OGM is not installed in the first convening, a new convening must occur through the publication of a new notice which must inform, in addition to the agenda, the location, date and time at which the meeting will be held in second convening. The said meeting cannot be held, in second convening, in a period less than 8 (eight) days, counted from the date on which the second notice was published (item II, of paragraph 1, of article 124, of Law No. 6.404/76).

The OGM and OGM/E convening notices of issuers registered both in Category A and in Category B must explicitly enumerate, in the agenda, all matters to be deliberated, the use of the rubric "general matters" for matters that require assembly deliberation being prohibited.

Furthermore, the convening notices must obligatorily contain:

a) in meetings intended for the election of members of the board of directors, the minimum percentage of participation in voting capital necessary to request the adoption of cumulative voting;

b) if, for reasons of force majeure, the meeting is not held in the building where the company has its headquarters, the location where the meeting will be held, which must be in the same Municipality as the headquarters;

c) if remote participation by means of an electronic system is admitted, in accordance with article 21-C, paragraph 2, item II, of CVM Instruction No. 481/09, information detailing the rules and procedures on how shareholders can participate and vote remotely in the meeting, including necessary and sufficient information for access and use of the system by shareholders, and whether the meeting will be held partially or exclusively in digital mode.

Upon receipt of a request for the adoption of the cumulative voting process and verified that it meets the provisions of article 141 of Law No. 6.404/76 and CVM Instruction No. 165/91, the company must disclose, through the "IPE Online" of the Empresas.NET System, in the category "Notice to Shareholders", type "Adoption of the cumulative voting process", that the election of the board of directors may take place by this process, as this is important information to instruct the decision to be taken by shareholders in the meeting.

Furthermore, it is recalled that regarding the adoption of the cumulative voting process, companies that adopt remote voting either mandatorily or facultatively must pay attention to the provisions on this matter brought by CVM Instruction No. 481/09 (see item 7.1.6).

According to the understanding stated by the CVM Collegiate Board in a meeting held on 04.11.2014 (CVM Processes No. RJ2013/4386 and RJ2013/4607) 7, the definition of the number of members of the Board of Directors, when the bylaws provide for a minimum and maximum number, must be the subject of deliberation in the general shareholders' meeting.

Thus, without prejudice to the provisions of paragraph 7 of article 141 of Law No. 6.404/76 8, the most appropriate procedure is the disclosure, in the call notice, that in its agenda the number of members to compose the Board of Directors of the Company will be deliberated.

7 See http://conteudo.cvm.gov.br/decisoes/2014/20141104_R1/20141104_D16.html.
8 Article 141. (...) § 7º Whenever, cumulatively, the election of the board of directors takes place by the cumulative voting system and the holders of ordinary or preferred shares exercise the prerogative to elect councilors, it shall be ensured to a shareholder or group of shareholders linked by a voting agreement that hold more than 50% (fifty percent) of the shares with voting rights the right to elect councilors in a number equal to that elected by the other shareholders, plus one, regardless of the number of councilors that, according to the bylaws, compose the body.”

In this line, it is recommended that the controlling shareholder/management inform the number (fixed or minimum) of councilors for a certain term that would be elected by cumulative or majority voting (for example, 10 members), such number could be increased by up to 2 members due to separate elections (that is, reaching the number of 11 or 12 councilors).

A copy of the convening notice of the ordinary general meeting must be sent to the CVM, via the Empresas.NET System, category "Assembly", types "OGM" or "OGM/E", species "Convening Notice", within 15 (fifteen) days before the date set for the holding of the ordinary general meeting or on the same day of its first publication, whichever occurs first, in accordance with item VII of article 21 of CVM Instruction No. 480/09.

It is recalled that Law No. 12.431/11 amended provisions of Law No. 6.404/76, which came to provide, in the sole paragraph of article 121, that in open companies, the shareholder may participate and vote remotely in a general meeting, in accordance with CVM regulation.

CVM Instruction No. 481/09 regulated the remote voting procedure, as stated in item 7.1.6 of this Circular Letter.

In accordance with CVM Instruction No. 622/20, companies may also hold meetings in a partial or exclusively digital manner provided that they fully comply with the requirements established in the said instruction.

It is considered that the meeting is held:

I. in an exclusively digital manner, if shareholders can only participate and vote through electronic systems, without prejudice to the use of the remote voting ballot as a means for exercising the right to vote; and

II. in a partially digital manner, if shareholders can participate and vote both in person and remotely, without prejudice to the use of the remote voting ballot as a means for exercising the right to vote.

It is highlighted that a meeting held exclusively in a digital manner will be considered as held at the company's headquarters.

The call announcement must list the documents required for shareholders to be admitted to the meeting, the company may request the prior deposit of the documents mentioned in the said announcement.

of voting the right to elect councilors in a number equal to that elected by the other shareholders, plus one, regardless of the number of councilors that, according to the bylaws, compose the body.”

The company may require the shareholder who intends to participate through the electronic system, in the form of article 21-C, item II, of CVM Instruction No. 481/09, the deposit of the documents referred to in paragraph 1 within up to 2 (two) days before the date of holding of the meeting.

3.4.5 Summary and Minutes of the OGM

According to the provisions of items IX and X of article 21 of CVM Instruction No. 480/09, summaries of decisions of the ordinary general meeting must be sent, via "IPE Online" of the Empresas.NET System, on the same day of its holding, by the category "Assembly", types "OGM" or "OGM/E", species "Summary of Decisions", as well as the minutes of OGMs, within 7 (seven) business days of its holding, with indication of the dates and newspapers of their publication by the category "Assembly", types "OGM" or "OGM/E", species "Minutes".

In this sense, it is worth observing that the summary of decisions taken in the meeting (provided for in item IX of article 21 of CVM Instruction No. 480/09) is not confused with the minutes of the OGM (provided for in item X of article 21 of CVM Instruction No. 480/09), which, in accordance with paragraph 1 of article 130 of Law No. 6.404/76, may be drafted in the form of a summary of the facts occurred.

Therefore, the summary provided for in item IX of article 21 of CVM Instruction No. 480/09 deals only with the result of the deliberations of the meeting.

It is highlighted that CVM Instruction No. 480/09 dispenses with the delivery of the summary of decisions to the issuer who delivers the minutes of the general meeting on the same day of its holding, as provided for in paragraph 2 of article 30 and the sole paragraph of article 31. For the use of this faculty, however, it is necessary that the issuer sends the complete minutes of the general meeting, on the same day of the holding of the meeting.

In this sense, it is highlighted that, in accordance with item X of article 21 of CVM Instruction No. 480/09, the minutes of the OGM must be accompanied, in the same file, of any declarations of vote, dissent or protest. In addition, the minutes must contain all documents referenced and related to the deliberations of the meeting, such as contracts.

Whenever possible, OGM minutes archived at the CVM must also contain the attendance list and the exact quorum for installation and approval of a certain matter. It is also recommended that the minutes contain, at least, the indication of relevant shareholders who elected members to the board of directors and fiscal council, without prejudice to the disclosure of the final voting map detailed in article 21-W, paragraph 6, item II of CVM Instruction No. 481/09.

Finally, it is highlighted that, if the meeting is suspended for any reason, the sending of the summary and/or minutes must be carried out with the information that the said meeting was suspended, the reason for the said suspension, and that subsequently the work will be resumed. The resumption of the meeting will entail the re-presentation of the respective summary and/or minutes.

3.4.6 Remuneration of administrators/fiscal council members

In accordance with Article 152 of Law No. 6,404/76, "the general assembly shall fix the global or individual amount of remuneration for administrators, including benefits of any nature and representation expenses." This amount must encompass all and any form of remuneration including, but not limited to, salary, pro-rata remuneration, variable remuneration, grant of shares or options, direct and indirect benefits, in accordance with CPC 33 (R1) – Employee Benefits.

It is highlighted that the CVM Collegiate Body expressed its understanding in a meeting held on 12/08/2020 (CVM Process No. 19957.007457/2018-10 9) that employer social charges are not covered by the concept of "benefits of any nature" referred to in Article 152 of Law No. 6,404/76, and therefore do not integrate the global or individual remuneration amounts subject to approval by the general assembly.

According to the understanding set forth by the CVM Collegiate Body in a meeting held on 03/10/2015 (CVM Process No. RJ2014/6629 10), amounts paid to administrators based on stock option plans, or other types of share-based remuneration plans, as they constitute their remuneration, must be approved in accordance with Article 152 of Law No. 6,404/76, as well as the disclosure requirements in the Reference Form (items related to administrator remuneration and share-based remuneration plans) and the provisions of Articles 12 and 13 of CVM Instruction No. 481/2009 must be observed.

Regarding the remuneration of the fiscal council member, paragraph 3 of Article 162 of Law No. 6,404/76 establishes that it may not be less, for each member in office, than ten percent of the average amount attributed to each director, excluding profit participation.

It is recalled that members of the board of directors can verify whether the administration of the Publicly Held Company observes the cited provision through the information disclosed in section 13 of the Reference Form, which must be updated annually, in compliance with the provision of paragraph 1 of Article 24 of CVM Instruction No. 480/09.

Furthermore, the detailed description of the composition of directors' remuneration must be included in the respective administration proposal in which it is deliberated, as provided for in Articles 12 and 13 of CVM Instruction No. 481/09.

If the council member considers that this data is insufficient to attest to compliance with the provision of paragraph 3 of Article 162 of Law No. 6,404/76, they may, at their sole discretion, request additional information from the administrators, based on the provision of paragraph 2 of Article 163 of the aforementioned law.

9 See http://conteudo.cvm.gov.br/decisoes/2020/20201208_R1/20201208_D1361.html.
10 See http://conteudo.cvm.gov.br/decisoes/2015/20150310_R1/20150310_D9342.html and http://conteudo.cvm.gov.br/decisoes/2015/20150602_R1/20150206_D9342.html.

It is emphasized that the CVM Collegiate Body, by majority vote, in a meeting held on 08/27/2019, regarding CVM Process No. 19957.007396/2017-00, expressed its understanding that "the regulator is not required to demand that the general assembly of publicly held companies also approve the amount of remuneration for administrators who hold positions in the administration of controlled companies – whether wholly-owned or not – for the functions performed therein." According to their understanding, the best interpretation of the command of Article 152 of Law No. 6,404/76 is that the general assembly of each company is responsible for approving the remuneration of its own administrators for the position held therein, observing the general criteria provided therein – which serve as benchmarks for the assembly's decision – without prejudice, however, to the adoption of governance mechanisms that allow shareholders of the company to define the voting instruction in the assemblies of the controlled company.

Finally, it is recommended, in cases where administrators of the publicly held company, who also hold positions as administrators in wholly-owned and controlled subsidiaries, and receive their remuneration, both directly, through the company itself, and indirectly, through these wholly-owned and controlled subsidiaries, that they submit to the scrutiny of the general assembly of the publicly held company, both the portion borne by the company itself and the portion borne by its wholly-owned and controlled subsidiaries.

3.5 Report and communications of the fiduciary agent

Law No. 6,404/76 determines, in items "b" and "c" of paragraph 1 of Article 68, that fiduciary agents must, respectively:

a) annually, prepare and make available to debenture holders, within 4 (four) months of the closing of the company's fiscal year, a report informing about relevant events that occurred during the year, related to the execution of obligations assumed by the company, to the assets securing the debentures and to the constitution and application of the amortization fund, if any, and the report must also contain the agent's declaration of their aptitude to continue in the exercise of the function;

b) notify debenture holders, within a maximum period of 60 (sixty days), of any default by the company in obligations assumed in the issuance deed.

Thus, it is the responsibility of issuers of debentures admitted to trading on regulated markets in Brazil to send the report provided for in item XI of Article 21 of CVM Instruction No. 480/09, via "IPE Online" of the Empresas.NET System, through the category "Economic-Financial Data", type "Fiduciary Agent Report", within 4 (four) months of the closing of the fiscal year or on the same day of its disclosure by the fiduciary agent, whichever occurs first.

Furthermore, without prejudice to the provision of Article 3 of CVM Instruction No. 358/02, communications of the fiduciary agent prepared in compliance with Article 68, paragraph 1, item "c" of Law No. 6,404/76 must be forwarded by issuers to the CVM, immediately after receipt of the notification sent by the fiduciary agent, through "IPE Online" of the Empresas.NET System, category "Economic-Financial Data", type "Notification of the fiduciary agent to debenture holders", as provided for in Articles 30, item XX, and Article 31, item IX, both of CVM Instruction No. 480/09.

According to Circular Letter No. 8/2019/SIN/CVM, published on 07/24/2019, and Circular Letter No. 10/2019/CVM/SIN, published on 09/09/2019, securitization companies must, since 10/01/2019, send their periodic and occasional information, with reference to CRA and CRI issuances, when the separate estate is constituted exclusively by them, exclusively through the Fundos.NET System. These obligations arise from CVM Instruction No. 600/18, which amended CVM Instruction No. 480/09.

4 Main Occasional Information
4.1 Act and relevant fact

In accordance with Article 157, paragraph 4, of Law No. 6,404/76, administrators of the publicly held company are obliged to immediately communicate to the stock exchange and disclose through the press any deliberation of the general assembly or the company's administration bodies, or any relevant fact that occurred in its business, that may influence, in a considerable manner, the decision of investors in the market to sell or buy securities issued by the company.

In CVM Instruction No. 358/02, in turn, the disclosure and use of information about acts or relevant facts are regulated, the disclosure of information in the trading of securities issued by publicly held companies by controlling shareholders, directors, members of the board of directors, the fiscal council, and any bodies with technical or consultative functions, created by statutory provision, and, also, in the acquisition of a significant lot of shares issued by a publicly held company, and the trading of shares of a publicly held company pending the disclosure of a relevant fact to the market.

It should be noted that on 02/05/2014, CVM Instruction No. 547/14 was published, which amended CVM Instruction No. 358/02, flexibilizing the regime for disclosing information about acts or relevant facts. The main objective of this reform was to offer publicly held companies the option to disclose relevant facts through news portals present on the Internet and not only in widely circulated newspapers. The aforementioned Instruction entered into force on 03/10/2014.

According to the instruction of paragraph 7 of Article 3 of CVM Instruction No. 358/02, as amended by CVM Instruction No. 547/14, any changes in the communication channels used, including for the adoption of the channel provided for in item II of paragraph 4 of Article 3 of CVM Instruction No. 358/02, must be preceded by (i) updating the policy on disclosure of acts or relevant facts, in accordance with Article 16 of CVM Instruction No. 358/02; (ii) updating the company's registration form; and (iii) disclosing the change to be implemented, in the manner previously used by the company for disclosing its relevant facts.

In the event of replacing the news portal with a web page used for the disclosure of acts and relevant facts with another, it is necessary to update the registration form and disclose a relevant fact regarding the subject, but there is no need to promote changes in the policy on disclosure of acts or relevant facts.

According to Article 3 of CVM Instruction No. 358/02, it is the responsibility of the IRD (Investor Relations Director) to send to the CVM, through an electronic system available on the CVM's website on the World Wide Web, and, if applicable, to the stock exchange and over-the-counter market entity in which the securities issued by the company are admitted to trading, any act or relevant fact that occurred or is related to its business (defined in Article 2 of this Instruction), as well as to guarantee its broad and immediate dissemination, simultaneously, in all markets in which such securities are admitted to trading.

Following the guidance of Article 5 of CVM Instruction No. 358/02, the disclosure of the act or relevant fact must be made, whenever possible, before the start (preferably, with at least one hour's notice relative to the opening of the trading session) or after the closing of business in the stock exchanges and over-the-counter market entities in which the securities issued by the company are admitted to trading.

Paragraph 1 of the same article determines that, if the securities issued by the company are admitted to simultaneous trading in markets of different countries, the disclosure of the act or relevant fact must be made, whenever possible, before the start or after the closing of business in both countries, prevailing, in case of incompatibility, the operating hours of the Brazilian market.

Although the Instruction provides for the possibility of disclosing a relevant fact before the start of business in the market, it is understood as a good practice that the disclosure occurs preferably after the closing of business in all countries in which the securities are traded, allowing a longer period for investors to analyze the effects resulting from the disclosed information.

If disclosure before the opening of the trading session is necessary, it must be made at least one hour in advance, in order to avoid delays in the start of trading.

If it is imperative that the disclosure of an act or relevant fact occurs during trading hours, the Investor Relations Director may request, always simultaneously to the stock exchanges and over-the-counter market entities, national and foreign, in which the securities issued by the company are admitted to trading, the suspension of trading of the securities issued by the publicly held company, or referenced to them, for the time necessary for the adequate dissemination of the relevant information, observing the procedures provided for in the regulations issued by the stock exchanges and over-the-counter market entities on the subject.

The sending of the file with the text of the act or relevant fact must be done through "IPE Online" of the Empresas.NET System, category "Relevant Fact", before or simultaneously with its disclosure through the channels provided for in Article 3, paragraph 4, of CVM Instruction No. 358/02 (widely circulated newspapers usually used by the company or news portal present on the Internet), informing the respective locations and dates of disclosure. The disclosure of information that constitutes a relevant fact must, in no case, be made in the "Market Communication" category, Type: "Other Communications Not Considered Relevant Facts" (see item 4.1.1).

The obligation to disclose through "IPE Online" of the Empresas.NET System is independent of the issuer's registration category, as determined in Article 30, item X, and Article 31, item VI, of CVM Instruction No. 480/09.

Corporate legislation does not prevent relevant information from being broadcast and discussed in meetings of professional associations, investors, analysts, or with a selected audience, in the country or abroad.

However, ensuring equitable treatment of all market participants, and in order to prevent, including the possibility of using insider information, it requires that the relevant fact in question be disclosed, prior or simultaneous to the meeting, to the entire market, as determined in the caput and paragraph 3 of Article 3 of CVM Instruction No. 358/02.

If controlling shareholders, directors, members of the board of directors, the fiscal council, and any bodies with technical or consultative functions, created by statutory provision, have personal knowledge of an act or relevant fact and verify the omission of the IRD in fulfilling its duty of communication and disclosure, including in the case of the sole paragraph of Article 6 of CVM Instruction No. 358/02, they will only be exempt from responsibility if they immediately communicate the act or relevant fact to the CVM, in accordance with Article 3, paragraph 2 of CVM Instruction No. 358/02.

Exceptionally, according to paragraph 5 of Article 157 of Law No. 6,404/76 and the caput of Article 6 of CVM Instruction No. 358/02, acts or relevant facts may fail to be disclosed if controlling shareholders or administrators consider that their disclosure would put at risk the legitimate interest of the company.

In the case where controlling shareholders or administrators consider that the revelation of the act or relevant fact may put the legitimate interest of the Company at risk, a request for exception to immediate disclosure may be addressed to the SEP through: (i) electronic correspondence addressed to the institutional address of the SEP with the subject "confidentiality request"; or (ii) a sealed envelope, in which the word "confidential" must appear in bold, in accordance with Article 7, paragraph 1, of CVM Instruction No. 358/02.

Notwithstanding, by virtue of the sole paragraph of Article 6 of CVM Instruction No. 358/02, administrators and controlling shareholders are obliged to, directly or through the IRD, immediately disclose the act or relevant fact, in the event that the information escapes control or if there is an atypical fluctuation in the quotation, price, or quantity traded of the securities issued by the publicly held company or referenced to them.

In order to give effectiveness to the rule of immediate disclosure in the above-mentioned cases, the IRD, whenever possible, must prepare a document about the act or relevant fact kept in confidence that can be disclosed in the cases provided for in the cited device. It is also advisable that the IRD have pre-approved documents in the languages of all countries in which the securities are admitted to trading, so that disclosure can be made quickly in case of urgency.

In these cases, paragraph 2 of Article 5 of CVM Instruction No. 358/02 must also be observed, which deals with the disclosure of an act or relevant fact during trading hours, including with the changes arising from CVM Instruction No. 590/17.

It should be highlighted that the CVM has understood that, in the event of a leak of information or if the company's securities fluctuate atypically, the relevant fact must be immediately disclosed, even if the information refers to operations in negotiation (not concluded), initial negotiations, feasibility studies, or even merely the intention to carry out the business (see judgment of CVM Process RJ2006/5928 11 and PAS CVM No. 24/05 12). If the relevant information escapes the control of the administration or if there is an atypical fluctuation in the quotation, price, or quantity traded of the securities issued by the publicly held company or referenced to them, the IRD must inquire about the people with access to acts or relevant facts, with the aim of verifying if they have knowledge of information that should be disclosed to the market.

11 See http://conteudo.cvm.gov.br/sancionadores/sancionador/2007/20070417_RJ20065928.html.
12 See http://conteudo.cvm.gov.br/sancionadores/sancionador/2008/20081007_2405.html.

Therefore, in cases where failures in the disclosure of an act or relevant fact are identified, without prejudice to the investigation of possible use of insider information, the IRD, as well as controlling shareholders, other directors, members of the board of directors, the fiscal council, and any bodies with technical or consultative functions, created by statutory provision, are subject to the investigation of responsibility for the eventual infringement of the cited Articles 3, 4, and 6 of CVM Instruction No. 358/02 and Articles 155, paragraph 1, and 157, paragraph 4 of Law No. 6,404/76, as the case may be.

Once the broadcasting of news in the press involving information not yet disclosed by the issuer is confirmed, through the Empresas.NET System, "IPE online" functionality, or the broadcasting of news that adds a new fact to already disclosed information, it is the responsibility of the company's administration and, in particular, its IRD to analyze the potential impact of the news on trading and, if necessary, to manifest itself immediately regarding the aforementioned news, through "IPE Online" of the Empresas.NET System, and not only after receiving a query from the CVM or B3.

The decision regarding the disclosure of acts or relevant facts is the competence of the company's administration itself, with the CVM being responsible for ensuring the quality of information brought to the market, prioritizing transparency and combating information asymmetry.

In this sense, it is worth alerting that it is the responsibility of administrators and controlling shareholders, in addition to the other persons indicated in paragraph 1 of Article 3 of CVM Instruction No. 358/02, to evaluate the need for disclosure of sentences issued in the context of proceedings, including arbitral, of which they have knowledge, when these can be characterized as relevant information, capable of affecting investors' decisions to buy, sell, or hold the securities issued by the company.

Similarly, it is necessary for the company's administration to evaluate the relevance of information broadcast in operational previews, which must be disclosed in strict observance of the provisions of CVM Instruction No. 358/02, emphasizing, in addition, that they are preliminary information, as well as making it clear whether they were audited or not.

The information, object of disclosure, must be expressed in clear and objective language, must be true, complete, consistent, and must not induce the investor to error, as required in Article 3, paragraph 5, of CVM Instruction No. 358/02, and in Articles 14 to 19 of CVM Instruction No. 480/09.

For example, the company must refrain from issuing value judgments, especially regarding the progress of judicial disputes and decisions rendered therein, which must reflect the exact wording of such decisions.

It should also be noted that the same rules provided in the norms dealing with the disclosure of information, notably those governing the disclosure of relevant facts (CVM Instruction No. 358/02) and establishing general rules on the content and form of information that issuers must observe (articles 14 to 19 of CVM Instruction No. 480/09), apply to disclosures made on social media (including live streams, i.e., live broadcasts of presentations with the presence of representatives of publicly-held companies, usually organized by a third party, not the company itself (see item 4.23)). This means, for example, that administrators and controlling shareholders: (a) may only disclose information relating to relevant acts or facts on social networks, after or simultaneously with the disclosure of such information by the communication means currently admitted in CVM Instruction No. 358/02; and (b) must disclose on social networks, as well as in any other medium or document, information that is true, complete, consistent, and does not mislead the investor, as required in article 14 of CVM Instruction No. 480/09.

Moreover, as provided in CVM Deliberation No. 809/19 and Circular Letter No. 02/2019/CVM/SEP, both dated 02/19/2019, if the request for registration of an issuer and/or public offering of distribution of securities submitted for reserved analysis escapes control, it is the issuer's responsibility to disclose it immediately, in accordance with CVM Instruction No. 358/02.

Based on article 3, paragraph 6, and article 4 of CVM Instruction No. 358/02, the CVM may determine the disclosure, correction, amendment, or republication of information about the relevant act or fact, as well as request additional clarifications regarding its disclosure.

It is recalled that the eventual provision of additional clarifications requested by the CVM does not replace the initial obligation to disclose the relevant act or fact that led to such request. In this sense, if the CVM sets a deadline for additional clarifications to be provided, and the investor relations director observes this deadline, such director may still be held liable if it is found that he should have promoted the disclosure of a relevant fact before any request by the CVM.

We take this opportunity to recall the full text of Market Communication CVM No. 02/2016, published on 06/02/2006, available at the link https://www.gov.br/cvm/pt-br/assuntos/noticias/comunicado-aomercado-n-02-2016-bae3c5764cf14c3a906c57cf2be7219d:

“Given the prejudice to investment decisions and the possible abuses facilitated by information asymmetry, the CVM considers it important to reinforce the duties and responsibilities involving the adequate dissemination of information, which are not limited to the duties of the investor relations director.

Article 157, § 4, of Law 6.404, as well as article 2 of CVM Instruction 358, determine the disclosure to the market of any relevant act or fact that may influence “in a considerable manner”: (i) the quotation of the securities issued by the publicly-held companies or referenced therein; or (ii) the decision to buy, sell, or hold such titles, or even to exercise any rights inherent to them.

Moreover, the aforementioned article 2 clarifies that the relevant act or fact may result from a decision by the controlling shareholder, deliberation of the general assembly or the administrative bodies of the publicly-held company, as well as from events external to the company, of a political-administrative, technical, business, or economic-financial nature, occurred or related to its business.

To ensure orderly and equitable access of the market to such information, CVM Instruction 358 imposes on the IRD of publicly-held companies the duty to disclose them, clearly and precisely, through official communication channels, as well as to ensure their broad and immediate dissemination (article 3).

Exceptionally, if controlling shareholders or administrators believe that the revelation of certain relevant information could compromise the legitimate interest of the company at that moment, CVM Instruction 358 authorizes its non-immediate disclosure. However, in case of a leak of the information, even if the source was not the company, or atypical fluctuation involving the securities issued by it, the information must be promptly disclosed to the market by the IRD and, only in case of their omission, by the controllers or administrators who had access to the information (article 6).

The aforementioned Instruction also recognizes that the IRD may not be aware of all potentially relevant facts subject to disclosure.
However, in case of atypical fluctuation in the quotation, price, or quantity traded of the securities issued by the company, it is the responsibility of the IRD to proactively investigate the existence of information that should be disclosed to the market (article 4, sole paragraph), which must also occur in response to questions from the CVM or a self-regulatory entity (article 4, caput).

On the other hand, the rule also obligates controlling shareholders, directors, board members, employees, and members of statutory bodies to keep the IRD informed about any relevant information of which they are aware (article 3, § 1).

In line with such obligations, the CVM emphasizes the need for persons who, by virtue of their position or role, even if not directly linked to the company, have access to information that may considerably influence the quotation of the securities issued by it, to act in an articulated manner with the institutional channels of the publicly-held company and communicate such information to the IRD before giving them publicity. In this way, the IRD can act timely to provide the market with true, complete, consistent information that does not mislead the investor, as provided in article 14 of CVM Instruction No. 480.

It is reiterated that, as mentioned above, such relevant information does not necessarily originate from the company itself, and may result from external events, such as strategic changes in specific sectors of the economy.

Finally, the CVM emphasizes that the responsibilities and guidelines referred to herein are applicable to publicly-held companies, including mixed-economy companies controlled, directly or indirectly, by federative entities (Union, States, Federal District, and Municipalities).”

It is alerted that, in accordance with article 18 of CVM Instruction No. 358/02, it constitutes a serious offense, for the purposes provided in paragraph 3 of article 11 of Law No. 6.385/76, the transgression of the provisions contained in the aforementioned Instruction.

4.1.1 Distinction between Relevant Fact and Market Communication

CVM Instruction No. 358/02 defines as a relevant act or fact any decision of the controlling shareholder, deliberation of the general assembly or the administrative bodies of the publicly-held company, or any other act or fact of a political-administrative, technical, business, or economic-financial nature occurred or related to its business that may influence in a considerable manner:
a) the quotation of the securities issued by the publicly-held company or referenced therein; b) the decision of investors to buy, sell, or hold such securities; c) the decision of investors to exercise any rights inherent to the status of holder of securities issued by the company or referenced therein.

Unlike Market Communication, the disclosure of a relevant act or fact is subject to a specific formality: immediate disclosure to the CVM, to the stock exchanges, or to the over-the-counter market entities where the publicly-held company trades its securities, and disclosure through the press (publication in a widely circulated newspaper usually used by the company) or through a news portal present on the Internet (which makes available, in a section accessible for free access, the information in its entirety). The forwarding to the CVM and to the exchange is done through the filing of the information in the “IPE Online” of the Empresas.NET System, in the category “Relevant Fact”.

The “Market Communication” represents a category that was created in the “IPE Online” of the Empresas.NET System for the disclosure of communications provided for in CVM Instruction 358/02 (such as the communication of acquisition or alienation of relevant participations provided for in article 12, whose publication is only required in the hypotheses provided for in paragraph 5 of this article) or of other information not characterized as a relevant act or fact, which the company considers useful to be disclosed to shareholders or to the market (such as material disclosed in meetings with analysts, etc.). Clarifications provided by companies regarding inquiries made by the CVM or the exchange are also filed in this category, for example. It is worth noting that for each of these cases there is an appropriate “type” within the chosen “category” in the “IPE Online” of the Empresas.NET System.

The distinction between the relevant act or fact and the “Market Communication” is, therefore, in the content of the disclosed information. If the company believes that the information has the potential to affect quotations or investment decisions, it must be treated internally and disclosed in the manner required for relevant information, which includes publication in widely circulated newspapers usually used by the company or disclosure in a news portal present on the Internet (which makes available, in a section accessible for free access, the information in its entirety), as provided in CVM Instruction No. 358/02.

It is worth clarifying that there is no requirement that the disclosure of relevant information be made with the placement of a specific title in the document, such as “Relevant Fact” (as occurs in the disclosure of financial statements or minutes of meetings of administrative bodies where there is a deliberation that characterizes a relevant act or fact), although it is useful and recommended for good communication with shareholders and the market that there is an indication of the importance of the disclosed information.

Finally, it is recommended that the company include in its disclosure policy all possible and necessary information to give maximum predictability to the market about how the company handles its disclosures, respecting CVM Instruction No. 358/02.

4.2 Extraordinary General Assembly (EGA), Special Assembly (ESPA), Debentureholders’ Assembly (ADA), and Assembly of Holders of Agricultural Receivables Certificates (AHARC) or Real Estate (AHARRC)

On 04/17/2020, CVM Instruction No. 622/20 was issued, which sought to improve the provisions of CVM Instruction No. 481/09, considering Provisional Measure No. 931, of March 30, 2020, which, among other measures, created paragraph 2-A of article 124 of Law No. 6.404/76.

The legal text began to allow that the regulation of the Securities and Exchange Commission could exception the rule provided in paragraph 2 of article 124 of Law No. 6.404/76 for publicly-held companies and, even, authorize the holding of a digital assembly.

In this sense, the issued norm established the conditions for companies to hold entirely digital assemblies. It was a point adjustment with the aim of providing a quick response to some of the challenges imposed by the current pandemic of the new coronavirus on publicly-held companies.

However, it is worth noting that since the 2015 reform (CVM Instruction No. 561/15) it was already possible for companies to provide their shareholders with an electronic system for (i) the sending of the remote voting ballot (article 21-C, I); or (ii) remote participation during the assembly (article 21-C, II).

Despite the regulatory provision, it was verified that publicly-held companies opted to hold their general assemblies only in person, with remote participation occurring only through the remote voting ballot.

In the scenario of the Covid-19 pandemic, it became imperative to adopt measures that enable alternative forms of holding general assemblies, with the objective of reconciling the full exercise of shareholders' rights with high standards of safety and health protection.

Regarding the reform, the CVM opted for a technologically neutral regulation, so that the changes did not specify the access conditions and the mode of operation of the tools that would be used by publicly-held companies to hold their digital general assemblies, opting to list the minimum requirements for their operation.

Among such aspects, the issued norm provided that the company must diligence that the electronic system referred to in the caput ensures the registration of the presence of shareholders and their respective votes, as well as ensures the possibility of manifestation and simultaneous access to documents presented during the assembly that were not previously made available, the full recording of the assembly, and the possibility of communication between shareholders.

It is recalled that when the conversion of the Provisional Measure into Law No. 14.030/20, the possibility for the CVM to regulate the possibility of holding the assembly in another place outside the municipality of the headquarters ceased to be in force, which is why CVM Resolution No. 5/20 was issued, which revoked paragraph 4 of article 4 introduced initially by CVM Instruction No. 622/20.

On 05/14/2020, CVM Instruction No. 625/20 was issued, which provides for remote participation and voting in debentureholders’ assemblies.

4.2.1 Call Notice for EGA, ESPA, ADA, AHARC, or AHARRC

In accordance with item II, of paragraph 1, of article 124, of Law No. 6.404/76, the call for a general assembly of shareholders of a publicly-held company shall be made through an announcement published three times, at least, containing, in addition to the location, date, and time of the assembly, the agenda, and, in case of statute reform, the indication of the matter, with the advance period of the first call being 15 (fifteen) days and that of the second call being 8 (eight) days, except in case of compliance with the provisions of paragraph 4 of article 124 of Law No. 6.404/76. By virtue of the provisions of paragraph 2 of article 71 of Law No. 6.404/76, the provisions of the aforementioned law regarding the general assembly of shareholders apply to the debentureholders’ assembly, insofar as applicable.

By analogy, the above periods must be observed in the case of calling an assembly of holders of agricultural or real estate receivables certificates, unless expressly provided otherwise in a specific rule, such as, for example, in the case of the call period for the AHARC, which, as provided in CVM Instruction No. 600/18, must be held with a minimum advance of 20 (twenty) days.

It is recommended, however, that companies adopt, whenever possible, the minimum period of 1 month for the call of the EGA, ESPA, ADA, AHARC, or AHARRC, similar to what is already required by article 9 of CVM Instruction No. 481/09 for the Administration Proposal of the EGA, so that shareholders, debentureholders, or holders of agricultural or real estate receivables certificates have sufficient time to analyze the deliberations to be taken and, if necessary, articulate to participate in the assembly.

It is also recommended that the issuer of shares that serve as collateral for a sponsored DR program call the general assembly with a minimum advance period of 30 (thirty) days, except in cases where the species or class of shares that collateralize the certificates do not have the right to vote on any of the matters on the agenda of the respective assembly.

It is emphasized that for the holding of an assembly in second call, the publication of a new Notice is necessary. It is considered irregular to include the second call of the EGA, ESPA, ADA, AHARC, or AHARRC already in the Notice of the first call.

Thus, in the event that the assembly is not installed in the first call, a new call must occur through the publication of a new notice that must inform, in addition to the agenda, the location, date, and time when the assembly will be held in second call. The aforementioned assembly may not be held, in second call, in a period less than 8 (eight) days, counted from the date on which the second notice was published (item II, of paragraph 1, of article 124, of Law No. 6.404/76).

As in the case of the EGA, the call notices for Extraordinary General Assemblies (EGA), Special Assemblies (ESPA), Debentureholders’ Assemblies (ADA), and Assemblies of holders of agricultural or real estate receivables certificates (AHARC or AHARRC) of issuers registered in both Category A and Category B must explicitly enumerate, in the agenda, all matters to be deliberated, with the use of the rubric “general matters” for matters that require assembly deliberation being prohibited.

Furthermore, the call notices must necessarily contain:
a) in assemblies intended for the election of members of the board of directors, the minimum percentage of participation in the voting capital necessary to request the adoption of multiple voting; b) if, for reasons of force majeure, the assembly is not held in the building where the company has its headquarters, the location where the assembly will be held, which must be in the same Municipality as the headquarters; c) if remote participation through an electronic system is admitted, in accordance with article 21-C, paragraph 2, item II, of CVM Instruction No. 481/09, detailed information on the rules and procedures on how shareholders can participate and vote remotely in the assembly, including necessary and sufficient information for access and use of the system by shareholders, and whether the assembly will be held partially or exclusively in digital mode.

Upon receipt of a request for the adoption of the multiple voting process and verified that it meets the provisions of article 141 of Law No. 6.404/76 and CVM Instruction No. 165/91, the company must disclose, through the “IPE Online” of the Empresas.NET System, in the category “Notice to Shareholders”, type “Adoption of the multiple voting process”, that the election of the board of directors may take place by this process, as this is important information to instruct the decision to be taken by shareholders in the assembly.

Moreover, it is recalled that regarding the adoption of the multiple voting process, companies that adopt remote voting obligatorily or facultatively must pay attention to the provisions on this matter brought by CVM Instruction No. 481/09 (see item 7.1.6).

According to the understanding set forth by the CVM Collegiate in a meeting held on 11/04/2014 (CVM Processes No. RJ2013/4386 and RJ2013/4607) 13, the definition of the number of members of the Board of Directors, when the corporate statute provides for a minimum and maximum number, must be the subject of deliberation in the general assembly of shareholders.

Thus, without prejudice to the provisions of paragraph 7 of article 141 of Law No. 6.404/76 14, the most appropriate procedure is the disclosure, in the call notice, that in its agenda the number of members to compose the Board of Directors of the Company will be deliberated.

Furthermore, the CVM Collegiate understood, on the same occasion, that the administration proposal should contain the possible scenarios regarding the number of members to be elected, either through multiple voting or, if this is not requested, by majority voting. This is because this represents fundamental information for minority shareholders, in order to subsidize their mobilization regarding the multiple voting process.

In this line, it is recommended that the controlling shareholder/administration inform the number (fixed or minimum) of councilors for a certain mandate that would be elected by multiple or majority voting (for example, 10 members), such number could be increased by up to 2 members due to separate elections (i.e., reaching the number of 11 or 12 councilors).

13 See http://conteudo.cvm.gov.br/decisoes/2014/20141104_R1/20141104_D16.html.
14 “Article 141. (...) § 7º Whenever, cumulatively, the election of the board of directors takes place by the multiple voting system and the holders of ordinary or preferred shares exercise the prerogative to elect councilors, it shall be assured to a shareholder or group of shareholders linked by a voting agreement that hold more than 50% (fifty percent) of the shares with voting rights the right to elect councilors in a number equal to that elected by the other shareholders, plus one, regardless of the number of councilors that, according to the statute, compose the body.”

In accordance with item I of articles 30 and 31 of CVM Instruction No. 480/09, issuers must forward, through the “IPE Online” in the Empresas.NET System, category “Assembly”, type “EGA”, “ESPA”, “ADA”, species “Call Notice”, the call notices for extraordinary, special, debentureholders’, and holders of agricultural or real estate receivables certificates assemblies, whose publications follow the mold of article 124, paragraph 1, item II, of Law No. 6.404/76. Circular Letter No. 8/2019/CVM/SIN, of 07/24/2020, provides that the sending of periodic and occasional information, with reference to CRA and CRI issuances, when the separate patrimony is constituted, must be done exclusively through the Fundos.NET System.

It is recalled that Law No. 12.431/11 altered provisions of Law No. 6.404/74, which began to provide in the sole paragraph of article 121 that, in publicly-held companies, the shareholder may participate and vote remotely in the general assembly, in accordance with the regulation of the CVM.

CVM Instruction No. 481/09 regulated the remote voting procedure, as stated in item 7.1.6 of this Circular Letter.

In accordance with CVM Instruction No. 622/2020, companies may also hold assemblies in a partial or exclusively digital manner, provided that they fully comply with the requirements established in the aforementioned Instruction.

An assembly is considered to be held:
I. in an exclusively digital manner, if shareholders can only participate and vote through electronic systems, without prejudice to the use of the remote voting ballot as a means to exercise the right to vote; and
II. in a partially digital manner, if shareholders can participate and vote both in person and remotely, without prejudice to the use of the remote voting ballot as a means to exercise the right to vote.

It is highlighted that an assembly held exclusively in a digital manner will be considered as held at the company's headquarters.

The call announcement must list the documents required for shareholders to be admitted to the assembly, and the company may request the prior deposit of the documents mentioned in the aforementioned announcement.

The company may require the shareholder who intends to participate through the electronic system, in the form of article 21-C, item II, of CVM Instruction No. 481/09, the deposit of the documents referred to in paragraph 1 up to 2 (two) days before the date of holding the assembly.

4.2.2 Administrative Proposal for Shareholders’ General Meetings (SGM), Special Shareholders’ Meetings (SSM), Debenture Holders’ Meetings (DHM), Agricultural Receivables Certificates Holders’ Meetings (CRAHM), or Real Estate Receivables Certificates Holders’ Meetings (ACRIHM)
a. Administrative Proposal – Category A – companies authorized by a market regulator to trade shares on a securities exchange and having shares in circulation

As provided for in paragraph 3 of Article 135 of Law No. 6,404/76 and item II of Article 30 of CVM Instruction No. 480/09, the documents relevant to the matters to be debated at the SGM, SSM, or DHM must be made available to shareholders or debenture holders at the company’s headquarters, upon publication of the first announcement convening the general meeting. In addition, issuers registered in Category A that are authorized by a market regulator to trade shares on a securities exchange and have shares in circulation must send all documents necessary for the exercise of voting rights at extraordinary, special, and debenture holders’ meetings 15 through an electronic system available on the CVM’s page on the World Wide Web (“IPE Online” in the Empresas.NET System), as determined by item II of Article 30 of CVM Instruction No. 480/09.

For issuers registered in Category A to which CVM Instruction No. 481/09 applies, it is worth alerting that CVM Instruction No. 481/09 now provides for the minimum documents and information that must be made available to shareholders whenever the general meeting is convened to deliberate on certain matters provided for in the Instruction. Such documents and information must be forwarded to the CVM via “IPE Online” in the Empresas.NET System (see Chapter 9) by the date of publication of the first announcement convening the meeting, unless Law No. 6,404/76, CVM Instruction No. 481/09, or another norm issued by the CVM establishes a longer deadline.

Thus, when convening a shareholders’ general meeting, issuers registered in Category A to which CVM Instruction No. 481/09 applies must pay attention to the provisions of said Instruction, especially with regard to Articles 8 to 21.

The forwarding of the documents and information required by Articles 8 and 10 to 21 for issuers registered in Category A to which CVM Instruction No. 481/09 applies must be done via “IPE Online” in the Empresas.NET System, as specified below, upon publication of the first announcement convening the general meeting:

a) information provided for in Article 8 of CVM Instruction No. 481/09, to be included in the administrative proposal and sent via the “Meetings” category, type “AGO/E”, “AGE” or “AGESP”, species “Administrative Proposal”, subject “Matter of special interest of a related party”;

15 As provided for in paragraph 2 of Article 71 of Law No. 6,404/76, combined with paragraph 3 of Article 135 of Law No. 6,404/76 and item II of Article 30 of CVM Instruction No. 480/09, the documents relevant to the matters to be debated at the debenture holders’ general meeting must be made available, at the company’s headquarters, upon publication of the first announcement convening the general meeting. These documents and the information necessary for the exercise of voting rights must be made available to the public via “IPE Online” in the Empresas.NET System, category “Meetings”, type “AGDEB”, species “Administrative Proposal”.

b) information indicated in Article 10 of CVM Instruction No. 481/09, to be sent via the “Meetings” category, type “AGO/E”, “AGE”, species “Administrative Proposal”, subject “Election of members of the Boards of Directors and Audit Committees”; c) information provided for in Article 11 of CVM Instruction No. 481/09, to be included in the administrative proposal and sent via the “Meetings” category, type “AGO/E”, “AGE” or “AGESP”, species “Administrative Proposal”, subject “Bylaws reform”; d) Information indicated in Article 12 of CVM Instruction No. 481/09 to be sent via the “Meetings” category, type “AGO/E”, “AGE”, species “Administrative Proposal”, subject “Remuneration of administrators and councilors”; e) information indicated in Article 13 of CVM Instruction No. 481/09, to be sent via the “Meetings” category, type “AGO/E”, “AGE”, species “Administrative Proposal”, subject “Share-based Remuneration Plan”; f) information indicated in Article 14 of CVM Instruction No. 481/09, to be sent via the “Meetings” category, type “AGO/E”, “AGE”, species “Administrative Proposal”, subject “Capital Increase”, with the exception of the following:
(i) Audit Committee’s opinion on capital increase (item 4 of Annex 14 of CVM Instruction No. 481/09), to be sent via the “Board of Directors Meeting” category, type “Audit Committee”, species “Minutes”, subject “Opinion on capital increase”; (ii) reports and studies that supported the determination of the issue price in capital increase (item 5, letter “k”, of Annex 14 of CVM Instruction No. 481/09) to be sent via the “Economic-Financial Data” category, type “Appraisal Report”, subject “Report used in capital increase”; (iii) appraisal report of assets (item 5, letter “s”, subitem “iii”, of Annex 14 of CVM Instruction No. 481/09) to be sent via the “Economic-Financial Data” category, type “Appraisal Report”, subject “Asset appraisal report”. g) information indicated in Article 15 of CVM Instruction No. 481/09, to be sent via the “Meetings” category, type “AGO/E” or “AGE”, species “Administrative Proposal”, subject “Issuance of debentures” or “Issuance of subscription warrants”; h) information indicated in Article 16 of CVM Instruction No. 481/09, to be sent via the “Meetings” category, type “AGO/E”, “AGE”, species “Administrative Proposal”, subject “Capital Reduction”, with the exception of the Audit Committee’s Opinion on capital reduction (Item 3 of Annex 16 of CVM Instruction No. 481/09), to be sent via the “Board of Directors Meeting” category, type “Audit Committee”, species “Minutes”, subject “Opinion on capital reduction”; i) information indicated in Article 17 of CVM Instruction No. 481/09, to be sent via the “Meetings” category, type “AGO/E”, “AGE”, “AGESP”, species “Administrative Proposal”, subject “Creation of preferred shares or alteration to their preferences, advantages or conditions for redemption or amortization”;

j) information indicated in Article 18 of CVM Instruction No. 481/09, to be sent via the “Meetings” category, type “AGO/E”, “AGE”, species “Administrative Proposal”, subject “Reduction of mandatory dividends”; k) information indicated in Article 19 of CVM Instruction No. 481/09, to be sent via the “Meetings” category, type “AGO/E”, “AGE”, species “Administrative Proposal”, subject “Acquisition of control of another company”, with the exception of the studies and reports that supported the negotiation of the control acquisition price (Item 13 of Annex 19 of CVM Instruction No. 481/09), to be sent via the “Economic-Financial Data” category, type “Appraisal Report”, subject “Report used in control acquisition”; l) information indicated in Article 20 of CVM Instruction No. 481/09, to be sent via the “Meetings” category, type “AGO/E”, “AGE”, species “Administrative Proposal”, subject “Right of Withdrawal”, noting that the reports that serve as the basis for the calculation provided for in item 9, letter “a”, of Annex 20 of CVM Instruction No. 481/09 must be sent via the “Economic-Financial Data” category, type “Appraisal Report”, subject “Report based on net asset value at market prices or other criteria accepted by the CVM”; m) information indicated in Article 20-A of CVM Instruction No. 481/09, to be sent via the “Meetings” category, type “AGO/E”, “AGE”, species “Administrative Proposal”; n) information indicated in Article 20-B of CVM Instruction No. 481/09, to be sent via the “Meetings” category, type “AGO/E”, “AGE”, species “Administrative Proposal”, subject “Acquisition of shares issued by the company itself” or “Alienation of shares issued by the company itself”, as applicable; and o) information indicated in Article 21 of CVM Instruction No. 481/09, to be sent via the “Meetings” category, type “AGO/E”, “AGE”, species “Administrative Proposal”, subject “Choice of Appraisers”.

Even in cases where the meeting is to deal with more than one of the subjects related in CVM Instruction No. 481/09, a single “Administrative Proposal” document containing the appropriate attachments must be forwarded via “IPE Online” in the Empresas.NET System, mentioning, in the subject, the respective items on the agenda.

It should be noted that, even when the subjects included in the agenda of the SGM or SSM are not provided for in CVM Instruction No. 481/09, it is necessary to present a proposal with the information and documents necessary for shareholders to understand the matter to be deliberated at the meeting. This is because, as provided for in CVM Instruction No. 480/09, the information and documents provided to shareholders must be true, complete and consistent, drafted in clear, objective and concise language, and must not induce investors to error. In accordance with item II of Article 30 of CVM Instruction No. 480/09, the obligation to present a proposal with the information and documents necessary for debenture holders to understand the matter to be deliberated at the meeting also applies to the DHM.

Furthermore, in any case, the administrative proposal must not be limited to listing the items to be submitted to meeting deliberation, as such a procedure would make it a mere repetition of information already contained in the Convening Notice.

To facilitate reading by users, it is recommended that the document with the Administrative Proposal contain an index.

In line with Article 6, item II, of CVM Instruction No. 481/09, and without prejudice to the provisions of Chapter III-A of said Instruction (see item 7.1.6), companies must disclose information about candidates for the Board of Directors and Audit Committee proposed by non-controlling shareholders, giving these candidates the same transparency and disclosure given to candidates proposed by the administration or controlling shareholders by virtue of Article 10 of CVM Instruction No. 481/09.

In the case of companies with Depositary Receipts traded abroad (as is the case with ADRs), it is worth noting that, if voting can be exercised by DR holders, it appears necessary that such prerogative be exercised to the maximum degree of equality possible with shareholders.

The suggested form of disclosure is via the Empresas.NET System, “IPE Online” functionality, in the “Notice to Shareholders” category, type “Other Notices”, including in the subject that it is an indication of candidates for member of the board of directors/audit committee presented by minority shareholders.

Attention is called to the fact that some companies already adopt this practice and allow in their Bylaws that non-controlling shareholders present candidates for the Board of Directors, provided that these shareholders present information about the candidates by a certain deadline prior to the date set for the meeting.

However, these practices must be regarded as faculties granted to shareholders to facilitate their articulation and the exercise of rights granted in Law No. 6,404/76. Requirements to present information about candidates prior to the meeting, even if provided for in the Bylaws, cannot be used as an imposition to obstruct the right of shareholders provided for in Law No. 6,404/76 to indicate and elect members to the Board of Directors and the Audit Committee at the moment of the meeting.

Whenever it is necessary to resubmit the Administrative Proposal due to compliance with CVM requirements or voluntarily, the Company must indicate in the “Reason for Resubmission” field the fact motivating the resubmission. In the case of resubmission of the proposal to comply with a requirement formulated by the CVM, reference must be made to the letter issued.

Finally, whenever the meeting agenda includes an item on the provision of indemnity commitment for administrators, it is recommended that the administrative proposal include the information necessary for shareholders to make a decision.

In this sense, we suggest consulting CVM Advisory Opinion No. 38, of 25.09.2018, Circular Letter No. 9/2018/CVM/SEP, and item 7.11 of this Circular Letter.

b. Administrative Proposal – Category B and companies in Category A to which CVM Instruction No. 481/09 does not apply

As provided for in paragraph 3 of Article 135 of Law No. 6,404/76, the documents relevant to the matter to be debated at the SGM, SSM, or DHM 16 must be made available to shareholders, at the company’s headquarters, upon publication of the first announcement convening the general meeting.

In accordance with item II of Article 31 of CVM Instruction No. 480/09, the issuer with Category B registration must send to the CVM all documents necessary for the exercise of voting rights at debenture holders’ general meetings (“AGDEB”), in accordance with the terms and deadlines established by law.

The sending of the documents and information necessary for the exercise of voting rights in the DHM must be done via “IPE Online” in the Empresas.NET System, category “Meetings”, type “AGDEB”, species “Administrative Proposal”, choosing the relevant subjects according to the guidelines provided in this letter (see item “a)”).

By analogy, the same obligation to make available the documents relevant to the matter to be debated at the meeting also applies to meetings of holders of agricultural or real estate receivables certificates (AGCRA or AGCRI).

According to Letter No. 8/2019/SIN/CVM of 24/07/2019, the sending of periodic and occasional information, with reference to CRA and CRI issuances, when the separate estate is constituted, must be carried out exclusively via the Fundos.NET System.

Issuers registered in Category B and Category A issuers to which CVM Instruction No. 481/09 does not apply may voluntarily forward the documents necessary for the exercise of voting rights at SGMs and SSMs.

The comments contained in item “a” above, with regard to the content and form of sending, apply to the proposals mentioned in this item.

4.2.3 Summary and Minutes of the SGM, SSM, DHM, CRAHM, or ACRIHM

Issuers registered in Categories A and B must obligatorily forward, in accordance with items III and IV of Articles 30 and 31 of CVM Instruction No. 480/09, the summaries of decisions, on the same day the meeting takes place, via the Empresas.NET System, category “Meetings”, types “AGE”, “AGESP” or “AGDEB”, species “Summary of Decisions”, as well as the minutes of the meetings, within 7 (seven) business days of its holding, via “IPE Online” in the Empresas.NET System, category “Meetings”, types “AGE”, “AGESP” or “AGDEB”, species “Minutes”.

16 As provided for in paragraph 2 of Article 71 of Law No. 6,404/76, combined with paragraph 3 of Article 135 of Law No. 6,404/76 and item II of Article 31 of CVM Instruction No. 480/09, the documents relevant to the matters to be debated at the debenture holders’ general meeting must be made available, at the company’s headquarters, upon publication of the first announcement convening the general meeting. The sending of the documents and information necessary for the exercise of voting rights must be done via “IPE Online” in the Empresas.NET System, category “Meetings”, type “AGDEB”, species “Administrative Proposal”.

By analogy, issuers must forward the summaries of decisions of meetings of holders of agricultural or real estate receivables certificates (AGCRA or AGCRI), on the same day the meeting takes place, via the Fundos.NET System, as well as the minutes of the meetings, within 7 (seven) business days of its holding, via the Fundos.NET System. In this sense, it is worth noting that the summary of decisions taken at the meeting (provided for in item III of Articles 30 and 31 of CVM Instruction No. 480/09) is not the same as the minutes of the SGM or DHM (provided for in item IV of Articles 30 and 31 of CVM Instruction No. 480/09), which, in accordance with paragraph 1 of Article 130 of Law No. 6,404/76, may be drawn up in the form of a summary of events.

Therefore, the summary provided for in item III of Articles 30 and 31 of CVM Instruction No. 480/09 deals only with the result of the meeting’s deliberations.

It is worth highlighting that CVM Instruction No. 480/09 exempts the delivery of the summary of decisions to the issuer who delivers the minutes of the general meeting on the same day of its holding, as provided for in paragraph 2 of Article 30 and the sole paragraph of Article 31. To use this option, however, it is necessary for the issuer to forward the complete minutes of the general meeting on the same day the meeting is held.

In this sense, it is worth noting that, in accordance with item IV of Article 30 (companies registered in Category A) and item IV of Article 31 (companies registered in Category B) of CVM Instruction No. 480/09, the minutes of the SGM, SSM, or DHM must be accompanied, in the same file, by any declarations of vote, dissent, or protest. In addition, the minutes must contain all documents referenced and related to the meeting’s deliberations, such as contracts.

Whenever possible, SGM, SSM, and DHM minutes filed with the CVM must also contain the attendance list and the exact quorum for installation.

Similarly, the minutes of AGCRA or AGCRI must be accompanied, in the same file, by any declarations of vote, dissent, or protest, as well as contain all documents referenced and related to the meeting’s deliberations, such as contracts. And, whenever possible, the aforementioned minutes must also contain the attendance list and the exact quorum for installation.

It is also recommended that the minutes contain, at least, the indication of relevant shareholders who elected members to the board of directors and audit committee.

4.3 Projections

The disclosure of projections is information of a relevant nature, subject to the determinations of CVM Instruction No. 358/02, and the company’s Disclosure Policy must contemplate the adoption of this practice. According to item XXI of the sole paragraph of Article 2 of CVM Instruction No. 358/02, the modification of projections disclosed by the company is an example of a relevant fact. In the same way, the initial disclosure of projections or the disclosure of projections regarding periods different from those of projections previously disclosed are also considered relevant facts, and therefore the determinations of CVM Instruction No. 358/02 apply.

If the company decides to disclose projections, these must be based on rational expectations, based on neutral judgments, useful for the investor. In this sense, projections must have well-defined values (or intervals of values) and deadlines. By way of example, but not exhaustively, some expectations that, if disclosed, generally constitute projections are: revenues, profits, EBITDA, production or sales volumes, debt ratios, etc. The quantification, in terms of values and timeframes, makes such information effective estimates or projections, rather than mere expectations or trends.

The absence of any element in statements or disclosures (such as, for example, relevant premises, parameters, methodologies adopted, and deadlines) by the Company and its administrators does not remove the essence of the projection, only indicating that a certain statement or disclosure does not meet the requirements of completeness and consistency required by Article 14 of CVM Instruction No. 480/09 in all information disclosed by the issuer. It is worth noting that the SEP’s action, with regard to the analysis of information disclosed by Companies to the market, seeks to prevent unofficial information from being provided, without clear methodology, and disconnected from its planning.

The use of words or expressions other than “projection” or “estimate” does not alter the essence of a certain statement nor, therefore, its ability to guide shareholders, potential investors, analysts, or other professionals on the Company’s expectation regarding the information disclosed to the market.

At this point, it is important to differentiate the concepts of projection, the disclosure of which is optional, and is informed in section 11 of the Reference Form, from the concept of trend. The trend does not confuse with projection because it is not quantified.

CVM Instruction No. 480/09, in its Article 20, provides that the disclosure of projections and estimates is optional and determines that, when the issuer decides to disclose them, they must be:
a) included in the Reference Form; b) identified as hypothetical data that do not constitute a performance promise; c) reasonable; and d) accompanied by relevant premises, parameters, and methodology adopted, and, if these are modified, the issuer must disclose, in the appropriate field of the Reference Form, that it has made changes to the relevant premises, parameters, and methodology of previously disclosed projections and estimates (paragraph 3).

As determined by paragraph 2 of Article 20 of CVM Instruction No. 480/09, projections and estimates must be reviewed periodically, at an interval of time appropriate to the object of the projection, which in no case may exceed 1 (one) year.

The issuer must also compare, quarterly, in the “Commentary on the behavior of business projections” field of the ITR and DFP Forms (see items 3.3.3 and 3.3.4), the projections disclosed in the Reference Form with the results actually obtained in the quarter, indicating the reasons for any differences (paragraph 4 of Article 20 of CVM Instruction No. 480/09). In addition, the Reference Form (Item 11. Projections) must be updated within 7 (seven) business days counted from the alteration or disclosure of new projections or estimates (item IX of paragraph 3 or item V of

paragraph 4 of article 24 of CVM Instruction No. 480/09), without prejudice to the disclosure of a Relevant Fact, in the form of article 3 of CVM Instruction No. 358/02.

It is emphasized that whenever the premises of projections and estimates are provided by third parties, the sources must be indicated (paragraph 5 of article 20 of CVM Instruction No. 480/09), and reference to generic terms such as "Market Analyst Reports" is not appropriate.

If the company uses calculated financial metrics, such as EBITDA – Earnings Before Interest, Taxes, Depreciation, and Amortization, it must present the reconciliation with the accounting items expressed directly in the financial statements, in accordance with CVM Instruction No. 527/12.

Finally, if the disclosed projections are discontinued, this fact must be reported in the appropriate field of the Reference Form, accompanied by the reasons that led to their loss of validity, as well as disclosed as a Relevant Fact.

4.4 Shareholder Agreements

Without prejudice to the disclosure of a Relevant Fact regarding the execution of shareholder agreements, in accordance with article 2 of CVM Instruction No. 358/02, issuers registered in Category A must forward to the CVM, via "IPE Online" in the Empresas.NET System:

a) Shareholder agreements, their amendments, and other corporate pacts filed with the issuer, within 7 (seven) business days counted from their filing, in the category "Shareholder Agreement";

b) Information on shareholder agreements of which the controlling shareholder or controlled and affiliated companies of the controlling shareholder are parties, regarding the exercise of voting rights in the issuer or the transfer of the issuer's securities, containing, at a minimum, date of signature, term of validity, parties, and description of provisions related to the issuer, within 7 (seven) business days counted from the issuer's knowledge of their existence, in the category "Information on shareholder agreements provided for in article 30, item XIX, of IN No. 480/09".

It is emphasized that the alteration of their clauses, their extinction due to term or resolutory condition, or the execution of a new shareholder agreement implies their update with the CVM.

Shareholder agreements that lose validity must be cancelled via the "Cancellation of documents" functionality of the Empresas.NET System, informing in the "Reason for cancellation" field that the aforementioned shareholder agreement has lost its validity. The document, even if cancelled, will remain available for consultation on the CVM and B3 websites, in the case of issuers listed there, in the condition of cancelled document, and will state the reason for its cancellation.

4.5 Group of Companies Convention

According to item IX of article 30 of CVM Instruction No. 480/09, the controlling company and its controlled companies that constitute, in the form of article 265 of Law No. 6.404/76, groups of companies, obligating themselves to combine resources or efforts to carry out their respective objects, or to participate in common activities or ventures, are obliged to send a copy of the convention to the CVM, via "IPE Online" in the Empresas.NET System, category "Group of Companies Convention", within a period of up to 7 (seven) business days counted from its signature.

It is worth noting that Law No. 6.404/76, when providing for Groups of Companies in articles 265 to 277 (Chapter XXI), stipulated in the sole paragraph of article 267 that only groups organized in accordance with the cited chapter may use the designation with the words "group" or "group of companies".

4.6 Bankruptcy Petitions and Judgments

Without prejudice to the disclosure of a Relevant Fact regarding the petition or confession of bankruptcy, in accordance with article 2 of CVM Instruction No. 358/02, issuers must present to the CVM, via "IPE Online" in the Empresas.NET System, the following documents provided for in article 30, items XXVI and XXVII, and in article 31, items XVII and XVIII, of CVM Instruction No. 480/09, on the same day of their knowledge by the issuer:

a) bankruptcy petition, provided it is based on a relevant value, under the category "Bankruptcy Petitions";

b) judgment denying or granting the bankruptcy petition, under the category "Bankruptcy Judgment", subjects "Judgment denying the bankruptcy petition" or "Judgment granting the bankruptcy petition", as applicable.

It is alerted that the declaration of bankruptcy is one of the hypotheses for updating the Reference Form, in accordance with paragraphs 3 and 4 of article 24 of CVM Instruction No. 480/09 (see item "b)"), as well as entails the presentation of a new version of the registration form, in accordance with article 23 of CVM Instruction No. 480/09.

4.7 Petitions and Judgments Involving Judicial and Extrajudicial Recovery

Without prejudice to the disclosure of a Relevant Fact regarding the petition or declaration of judicial or extrajudicial recovery, in accordance with article 2 of CVM Instruction No. 358/02, issuers must present to the CVM, via "IPE Online" in the Empresas.NET System, the following documents provided for in article 30, items XXI to XXV, and in article 31, items XII to XVI, of CVM Instruction No. 480/09, within the deadlines indicated:

a) initial petition for judicial recovery, with all documents that support it, on the same day of filing in court, in the category "Information on Companies in Judicial or Extrajudicial Recovery", type "Initial Petition";

b) judicial recovery plan, on the same day of filing in court, in the category "Information on Companies in Judicial or Extrajudicial Recovery", type "Recovery Plan";

c) judgment denying or granting the judicial recovery petition, with the indication, in the latter case, of the judicial administrator appointed by the judge, on the same day of its knowledge by the issuer, in the category "Information on Companies in Judicial or Extrajudicial Recovery", type "Judgments";

d) petition for homologation of the extrajudicial recovery plan, with the accounting statements raised specifically to support the petition, on the same day of filing in court, in the category "Information on Companies in Judicial or Extrajudicial Recovery", type "Petition for homologation of extrajudicial recovery plan";

e) judgment denying or granting the homologation of the extrajudicial recovery plan, on the same day of its knowledge by the issuer, in the category "Information on Companies in Judicial or Extrajudicial Recovery", type "Judgments".

It is alerted that the declaration of judicial recovery and the judicial homologation of extrajudicial recovery are hypotheses for updating the Reference Form, in accordance with paragraphs 3 and 4 of article 24 of CVM Instruction No. 480/09 (see item "b)"), as well as entail the presentation of a new version of the registration form, in accordance with article 23 of CVM Instruction No. 480/09.

4.8 Trading by Directors, Persons Related to Them, and Controlled, Affiliated, and the Company Itself with Securities Issued by the Company

Article 11 of CVM Instruction No. 358/02 provides for the periodic disclosure of trades carried out:

a) by directors and members of the board of directors, the fiscal council, and any bodies with technical and advisory functions created by statutory provision;

b) by the company itself, its controlled and affiliated companies.

In the case of the natural persons referred to above, as provided for in article 11, caput and paragraph 4, of CVM Instruction No. 358/02, the communication must be made to the public company (via the DRI), indicating the quantity, characteristics, price, and date of the transactions and the method of acquisition or alienation of the securities issued by them and by controlled or controlling companies, or referenced to them, of which they are holders:

a) within 5 (five) days after the completion of each transaction;

b) on the first business day after assuming office; and

c) upon submission of the documentation for the registration of the company as a public company.

As provided in paragraph 2 of article 11, the natural persons mentioned in this article will also indicate the securities that are the property of a spouse not judicially or extrajudicially separated, partner, any dependent included in their annual income tax return, and companies directly or indirectly controlled, including the name, qualification, and CPF or CNPJ of the said persons, in accordance with paragraph 3 of the said article.

It is emphasized, especially regarding trades carried out by the natural persons referred to in article 11 of CVM Instruction No. 358/02, that any transaction carried out by them must be reported to the DRI and will result in the obligation to send the information to the CVM within 10 days after the end of the month in which such movement occurs, regardless of modification of the final balance. It is recommended that both the persons mentioned in the caput of article 11 of CVM Instruction No. 358/02 and the DRI keep archived the proof of sending and receiving messages exchanged regarding the movements carried out.

Another point to be highlighted is that the communication must cover trades with derivatives or any other securities referenced in the securities issued by the public company and, if they are public companies, their controlling and controlled companies. Financial instruments such as ADRs are covered by article 11 of CVM Instruction No. 358/02 and, therefore, must be reported, as well as fund shares that invest in shares of public companies.

Both in the case of trades by legal entities and in the case of natural persons, the DRI must send, in accordance with paragraph 6 of article 11 of CVM Instruction No. 358/02, the information subject to the cited article, monthly to the CVM, until 10 (ten) days after the end of each month in which changes in the positions held or in the month in which the assumption of office of the persons cited occurs. In this sense, in months where the 10th coincides with weekends or holidays, the information may be presented on the following business day.

It is emphasized that, in accordance with Circular Letter No. 10/2018/CVM/SEP, since 19.12.2018, the new functionality for providing the information referred to in article 11 of CVM Instruction No. 358/02 has been made available, which will allow the creation, structured and standardized filling, and sending of individual and consolidated forms ("Forms").

Such information must be forwarded via the Structured Electronic Form made available in the Empresas.NET System.

Regarding the functionality described above, once the Individual Form of each director, member of the board of directors, the fiscal council, and any bodies with technical or advisory functions created by statutory provision is completed, the Consolidated Form will be automatically generated. Similarly, upon sending the Individual Form, the system will also automatically send the Consolidated Form.

With the objective of having complete and reliable information, it is requested that Companies, as an example of what many issuers already do, voluntarily send the forms, even in months when no movements or changes in the positions of administrators and related persons have been verified. The information inserted in the Structured Electronic Forms will form three files. One containing data on the individual positions held by each administrator or related person. Another containing the consolidated position of the members of each body (management, board of directors, fiscal council, and technical or advisory bodies). The third file will contain data on individual positions of the company itself, its controlled, and its affiliated companies.

The following will be available to the external public through consultation on the CVM and B3 websites, in the case of companies listed there: (i) the consolidated positions of the administrators; and (ii) the individual positions of the company itself, its controlled, and its affiliated companies.

In the "Date of Movement" field of each form, the date of the purchase or sale operation (and not the date of physical or financial settlement of the operation) must be informed.

If there have been more than one purchase operation or more than one sale operation on the same day, of the same type of security, the Company may choose to disclose the information of each negotiation separately (date, quantity, and price) or disclose the total quantity of the day's negotiations, in which case the value to be informed in the "Volume" field must be the total amount of the operations carried out on that date. It is emphasized, however, that in both cases, purchase and sale operations must be disclosed separately, that is, it is not allowed to fail to inform purchase operations because there were sale operations on the same day or vice versa.

It is emphasized that CVM Instruction No. 590/17 included paragraph 9 in article 11 of CVM Instruction No. 358/02, which equated to trading with securities issued by the company, by its controlling or controlled companies, in these two latter cases, provided they are public companies, the application, redemption, and trading of shares of investment funds whose regulations provide that their stock portfolio be composed exclusively of shares issued by the company, its controlled, or its controlling company.

Finally, one must also observe the inclusion of paragraphs 10 and 11 in article 11, promoted by CVM Instruction No. 590/17.

4.9 Relevant Trades

By virtue of article 12 of CVM Instruction No. 358/02, any natural or legal person, or group of persons, acting jointly or representing the same interest, who comes to carry out a relevant trade with shares representing the social capital of a public company, is obliged to, immediately after the operation, communicate to the Company the change in its participation.

According to the same provision, a relevant trade is considered to be the business or set of businesses through which the participation of the aforementioned persons exceeds, upwards or downwards, the thresholds of 5%, 10%, 15%, and so on, of the species or class of shares.

Let it be noted that the relevant participation must be computed specifically in relation to the class or species of shares, so as to qualify the participation, allowing the identification of rights attributed to it. However, if there are derivatives referenced in shares of such class or species, such derivatives must be considered for the purposes of the disclosure in question, observing the specific rules commented on below.

It is also noted that, in accordance with article 20 of Instruction No. 358/02, the obligation of communication commented here:

a) applies to both trades carried out in stock exchanges and in the over-the-counter market, organized or not, as well as those carried out without the intervention of an institution part of the distribution system in Brazil and abroad; and

b) extends to trades carried out directly or indirectly by the persons referred to in article 12 of the aforementioned norm, whether such trades take place through a controlled company or through third parties with whom a contract of trust or portfolio or share management is maintained.

It is also alerted that indirect trades are not considered those carried out by investment funds of which the persons mentioned in article 12 are shareholders, provided that such funds are not exclusive, nor the trading decisions of the administrator can be influenced by the shareholders, as provided in the sole paragraph of article 20 of CVM Instruction No. 358/02.

4.9.1 Recipient of the Obligation

In accordance with article 12 of CVM Instruction No. 358/02, the obligation to send a notice to the public company, reporting the operation, falls on the investor who reaches the integer multiples of 5%. (see items 4.9.6 and 4.9.7).

As provided in this article, the increase or reduction in participation can occur both by an individual investor as well as by a group of persons, acting jointly or representing the same interest.

According to article 20 of CVM Instruction No. 358/02, the aforementioned obligation to inform extends to trades carried out indirectly through "third parties with whom a contract of trust or portfolio or share management is maintained", except, in accordance with the sole paragraph of the device, for trades carried out by funds under discretionary management.

4.9.2 Object of Relevant Participation

a. Shares

As indicated by the reading of the full text of article 12, the focus of the disclosure obligation is the direct and indirect shareholdings held in the social capital of the public company.

b. Financial Derivative Instruments and Other Securities Referenced in Shares

The disclosure obligation associated with the carrying out of relevant trades extends to financial derivative instruments and other securities referenced in shares.

Thus, this provision covers trades involving, for example, call and put options on shares and "Total Return Equity Swaps".

In accordance with article 12, paragraph 2, of CVM Instruction No. 358/02, the disclosure obligation in question applies even if the financial instruments in question contain provision for exclusively financial settlement.

The device in question also covers investment in structured operation certificates – COE and investment funds in stock indices. Thus, the holder of such instruments may be subject to the duty to communicate their participation with respect to shares underlying them.

However, article 12, paragraph 3, item IV, of CVM Instruction No. 358/02 exempts the need for communication if the COE, fund, or derivative in question has less than 20% (twenty percent) of its return determined by the share in question.

For the purposes of the norm, return must be interpreted as the "weight" of the share. For example: if a share represents 25% of the weight of a certain index that serves as a reference for the invested fund, that share is considered an indirect participation for disclosure purposes. The same reasoning applies to COEs and other derivatives.

There are situations, however, where the "weight" is not known in advance, such as, for example, in situations of COEs that guarantee at maturity better yield among 'n' shares. The norm does not apply to situations like this, in principle, without prejudice to the possibility of CVM action if it verifies in a specific concrete case that the operation was structured with the purpose of concealing relevant participation.

Regarding the rules for calculating the percentages of participation in the case of financial derivative instruments, see item 4.9.3.

A specific situation that deserves to be highlighted is that of convertible debentures and subscription warrants, the holders of which may come to become holders of shares yet to be issued. Such shares yet to be issued should not be considered in the computation of the percentages that entail disclosure.

However, if the investor carries out other acquisitions of shares or derivatives that entail the need for communication, the positions in convertible debentures or subscription warrants must be reported.

c. ADR, GDR, and BDR

American Depositary Receipts – ADR, Global Depositary Receipts – GDR, and other securities of Brazilian companies issued and/or listed abroad under foreign regulation must also be considered for the purposes of the disclosure of article 12 of CVM Instruction No. 358/02, insofar as they are titles representing shares of Brazilian public companies.

It is clarified that Brazilian Depositary Receipts – BDR must also be considered for the purposes of the disclosure provided for in the article in question, given the provision in article 21 of CVM Instruction No. 358/02, which imposes on sponsoring companies of BDR programs levels II and III the rules of the aforementioned Instruction, provided they are compatible with the provisions applicable in the countries where the shares serving as collateral for such securities were issued. However, sponsoring companies of Level I BDRs and non-sponsored BDRs do not fall under the disclosure obligation provided for in article 12 of CVM Instruction No. 358/02.

It is emphasized that, in the case of the securities mentioned in the previous paragraphs, the acquisitions, movements, and alienations subject to reporting in a notice to the market are those that correspond to 5%, 10%, 15%, and so on, of the class or species of the issuer's share represented through these titles.

d. Share Lending

It is worth noting that the investor or group of investors who exceeds, upwards or downwards, even through ownership of shares acquired by loan, thresholds of 5%, 10%, 15%, and so on, of the species or class of shares representing the capital of a public company, must proceed with the disclosure of the declaration provided for in article 12 of CVM Instruction No. 358/02.

Similarly, the shares subject to lending must be considered in the calculation of the increase or reduction in participation for the purposes of the provision in the caput and paragraphs 1 and 4 of the same article.

In this sense, the declarations referred to in article 12 of CVM Instruction No. 358/02 must discriminate the portion of the shares held by the declaring investor that was acquired or alienated through share lending.

The obligation to communicate the relevant participation partially or entirely composed of shares taken by loan is applicable regardless of the purpose to which these operations propose.

e. Indirect Participation

The indirect participation referred to in CVM Instruction No. 358/02 refers to that held through a vehicle that is under the control or decisive influence of the investor, as illustrated by the examples below:

a) company controlled, directly or indirectly, by the investor;

b) exclusive investment fund, whose only shareholder is the investor;

c) investment fund or portfolio where the administrator's decisions can be influenced by the investor;

d) person with whom the investor maintains a trust contract.

In examples "b", "c", and "d", according to the rules mentioned in this Circular (see item 4.9.1), it is the investor who must proceed with the disclosure of the Declaration provided for in article 12 of CVM Instruction No. 358/02, given the set of shares held by him directly and indirectly.

In cases where the indirect participation occurs through other companies, as in example "a" above, the indirect participation should only be taken into consideration, for the purposes of compliance with article 12 of CVM Instruction No. 358/02, in cases where the relevant participation is reached, increased, or reduced by a group of persons, acting jointly or representing the same interest (see item 4.9.4).

Thus, if investor X does not hold any other direct or indirect share participation, but is the controlling shareholder of company Y, which in turn reaches a participation corresponding to 5% of the ordinary or preferred shares of the public company, it is company Y that must proceed with the disclosure of the Declaration provided for in article 12 of CVM Instruction No. 358/02, and investor X is not obliged to make another Declaration to disclose his indirect participation in the capital of the public company.

For its part, if investor X holds direct participation in the publicly held company and is also the controlling shareholder of company Y, which also holds participation in the publicly held company, it is investor X who must proceed with the disclosure of the Declaration provided for in article 12 of CVM Instruction No. 358/02, if the sum of these participations reaches 5% or more of the ordinary or preferred shares of the publicly held company.

As already commented, note that indirect transactions are not considered those carried out by investment funds of which the persons mentioned in article 12 are unitholders, provided that such funds are not exclusive, nor can the administrator's trading decisions be influenced by the unitholders.

4.9.3 Calculation of increase or reduction in participation

The incidence of the obligation to disclose relevant transactions occurs whenever there is a crossing, upwards or downwards, of the thresholds of 5%, 10%, 15%, and so on, of participation in shares or class of shares representing the capital of a publicly held company.

It should be emphasized, however, that, in addition to the shares themselves, derivatives referenced in such shares, whether for physical or financial settlement, must be considered. When taking derivatives into account in verifying the aforementioned percentages, the following rules must be observed:

a) the total quantity of shares referred to in the derivative instrument must be taken into account, without adjustments based on the delta of the position; b) there are two parallel counts: (i) one involving, together, financial derivative instruments for physical settlement and shares and (ii) another involving only financial derivative instruments for financial settlement – disclosure is necessary when the percentages provided for in the regulation are reached in any of these counts and the disclosure must cover both shares and other instruments referenced therein, regardless of their form of settlement; c) whenever a financial derivative instrument, COE, or index fund allows for the possibility of physical settlement (including through the redemption of shares in shares), it must be considered as physical settlement; d) “sold” positions by themselves do not entail the need for disclosure, however (i) nor is there compensation between “bought” and “sold” positions and (ii) once the need for disclosure is triggered, it must cover even “sold” positions; e) “bought” positions are considered, for example: shares held spot, instruments that confer the right or obligation to acquire shares at a future date, and swap contracts that confer on the investor payments based on the return of the shares; f) “sold” positions are considered, for example, those resulting from instruments that confer the right or obligation to alienate shares or that imply the need to make payments positively related to the return of the shares;

g) if a share has a weight of less than 20% in the determination of the return of a certain financial derivative instrument, COE, or market index investment fund, this share must not be aggregated with other positions possibly held in this share by the investor; h) if a share has a weight of more than 20% in the determination of the return of a certain financial derivative instrument, COE, or market index investment fund, this share must be aggregated with other positions possibly held in this share by the investor, weighting the notional value of the instrument in question by the respective weight of the share; and i) shares that do not yet exist and that may be issued as a result, for example, of rights associated with convertible debentures or subscription warrants must not be aggregated with positions already held by the investor.

To illustrate the incidence of some of the situations mentioned, suppose a company has its capital represented by 200 shares, being 100 ordinary shares and 100 preferred shares of a single class. Suppose, further, that the investor carries out a series of transactions with shares issued by this company and derivatives referenced in such shares, as described below.

At the first moment, 4 ordinary shares and 4 preferred shares are acquired. At this moment, no disclosure is required, as the 5% threshold is computed with respect to each species of shares and it was not exceeded in either ordinary or preferred shares.

Subsequently, the investor enters into a swap contract for exclusively financial settlement in which it receives payments determined based on the positive variation of 4 preferred shares issued by the company. No disclosure is yet necessary, due to the separate computation of derivatives for exclusively financial settlement, that is, the 4 preferred shares in the swap contract are not added to the 4 preferred shares previously held.

At a later moment, the investor acquires a put option on 6 preferred shares. Regardless of the form of settlement of this contract and the fact that it represents 6% of the total of this species of shares, no disclosure is necessary and this “sold” position is disregarded in the calculation 17.

Finally, the investor acquires a call option on 2 preferred shares, with physical settlement. The preferred shares referenced in this option contract are added to the 4 preferred shares held spot previously, causing the 5% percentage to be exceeded and, thereby, triggering the need for disclosure. This disclosure will cover and discriminate the 4 ordinary shares held spot, the 4 preferred shares held spot, the 4 shares referenced in the swap contract, the 6 preferred shares referenced in the put option, and the 2 preferred shares referenced in the call option.

Note, however, that in this particular example, the investor's obligation to communicate does not entail a corresponding obligation, on the part of the company, to update field 15.1 of the Reference Form. This is because the investor's position in shares did not exceed the 5% percentage of any of the species (see item 10.2.15).

17 Although the “sold” position is disregarded in the calculation with respect to an investor, see item 4.9.4 below, with regard to intragroup positions in derivatives.

Despite this, the update of field 15.1 is recommended, in order to reflect the most recent share position that has been disclosed by the investor. Additional information made public by the investor regarding financial derivative instruments may be included in field 15.8 of the form.

Finally, it is warned that the variation in share participation is not exclusively tied to a single operation, being also assessed cumulatively, and referring to the acquisition, alienation, or extinction of shares and rights over shares both onerous (purchase and sale, swap, and loan) and gratuitous (donation).

4.9.4 Group of persons acting in concert or representing the same interest

The obligation to communicate the variation in relevant share participation covers not only individual investors, but also groups of persons acting in concert or representing the same interest. In order to facilitate understanding of the concept covered by the expression “representing the same interest”, the following are exemplary hypotheses of linkage between shareholders:

a) link due to kinship, contract, or shareholders’ agreement providing for voting rights; b) two or more companies under common control; c) company and its direct or indirect controlling shareholder; d) exclusive fund and its sole unitholder; and e) situations where there is common discretionary management of resources.

Considering the concept of indirect participation (see item “e)”) and except as provided in the following paragraph, if relevant share participation has been reached by a set of investors acting in concert or representing the same interest, the Declaration must discriminate them, one by one, with indication of their respective participations, even if none of these investors holds or moves the 5% (five percent) percentage individually. It must also identify the investors with indirect participation in the share capital of the publicly held company and indicate the total participation held, directly and indirectly, by them.

If the relevant participation is reached by a set of investors under common discretionary management, the declaration to be provided by the administrator must identify the manager and indicate the total share participation held, jointly, by the funds and portfolios under its management. It is not mandatory to discriminate the funds or portfolios and their respective share participations, according to a Decision of the CVM Collegiate Board, in an extraordinary meeting held on 11.03.2011 (CVM Process RJ2011/2324) 18.

18 See http://conteudo.cvm.gov.br/decisoes/2011/20110311_R1/20110311_D01.html.

It is worth clarifying that, under the same Decision, in the case where a relevant participation is reached individually by a certain fund or portfolio under discretionary management, the Declaration must identify the manager and the total share participation held, jointly, by all funds or portfolios under its management, and it is not mandatory to reveal the fund holding the relevant participation.

Finally, situations are highlighted where two or more companies of the same economic group trade with each other, especially through derivative contracts referenced in the shares in question, for the transfer of economic exposure related to a certain share.

As already clarified by the CVM Collegiate Board in a previous decision (e.g. decision in Process CVM RJ2009/1365 19), the purpose of CVM Instruction No. 358/02, in requiring the disclosure of the trading of relevant participations, is to inform the market about significant changes in the distribution of patrimonial and political rights among shareholders, as well as in the dispersion and liquidity of the company's shares. In the case of derivative transactions carried out between companies of the same group, the accumulation of information resulting from the disclosure of each of these transactions (for example, in scenarios where the risk of an operation contracted by a company of the same group is transferred to another company(ies) of the same group) could impact the quality of the information provided to the market. In this sense, and in cases where it may be considered that the companies of the group are “acting in concert or representing the same interest”, under article 12 of the Instruction, derivative transactions between persons of the same group must be disregarded in the disclosure of relevant participation.

4.9.5 Responsibility of the administrator or manager

By virtue of article 19 of CVM Instruction No. 558/15, the administrator of a securities portfolio must guarantee, through adequate internal controls, the permanent compliance with the norms and regulations in force, referring to the various alternatives and modalities of investment, to the activity of portfolio administration itself, and to standards of ethical and professional conduct.

Therefore, in the investor's omission regarding compliance with what is determined in article 12 of CVM Instruction No. 358/02, the administrator of securities portfolios or the manager of resources may eventually be held administratively liable for the provision of such information, based on article 19 of CVM Instruction No. 558/15, when: (i) it represents the same interest of its clients, being directly and exclusively responsible for the operation; (ii) it has unequivocal knowledge about the effective possibility of reaching relevant share participation; and (iii) it can exercise in a discretionary manner the political right of shares of a company acquired for its clients.

Moreover, according to paragraph 3 of article 79 of CVM Instruction No. 555/15, the administrator of an investment fund is liable for damages resulting from its own acts and omissions that caused them, whenever it acts contrary to the law, regulation, and normative acts issued by the CVM.

In light of the above, the administrator of investment funds may be held liable for infringement of article 12 of CVM Instruction No. 358/02.

19 See http://conteudo.cvm.gov.br/sancionadores/sancionador/2010/20100713_RJ20091365.html.

4.9.6 Time and form of disclosure

Under article 12 of CVM Instruction No. 358/02, the communication of the increase or reduction of relevant participation must be made immediately after the participation referred to therein is reached. As a rule, in order to observe the deadline established in the aforementioned article, the disclosure must occur by the start of trading on the fourth business day following: (i) the date of execution of the buy or sell order for securities admitted to trading on markets managed by B3; or (ii) the date of celebration of a contract - through an unlisted instrument - that may result in the exercise of rights that have as a basis shares that, considering the participation already held by the investor, will represent a relevant percentage of the species or class of shares issued by a publicly held company.

The exception to the above rule occurs in cases where the transaction was made with the purpose of altering the control or administrative structure of the company. In these cases, the same disclosure regime of Relevant Facts must be followed, as provided for in article 3 of CVM Instruction No. 358/02.

In the case of securities convertible into shares and other financial derivative instruments referenced in such shares, without prejudice to the disclosure of acquisition of such titles (see item 4.9.3), the communication must also be promoted upon conversion into shares or physical settlement of the financial instrument, provided that, by virtue of such conversion or settlement, the investor's share participation exceeds 5%, 10%, or 15% and so on.

Regarding the hypothesis of expiration of the conversion or settlement period of such securities and financial derivative instruments, without such conversion or settlement occurring, such case must be treated as an alienation of the security or derivative instrument. Thus, the communication must be promoted if a percentage lower than 5%, 10%, 15%, and so on is reached, observing the method of computation described in item 4.9.3 above.

As a rule, an increase in participation greater than 5% does not need to be disclosed in the press.

Only in cases where the acquisition results from or has been carried out with the objective of altering the composition of control or the administrative structure of the company, as well as in cases where the acquisition generates the obligation to carry out a public offering, under CVM Instruction No. 361/02, the acquirer, in addition to sending the aforementioned declaration to the Company, must promote its disclosure through the press or in a news portal present on the Internet, under article 3, paragraph 4, of CVM Instruction No. 358/02.

The “Declarations of Acquisition of Relevant Share Participation” and the “Declarations of Alienation of Relevant Share Participation” must be sent to the IR Department of the publicly held company.

Once received by the Company, the IR Department must forward the declarations through “IPE Online” in the Empresas.NET System, category “Market Communication”, type “Acquisition/Alienation of Share Participation (article 12 of CVM Instruction No. 358)” and species “Declaration of alienation of relevant share participation – article 12 of CVM Instruction No. 358/02” or “Declaration of acquisition of relevant share participation – article 12 of CVM Instruction No. 358/02”. In the case of declarations that have been published, by virtue of paragraph 5 of article 12 or spontaneously, the dates and newspapers in which the publication was carried out must be informed.

Additionally, the IR Department must evaluate whether, due to the information received, the share participation (without considering derivatives, whether physical or financial settlement) has exceeded the threshold of 5%, 10%, 15%, and so on. If so, the IR Department must, likewise, promote the necessary update of the information provided on the subject in the Reference Form, under paragraphs 3, items V and VI, and 4, item III, of article 24 of CVM Instruction No. 480/09.

Finally, if the IR Department believes that the declaration of acquisition or alienation of relevant share participation presented by the investor in compliance with article 12, caput, of CVM Instruction No. 358/02, does not reflect the reality ascertained by the company, it must include its reservation when retransmitting the declaration, informing what share participation the company believes to be correct.

4.9.7 Content of the declaration of increase and reduction of participation

Both acquirers and sellers, where applicable, must disclose the information provided for in items I to VI of article 12, caput, of CVM Instruction No. 358/02, namely:

a) name and qualification, indicating the registration number in the National Registry of Legal Entities or in the Registry of Natural Persons; b) objective of the participation and quantity sought, containing, if applicable, a declaration by the acquirer that the transactions do not aim to alter the composition of control or the administrative structure of the company; c) number of shares and other securities and financial derivative instruments referenced in such shares, specifying the quantity, class, and species of shares referenced; d) indication of any agreement or contract regulating the exercise of voting rights or the purchase and sale of securities issued by the company; and e) if the shareholder is resident or domiciled abroad, the name or corporate name and the registration number in the Registry of Natural Persons or in the National Registry of Legal Entities of its attorney or legal representative in the Country for the purposes of article 119 of Law No. 6.404/76.

It should be noted that, in the case of funds and portfolios administered, the information provided in letter “a” above must refer to the manager, as guided in this circular (see item 4.9.4).

The communication must also contain the identification of the vehicles that led to the relevant acquisition (see item “e)”).

With regard to the objective of the participation provided for in letter “b)” above, if applicable, the acquirer must inform that it is an operation carried out with the objective of hedging obligations assumed by it in derivative contracts.

4.9.8 Disclosure of declaration by non-resident investor

Under articles 12 and 21 of CVM Instruction No. 358/02, it is the shareholder's responsibility, regardless of its domicile, to disclose the declaration of acquisition or alienation of relevant share participation, by forwarding the information to the Company.

In the case of the non-resident investor, it is the responsibility of its legal representative, under item III of article 3 of the Regulation Annex I to CMN Resolution No. 4.373/14, “to immediately communicate to the Central Bank of Brazil and to the Securities and Exchange Commission, observing their respective competencies, the extinction of the representation contract, as well as the occurrence of any irregularity of which it takes knowledge”.

In cases where the omission of the non-resident investor regarding compliance with what is determined in article 12 of CVM Instruction No. 358/02 is verified, its legal representative may eventually be held administratively liable, based on the sole paragraph of article 3 of the Regulation Annex I to CMN Resolution No. 4.373/14.

4.10 Trading Policy

The formulation of a trading policy for securities, provided for in article 15 of CVM Instruction No. 358/02, is the initiative of the issuer and is optional. However, the preparation of such a policy is recommended, as it is very useful for issuers to establish additional conduct norms to those provided for in Law No. 6.404/76 and CVM Instruction No. 358/02, for transactions involving, mainly, its own issued shares.

The trading policy should not, therefore, represent a mere repetition of the text of the aforementioned Instruction, but contain a detailed description of the procedures and measures effectively adopted by the company to avoid infringements of the norms that deal with trading in the company's shares by the company itself, controlling shareholders, administrators, members of the fiscal council or other bodies created by statutory provision.

In the event that the issuer admits the trading of persons with access to relevant information not disclosed to the market based on individual investment plans (see item 4.11), such prerogative must be disclosed in the trading policy, under paragraph 5 of article 15-A of CVM Instruction No. 358/02. In this case, the trading policy will be mandatory.

Issuers registered in Category A that have this policy must forward it through “IPE Online” in the Empresas.NET System, category “Trading Policy of the company's shares”, as provided for in article 30, item XI, of CVM Instruction No. 480/09.

Although this obligation does not exist for issuers registered in Category B, voluntary sending in the manner described above is recommended.

If the issuer chooses to prepare the trading policy and the disclosure policy as a single document, it must forward it through the Empresas.NET System, both through the category “Trading Policy of the company's shares” and through the category “Disclosure Policy of Relevant Act or Fact”.

4.11 Investment Plan
Investment plans, provided for in article 15-A of CVM Instruction No. 358/02, are individual and optional.
Controlling shareholders, administrators, members of the fiscal council and of any bodies with technical or advisory functions, created by statutory provision, or anyone who, by virtue of their position, role or position in the open company, its holding company, its subsidiaries or affiliates, has knowledge of information regarding a material act or fact, may formalize investment plans. The investment plan allows its holder to trade securities with knowledge of material information not yet disclosed to the market, provided that the following requirements are met:
a) prior written formalization before the DRI; b) establishment, in an irrevocable and unalterable manner, of the dates and values or quantities of the transactions to be carried out; c) minimum period of 6 (six) months for the plan, its possible modifications and cancellations to take effect; d) existence of no more than one investment plan in force simultaneously; e) absence of operations that nullify or mitigate the economic effects of the operations to be carried out in accordance with the investment plan; and f) at least semi-annual verification by the board of directors of the adherence of the negotiations carried out by the participant to the investment plan formalized by him. Regarding item "b" above, it is worth noting the possibility that a set of parameters be defined, such as algorithms and formulas, which, once applied to the concrete case, determine whether the transactions will be carried out or not and, if so, what the dates and financial values involved are. In this case, however, all parameters must be previously and objectively defined and be irrevocable and unalterable, in order to eliminate the participant's ex post discretion in carrying out or not the transaction in question. Regarding item "e", attention is drawn to the impossibility of carrying out operations with financial derivative instruments for the purpose of hedging the commitment assumed by the participant in the investment plan. The investment plan may also allow its holder to trade securities in the 15-day period prior to the disclosure of the issuer's quarterly (ITR) and annual (DFP) information, provided that, in addition to the above requirements, the following is also observed:
a) a schedule with specific dates for the disclosure of ITR and DFP forms has been approved; and

b) the plan obliges the participant to revert to the company any avoidable losses or gains obtained in negotiations resulting from a possible change in the disclosure dates of the ITR and DFP forms, calculated by reasonable criteria defined in the plan itself.
Some open companies opt to extend similar restrictions described in this section to a larger group of people, such as employees and collaborators, requiring, in addition, that the negotiations of these people take place in line with an investment plan signed by the participant.
Regarding this, it should be clarified that there is no impediment for such additional restrictions to be established by the companies, which is one of the functions of the investment policy, provided for in article 15 of CVM Instruction No. 358/02. It should be noted, however, that to be entitled to the prerogatives described above, the investment plan must satisfy all the specified requirements, including the periodic verification of transactions by the board of directors, which may prove difficult in cases where the participants in the plan are very numerous. In this sense, it is permitted for companies to require their collaborators to have investment plans that will not be periodically monitored by the board of directors, and for this reason, also do not serve to allow transactions in periods in which CVM Instruction No. 358/02 determines that they should not be carried out. Even in these cases, it is recommended that the company have other internal procedures for regular verification of the investment plans in question. It should be clarified that investment plans should not be sent via the Empresas.NET System. Finally, it is recommended to consult the decision of the Collegiate Body, in the meeting of 19.11.2019, regarding Process CVM No. 19957.005109/2018-08 20 .
4.12 Disclosure Policy
The policy for disclosure of material acts or facts is a mandatory document established in article 16 of CVM Instruction No. 358/02, for all issuers. Such a document must include, at minimum, the channel or channels of communication used to disseminate information about material acts and facts (in accordance with article 3, paragraph 4, of CVM Instruction No. 358/02) and the procedures related to maintaining confidentiality regarding undisclosed material information. It is recommended that the Information Disclosure Policy provide for adequate internal controls for each type of information to be treated, such as through the creation of a classification by order of relevance, and access controls for each type of information. Additionally, it is advisable that the Disclosure Policy establish objective criteria for determining the time, manner and means of disclosing information, and for identifying exceptional cases that would justify an exception to the rule of immediate disclosure and the request to maintain confidentiality with the CVM. CVM Instruction No. 358/02 did not make any restriction or exception to the obligation to adopt the document. Therefore, it is sufficient for the company to be regularly registered with the CVM, regardless of the corporate structure and the nature of the securities issued, to have the duty to adopt the disclosure policy. 20 See http://conteudo.cvm.gov.br/decisoes/2019/20191119_R1/20191119_D1067.html.

Issuers must send the Disclosure Policy to the CVM, via “IPE Online” in the Empresas.NET System, category “Disclosure Policy for Material Act or Fact”, as provided for in article 30, item XII (for issuers registered in Category A), and article 31, item VII (for issuers registered in Category B), both of CVM Instruction No. 480/09.
If the issuer chooses to prepare the trading policy and the disclosure policy as a single document, it should send it via “IPE Online” in the Empresas.NET System, both through the category “Trading Policy for the company's shares” and through the category “Disclosure Policy for Material Act or Fact”.
The disclosure policy for material acts or facts must be updated whenever there is any change in the communication channels used by the company, in accordance with paragraph 7 of article 3 of CVM Instruction No. 358/02, prior to the implementation of the change.
It is recommended that the disclosure policy be drafted in a clear, objective and detailed manner, bringing specific procedures, such as:

Objective criteria to distinguish, when possible, cases of disclosure of information to the market through Material Fact or Market Notice;
Obligations of the DRI to disclose information to the market, as well as to supervise any information leaks in the media and/or atypical fluctuations related to the trading of the company's securities;
Time of disclosure of material facts, which should preferably occur after the closing of the trading session (in Brazil and in any foreign markets where the company's securities are traded);
Procedures to be adopted when the disclosure of a Material Fact has to occur during the trading session, addressing the request for suspension of trading of the securities until the material information is adequately disseminated;
Contingency plan in case of leakage of material information, in order to accelerate the disclosure of information through official channels and avoid the persistence of a situation of information asymmetry;
Maintenance of controls identifying people who have knowledge of material facts not yet disclosed to the market;
Obligations of controlling shareholders, administrators and other persons linked to the company to promptly notify the DRI in case of having knowledge of material information;
Procedures to be adopted when there is doubt about the relevance of certain information; Recommendations to ensure compliance with the duty of confidentiality;
Cases of exceptions to the obligation to disclose; and
Responsibility in cases of non-compliance with the disclosure policy.

4.13 Corporate Bylaws
In accordance with CVM Instruction No. 480/09, issuers registered in Category A and Category B are obliged, by virtue of item XIII of article 30 and item XXIII of article 31 of the aforementioned Instruction, respectively, to submit the consolidated corporate bylaws, within 7 (seven) business days counted from the date of the assembly that deliberated the amendment. The submission must be made through “IPE Online” in the Empresas.NET System, in the category “Corporate Bylaws”. The submission of the corporate bylaws attached to the minutes of the assembly that deliberated its amendment does not dispense with its submission via “IPE Online” in the Empresas.NET System in the category “Corporate Bylaws”.
4.14 Meetings of the Board of Directors and the Fiscal Council
CVM Instruction No. 480/09 determines, in items V and VI of article 30, that issuers registered in Category A must send, via “IPE Online” in the Empresas.NET System, the following information, within the indicated deadlines:
a) minutes of Board of Directors meetings, provided they contain deliberations intended to produce effects vis-à-vis third parties, accompanied by any statements sent by the councilors, within 7 (seven) business days counted from their holding, via the “Board Meeting” category, type “Board of Directors”, species “Minutes”; b) minutes of Fiscal Council meetings that approved opinions, accompanied by any statements sent by the councilors, within 7 (seven) business days counted from the date of disclosure of the act or fact subject of the opinion, via the “Board Meeting” category, type “Fiscal Council”, species “Minutes”. It should be noted that issuers registered in Category B are obliged to send, via the Empresas.NET System, in the manner described above, the minutes of Board of Directors meetings, provided they contain deliberations intended to produce effects vis-à-vis third parties, accompanied by any statements sent by the councilors, within 7 (seven) business days counted from their holding, as provided for in item V of article 31 of CVM Instruction No. 480/09. Issuers whose securities are admitted to trading in organized markets must also observe the rules established by the entities administering such markets regarding the deadline for providing information about Board of Directors deliberations that impact the rights and manner of trading of their issued securities. It should also be noted that, by virtue of the provision contained in article 14 of CVM Instruction No. 480/09 which determines that “the issuer must disclose true, complete, consistent information that does not mislead the investor”, the content of the minutes of meetings of the administration and the fiscal council must inform the reasons that led to any contrary vote, as well as must contain any individual statements that have been presented by its members, in cases where such information may influence the investor's decision. Finally, although the minutes relating to the meetings of the board of directors have not been included in the Instruction among the eventual information of mandatory presentation, their voluntary submission is recommended.

4.15 Communication of auditor change
As determined by article 28 of CVM Instruction No. 308/99, the administration of the audited entity is responsible, within 20 (twenty) days, for communicating the change of auditor to the CVM, whether or not there is a termination of the contract for the provision of audit services, with justification for the change, which must include the consent of the replaced auditor. Such communication must be sent to the CVM, by the Company's DRI, via “IPE Online” in the Empresas.NET System, category “Market Notice”, type “Change of auditor (article 28, CVM Instruction No. 308/99)”. It should be highlighted that, according to article 29 of the aforementioned Instruction, it is the responsibility of the fiscal council of the audited entity, when in operation, to verify the correct compliance by the administrators with the provisions of article 28. It is also worth noting that, as determined by item XII of paragraph 3 (for issuers registered in category “A”) and item VII of paragraph 4 (for issuers registered in category “B”), both of article 24 of CVM Instruction No. 480/09, the Reference Form must be updated within 7 (seven) business days counted from the date of communication by the issuer of the change of the independent auditor, even if the start of the provision of services of the new auditor is on a future date. In this sense, as provided for in annex 24 of CVM Instruction No. 480/09, the date of hiring of the services covered by the change communicated by the company must be informed in field 2.1.c of the Reference Form. Furthermore, the company must specify in item 2.3 “Provide other information that the issuer deems relevant” the first document that will be subject to analysis by the new auditor. In addition, the issuer must resend the registration form with the updated data of the new independent auditor, within 7 (seven) business days counted from the fact that caused the alteration (in this case, this must be understood as being the aforementioned communication of change of auditor), in accordance with article 23 of CVM Instruction No. 480/09. It should be noted that item 3.3 of the registration form – “Date of start of service provision” must be understood as the start date of the period of the first document audited by the new auditor. Example:
In the case of the 1st ITR/17, the start date would be 01.01.2017.
4.16 Communication on transactions between related parties
As determined by article 30, item XXXIII, of CVM Instruction No. 480/09, open companies registered in Category A must disclose communication on transactions between related parties, in accordance with the provisions of Annex 30-XXXIII of the aforementioned Instruction, within 7 (seven) business days from the occurrence of each transaction subject to disclosure. Such disclosure must occur through “IPE Online” in the Empresas.NET System, category “Communication on Transaction between Related Parties”.

Considering the diversity of ways in which transactions between related parties can take place, it is not possible to establish, a priori, uniform and objective criteria or to determine all the situations that may demarcate the moment of occurrence of a transaction of this type.
However, without prejudice to the provisions of CVM Instruction No. 358/02, SEP advises that the term “occurrence” be interpreted as the date of celebration of the contract in accordance with the applicable legislation, which may not exceed: (i) the date of signing of the contract, if any, which establishes the transaction or set of transactions between related parties; or (ii) in exceptional cases, where, given the nature of the business or the circumstances of the case, it is not possible to adopt the moment of celebration of the contract as a reference, the date of settlement of the transaction or the date of start of its execution, whichever occurs first. It is important that administrators, in the exercise of their fiduciary duties, implement internal controls that ensure the identification of these operations throughout the preliminary negotiation and timely disclosure upon their celebration. In accordance with Annex 30-XXXIII of CVM Instruction No. 480/09, only the following should be subject to disclosure:
I – the transaction or the set of related transactions, whose total value exceeds the lower of the following values:
a) R$50,000,000.00 (fifty million reais); or b) 1% (one percent) of the issuer's total assets; and II – at the discretion of the administration, the transaction or the set of related transactions whose total value is lower than the above parameters, taking into account: (a) the characteristics of the operation; (b) the nature of the related party's relationship with the issuer; and (c) the nature and extent of the related party's interest in the operation. Regarding item I above, item III of article 3 of Annex XXXIII of CVM Instruction No. 480/09 establishes that:
“III – “related transactions” is understood as the set of similar transactions that have a logical relationship with each other by virtue of their object or their parties, such as:
a) subsequent transactions that result from a first transaction already carried out, provided that this has established its main conditions, including the values involved; and b) transactions of continued duration that encompass periodic installments, provided that the values involved are already known.”
In this sense, communications on transactions between related parties regarding contracts that the company's administration identifies as relevant must be disclosed within the deadline provided for in article 30, item XXXIII, of CVM Instruction No. 2009/480, counted from the date of signing, renewal or amendment of the contract being disclosed. The concept of relevance must take as a basis the values described in Annex 30-XXXIII and the best estimates of the administration, even if it is not possible, on the date of celebration of the contract, to determine the exact value that will result from its execution. Additionally, it is recommended that these communications include a reference to the explanatory note in the financial statements, as well as to the items of the Reference Form that detail the evolution of the described contract. The hiring, for example, of a related party in 2017 to provide services totaling R$40 million would not be subject to communication, in principle, provided that the company's administration does not deem it relevant due to other factors. If, in 2018, there is a new hiring of the same related party to provide new services, with a new contract, totaling R$10 million, but which fits the definition of related transaction set out above, the transactions must be reported. The fact that the hiring occurs in different years does not rule out the need for disclosure. If there are, for example, monthly contracts with a related party and in a certain month the amount of R$50 million is reached, communication is required. If in the following month, there is a new contract of R$5 million, for example, no new disclosure is required. Communication is required only when a new amount of R$50 million (or 1% of the issuer's total assets) is reached. Transactions referenced in foreign currency must be periodically verified for analysis of their classification for disclosure. The following do not need to be subject to disclosure: (a) transactions between the issuer and its direct and indirect subsidiaries, except in cases where there is participation in the share capital of the subsidiary by the direct or indirect controlling shareholders of the issuer, its administrators or persons linked to them; (b) transactions between direct and indirect subsidiaries of the issuer, except in cases where there is participation in the share capital of the subsidiary by the direct or indirect controlling shareholders of the issuer, its administrators or persons linked to them; and (c) remuneration of administrators. For illustrative purposes of the logic of incidence and non-incidence of the norm, see the flowchart below:
Imagine that the issuer reporting the information is A.
Transactions (i) between A (or its subsidiaries Sub A1 and Sub A 2) and the Controller; and (ii) between A (or its subsidiaries Sub A1 and Sub A 2) and B.
Controller
A
Sub A1 Sub A2
B

There is no obligation to disclose (i) transactions between Sub A1 and Sub A2 inter se, nor (ii) transactions between A and its subsidiaries. Such disclosure would only become mandatory if the Controlling shareholder or B held participation in Sub A1 or Sub A2 by means other than via A 21.

It is highlighted that, in accordance with the Collegiate Body's decision in Process CVM No. 19957.003597/2018-19, 22 ordinary and recurring cash and treasury management operations, performed within the intervals of the tariff tables published by the contracted financial institutions, are exempt from disclosure under Annex 30-XXXIII, even if they exceed the financial thresholds referred to in the regulation. This exemption does not cover the disclosure of transactions between related parties in the Reference Form and in the financial statements, in the manner of the specific applicable regulation, nor does it exempt administrators and controlling shareholders from the duties established in the Corporations Law.

Still within the scope of the aforementioned decision, it is worth noting that the CVM Collegiate Body understood the forwarding of the aforementioned process to the Market Development Superintendence – SDM, so that it could conduct studies on the subject, aiming at eventual regulatory alteration that encompasses the exemption currently discussed.

It is also highlighted, the decision of the Collegiate Body within Process CVM No. 19957.001316/2020-08, following the statement of the SEP, which understood (i) that it is reasonable to grant the exemption from compliance with Article 30, item XXXIII, of CVM Instruction No. 480/09, for operations of granting credit and providing banking services, routine in the case of financial institutions; and for transactions involving the issuer and sponsored entities, and (ii) on the other hand, that it is not reasonable to exempt compliance with the cited regulation for transactions with subsidiaries in which there is participation in the subsidiary's share capital by the issuer's direct or indirect controllers, its administrators, or persons linked to them, but at a level below 1%.

Considering the diversity of forms in which transactions between related parties may occur, it is not possible to establish, a priori, an exhaustive list of which would be the main terms and conditions to be highlighted in the communication. However, it is always important for the company to consider that the objective of the communication is to allow the investor to know – and, thus, monitor – the relevant transactions carried out by the company with related parties. In this sense, the communication must contain the information necessary for the investor to be able to evaluate whether the transaction was taken in the best interest of the company.

For example, in a purchase and sale or lease contract, it is essential that information about the transacted asset, the agreed price, and the settlement deadlines be disclosed, as well as other relevant information in the specific case. Furthermore, still as an example, in the case of a loan or assignment of credits, it is important that the investor has access, among other things, to understandable information regarding interest rates (including, if variable, which index is used), any guarantees provided or received by the company, and settlement deadlines. In other words, the communication must include the summarized information that the company's senior management itself should have access to, loyally and diligently, to analyze whether the terms and conditions of the transaction are compatible with the terms and conditions practiced in the market.

21 This example considers only corporate participations of the controlling shareholder, but the same logic applies to administrators.
22 See http://www.cvm.gov.br/decisoes/2018/20181227_R1/20181227_D1018.html.

The disclosure of this communication does not interfere with the other legal and regulatory obligations to disclose information about transactions between related parties, such as those existing in the Reference Form or in the companies' financial statements.

It is recommended that issuers prepare and disclose a Related Party Transactions Policy, approved by the Board of Directors, which provides procedures and criteria that allow (i) the identification of related parties; (ii) the identification of suppliers, service providers, and customers who have transactions with parties related to the Company; (iii) the criteria and procedures related to the selection of the counterparty, evaluation, and approval of contracts, with the objective of mitigating potential conflicts of interest and ensuring that all transactions with related parties are carried out in the interest of the Company.

Whenever such a document exists, it must be forwarded through the Empresas.net System, under the category “Related Party Transactions Policy”.

The Brazilian Corporate Governance Code brings suggestions of practices to be adopted by issuers with the objective of ensuring the equity of operations. According to the aforementioned document, the board of directors must approve and implement a policy on transactions with related parties, which includes, among other rules:
a) provision that, prior to the approval of specific transactions or guidelines for contracting transactions, the board of directors requests from the management alternatives to the market transaction in question, adjusted by the risk factors involved; b) prohibition of forms of remuneration for advisors, consultants, or intermediaries that generate conflicts of interest with the company, the administrators, the shareholders, or classes of shareholders; c) prohibition of loans in favor of the controller and administrators; d) the hypotheses of transactions with related parties that must be based on independent evaluation reports, prepared without the participation of any party involved in the operation in question, whether it be a bank, lawyer, specialized consulting company, among others, based on realistic premises and information endorsed by third parties; and e) that corporate restructuring involving related parties must ensure equitable treatment for all shareholders.

It is also recommended that the Policy provides that transactions with related parties be analyzed by the Statutory Audit Committee, when present, or another specific independent body, which would be responsible for evaluating the conditions under which such transactions are established and ensuring that they are carried out in the best interest of the company. The approval of these operations must be preceded by effective negotiation, in which persons without personal interests in the matter participate on behalf of the company, and it is also recommended the creation of approval levels according to the relevance of the transaction.

4.17 Communication regarding indemnity contracts
In accordance with Circular Letter No. 9/2018/CVM/SEP, whenever there is a commitment to provide indemnity for administrators, the company must forward, through the Empresas.Net System, the indemnity contracts, their amendments, and any other documents that also reflect the terms and conditions applicable to the indemnity regime.

In this sense, the associations to be used for the aforementioned submissions are: Category “Indemnity Contracts” and Types: “Indemnity Contracts and Amendments” and “Other Documents Related to Indemnity Contracts”, according to the document to be forwarded.

Finally, we suggest consulting CVM Advisory Opinion No. 38, of September 25, 2018, Circular Letter No. 9/2018/CVM/SEP, and item 7.11 of this document.

4.18 Equity-based remuneration plans
The company must disclose, through the Empresas.NET System, any equity-based remuneration plans it possesses, including stock purchase option plans.

Traditional stock purchase option plans must be archived in “IPE Online” within the Empresas.NET System, under the category “Option Plan”.

As for other equity-based remuneration plans, they must be archived under the category “Equity-Based Remuneration Plan (Except Option Plan)”.

The reference date of the document must represent the date of approval of the remuneration plan.

All equity-based remuneration plans regarding the remuneration of administrators of the publicly-held company must be archived in the Empresas.NET System, even if the shares used in the plan are not issued by the company itself, but by the controlling, controlled, affiliated, or commonly controlled company.

Additionally, in the case of exercise of the plan, through the issuance of new shares of the publicly-held company, the corporate act of issuance of the aforementioned shares must be archived, which must contain, in addition to the quantity of shares issued, the new value of the share capital and its composition, the right of the new shares in any distribution of dividends or interest on equity capital that may be declared by the company.

4.19 Results Release
Companies that opt to disclose a results release must do so through “IPE Online” in the Empresas.NET System, category “Economic-Financial Data”, type “Press-Release”. This disclosure must generally occur after the disclosure of the financial statements, annual or interim, that served as the basis for its preparation.

In preparing results releases, considering the risks arising from the disclosure of only a portion of the information contained in the financial statements, special attention must be paid to the observance of the principles contained in Articles 14 to 16 of Instruction No. 480/09, particularly regarding the disclosure of complete, consistent information that does not mislead the investor.

In this sense, the content and form of the press release must be structured with the concern of avoiding the disclosure of information that may mislead the investor to a different conclusion than that which would be obtained after reading the complete financial statements. Among other aspects, positive and negative information of equal relevance included in the press release must be disclosed with the same prominence.

In the case of disclosure of non-accounting information, the principles contained in CVM Instruction No. 527/12 must always be observed, whenever applicable, especially regarding the need to reconcile this data with accounting numbers.

4.20 Presentation material to analysts / market agents
According to Article 30, item XIV, of CVM Instruction No. 480/09, companies that hold public meetings with analysts and market agents must forward the material presented on the same day of its occurrence.

The submission must be made through “IPE Online” in the Empresas.NET System, under the category “Market Communication” and type “Presentations to Analysts / Market Agents”.

For equitable treatment of all market participants, this material must be sent before or simultaneously with the start of the meeting, containing all relevant information that will be addressed in it. The material must be easily understood, even by users who do not participate in the meeting.

If additional information to that contained in the presentation material used is disclosed during the meeting, for example, as a result of questions formulated by meeting participants, these must be included in this material, which must be resubmitted through the Empresas.NET System, without prejudice to the provisions of Article 3 of CVM Instruction No. 358/02, in cases where such information constitutes a Relevant Fact.

Appropriately, also with the aim of promoting equitable treatment to all market participants, presentations made by the Company's management to the press must be disclosed. The disclosure must be made through “IPE Online” in the Empresas.NET System, under the category: “Market Communication” and the type: “Other communications not considered relevant facts”, considering, in addition, the provisions contained in CVM Instruction No. 358/02.

4.21 Market Maker
The activity of market maker is regulated by CVM Instruction No. 384/03. According to the definition given by Article 2 of this CVM Instruction, a market maker is a legal entity, duly registered with stock exchanges and over-the-counter organized market entities, interested in carrying out operations intended to foster the liquidity of securities registered for trading.

The market maker may exercise its activity autonomously or be contracted by the issuer of the securities in which it specializes, by controlling, controlled, or affiliated companies, or by any holders of securities who have an interest in forming a market for the papers of their ownership.

At the time of hiring or dismissal of the market maker, by the issuer or its controlling shareholder, the company must inform the CVM and the stock exchange or the over-the-counter organized market entity, as applicable: I – name and qualification of the market maker; II – the company's objective in the operation; III – the duration of the contract; IV – the quantity of shares in circulation in the market, by species and class, according to the definition contained in CVM Instruction No. 567/15; V – indication of any agreement or contract between the market maker and the controller, when applicable, regulating the exercise of voting rights or the purchase and sale of securities issued by the company.

In the case of hiring by a party other than the issuing company or its controlling shareholder, the contracted institution must inform the fact to the stock exchange or the over-the-counter organized market entity, as applicable.

The activity of the market maker seeks to establish a reference price for the trading of the asset, and its importance will be measured by the results obtained with its performance, since the possibility of buying and selling assets at any time encourages people to invest in these papers. Therefore, the SEP understands that both the hiring and dismissal of a market maker are decisions that may influence investors' decisions to buy, hold, or sell such securities in a considerable manner; thus, both the hiring and dismissal of a market maker must be informed to the market through a relevant fact, in accordance with CVM Instruction No. 358/02.

4.22 Installation of the Statutory Audit Committee and election of its members
Attention is called to the obligation to send the communications provided for in items XXIX and XXX of Article 30 and items XX and XXI of Article 31 of CVM Instruction No. 480/09, including regarding the information of the curriculum of new members in case of changes in the committee composition, which must be forwarded within 7 (seven) business days counted from the date of installation or change in composition.

For submission, one must use “IPE Online” in the Empresas.NET System: Category: “Market Communication”, Type: “Installation, change in composition, or dissolution of the statutory audit committee”.

The subjects are mandatory fields and are as follows: Installation of the statutory audit committee, Change in composition of the statutory audit committee, and Dissolution of the statutory audit committee.

4.23 Communication regarding the holding of lives
On 26.08.2020, the SEP published Circular Letter No. 7/2020/CVM/SEP regarding live presentations with the presence of executives from publicly-held companies:

We verified that the existence of uncertainties about the effect of the Covid-19 pandemic on the companies' performance, as well as the changes in work routines occurring in recent months, fostered the more frequent holding of “lives”, that is, “live” transmissions of presentations with the presence of executives from publicly-held companies, usually organized by a third party, not the company itself.

Firstly, we emphasize that the same rules provided for in the norms dealing with the disclosure of information apply to such events, notably those that regulate the disclosure of relevant information (CVM Instruction No. 358/02) and establish general rules on content and form of the information that issuers must observe (Articles 14 to 19 of CVM Instruction No. 480/09), especially Article 16, according to which the issuer must disclose information in a comprehensive, equitable, and simultaneous manner to the entire market.

Regarding the publicity of events of this nature, even if held on platforms open to the general public, it is important to highlight that, since they do not appear in the Company's Corporate Events Calendar and are organized by persons or entities unrelated to the company's administration, we recommend that a Market Communication be disclosed in advance, informing the date, time, and internet address where the “live” will be transmitted, which will feature the participation of some company representative.

Furthermore, according to Article 30, item XIV, of CVM Instruction No. 480/09, the issuer must send through the Empresas.NET System the material presented in meetings with analysts and market agents, on the same day of the meeting or presentation. And, according to the guidance contained in item 4.20 of CIRCULAR LETTER/CVM/SEP/No. 2/2020, “for equitable treatment of all market participants, this material must be sent before or simultaneously with the start of the meeting, containing all relevant information that will be addressed in it.”

This same guidance applies to the information to be disclosed in the aforementioned “live”. Even if there is no visual presentation, in slides or any other format, the Market Communication that informs about the holding of the event must also contain a list of the topics to be discussed, and eventually the questions that will be asked, which must be obtained from the organizers if there is no pre-defined agenda established together with the company.

Citing again the CIRCULAR LETTER/CVM/SEP/No. 2/2020, “if during the meeting additional information to that contained in the presentation material used is disclosed, for example, as a result of questions formulated by meeting participants, these must be included in this material, which must be resubmitted through the Empresas.NET System, without prejudice to the provisions of Article 3 of CVM Instruction No. 358/02, in cases where such information constitutes a Relevant Fact.”

If it is not possible to disclose the content of the presentation in advance, due to the impossibility of obtaining such information from the organizers, or due to a free presentation format, we recommend that the live be held outside trading hours, preferably after the market close, so that the IR team has time to prepare the material that must be disclosed after the end of the event in the Empresas.NET System, containing the main information disclosed in the event and not contained in the documents already disclosed by the company.

It is important to mention, finally, that, due to the mentioned scenario, this letter highlights and details guidance already contained in CIRCULAR LETTER/CVM/SEP/No. 2/2020 and does not present innovations regarding the obligations provided for in Law 6.404/76 and CVM Instructions 358/02 and 480/09.

On 14.09.2020, due to questions sent to the Authority by market participants, the CVM published the following communication to clarify doubts about the guidelines involving lives with executives:

The Superintendence of Corporate Relations of the Securities and Exchange Commission (SEP/CVM) received and answered questions from participants and market institutions — such as the Brazilian Association of Publicly-Held Companies (Abrasca) and the Brazilian Investor Relations Institute (IBRI) — regarding the guidelines on lives with executives, published by the technical area on 8/26/2020.

Circular Letter CVM/SEP 07/2020 highlights that the same rules provided for in the norms dealing with the disclosure of relevant information and the general rules on content and form of information apply to such online events.

Best Practices
Regarding the questions received after publication, the SEP emphasizes that the most important thing is the compliance with the regulation applicable to publicly-held companies and that the recommendations of the CVM superintendence are the result of its supervision, especially in this period of the Covid-19 pandemic and confinement. Therefore, the non-adoption of the suggested practices will not be the subject of sanctioning action by the SEP, provided that the aforementioned regulation is complied with.

Additionally, the technical area explains that company administrators, in specific situations and in possession of a broader set of information, may adopt the practices they consider most appropriate, even if different from those cited in Circular Letter CVM/SEP 07/2020.

Meetings
Regarding closed meetings held electronically and other private nature events, with groups of investors or other market agents, the Authority's technical area clarified that they do not belong to the events treated by the letter.

Scope
The SEP also informs that the terms “executives” and “company representatives” were used in the circular letter to broaden the scope, as the technical area understands that any person speaking on behalf of the company (whether statutory administrator or not) must observe the regulation. Thus, the recommendations do not apply to a live with the participation of a Statutory Director speaking about their career or studies, or even a discussion about a certain production technique, but reach a live transmission with the participation of a Non-Statutory Director speaking about information of interest to the capital market, shareholders, and investors in general.

Furthermore, the technical area emphasizes that disclosure rules apply not only to the statutory management but also to the board of directors, its controllers, and any other bodies with technical or consultative functions.

5 Common Guidelines for Periodic and Occasional Information

5.1 Cooperation Agreement between CVM and B3 – Brasil, Bolsa, Balcão (B3)
On 13.12.2011, in order to avoid overlapping efforts, the CVM and B3 – Brasil, Bolsa, Balcão (B3) signed an agreement establishing mechanisms of cooperation and organization of the inspection activities exercised by the CVM and by this exchange, within their respective competencies, regarding the monitoring of the disclosure of information provision to the market by issuers with securities traded on the exchange.

As foreseen in the agreement, the SEP and the Issuers Department of the Stock Exchange (DIE) also entered into a Work Plan on 13.12.2011, which was subsequently updated on 28.12.2018, establishing the information and documents whose disclosure will be supervised by B3 and how the SEP will act in support of the exchange, whether by exercising advisory and training activities or by acting with the companies, in cases where the exchange's requests are not met.

In this way, issuers with securities traded on B3 are called to attention regarding the need to comply with requests that may be issued by the exchange based on the aforementioned agreement.

The full version of the agreement can be consulted at the link http://www.cvm.gov.br/export/sites/cvm/convenios/anexos/Convenio-BMFBovespa.pdf.

5.2 General Guidelines

The submission of periodic and occasional information provided for in CVM Instruction No. 480/09, CVM Instruction No. 481/09, Article 28 of CVM Instruction No. 308/02, and CVM Instruction No. 358/02 must be made through the Empresas.NET System (see Chapter 9).

It should be noted that the final deadlines for submitting periodic and occasional information are non-extendable, as there is no express authorization in the legislation to authorize, for any reason, a request for extension of the deadline for submitting this information.

For information whose submission deadline is not stipulated in CVM Instruction No. 480/09 on business days, it should be noted that, coinciding with Saturday, Sunday, or a national holiday, the final date for presenting periodic and occasional information will be the following business day, as established by Article 66 of Law No. 9.784/99.

The issuer that fails to comply with the obligations to submit periodic information provided for in CVM Instruction No. 480/09 will be subject to a daily coercive fine (see item 2.6.1), according to the values listed in Annex 3 of CVM Instruction No. 608/19, without prejudice to the assessment of possible responsibilities of the administrators for non-compliance with the deadlines (and, where applicable, the trustee, the trustee, the judicial administrator, the judicial manager, or the liquidator), in accordance with Articles 9, item V, and 11 of Law No. 6.385/76.

Furthermore, it is emphasized that it constitutes a serious offense, for the purposes provided for in paragraph 3 of Article 11 of Law No. 6.385/76, the transgression of the provisions of CVM Instruction No. 358/02, as provided for in its Article 18, as well as the disclosure to the market or delivery to the CVM of false, incomplete, or inaccurate information that misleads the investor and the repeated non-observance of the deadlines fixed for the presentation of occasional information provided for in CVM Instruction No. 480/09, in accordance with its Article 60.

Without prejudice to the provisions of the two preceding paragraphs, it is highlighted that the company must keep the market informed about any difficulty in meeting the deadlines provided for the presentation of periodic and occasional information.

In this sense, it is worth mentioning the vote delivered by the President of the CVM in PAS RJ2011/9493 (minutes of the Collegiate Meeting No. 6, of 05.02.2013) 23 suggesting that, in these occasions, the DRI must disclose a Market Notice informing (a) that the company will not disclose the aforementioned periodic information within the deadlines established in the Corporate Law or specific regulations regarding the subject; (b) the reasons why the company will not be able to meet the deadline; (c) the effective measures that are being taken to correct the problem; and (d) the estimated deadline, within reasonableness, for the disclosure of the periodic information that will not be provided in a timely manner.

In order for the documents related to periodic and occasional information to be prepared and submitted in full to the CVM, companies are recommended to observe the following minimum requirements of readability and clarity in the preparation of this information:
a) The texts may not exceed the minimum margin limits that allow for their printing, nor should they be overlaid by graphic elements, tables, headers, etc.; b) The content must have sufficient resolution for electronic or printed reproduction; c) Page numbering must not contain repetitions, and section numbering must be respected; d) Analytical indexes and cross-references must faithfully reflect the pages on which each content is located; e) The minimum font size limit is 7pt, especially for covers and tables; f) The logical integrity of the disclosed file must be preserved, without defective pages; g) No text or image may be cut, wholly or partially; h) Numbered and alphabetical lists must be correctly sequenced and without repetitions, in a unified and continuous manner; and i) Practices that prioritize reading fluency and consultation of the information must be used;

Although not crucial, the following should also be observed:
a) Page and paragraph breaks that prevent truncated reading, in order to avoid "orphan" and "widow" lines; b) Use of typography and font size consistent throughout the document; c) Consistency in sequences of alphabetical and numbered lists, in order to prevent doubts regarding the logical structure of the document; d) Consistent page size throughout the same document; e) Avoid improper separation of titles, table headers, or footnotes from their respective contents onto two pages; 23 See http://conteudo.cvm.gov.br/decisoes/2013/20130205_R1/20130205_D01.html.

f) Pay attention to misaligned or poorly formatted tables, which make it difficult to understand the information; g) In pages of files that have been digitized, avoid the presence of stains resulting from the digitization process, such as threads and black margins; h) Signatures should be omitted or replaced with the expression “/s/” – indication that the original contains the signature of the person responsible for the information; i) Observe the optimization of page and section spaces; and j) Avoid blank pages with repeated headers and/or footers.

5.3 Obligation to Maintain a Page on the World Wide Web

CVM Instruction No. 480/09 determines, in its Article 13, that the issuer must send to the CVM and to the entities administering the markets in which its securities are admitted to trading periodic and occasional information, according to the content, form, and deadlines established in Chapter III of the Instruction, which provides, among other things, the obligation to send via an electronic system available on the CVM's page on the World Wide Web.

The issuer registered in Category A must also place and maintain the information it discloses on its page on the World Wide Web for 3 (three) years, counted from the date of disclosure.

It should be noted that this archiving rule refers to all periodic and occasional information provided for in legislation and regulation issued by the CVM, not limited only to those listed in Article 30 of CVM Instruction No. 480/09. Thus, there is a need to archive communications provided for in CVM Instruction No. 358/02, such as, for example, those regulated in Articles 11 and 12 of this Instruction.

It is also necessary to clarify that there is a need for the effective archiving of information on the company's page. The simple insertion of a link on the company's page, directing investors to documents archived on the CVM or exchange website, in the Empresas.NET System, is not considered a valid procedure to comply with the provision of the norm.

Although not mandatory, it is recommended that companies registered in Category B place and maintain the periodic and occasional information provided in compliance with Articles 21 and 31 of CVM Instruction No. 480/09 on their own page on the World Wide Web, similar to what is required for companies registered in Category A by Article 13, paragraph 2, of the aforementioned Instruction.

5.4 Confidentiality Request

In accordance with Article 7 of CVM Instruction No. 358/02, the CVM, at the request of administrators, any shareholder, or on its own initiative, may decide on the provision of information that has failed to be disclosed, in the form of the caput of Article 6 of the same Instruction.

Such a request must be addressed to the SEP by means of (i) electronic correspondence addressed to the SEP's institutional address (sep@cvm.gov.br) with the subject “confidentiality request”; or (ii) a sealed envelope, in which the word “confidential” must appear, in accordance with Article 7, paragraph 1 of CVM Instruction No. 358/02.

It is worth remembering that, in accordance with Article 56 of CVM Instruction No. 480/09, the SEP may request the sending of additional information and documents beyond those required by this Instruction or ask for clarification on information and documents sent, by means of communication sent to the issuer, granting a deadline to comply with the request. Such information and documents will be considered public by the SEP, as provided for in paragraph 2 of Article 56 of Instruction No. 480/09.

As provided for in Article 56, paragraph 3, of CVM Instruction No. 480/09, exceptional requests for confidential treatment of such information and documents must be sent to the SEP and accompanied by the presentation of the reasons why the issuer believes that its disclosure to the public would put the issuer's legitimate interest at risk.

According to paragraphs 4 and 5 of Article 56 of CVM Instruction No. 480/09, confidential information must be sent inside a sealed envelope, addressed to the SEP, with the word “confidential” appearing on the envelope, and the issuer and its administrators, directly or through the DRI, will be responsible for immediately disclosing to the market the information for which the SEP has approved confidential treatment, in the event that the information escapes control or there is atypical fluctuation in the quotation, price, or quantity traded of the issuer's securities.

It should be noted that, in accordance with paragraph 1 of Article 56 of CVM Instruction No. 480/09, the SEP may, in any way, determine that the issuer disclose the information or document, if it considers that the information and documents subject to the request are relevant or that in some way differ from what was previously disclosed by the issuer.

5.5 Documents in Foreign Language

By analogy to that provided for in Article 22, paragraph 1, of Law No. 9.784/99 and observing the interpretation given to Article 13 of the Federal Constitution combined with Article 224 of the Brazilian Civil Code, all documents drafted in a foreign language to have legal effects in the country must be translated into Portuguese, the official language in Brazil, which is why all information and documents presented through the Empresas.NET System must be translated into the Portuguese language.

It should be noted that formal documents governing the social relations of the issuer, such as Shareholder Agreements, Bylaws, or similar, must be translated by a sworn translator into the Portuguese language.

In this sense, documents provided to foreign exchanges that must be disclosed by the issuer may, if necessary, exceptionally, be archived in a foreign language, and the issuer must provide for the subsequent archiving of the translated version of the document, in the shortest possible time.

Furthermore, it is emphasized that companies listed on B3's Novo Mercado must observe the rules established regarding the disclosure of documents in English.

6 Special Rules on Issuers

6.1 Issuers with Large Market Exposure

In accordance with Article 34 of CVM Instruction No. 480/09, issuers with large market exposure are those that cumulatively meet the following requirements:
a) have shares traded on the exchange for at least 3 (three) years; b) have timely complied with their periodic obligations in the last 12 (twelve) months; and c) whose market value of shares in circulation is equal to or greater than R$ 5,000,000,000.00 (five billion reais), according to the closing quotation on the last business day of the quarter prior to the date of the public distribution offering registration request.

The status of issuer with large market exposure must be declared by the issuer in the public distribution offering registration request, by means of a document signed by the DRI containing:
a) a declaration that the issuer meets the aforementioned requirements; and b) a calculation memo made by the issuer to verify the market value of shares in circulation.

It is worth highlighting that the procedure for the automatic granting of registration of a securities distribution offering for such issuers, within 5 (five) business days from the protocol of the request at the CVM, is subject to verification of compliance with Articles 6-A and 6-B of CVM Instruction No. 400/03.

6.2 Issuers in Special Situation

6.2.1 Issuers in Extrajudicial Recovery

In addition to the periodic and occasional information provided for in Sections II and III of Chapter III of CVM Instruction No. 480/09, issuers in extrajudicial recovery must send to the CVM reports on compliance with the payment schedule and other obligations established in the extrajudicial recovery plan, with a frequency not exceeding 90 (ninety) days, as provided for in Article 35 of the Instruction. These reports must be sent via “IPE Online” in the Empresas.NET System, category “Information of companies in judicial or extrajudicial recovery”, type “Compliance Report with the Plan”.

It is alerted that paragraph 3 of Article 44 of CVM Instruction No. 480/09 provides that whenever an issuer in a special situation has its administrators replaced by a liquidator, judicial administrator, judicial manager, intervener, or similar figure, this person will be equated to the DRI for all purposes provided for in the legislation and regulation of the securities market.

It is worth noting that, in addition to sending the aforementioned documents, issuers must update their registration data with the CVM, notably regarding the change in the company's situation and its responsible person by sending the registration form, within 7 (seven) business days from the event that caused the change, without prejudice to the confirmation of the information contained in the Form until May 31 of each year, in accordance with Article 23 of CVM Instruction No. 480/09.

6.2.2 Issuers in Judicial Recovery

Article 36 of CVM Instruction No. 480/09 exempts issuers in judicial recovery from submitting the Reference Form, and this exemption remains valid until the submission to court of the detailed report at the end of the recovery process.

Notwithstanding, according to paragraph 1 of the aforementioned article, the issuer in judicial recovery registered in category A authorized by a market administrator entity to trade shares or depositary receipt shares on a stock exchange must submit the Reference Form filled out with sections 1, 4, 10, and 13 and items 12.5, 12.7, 15.1, and 15.2, until the submission to court of the detailed report at the end of the recovery, observing the provisions of paragraph 3 of Article 24 of this Instruction.

Furthermore, these issuers must send, via “IPE Online” in the Empresas.NET System, the other periodic and occasional information provided for in the Instruction, including the following information provided for in its Article 37, within the respective deadlines specified:
a) monthly financial statements accompanied by the judicial administrator's report, in the category “Information of Companies in Judicial or Extrajudicial Recovery”, type “Monthly Financial Statements”; b) recovery plan (see item 4.7); c) declaration of bankruptcy during the process (see item 4.6); and d) detailed report presented by the judicial administrator at the end of the recovery, in the category “Information of Companies in Judicial or Extrajudicial Recovery”, type “Detailed Report”.

It is worth noting that, in addition to sending the aforementioned documents, issuers must update their registration data with the CVM, notably regarding the change in the company's situation and its responsible person by sending the registration form, within 7 (seven) business days from the event that caused the change, without prejudice to the confirmation of the information contained in the form until May 31 of each year, in accordance with Article 23 of CVM Instruction No. 480/09.

It should be noted that the responsible person's data must also be updated via the Empresas.NET System (see items 3.3.1 and Chapter 9).

6.2.3 Issuers in Bankruptcy

According to Article 38 of CVM Instruction No. 480/09, the issuer in bankruptcy is exempt from providing the periodic information referred to in Section II of Chapter III of CVM Instruction No. 480/09, except for the registration form, in accordance with Article 23 and its sole paragraph.

Furthermore, these issuers must send to the CVM, via “IPE Online” in the Empresas.NET System, the occasional information provided for in the Instruction, including the following information, provided for in Article 39 of CVM Instruction No. 480/09, within the respective deadlines specified:
a) report on the causes and circumstances that led to the bankruptcy situation, in the category “Information of Companies in Bankruptcy”, type “Causes and circumstances of bankruptcy”; b) administrative financial statements, in the category “Information of Companies in Bankruptcy”, type “Administrative Financial Statements”; c) any other accounting information presented to the judge in the bankruptcy process, in the category “Information of Companies in Bankruptcy”, type “Other accounting information”; d) accounts presented at the end of the bankruptcy process, in the category “Information of Companies in Bankruptcy”, type “Accounts presented at the end of the bankruptcy process”; e) final report on the bankruptcy process, in the category “Information of Companies in Bankruptcy”, type “Final Report”; and f) sentence closing the bankruptcy process, in the category “Information of Companies in Bankruptcy”, type “Closing Sentence”.

6.2.4 Issuers in Liquidation

According to Article 40 of CVM Instruction No. 480/09, the issuer in liquidation is exempt from providing the periodic information referred to in Section II of Chapter III of CVM Instruction No. 480/09, except for the registration form, in accordance with Article 23 and its sole paragraph.

c) definitive general creditor list, in the category “Information of Companies in Liquidation”, type “Definitive general creditor list”; d) report and final balance sheet of the liquidation, in the category “Information of Companies in Liquidation”, type “Report and Final Balance Sheet of Liquidation”; e) other reports, opinions, and accounting information, in the category “Information of Companies in Liquidation”, type “Other reports, opinions, and accounting information”; and f) act of closing the liquidation, in the category “Information of Companies in Liquidation”, type “Act of Closing the Liquidation”.

It is worth noting that, in addition to sending the aforementioned documents, issuers must update their registration data with the CVM, notably regarding the change in the company's situation and its responsible person, by sending the registration form, within 7 (seven) business days from the event that caused the change, without prejudice to the confirmation of the information contained in the Form until May 31 of each year, in accordance with Article 23 of CVM Instruction No. 480/09.

It should be noted that the responsible person's data must also be updated via the Empresas.NET System (see items 3.3.1 and Chapter 9).

7 Relevant Corporate Events and Other Guidelines

7.1 Guidelines Common to Ordinary and Extraordinary General Assemblies

7.1.1 Representation of Shareholders in Assembly

Paragraph 1 of Article 126 of Law No. 6.404/76 establishes that a shareholder may be represented in an assembly by a proxy constituted less than 1 (one) year ago, who is a shareholder, administrator of the company, or lawyer, and, in the open company, the proxy may also be a financial institution, with the fund manager representing the co-owners.

The CVM Collegiate, in a meeting held on 04.11.2014 (Process CVM RJ2014/3578) 24, understood that corporate shareholders may be represented in shareholders' assemblies by their legal representatives or through duly constituted mandataries, in accordance with the constitutive acts of the society and with the rules of the Civil Code. In this way, there is no need for this mandatary to be a shareholder, administrator of the company, or lawyer.

CVM Instruction No. 481/09 provides, in its Article 5, that the call announcement must list the documents required for shareholders to be admitted to the assembly.

24 See http://conteudo.cvm.gov.br/decisoes/2014/20141104_R1/20141104_D17.html.

The Instruction allows the company to request the prior deposit of the documents mentioned in the convening notice, if the bylaws contain a provision regarding the matter, but determines that the shareholder who attends the assembly equipped with the required documents may participate and vote, even if they failed to deposit them in advance.

Thus, the impediment to participation in the assembly of a shareholder representative who failed to adopt the advance delivery procedure of the proxy instrument as established by the company constitutes a violation of Law No. 6.404/76 and Article 5 of CVM Instruction No. 481/09.

It is also worth noting that, in a meeting held on 24.06.2008 (CVM Process RJ2008/1794) 25, the CVM Collegiate issued an understanding that, although Law No. 6.404/76 conditions the representation of shareholders on the presentation of a proxy, neither the Civil Code nor the Corporations Law require the notarization or consularization of proxies. Thus, the company may always, at its discretion, waive the notarization and consularization of proxy instruments granted by shareholders to their representatives.

The Collegiate also understood that there is no obstacle to proxies being granted electronically, given, moreover, that Provisional Measure 2200-2/01 expressly recognizes the legal validity of documents signed electronically. According to the decision, any mechanism that ensures the authorship and integrity of electronic proxies and is admitted as valid by the parties involved, notably the company, can be used for this purpose.

7.1.2 Public proxy requests

CVM Instruction No. 481/09, which regulated the information and documents that companies must disclose to instruct the exercise of their shareholders' voting rights in assemblies, also established rules to discipline public proxy requests for the exercise of voting rights.

For the purposes of CVM Instruction No. 481/09, public proxy requests are considered to be:

a) requests that employ public means of communication, such as television, radio, magazines, newspapers, and pages on the worldwide computer network; b) requests directed to more than 5 (five) shareholders, when promoted, directly or indirectly, by the administration or by a controlling shareholder; and c) requests directed to more than 10 (ten) shareholders, when promoted by any other person.

Proxy requests that do not fall into any of the above hypotheses will be considered private requests, not subject to the procedures provided for in the aforementioned Instruction.

It is worth noting that investment funds whose decisions on the exercise of voting rights in assemblies are taken discretely by the same manager are considered as a single shareholder, under the terms of CVM Instruction No. 481/09.

25 See http://conteudo.cvm.gov.br/decisoes/2008/20080624_R1/20080624_D02.html.

According to the Instruction, any public proxy request for the exercise of voting rights must be sent to all shareholders with voting rights in the assembly in question.

A copy of the proxy draft and the other information required in Article 23 of the Instruction, including the identification of the natural or legal persons who promoted, organized, or funded the proxy request, even if partially, must be sent to the CVM, on the date of the start of the request, through "IPE Online" in the Empresas.NET System, category "Assembly", type "AGO", "AGO/E", "AGE" or "AGESP", as applicable, species "Material regarding public proxy requests".

For this obligation to be fulfilled, interested shareholders must send the public proxy request, accompanied by all the information required in Article 23 of CVM Instruction No. 481/09, to the DRI by the business day prior to the date of the start of the request (Article 26, paragraph 1, of the same Instruction).

In line with the provisions of Law No. 6.404/76, CVM Instruction No. 481/09 determines that proxies subject to public requests must:

a) indicate a proxy to vote in favor, a proxy to abstain, and another proxy to vote against each of the proposals subject to the request; b) expressly indicate how the proxy must vote regarding each of the proposals or, if applicable, if they should abstain regarding such proposals; and c) be limited to a single assembly.

When the public proxy request is made by the company, the administration must communicate to the market its intention to make the request up to 10 (ten) business days before the start of the campaign, indicating the matters for which the proxies will be requested.

The objective of this rule is to enable the company's shareholders to have sufficient time to organize before the general meeting.

In this sense, the rule stipulates that proxies subject to a public request promoted by the administration regarding the election of administrators and members of the fiscal council must allow the shareholder to vote both on the candidates indicated by the administration and on candidates indicated by shareholders representing at least 0.5% (zero point five percent) of the share capital.

Shareholders who represent at least 0.5% (zero point five percent) of the share capital of the open company may also obtain a list containing the addresses of all other shareholders of the company, free of charge (see item 7.1.3).

Regarding the charges related to the public proxy request, CVM Instruction No. 481/09 establishes, in its Article 32, that requests promoted by the administration may be funded by the company. In the case of requests formulated by shareholders representing at least 0.5% (zero point five percent) of the share capital, the rule provides that only expenses resulting from the following will be reimbursable:

a) publication of up to 3 (three) notices in the same newspaper in which the company publishes its financial statements; and

b) printing and sending of proxy requests to the company's shareholders.

If the proposal supported by the shareholders is approved or if at least one of the candidates they support is elected, the company must bear the total value of the reimbursable expenses incurred.

On the other hand, if the shareholders' proposal is not accepted or the candidates they support are not elected, the company will be obliged to reimburse only 50% (fifty percent) of the reimbursable expenses.

Reimbursement must be made within 10 (ten) business days from the receipt of the request formulated to the company, which must be accompanied by all supporting documents of the reimbursable expenses incurred.

It is worth noting that the company that accepts electronic proxies through a system on the worldwide computer network will not be obliged to reimburse shareholders for expenses incurred with the realization of public proxy requests for the exercise of voting rights (Article 32 of CVM Instruction No. 481/09).

It is worth noting that companies that adopt remote voting, in accordance with CVM Instruction No. 481/09, and wish to carry out a public proxy request must disclose, together with the communication to the market of their intention to carry out said request (Article 27 of CVM Instruction No. 481/09), all valid requests for inclusion of proposals and candidates received so far, in accordance with Article 21-P of CVM Instruction No. 481/09 (see item 7.1.6).

Finally, it is alerted that the provisions contained in Articles 1, 21-A, 21-L, 21-W, 21-X and Annex 21-F of CVM Instruction No. 481/09, which deal specifically with remote voting, were amended in accordance with CVM Instruction No. 594, issued on 20.12.2017, and apply to assemblies held from March 5, 2018 onwards and whose remote voting ballots are disclosed, in the form of paragraph 1 of Article 21-A, from February 1, 2018 onwards (see item 7.1.6).

7.1.3 Request for a list of shareholder addresses (Article 126, paragraph 3, of Law No. 6.404/76)

The purpose of access to the address list of Article 126, paragraph 3, of Law No. 6.404/76 is to allow the representation of shareholders by proxy in assemblies, regardless of prior request for proxy by the company itself, increasing the possibilities of organization of non-controlling shareholders, aiming at the exercise of voting rights. If the shareholder wants to obtain the addresses of other shareholders for any other purpose than contacting them to represent them in assemblies, using proxies, Article 126 cannot be invoked.

The express reference of paragraph 3 of Article 126 to paragraph 1 of the same article, combined with the fact that the matter is regulated in the article that deals with representation in assemblies, leaves no doubt about the need for a convened assembly, or one imminent to be convened, for the rule of paragraph 3 to apply.

CVM Instruction No. 481/09, which regulates public proxy requests for the exercise of voting rights, also disciplines the matter.

According to the Instruction, requests for address lists formulated by shareholders holding 0.5% (zero point five percent) or more of the share capital of the open company, based on Article 126, paragraph 3, of Law No. 6.404/76, must be attended to by the company within a maximum of 3 (three) business days, and the company is prohibited from: (a) requiring any other justifications for the request; (b) charging for the provision of the shareholder list; or (c) conditioning the approval of the request to the fulfillment of any formalities or the presentation of any documents not provided for in paragraph 2 of Article 126, namely: (i) contain all the informative elements necessary for the exercise of the requested vote; (ii) allow the shareholder to exercise a vote contrary to the decision with the indication of another proxy for the exercise of this vote; and (iii) be directed to all holders of shares whose addresses are in the company's registers.

Also according to CVM Instruction No. 481/09, the address list must list all shareholders in descending order, according to their respective number of shares, and it is unnecessary to identify the shareholding participation of each one.

7.1.4 Installation of the Fiscal Council and election of its members

Law No. 6.404/76 established, in Article 161, paragraph 4, letter "a", that holders of preferred shares without voting rights or with restricted voting rights will have the right to elect, in a separate vote, a member and respective alternate; the same right will have minority shareholders, provided that they represent, together, ten percent or more of the shares with voting rights.

Article 240 of Law No. 6.404/76 also ensures that the functioning of the fiscal council will be permanent in mixed-economy societies and that one of its members, and respective alternate, will be elected by minority ordinary shares and another by preferred shares, if any.

In interpreting Article 161, paragraph 4, letter "a", of Law No. 6.404/76, the CVM exposed, through CVM Orientation Opinion No. 19/90, that in order for the right attributed by law to preferred shareholders not to become merely nominal, it must be understood that, in the separate vote of these shareholders for the election of their representative on the Fiscal Council, controlling shareholders cannot participate, even if they also hold preferred shares. Such participation, if admitted, would result in an effective curtailment of the essential right to supervise and in a non-equitable representation of interests, often contrary, which the law sought to protect.

In this sense, the understanding of SEP, in consonance with the provisions of Orientation Opinion No. 19/90, is that, in the election processes for the fiscal council provided for in Article 161, paragraph 4, letter "a", and in Article 240 of Law No. 6.404/76, no shareholders who do not fall within the concept of minority that the Law sought to protect should participate, that is, besides controllers, persons linked to them should also not participate.

It is worth noting that the CVM Collegiate confirmed, on more than one occasion, in sanctioning processes, that entities over which the company's controller has a decisive influence cannot participate in the separate election of members of the fiscal council provided for in Article 161, paragraph 4, of Law No. 6.404/76, whether in the slot of preferred shareholders or in the slot of minorities. In this sense, see the decision of the CVM Collegiate issued in PAS CVM No. 11/12, in a judgment session held on 02.12.2014 26.

26 See http://conteudo.cvm.gov.br/sancionadores/sancionador/2014/20141202_PAS_112012.html.

CVM precedents have stated that to determine whether closed complementary pension entities can participate in the separate election of members of the fiscal council for companies that are subject to dominant influence from their sponsor or the direct and indirect controllers of their sponsor, an analysis of the entity's own governance is necessary.

Thus, as already stated in the vote of President-Relator Marcelo Trindade in PAS CVM No. 07/05 27, the impediment to vote extends to pension entities sponsored by the open company or its holding companies when, cumulatively:

a) the indication of the majority of its administrators falls to the sponsor or its controller, even when the tie-breaking vote falls to the representative of the sponsor or its controller; and b) no mechanism has been adopted that ensures that the deliberation for the choice of councilors to be elected by minority shareholders was taken with the majority participation of the administrators elected by the participants of the pension entity.

In the analysis of the existence of decisive influence of the controller over the other shareholders of the company, the governance structure of each shareholder will be taken into account, mainly.

It is worth noting that, as mentioned in the vote of Director Otávio Yazbek, within the scope of CVM Process No. RJ2009/13179 28, the impediment to vote is directed to the shareholder. It is then up to the president of the table to declare this impediment only in cases where the prohibition is evident. Thus, the president of the assembly table should only impede the vote of shareholders in the separate election if it remains evident, in each case, that there is the decisive influence of the controller or sponsor on the voting decision of the complementary private pension entity.

The president of the table, after evaluating and concluding that the controller's influence is not evident, must draw attention in the assembly (leaving, moreover, recorded in the respective minutes) to the understanding issued by SEP in this Circular Letter, to the effect that it is up to each complementary private pension entity to evaluate whether its vote, to some extent, suffers influence from the controlling shareholder and, if it decides to vote in the separate election, it must be able to present, if questioned after the assembly, elements that allow demonstrating that there was no such influence.

As provided in paragraph 2 of Article 161 of Law No. 6.404/76, the fiscal council, when the functioning is not permanent, will be installed by the general meeting at the request of shareholders who represent at least 0.1 (one tenth) of the shares with voting rights, or 5% (five percent) of the shares without voting rights, and each period of its functioning will end at the first ordinary general assembly after its installation.

CVM Instruction No. 324/00 sets a scale reducing, based on share capital, the minimum percentages of share participation necessary for the request for installation of the Fiscal Council of an open company provided for in paragraph 2 of Article 161 of Law No. 6.404/76.

Thus, the minority shareholder has the right to request, in a general assembly, the installation of the Fiscal Council, observing the special quorum for installation provided for in Instruction 324/00.

27 See http://conteudo.cvm.gov.br/sancionadores/sancionador/2007/20070424_0705.html.
28 See http://conteudo.cvm.gov.br/decisoes/2010/20100909_R1/20100909_D09.html.

Once the installation is approved, the election of its members becomes mandatory 29. However, the percentage of share participation for the separate election, referred to in paragraph 4, (a), of Article 161 of Law No. 6.404/76, cannot be reduced by the CVM, as it does not fall into one of the hypotheses provided for in Article 291 of the same law.

For this reason, in cases where (i) there are no non-controlling shareholders holding preferred shares; and (ii) minority shareholders holding ordinary shares do not reach the percentage for the separate election of a member of the fiscal council, the CVM's understanding 30 is that the shareholders present, including the controller, may elect the fiscal councilors, by majority vote. The controlling shareholder is not obliged to participate in the election of the members of the fiscal council in the mentioned hypothesis, and if they do not do so, all councilors will be elected by the vote of the other shareholders, regardless of their participation in the capital, since the council will be installed (Article 161, paragraph 2), and the election of its members will be mandatory (Article 161, paragraph 4).

Furthermore, it is worth highlighting the understanding issued by the CVM Collegiate in the meetings of 06.05.2008 31 and 23.09.2008 32 (CVM Process RJ2007/11086), to the effect that the requirement of "10% or more of the shares with voting rights" provided for in Article 161, paragraph 4 does not refer to the number of shares that the minority present at the assembly needs to hold to elect, in a separate vote, a member and respective alternate of the fiscal council, but rather to the number of shares with voting rights held by all non-controlling shareholders of the company.

It is also alerted that CVM Instruction No. 481/09 provides that whenever the general assembly is convened to elect administrators or members of the fiscal council, companies registered in Category A to which the aforementioned Instruction applies must provide, at minimum, the information required for items 12.5 to 12.10 of the Reference Form, regarding the candidates indicated or supported by the administration or by controlling shareholders (see Article 1 and 10 of CVM Instruction No. 481/09).

On the other hand, open companies registered in Category B may, in line with the provisions of Article 133, item V of Law No. 6.404/76 (in the case of AGO) and in Article 21, item VIII and Article 31, item II, both of CVM Instruction No. 480/09, send all documents necessary for the exercise of voting rights in general assemblies, providing sufficient information about the candidates, in order to allow shareholders to deliberate on the matter.

Regarding the indication of candidates for election to the Board of Directors, it is worth highlighting the decision of the CVM Collegiate, issued within the scope of administrative process 19957.004466/2018-41 33, which, by majority, understood that the prohibitions of Article 17, paragraph 2 of Law No. 13.303/16 are also applicable to candidates for the fiscal council of state-owned companies. Notwithstanding, it is worth noting that, at the present moment, a preliminary decision of the Justice suspending the effects of the aforementioned decision is in force, in the concrete case.

29 See http://conteudo.cvm.gov.br/decisoes/2007/20070710_R1/20070710_D16.html and http://conteudo.cvm.gov.br/decisoes/2008/20080311_R1/20080311_D01.html.
30 See http://conteudo.cvm.gov.br/decisoes/2007/20070710_R1/20070710_D16.html and http://conteudo.cvm.gov.br/decisoes/2008/20080311_R1/20080311_D01.html.
31 See http://conteudo.cvm.gov.br/decisoes/2008/20080506_R1/20080506_D03.html.
32 See http://conteudo.cvm.gov.br/decisoes/2008/20080923_R1/20080923_D02.html.
33 See http://conteudo.cvm.gov.br/decisoes/2018/20180426_R1/20180426_D1021.html.

Regarding mixed-economy companies, in view of the position taken by the SEP within the scope of CVM Process No. 19957.004086/2019-97, a mixed-economy company created at the state level, despite being controlled by a member state of the Union, may not appoint Ministers of State, Municipal Secretaries, or blood relatives and relatives by affinity of these persons up to the third degree to administrative positions in its investments.

In line with the provisions of Article 6, item II, of CVM Instruction No. 481/09, for those companies that adopt distant voting (see item 7.1.6), companies must disclose information about candidates for the Board of Directors and the Fiscal Council proposed by non-controlling shareholders, giving these candidates the same transparency and disclosure currently given to candidates proposed by management or controlling shareholders by virtue of Article 10 of CVM Instruction No. 481/09.

It is worth noting the understanding of the CVM Collegiate in response to the SEP consultation examined in a meeting on 21.01.2020 34 (CVM Process No. 19957.006786/2018-35), to the effect that minority shareholders linked to the controller or under its decisive influence may not request inclusion, nor contribute their shares to, together with other shareholders, reach the minimum percentage necessary for inclusion, in the Distant Voting Bulletin, of candidates to compete for seats on the Board of Directors and the Fiscal Council to be filled in a separate election reserved for minority shareholders.

It is alerted that the provisions contained in Articles 1, 21-A, 21-L, 21-W, 21-X, and Annex 21-F of CVM Instruction No. 481/09, which deal specifically with distant voting, were amended in accordance with CVM Instruction No. 594, issued on 20.12.2017, and apply to assemblies held from March 5, 2018, and whose distant voting bulletins are disclosed, in the form of paragraph 1 of Article 21-A, from February 1, 2018 onwards (see item 7.1.6).

In the case of companies with Depositary Receipts traded abroad (as is the case with ADRs), it is emphasized that, if voting is possible by the holders of DRs, it appears necessary that such prerogative be exercised to the maximum degree of equality possible with shareholders.

The suggested form of disclosure is via “IPE Online” in the Empresas.NET System, in the category “Notice to Shareholders”, type “Other Notices”, including in the subject that it concerns the indication of candidates for the Fiscal Council presented by minority shareholders.

Such information must be provided by registered companies in Categories A and B in the manner established in this Letter (see items 3.4 and 4.2), as applicable.

Regarding the election of alternate members of the Fiscal Council, Article 161, paragraph 1, of Law No. 6.404/76 provides that the Fiscal Council shall be composed of at least 3 (three) and, at most, 5 (five) members, and alternates in equal number, shareholders or not, elected by the general assembly.

The election of alternate members of the Fiscal Council is therefore mandatory, and the Fiscal Council must be composed of full and alternate members in equal number, insofar as the indication of the alternate member is necessary to prevent the possibility of the absence of the full member, avoiding that shareholders are unable to exercise their fundamental right of oversight, provided for in Article 109, item III, of Law No. 6.404/76, through their elected representative.

34 See http://conteudo.cvm.gov.br/decisoes/2020/20200121_R1/20200121_D1112.html.

7.1.5 Election of members of the Board of Directors

Law No. 6.404/76 establishes, as a rule, the election of members of the board of directors by absolute majority (Article 129), with those who gather the largest number of votes from those present at the assembly being elected. To ensure, however, the proportional nature of the filling of board of directors positions, the Law created two other electoral mechanisms that confer on minority holders of relevant participation the possibility of electing members to the board of directors, through:
a) the multiple voting process provided for in the caput of Article 141; and b) the separate election mechanism provided for in paragraph 4 of Article 141, in which the majority of holders may elect one member and his alternate, excluding the controlling shareholder:
(i) shares issued by a public company with voting rights, representing at least 15% (fifteen percent) of the total shares with voting rights; and (ii) preferred shares without voting rights or with restricted voting rights issued by a public company, representing at least 10% (ten percent) of the share capital.

According to guidance contained in the Vote of Director-President Marcelo Barbosa, in a meeting held on 26.02.2019 (Process SP2016/0245), in cases of election of the board of directors of companies whose bylaws provide that this body may be composed of a variable number of members, the general assembly is responsible for determining the exact number of councilors to be elected. In these cases, the following procedures must be observed (see items 3.4.2, 3.4.3, and 4.2.1):
a) management must inform, in its proposal for the assembly, the number of members it indicates, or are indicated by the controlling shareholder, to compose the board of directors; b) it is recommended, to facilitate understanding and mobilization of shareholders, that management also present in the proposal the possible scenarios for board composition according to the voting systems that may be adopted (majority voting, multiple voting, and separate voting); and c) management must include, as an item on the agenda, the deliberation on the fixing of the exact number of members that will compose the board of directors.

In the same vote manifestation, the Collegiate draws attention to the fact that, in scenarios where the bylaws establish a variable number of members to compose the board of directors, the definition of the number of board members must necessarily precede the deliberations regarding the election of its members, at which time shareholders may be asked to manifest whether they wish to continue with the multiple voting system, if it has already been requested in accordance with the law, or adopt separate voting, thus withdrawing the request for multiple voting, without prejudice to, if applicable, both procedures being adopted.

In the same line, the CVM Collegiate understands it is important to reinforce that, procedurally, if in the same assembly there is adoption of the multiple voting system cumulated with a request for separate voting, the election of councilors according to the latter system must be prior to the election by multiple voting, because only after the separate voting is it possible to identify the number of remaining vacancies and, thus, calculate the multiple voting coefficient.

The CVM Collegiate, in a meeting held on 04.11.2014 (CVM Processes No. RJ2013/4386 and RJ2013/4607) 35, understood that shares held in treasury must be excluded from the total number of shares or the total number of shares with voting rights, as applicable, for the purpose of calculating the percentages indicated in Article 141, paragraphs 4 and 5, of Law No. 6.404/76.

Article 239 of Law No. 6.404/76 further ensures to the minority the right to elect one of the members of the board of directors, if a larger number does not fall to them by the multiple voting process, in mixed-economy companies.

The objective of introducing the separate voting mechanism for the election of representatives of preferential and minority shareholders in the fiscal and administrative councils is to make the body effectively representative, which contributes to the good governance of public companies.

For this reason, the SEP understands that the interpretation that CVM has been making in CVM Orientation Opinion No. 19/90 and in sanctioning processes regarding participation in the separate election provided for in Article 161, paragraph 4, of Law No. 6.404/76 (see item 7.1.4), also applies to the separate election of Article 141, paragraphs 4 and 5, of Law No. 6.404/76, as well as to Article 239 of this Law.

The prerogative of election of members of the board of directors established in these devices belongs to minority or preferential shareholders whose will cannot be determined, directly or indirectly, by the controlling shareholder or by entities in which he, directly or indirectly, exercises decisive influence. In this sense, see the decision of the CVM Collegiate issued in CVM PAS No. 11/12, in a judgment session held on 02.12.2014 36.

The SEP understands that the understanding established in the vote of President-Relator Marcelo Trindade in CVM PAS No. 07/05 37 (see item 7.1.4) also applies to the elections of members for the board of administration dealt with in Articles 141, paragraphs 4 and 5, and 239 of Law No. 6.404/76. Thus, in the analysis of the existence of decisive influence of the controller over other shareholders of the company, for the purpose of verifying the classification of these as minority holders of the right to participate in the separate election, the governance structure of each shareholder will be taken into account, mainly.

In this aspect, it is worth highlighting the vote of President-Relator Marcelo Barbosa in PAS 19957.011244/2019-65, in a judgment session held on 14.07.2020, which brings understanding to the effect that, in the specific case of pension entities, “according to the reiterated position of this Collegiate, participation in separate elections is not permitted for pension entities, the majority of whose administration is appointed by its sponsor, unless such entity has governance mechanisms that prevent the sponsor from influencing, directly or indirectly, the decision on the choice of candidate.”

Notwithstanding, regardless of whether it concerns pension entities, for the purpose of determining the existence of the mentioned influence, one must not focus only on the search for the formalization of corporate links between the controller and the shareholder who intends to vote in the separate election, but rather on any aspects that, by themselves or jointly, may lead to the conclusion that the mentioned influence of the controller is not present.

This understanding is clear when, still in the judgment of PAS 19957.011244/2019-65, the President-Relator states in his vote that “regardless of the formalization of influence over the political-administrative bodies of the company, as well as any other corporate link between the parties, it is also important to take into account the history of the minority shareholder’s positions vis-à-vis those of the controller. Although such history does not serve, by itself, to evidence a relationship of subordination or relevant influence, when considered alongside other substantial indications, it can help to robust the factual-probative set.”

It is emphasized that, as mentioned in the vote of Director Otávio Yazbek, within the scope of CVM Process No. RJ2009/13179 38, the prohibition of voting is directed at the shareholder. It is then up to the chairman of the table to declare this prohibition only in cases where the prohibition is evident. Thus, the chairman of the assembly table should only prohibit the voting of shareholders in the separate election if it remains evident, in each case, that there is decisive influence of the controller or sponsor on the voting decision of the complementary private pension entity.

The chairman of the table, after evaluating and concluding that the influence of the controller is not evident, must draw attention in the assembly (leaving, moreover, recorded in the respective minutes) to the understanding issued by the SEP in this Circular Letter, to the effect that it is up to each complementary private pension entity to evaluate whether its vote, to some extent, suffers influence from the controlling shareholder, and if it decides to vote in the separate election, it must be able to present, if questioned after the assembly, elements that allow demonstrating that the aforementioned influence did not occur.

Still regarding the election of administrative councilors by non-controlling shareholders, it is emphasized that in the meeting held on 11.04.2006 39, the CVM Collegiate decided to maintain the interpretation of Article 141, paragraph 5, of Law No. 6.404/76 given in the meeting of 08.11.2005 (CVM Process RJ2005/5664) 40, which, in cases where the company has only issued shares with voting rights, shall have the right to elect and remove one member and his alternate from the Board of Directors, in separate voting at the general assembly, excluding the controlling shareholder, the majority of holders who hold at least 10% of the total shares with voting rights.

35 See http://conteudo.cvm.gov.br/decisoes/2014/20141104_R1/20141104_D16.html.
36 See http://conteudo.cvm.gov.br/sancionadores/sancionador/2014/20141202_PAS_112012.html.
37 See http://conteudo.cvm.gov.br/sancionadores/sancionador/2007/20070424_0705.html.
38 See http://conteudo.cvm.gov.br/decisoes/2010/20100909_R1/20100909_D09.html.
39 See http://conteudo.cvm.gov.br/decisoes/2006/20060411_R1/20060411_D03.html.
40 See http://conteudo.cvm.gov.br/decisoes/2005/20051108_R1/20051108_D02.html.

In cases where a shareholder requests the adoption of the multiple voting procedure for the election of members of the board of directors, attention is drawn to the possibility that this shareholder withdraw the formulated request at any time, even in the assembly itself, as decided in CVM Process No. 19957.003630/2018-01.

41 Therefore, it is recommended that shareholders who are interested in election by multiple voting present their own requests for the adoption of such procedure, independent of similar previous requests that may have been formulated by other shareholders.
Thus, even if a previous request is withdrawn by the shareholder who formulated it, the multiple voting procedure must still be observed.

Article 239 of Law No. 6.404/76, specifically aimed at mixed-economy companies, allows holders of non-controlling ordinary shares of these companies, regardless of the shareholding participation they hold, to elect one member of the board of directors, if a larger number does not fall to them by the multiple voting process provided for in Article 141 of the Law. Thus, the application of Article 239 depends initially on verifying the number of board members that holders of ordinary shares will be able to elect by the multiple voting process.

It is important to emphasize that the CVM Collegiate deliberated, in a meeting held on 07.07.2015 (RJ2014/4375) that, in mixed-economy companies, the application of Article 239 excludes the application of Article 141, paragraph 4, item I of Law No. 6.404/76, prevailing, thus, the special norm over the general determination.

Notwithstanding, as it is specifically directed at shareholders holding ordinary shares, the use of Article 239 does not prejudice the exercise by preferential shareholders of the right to elect separately one member of the board of directors and his alternate, in the form of Article 141, paragraph 4, item II, of Law No. 6.404/76, although paragraph 5 of Article 141 of Law No. 6.404/76 remains inapplicable, in view of the fact that minority shareholders with voting rights would have already participated in the election dealt with in the aforementioned Article 239, making it impossible to use their shares to compose the quorum required by the aforementioned paragraph 5.

Note that Article 147, paragraph 1, of Law No. 6.404/76 enumerates certain hypotheses of ineligibility for administrative positions, including cases provided for in special law. In this regard, and specifically regarding the situation of public mixed-economy companies, attention is drawn to the hypotheses of ineligibility provided for in Article 17, paragraph 2, of Law No. 13.303/16.

In this respect, in addition to observing, in the election of its own administrators, the hypotheses of ineligibility provided for in such device, according to the understanding of the Collegiate in CVM Process No. 19957.008923/2016-12 42, mixed-economy companies must also refrain from making indications of persons falling under these hypotheses for positions in companies in which such mixed-economy companies are investors.

Additionally, according to the understanding of the Collegiate in CVM Process No. 19957.011269/2017-05 43, the requirements and prohibitions for the indication and election of administrators, provided for in Law No. 13.303/16, also apply to members of the statutory nomination and evaluation committee provided for in Article 10 of the aforementioned Law.

41 See http://conteudo.cvm.gov.br/decisoes/2018/20181009_R1/20181009_D1053.html.
42 See http://conteudo.cvm.gov.br/decisoes/2016/20161227_R1/20161227_D0476.html.
43 See http://conteudo.cvm.gov.br/decisoes/2018/20180105_R1/20180105_D0870.html.

Furthermore, in view of the position taken by the SEP within the scope of CVM Process No. 19957.004086/2019-97, a mixed-economy company created at the state level, despite being controlled by a member state of the Union, may not appoint to administrative positions in its investments Ministers of State, municipal secretaries, or blood relatives and relatives by affinity of these persons up to the third degree.

It is necessary to alert that CVM Instruction No. 481/09 provides for the minimum documents and information that must be made available to shareholders whenever the general assembly is convened to deliberate on certain matters provided for in the Instruction. Such documents and information must be sent until the date of publication of the first call announcement, except when Law No. 6.404/76, CVM Instruction No. 481/09, or another norm issued by CVM establishes a longer deadline.

It is highlighted that CVM Instruction No. 481/09 provides that whenever the general assembly is convened to elect administrators or members of the fiscal council, the company must provide, at minimum, the information required for items 12.5 to 12.10 of the Reference Form, regarding the candidates indicated or supported by management or controlling shareholders (see items 3.4.3 “a)” and 4.2.2 “a)”).

Regarding public companies registered in Category B, it is worth noting that, in accordance with Article 133, item V of Law No. 6.404/76 (in the case of the EGM), paragraph 3 of Article 135 of Law No. 6.404/76 (in the case of the EGM), and Article 21, item VIII and Article 31, item II, both of CVM Instruction No. 480/09, it is mandatory to send all documents necessary for the exercise of the right to vote at general assemblies. Thus, sufficient information about candidates must be provided, in order to allow shareholders to deliberate on the matter.

In line with the provisions of Article 6, item II, of CVM Instruction No. 481/09, companies must disclose information about candidates for the Board of Directors and Fiscal Council proposed by non-controlling shareholders, giving these candidates the same transparency and disclosure currently given to candidates proposed by management or controlling shareholders by virtue of Article 10 of CVM Instruction No. 481/09.

Attention is drawn to the fact that some companies already adopt this practice and allow in their Bylaws that non-controlling shareholders present candidates for the Board of Directors, provided that these shareholders present information about the candidates until a certain deadline prior to the date scheduled for the assembly.

These practices, however, must be regarded as faculties granted to shareholders to facilitate their articulation and the exercise of rights granted in Law No. 6.404/76. According to understanding issued by the SEP, requirements to present information about candidates prior to the assembly, even if provided for in the Bylaws, cannot be used as an imposition to obstruct the right of shareholders provided for in Law No. 6.404/76 to indicate and elect members to the Board of Directors and the Fiscal Council at the very moment of the assembly.

Such information must be provided by companies registered in Categories A and B in the manner indicated in this letter (see items 3.4 and 4.2).

It is also worth highlighting the understanding of the CVM Collegiate in response to the SEP consultation examined in a meeting on 21.01.2020 44 (CVM Process No. 19957.006786/2018-35), to the effect that minority shareholders linked to the controller or under its decisive influence may not request inclusion, nor contribute their shares to, together with other shareholders, reach the minimum percentage necessary for inclusion, in the Distant Voting Bulletin, of candidates to compete for seats on the Board of Directors and the Fiscal Council to be filled in a separate election reserved for minority shareholders.

Finally, regarding the performance of members of the board of directors elected as representatives of employees of mixed-economy companies, the decision of the CVM Collegiate, issued within the scope of process 19957.011059/2019-71, in a meeting held on 22.09.2020, is emphasized, to the effect that these members would be prohibited from acting in deliberations of the Board of Directors that concern the process of privatization of the company, or its controlling company, notably because, in accordance with Law No. 12.353/10, they cannot intervene “in any social operation in which they have an interest conflicting with that of the company” and in “discussions and deliberations on matters involving union relations, remuneration, benefits and advantages, including matters of complementary pension and assistance.”

7.1.6 Distant Voting – CVM Instruction No. 481/09
7.2 Scope of CVM Instruction No. 481/09

On 07.04.2015, CVM Instruction No. 561/15 was issued, which promoted alterations in CVM Instructions No. 480/09 and 481/09 in order to regulate the participation and distant voting of shareholders in general assemblies of public companies. Through this norm, CVM sought to facilitate participation in assemblies and the exercise of certain rights by non-controlling shareholders.

On 21.12.2017, CVM Instruction No. 594/17 was issued, which altered provisions of CVM Instruction No. 481/09, including, regarding the institute of distant voting. It is worth noting that these alterations are applicable to assemblies held from March 5, 2018, and whose distant voting bulletins are disclosed, in the form of paragraph 1 of Article 21-A, from February 1, 2018 onwards.

44 See http://conteudo.cvm.gov.br/decisoes/2020/20200121_R1/20200121_D1112.html.

Furthermore, CVM Instruction No. 594/17 restricted the application of CVM Instruction No. 481/09 to open companies registered in Category A, authorized by a market administrator entity to trade shares on a stock exchange, and that have shares in circulation, considered as the company's shares, with the exception of those owned by the controlling shareholder, persons linked to them, the company's administrators, and those held in treasury.

The procedures described in CVM Instruction No. 481/09 apply to: (a) Ordinary General Meetings; (b) Extraordinary General Meetings that deliberate (i) on the election of members of the fiscal council or (ii) of the board of directors, when the election becomes necessary due to the vacancy of the majority of the council's positions, due to vacancy in a council that was elected by multiple votes or to fill the vacancies dedicated to the separate election referred to in articles 141, paragraph 4, and 239 of Law No. 6.404/76; and (c) whenever the extraordinary general meeting is convened to occur on the same date scheduled for the ordinary general meeting, in accordance with article 4 of CVM Instruction No. 594/17.

Attention is drawn to the possibility of minority shareholders reaching the quorum for the installation of the Fiscal Council, and yet not reaching the percentage required, in accordance with article 161, paragraph 4, of Law No. 6.404/76, for the election of a candidate. In such cases, according to a decision by the CVM Collegiate Body, if the quorum provided for in the mentioned provision is not reached, the controlling shareholder is not obliged to participate in the election of the members of the Fiscal Council, with such election being the responsibility of the shareholders present, regardless of their participation (Processes RJ2007/3246 and RJ2006/5701, REg. 5489/07, Rel. President Marcelo Fernandes Trindade, j. 10.7.2007).

Thus, once the council is installed, the election of members becomes mandatory. It would therefore be advisable, in order to facilitate the election, to guide minority shareholders, administrators, and controlling shareholders to be prepared for this scenario in the meetings.

The provisions of the rule are mandatory from January 1, 2018, for open companies registered in Category A and authorized by a market administrator entity to trade shares on a stock exchange that have shares in circulation.

The provisions of the aforementioned Instruction do not apply to open companies that do not have shares in circulation, considered as the company's shares, with the exception of those owned by the controlling shareholder, persons linked to them, the company's administrators, and those held in treasury.

Notwithstanding, companies not obliged by CVM Instruction No. 481/09 to adopt the remote voting procedure may do so optionally, in which cases they must fully comply with the provisions of CVM Instruction No. 481/09.

In line with what is provided in paragraph 2 of article 21-A of CVM Instruction No. 481/09, any open company to which the aforementioned Instruction applies may use remote voting voluntarily in a specific extraordinary general meeting. The issuer that chooses to adopt remote voting in an extraordinary general meeting not included in the list of article 21-A of CVM Instruction No. 481/09 will not be obliged to do so in other extraordinary general meetings, but must follow the deadlines and conditions established in Chapter III-A, except for Section IV, of CVM Instruction No. 481/09.

The adoption of remote voting in a specific general meeting must always cover all matters included in the agenda, regardless of their presence or not in the list provided in article 21-A of CVM Instruction No. 481/09, as provided in article 21-F, paragraph 1, item I of the aforementioned Instruction.

Companies that opt for the adoption of remote voting in their general meetings, and that are not obliged to do so, must communicate this fact to the market through "IPE Online" in the Empresas.NET System (Category: "Notice to Shareholders" / Type: "Adoption of remote voting").

Furthermore, in line with what is provided in Subsection I of Section I of Chapter III of CVM Instruction No. 480/09 – "Content and Form of Information", the company must inform that it will adopt the remote voting procedure provided in CVM Instruction No. 481/09, in the notice of convocation of the respective general meeting.

It is important to note that the deadlines provided in CVM Instruction No. 481/09, regarding the remote voting mechanism, take into account calendar days (except those that the instruction itself expressly provides that the deadline is counted in business days), including weekends and national holidays in the count, so companies must take into account the final terms of the aforementioned deadlines to establish the dates of the meetings in which remote voting will apply.

Furthermore, in the case of a second call, the deadlines provided in CVM Instruction No. 481/09 are not altered, with all deadlines established for the first call of the meeting in question being maintained.

The CVM Specialized Prosecutor's Office (PFE), within the scope of process 19957.003377/2020-00, manifested that "from the reading of Provisional Measure No. 2.200-2, of 25.08.2001, it is verified that the Brazilian Public Key Infrastructure, commonly designated by the acronym ICP-Brasil, is a Brazilian national digital certification system, which was instituted by the Provisional Measure to guarantee the authenticity, integrity, and legal validity of documents in electronic form, of support applications, and of enabled applications that use digital certificates, as well as the realization of secure electronic transactions".

In this sense, companies must not require, from shareholders who wish to vote remotely, manifestation and delivery of physical documents to ratify the electronic transmission of the documents mentioned in the notice of convocation of the Assembly, in accordance with paragraph 1 of article 5 of CVM Instruction No. 481/09, with wording given by CVM Instruction No. 622/20, which contain documents produced and signed with the use of the aforementioned ICP-Brasil certification.

7.3 Remote Voting Ballot

To instrument the remote voting procedure, a document called Remote Voting Ballot was created. This document allows shareholders to indicate whether they wish to use their shares to request, for example, the adoption of the multiple voting procedure or the installation of the Fiscal Council, issues that, although not proposed by the administration, must be included in the remote voting ballot, as they are shareholders' rights, according to Corporate Law. It also gathers all deliberation proposals included in the agenda of the meetings to which it applies, whether by controlling shareholders and the administration, or by non-controlling shareholders. Thus, the Remote Voting Ballot seeks to function not only as a voting instrument, but also as an articulation tool among shareholders.

The Remote Voting Ballot is an electronic document whose form reflects Annex 21-F of CVM Instruction No. 481/09 and must contain (i) all matters on the agenda of the general meeting to which it refers; (ii) guidelines on the possibility of direct submission to the company and mention of the possibility of using authorized service providers; (iii) guidelines on its sending by postal mail or electronically, when the shareholder wishes to send it directly to the company; and (iv) guidelines on the formalities necessary for the vote sent directly to the company to be considered valid.

The description of the matters to be deliberated in the meeting in the Remote Voting Ballot must be drafted in clear, objective language that does not mislead the shareholder, and may contain indications of pages on the World Wide Web where the proposals are described in more detail, and the other provisions of article 21-G of CVM Instruction No. 481/09 on the subject must also be observed. Additionally, the wording and order of the deliberations in other electronic documents published by the company, such as the administration's proposal and the meeting participation manual, must reflect those contained in the Remote Voting Ballot.

In this sense, matters included in the remote voting ballots at the request of shareholders must be accompanied by information that their inclusion originated from the aforementioned request.

The remote voting ballots must be generated in the CI.CORP system for each meeting that uses the chain of collection and transmission of voting instructions. In this sense, in the event of an OGM/EGM, the meetings (OGM and EGM) must be registered separately in CI.CORP, generating two separate ballots.

Notwithstanding, the forwarding of the ballot of the aforementioned OGM/EGM will be done in a single pdf document (see item 7.1.6.c).

The Remote Voting Ballot must be made available by the company up to 1 (one) month before the date scheduled for the holding of the meeting, and, in accordance with CVM Instruction No. 481/09, the ballot may be reissued by the company:

(i) up to 20 (twenty) days before the date scheduled for the holding of the meeting for the inclusion of candidates indicated for the board of directors and the fiscal council in the form of article 21-L (article 21-A, paragraph 3, item I of CVM Instruction No. 481/09); or

(ii) in exceptional situations, to correct a relevant error that hinders the understanding of the matter to be deliberated by the shareholder, or to adapt the proposal to the provisions of the regulation or the bylaws (article 21-A, paragraph 3, item II of CVM Instruction No. 481/09).

In the case described in item (i) above, unless the shareholder sends a new voting instruction, the votes already granted by him to candidates included in the previously published ballot must be considered valid. In the case described in item (ii) above, the votes already granted by the shareholder to the affected proposal must be considered invalid.

The reissuance of the remote voting ballot for any reason must be immediately communicated by the company to the market, informing:

(i) the reason for the reissuance and the proposals of the ballot that were altered;

(ii) that the votes already granted to the altered deliberation will be considered invalid, in the case provided for in article 21-A, paragraph 3, item II of CVM Instruction No. 481/09;

(iii) the deadline for the shareholder, if they wish, to send a new voting instruction; and

(iv) that, in order to avoid that their voting instruction may be considered conflicting, it is recommended that the shareholder send their eventual new instruction to the same service provider previously used.

The voting instruction must be sent by the shareholder (i) directly to the company (by postal mail or electronically), (ii) to the shareholder's custodian (if the shares are deposited in a central depository) or (iii) to the financial institution contracted by the company for the provision of securities registration services, and must be received up to 7 (seven) days before the said date, in accordance with article 21-B of CVM Instruction No. 481/09.

Shareholders who wish to may, in accordance with article 21-L of CVM Instruction No. 481/09, request the inclusion of proposals in the Remote Voting Ballot of (i) candidates for the board of directors and the fiscal council of the company and (ii) matters to be deliberated on the occasion of the ordinary general meeting, and for this purpose, the participation percentages provided for in Annex 21-L-I and Annex 21-L-II of CVM Instruction No. 481/09 must be observed, respectively.

In these cases, within 3 (three) business days, the company must inform the requesters that it will include the proposals received from shareholders in the voting ballot or indicate the complete list of reasons why such request does not meet regulatory requirements, including cases where the requests were received outside the deadlines regulated by CVM Instruction No. 481/09.

Although item II of article 21-L of CVM Instruction No. 481/09 limits the inclusion of deliberation proposals by shareholders to the occurrence of ordinary general meetings, these proposals may have as their object matters of competence of ordinary or extraordinary general meetings, as provided for in the sole paragraph of article 21-M of the aforementioned Instruction.

In the case of deliberation proposals in the remote voting ballot on the occasion of an OGM, the request must be sent in the period between the first business day of the social year in which the ordinary general meeting will be held and up to 40 (forty-five) days before the date of its holding, in accordance with CVM Instruction No. 594/17.

In the specific case of indication of candidates for the board of directors and the fiscal council of the company, in accordance with article 21-L, paragraph 1 of CVM Instruction No. 481/09 amended by CVM Instruction No. 594/17, the request must be received by the investor relations director, in writing and in accordance with the guidelines contained in item 12.2 of the Reference Form, within the following deadlines:

(i) between the first business day of the social year in which the general meeting will be held and up to 25 (twenty-five) days before the date of its holding, in the case of an ordinary general meeting; or

(ii) between the first business day after the occurrence of the event that justifies the convocation of a general meeting for the election of members of the board of directors and the fiscal council and up to 25 (twenty-five) days before the date of holding of the meeting, in the case of an extraordinary general meeting convened for this purpose.

Like what occurs in the publication of the Remote Voting Ballot by companies, the proposals for inclusion of deliberations carried out by shareholders must contain the description of the matters to be deliberated in clear, objective language that does not mislead, and may also contain indications of pages on the World Wide Web where the proposals are described in more detail, and the other provisions of article 21-M of CVM Instruction No. 481/09 on the subject must also be observed.

As provided in article 21-O of CVM Instruction No. 481/09, the request for inclusion of proposals in the Remote Voting Ballot can be revoked at any time until the date of holding of the general meeting, by written communication by the respective proposers, addressed to the DRI of the company, in which case the votes that had already been granted to the revoked proposal will be disregarded.

The company must immediately communicate to the market the revocation of the request for inclusion referred to in the previous paragraph, if the Remote Voting Ballot has already been made available, through "IPE Online" in the Empresas.NET System (Category: "Notice to Shareholders" / Type: "Shareholder request for voting ballot");

With regard to voting ballots from shareholders received directly by the company, it must communicate to the shareholder, within 3 (three) days of its receipt: (i) the receipt of the remote voting ballot, as well as that the ballot and the documents sent as attachments are sufficient for the remote vote to be considered valid; (ii) the need to rectify or resend the remote voting ballot or the documents accompanying it, describing the procedures and deadlines necessary for the regularization of the vote.

Companies that wish to make a public request for proxy must publish, together with the communication to the market of their intention to make the said request (article 27 of CVM Instruction No. 481/09), all valid requests for inclusion of proposals and candidates received so far, in accordance with article 21-P of CVM Instruction No. 481/09.

It is emphasized that for compliance with paragraphs 2 and 3 of article 21-L of CVM Instruction No. 481/09, the company must publish the date of holding of the general meetings through "IPE Online" in the Empresas.NET System, Category: "Notice to Shareholders" / Type: "Scheduled Date for the General Meeting", (i) up to the first 15 (fifteen) days of the social year in the case of OGM and (ii) within 7 (seven) business days after the occurrence of the event that justified the convocation, in the case of EGM.

In this sense, in accordance with paragraph 2 of article 21-L of CVM Instruction No. 481/09, if the company does not publish, within the established deadline, the date of its ordinary general meeting, it must be considered that its holding will take place on the same date as was held in the previous social year.

Although CVM Instruction No. 481/09 has not fixed a minimum deadline between the publication of the date of occurrence of a meeting and the deadline for sending proposals by shareholders, the company must grant a reasonable deadline so that shareholders can exercise this right.

This reasonableness is expressly provided for in the case of alteration in the date of occurrence of the meeting, in accordance with article 21-L, paragraph 4, of CVM Instruction No. 481/09, but must always be observed when publishing the date of any meeting in which the remote voting mechanism will be used, regardless of whether there has been an alteration of the initially published date or not.

It is important to record a specific alteration made to CVM Instruction No. 481/09, through CVM Instruction No. 614/19, which altered the wording of the remote voting ballot provided for in Annex 21-F of CVM Instruction No. 481/09.

The aforementioned alteration was proposed by SEP, aiming to enable holders of shares with voting rights to manifest voting intentions both in field 12 of the Remote Voting Ballot (which deals with the general election of a member of the board of directors) and in fields 13 and 13-A (which deal with the requisition and the separate election of a member of the board of directors by holders of shares with voting rights).

Before this normative alteration, the Remote Voting Ballot was arranged in such a way that the shareholder who opted for the separate election ran the risk that, in the event that the minimum percentage required by law was not reached, their vote would not be counted in the general election for the board of directors.

Thus, shareholders may use their shares to vote in the general election of members of the board of directors, including through the multiple voting process, if the quorums required by article 141 of Law No. 6.404/76 are not reached. Furthermore, given the punctual nature and limited repercussion of the alteration promoted, CVM Instruction No. 614/19 was not submitted to public consultation, as provided for in article 19 of PORTARIA/CVM/PTE/Nº 48/2019.

Finally, in line with the decision of the CVM Collegiate Body in the meeting of 21.01.2020, regarding Process CVM No. 19957.006786/2018-35 45, it is forbidden for minority shareholders linked to the controlling shareholder or under its decisive influence to request the inclusion, or contribute with their shares to, together with other shareholders, make up the minimum percentage necessary for the inclusion, in the Remote Voting Ballot, of candidates to compete for vacancies on the Board of Directors or the Fiscal Council to be filled in a separate election reserved for minority shareholders.

7.4 Frequently Asked Questions for Filling Out

Paragraphs 4 and 5 of article 141 of Law No. 6.404/76

With the entry into force of CVM Instruction No. 561/15, which altered CVM Instruction No. 481/09, in the sense of instituting the remote voting system in the shareholders' meetings of joint-stock companies with registration at CVM in Category A and authorized by a market administrator entity to trade shares on a stock exchange that have shares in circulation, the rights of minority ordinary and preferred shareholders provided for in Law were not altered.

Paragraphs 4 and 5 of article 141 of Law No. 6.404/76 provide that:

"§ 4. Shall have the right to elect and remove a member and their alternate from the board of directors, in a separate vote at the general meeting, excluding the controlling shareholder, the majority of holders, respectively:

I - of shares issued by an open company with voting rights, representing at least 15% (fifteen percent) of the total of shares with voting rights; and

45 See http://conteudo.cvm.gov.br/decisoes/2020/20200121_R1/20200121_D1112.html."

II - of preferred shares without voting rights or with restricted voting rights issued by a public company, representing at least 10% (ten percent) of the share capital, which have not exercised the right provided for in the bylaws, in accordance with Article 8.

§ 5º If it is verified that neither the holders of shares with voting rights nor the holders of preferred shares without voting rights or with restricted voting rights have respectively reached the quorum required in items I and II of § 4º, they shall be entitled to aggregate their shares to jointly elect one member and their alternate for the board of directors, observing, in this case, the quorum required by item II of § 4º.”

It should be noted that the legal provisions mentioned deal with the quorum necessary for the election to take place separately. During the course of the meeting, once the quorum is reached, by fulfilling the requirements of items I and II of paragraph 4º or paragraph 5º, the indication of candidates for minority ordinary shareholders and/or preferred shareholders shall proceed, if they have not been previously indicated.

Therefore, the Remote Voting Ballot must offer the preferred shareholder the option to aggregate their votes with those of minority ordinary shareholders for the purpose of reaching the quorum necessary for the separate election, as permitted by paragraph 5º of Article 141 of Law No. 6,404/76.

Thus, it is recommended that, given the impossibility of inserting in the Remote Voting Ballot the item regarding item 16-A of Annex 21-F of CVM Instruction No. 481/09, due to the absence of candidates indicated by preferred shareholders, the Company should present to preferred shareholders the question “If it is verified that neither the holders of shares with voting rights nor the holders of preferred shares without voting rights or with restricted voting rights have respectively reached the quorum required in items I and II of § 4º of Article 141 of Law No. 6,404 of 1976, do you wish for your vote to be aggregated with the votes of shares with voting rights in order to elect to the board of administration the candidate with the highest number of votes among all those appearing in this remote voting ballot, competing in the separate election? [ ] Yes [ ] No [ ] Abstain” through a Simple Question or Simple Deliberation.

Regarding the fixation of the number of board members in the Remote Voting Ballot It has been observed that some issuers, whose bylaws establish a variable number of board members, although they disclose in their proposal for the meeting the number of members that indicates, or are indicated by the controlling shareholder, to compose the board of directors, in addition to including as an item on the agenda the deliberation on the fixation of the exact number of members, end up not including such deliberation in the Remote Voting Ballot.

On this subject, considering the current format of the Remote Voting Ballot, it is recommended that the issuer include a simple deliberation, putting for scrutiny what was suggested in the administration's proposal.

Due to this orientation, we suggest orienting companies to include in the remote voting ballot the type of deliberation “election of the board of administration” by slate or by candidate only if there is an indication of names.

7.5 CI.CORP System and integration with the Empresas.NET System
The CI.CORP system was developed as a means for creating and sending the remote voting ballot in a structured manner.

Since 01.02.2019, in accordance with Circular Letter No. 1/2019/CVM/SEP, this system is integrated with the Empresas.Net System, that is, when the company finishes filling out the ballot via CI.CORP, there will be its automatic transmission via the Empresas.NET System. This transmission will also occur in the case of resubmission.

However, if the company needs to cancel the ballot, the cancellation must be done in both the CI.CORP system and the Empresas.NET system.

Unlike previous years, starting from 2019, the alteration of the remote voting ballot up to 20 (twenty) days before the meeting can be made without any request for release or authorization from either CVM or B3.

From the 19th day onwards, the alteration of the ballot in the CI.CORP system can only be carried out through a formal request for access release to B3. It is emphasized that, according to item II of paragraph 3º of Article 21-A of CVM Instruction No. 481/09, the Remote Voting Ballot may be resubmitted by the company in exceptional situations, to correct a relevant error that hinders the understanding of the matter to be deliberated by the shareholder, or to adapt the proposal to the provisions of the regulation or the bylaws.

It was verified that in the CI.CORP system, in the case of election by multiple voting, in an election that would initially be by slate, it was not possible for shareholders to opt for the distribution of the percentage between candidates of one slate and another, only between candidates of the same slate.

However, considering that such a limitation is not imposed by the Corporation Law, which recognizes in its Article 141 the possibility for the shareholder to distribute their votes among several candidates, nor by CVM Instruction No. 481/09, in its Annex 21-F, item 12-B, the system was altered so that the shareholder can manually distribute the percentage of multiple voting among candidates of the non-approved slate. For the automatic distribution of multiple voting, there was no alteration, continuing to be possible only among candidates of the approved slate.

7.6 Remote voting exercised through service providers
As provided for in item II of Article 21-B of CVM Instruction No. 481/09, the shareholder may forward the instructions for filling out the Remote Voting Ballot to their custodians or to the financial institutions contracted by the companies for the provision of securities registration services.

Conflicting voting instructions are considered those sent by the same shareholder who, regarding the same deliberation, has voted in different directions in voting ballots delivered through different service providers, as provided in paragraph 1º of Article 21-S of CVM Instruction No. 481/09.

It is emphasized that, in accordance with Article 21-W, paragraph 5º, item I of CVM Instruction No. 481/09, if a shareholder who has forwarded a remote voting ballot by any means attends the meeting and requests to exercise the vote in person, the votes should not be considered conflicting. In these cases, the forwarded ballot should be disregarded, and the vote cast in person should be counted by the company.

In accordance with item “b” of item II of Article 21-T of CVM Instruction No. 481/09, the registrar must send to the company a synthetic map of the shareholders' voting instructions, identifying how many approvals, rejections, or abstentions each deliberated matter received and how many votes each candidate or slate received.

The company will publish, via “IPE Online” in the Empresas.NET System (Category: “Meeting” / Type: EGM, GM, or EGM/GM” / Species: “Registrar Map”) and on its website, the synthetic voting map received from the registrar, on the same date of its receipt, as established in paragraph 2º of Article 21-T of CVM Instruction No. 481/09.

It is important to note that companies that are temporarily without a contract with a financial institution for the provision of share registration services must fulfill the obligations attributed to registrars, while this condition persists, in accordance with paragraph 5º of Article 21-B of CVM Instruction No. 481/09. In this sense, such companies must make available, via the Empresas.NET System, the registrar map, as provided in paragraph 2º of Article 21-T of CVM Instruction No. 481/09.

If there is no exercise of remote voting through service providers (custodians and registrar), the Company must forward, via the Empresas.NET System, the registrar map, informing that there was no exercise of remote voting through service providers.

If the exercise of remote voting is carried out exclusively through service providers, the Company must forward, via the Empresas.NET System, the consolidated remote voting map, even if the information contained in this map is identical to that previously informed in the registrar map.

7.7 Remote voting exercised directly
As provided for in item I of Article 21-B of CVM Instruction No. 481/09, the shareholder may forward the Remote Voting Ballot directly to the company, by postal mail or electronically, in accordance with the guidelines contained in item 12.2 of the Reference Form.

Regarding the formalities to be required by companies for the identification of the shareholder, CVM Instruction No. 481/09 did not delimit a specific list of documents, leaving it to the company to specify these formalities, which, however, must not unjustifiably impede the shareholder's participation in the meeting using remote voting.

Until the end of the deadline for receiving the Remote Voting Ballot, the shareholder may send a new voting instruction to the company, which should not be considered as a conflicting voting instruction, but rather as a correction, in accordance with the sole paragraph of Article 21-U of CVM Instruction No. 481/09.

It is recommended that, in the case where the shareholder does not fill out the ballot in its entirety or contains items filled out incorrectly, if the deadline for correcting remote voting instructions is still in effect, the company must inform the shareholder of the inconsistencies found in the ballot and grant the shareholder the possibility of correction. If the aforementioned deadline has already expired, the company should count the items that were filled out correctly and reject the specific items where problems in filling out were found.

Finally, it is recalled that, even if there was no exercise of remote voting, the Company must forward, via the Empresas.NET System, in the corresponding associations and within the deadlines provided in CVM Instruction No. 481/09, the maps provided for in this instruction.

7.8 Counting of votes in the general meeting
The shareholder who uses remote voting and whose voting ballot has been considered valid or who has registered their presence in the electronic participation system made available by the company must be considered present at the respective meeting and signatory of its minutes, in accordance with the sole paragraph of Article 21-V of CVM Instruction No. 481/09.

In the event of an EGM/GM, although the meetings take place on the same day, their respective quorums (EGM and GM) must be counted separately.

Thus, a shareholder who may have filled out only the ballot generated for the EGM, but not for the ballot generated for the GM, must have their presence counted only in the EGM, the same rationale applying to that who casts votes in the remote voting ballot regarding the GM and does not fill out the EGM voting ballot.

Paragraph 1º of Article 21-W of CVM Instruction No. 481/09 provides that the voting instruction from a specific CPF or CNPJ must be attributed to all shares held by that CPF or CNPJ, according to the shareholder positions provided by the registrar, on the date of the meeting.

Furthermore, in case of discrepancies between the remote voting ballot received directly by the company and the voting instruction contained in the registrar's analytical map, the voting instruction from the registrar must prevail in the counting of votes to the detriment of those received directly by the company, as provided in paragraph 2º of Article 21-W of CVM Instruction No. 481/09.

As provided in paragraph 3º of Article 21-W of CVM Instruction No. 481/09, on the eve of the date of the general meeting, the company must publish via the electronic system on the CVM page (“IPE Online” in the Empresas.NET System, Category: “Meeting” / Type: “EGM, GM or EGM/GM” / Species: “Consolidated remote voting map”) and on its own website, a synthetic consolidated voting map consolidating the votes cast remotely, that is, adding to the count of remote votes the instructions received directly by the company.

Regarding the method of counting votes in the general meeting, in accordance with paragraph 5º of Article 21-W of CVM Instruction No. 481/09, remote voting instructions from shareholders who, (i) physically attending the general meeting, request to exercise the vote in person; (ii) have opted to vote through an electronic system made available by the company, in the form of item II of paragraph 2º of Article 21-C of CVM Instruction No. 481/09; or (iii) are not eligible to vote in the meeting or in the respective deliberation, must be disregarded.

In this sense, the company must count votes, in accordance with Article 21-W of CVM Instruction No. 481/09: (i) according to the analytical map of shareholders' voting instructions provided by the registrar; (ii) according to the analytical voting map prepared by the company based on remote voting ballots received directly from shareholders; and (iii) according to the voting manifestations presented by shareholders present at the meeting.

It is recalled that CVM Instruction No. 594/17 establishes rules for rounding percentages when counting votes from remote voting ballots, notably in matters involving the distribution of votes in case the election occurs by multiple voting.

The rule defined that equal distribution will consider the division of the percentage of 100% among the chosen candidates up to the first two decimal places, without rounding, and that fractions of shares processed from the application of the resulting percentage will not be allocated to any candidate, being disregarded in the multiple voting procedure.

Paragraph 1º of Article 21-W of CVM Instruction No. 481/09 does not provide a cutoff date for the apportionment of shareholders eligible to participate in the meeting. There was no change in this regard in the procedures normally applied in the meeting, which will continue to observe the provisions of Article 126 of the Corporate Law.

Thus, if the shareholder alienates shares between the date of transmission of the voting instruction (remote voting ballot) and the date of the meeting, only the votes of the shares that remain in their ownership should be counted, being the company's responsibility to verify this balance at the time of the meeting.

As provided in paragraph 6º of Article 21-W of CVM Instruction No. 481/09, on the date of the general meeting, the company must publish via the electronic system on the CVM page (“IPE Online” in the Empresas.NET System, Category: “Meeting” / Type: “EGM, GM or EGM/GM” / Species: “Final voting map”) and on its own website, a final synthetic voting map consolidating the votes cast remotely and the votes cast in person, as counted in the meeting.

It is emphasized that the publication of the final synthetic voting map or the final detailed voting map as attachments to the summary of the meeting's decisions or the meeting's minutes, respectively, does not dispense with the obligation to publish them in their specific associations in the Empresas.NET System.

Furthermore, in accordance with CVM Instruction No. 594/17, within 7 business days after the holding of the meeting, the company must publish via “IPE Online” in the Empresas.NET System, a final detailed voting map consolidating the votes cast remotely and the votes cast in person, as counted in the meeting, containing the first 5 numbers of the shareholder's registration in the Individual Taxpayer Registry – CPF or in the National Registry of Legal Entities – CNPJ, the vote cast by them regarding each matter, and information about the shareholder position.

It is emphasized that it is necessary for the deliberation that questions shareholders if they wish for their shares to compose the quorum for the formation of a separate election to be included in the map provided for in Article 21-W, paragraph 6º, of CVM Instruction No. 481/09, whether or not the quorum was reached.

In this sense, the information regarding the aforementioned deliberation must be included in the consolidated final detailed voting map, regardless of whether the separate election occurred.

In accordance with paragraph 7º, of Article 21-W of CVM Instruction No. 481/09, included by CVM Instruction No. 609/19, the company that publishes the final detailed voting map on the same day of the holding of the meeting is exempt from delivering the final synthetic voting map.

It is emphasized that, when the election does not allow for the use of the multiple voting process, requests of this nature made through the remote voting ballot must be disregarded, remaining valid the votes cast in the same ballot regarding other matters.

Once the multiple voting process is adopted for the election of members of the board of directors, the votes cast by shareholders who, via remote voting ballot, have opted for “ABSTAIN” in the item of prior distribution of votes to the candidates informed in the ballot, are considered as abstention in the respective deliberation of the meeting, so that the votes of such shareholders are not counted in the quorum for deliberation and, therefore, these shareholders do not participate in the election of the members of the board of directors.

Therefore, considering that multiple voting is not an institute commonly found in the legislation of other jurisdictions, for a better understanding of shareholders, companies must detail the voting procedure in the material for convening the General Meetings, making it clear that the votes of shareholders who fall under the hypothesis mentioned in the previous paragraph will be disregarded.

7.9 Presentation of documents – demonstrative table
For the sending of documents via the Empresas.NET System, the following associations must be used:

Category Type Species Deadline
Meeting EGM or EGM/GM Remote Voting Ballot Up to 1 month before the meeting Meeting EGM or EGM/GM Registrar Map 48 hours before the meeting Meeting EGM or EGM/GM Consolidated Remote Voting Map Eve of the meeting date Meeting EGM or EGM/GM Final Synthetic Voting Map* On the day of the meeting Meeting EGM or EGM/GM Final Detailed Voting Map Up to 7 business days after the date of the meeting

(*) In accordance with paragraph 7º, of Article 21-W of CVM Instruction No. 481/09, included by CVM Instruction No. 609/19, the company that publishes the final detailed voting map on the same day of the holding of the meeting is exempt from delivering the final synthetic voting map.

7.9.1 Abuse of voting rights and conflict of interest (Article 115, paragraph 1º, of Law No. 6,404/76)
As provided in paragraph 1º of Article 115 of Law No. 6,404/76, the shareholder may not vote on the deliberations of the general meeting relating to the appraisal report of assets with which they contribute to the formation of social capital and to the approval of their accounts as an administrator, nor in any others that could benefit them in a particular manner, or in which they have an interest conflicting with that of the company.

The CVM Collegiate Body, in a judgment held on 28.11.2017 (CVM Sanctioning Administrative Process No. RJ2014/10556), understood that the shareholder who is also an administrator is, in accordance with Article 115, paragraph 1º, of Law No. 6,404/76, prohibited from voting regarding the proposal of a liability action against themselves (Article 159 of Law No. 6,404/76) 46.

It is worth highlighting that, according to the Collegiate's decision, the fact that the accused had resigned from the position of administration before the holding of the general meeting does not change the configuration of the voting impediment, as they are the target of the proposal for a civil liability action, which would be based on facts that occurred during the period in which they were part of the company's administration.

On the other hand, it was decided that the shareholder-administrator may vote on the deliberation regarding the proposal of a liability action against another administrator, even if that administrator was elected with their favorable votes, or even indicated by them.

At the same time, the Collegiate reiterated the understanding already expressed in the records of the CVM Sanctioning Administrative Process No. RJ2014/10060, judged on 10.11.2015 47, to the effect that the shareholder-administrator is also prohibited, in accordance with Article 115, paragraph 1º, of Law No. 6,404/76, from voting on the deliberation regarding the taking of their accounts, through a company under their complete influence. It was highlighted that, if the norm seeks to remove the administrator's will from the deliberation, it is not logical nor reasonable to admit that this will is manifested through a different means, but with the same effectiveness.

In a decision of 13.11.2020, the Collegiate, by majority, within the scope of Process No. 19957.005563/2020-75, expressed the view that the characterization of particular benefit, for there to be an impediment to vote, “must result from the shareholder's condition resulting in the breaking of equality in the treatment of partners, and bear a direct relationship with the matter under deliberation”. Furthermore, it would not be appropriate to interpret the concept of particular benefit in a way that covers indirect benefits, lest it be confused with the concept of conflicting interest, a distinct hypothesis of voting impediment in Article 115, paragraph 1º, of Law No. 6,404/76.

7.10 Incorporation, merger, and spin-off
The administration bodies or partners of the societies involved in operations of incorporation, share incorporation, merger, or spin-off must sign a protocol containing the conditions of the operation, with the minimum information listed in the items of Article 224 of Law No. 6,404/76.

Such operations will be submitted to the deliberation of the general meeting of the companies through justification, in which the information contained in the items of Article 225 of Law No. 6,404/76 will be exposed.

In situations where at least one of the issuers is registered in category A, CVM Instruction No. 565/15 also applies.

46 See http://conteudo.cvm.gov.br/sancionadores/sancionador/2017/RJ_201410556_Forjas-Taurus.html.
47 See http://conteudo.cvm.gov.br/sancionadores/sancionador/2015/20151110_PAS_RJ201410060.html.

In the case of incorporation, merger, and share incorporation involving a controlling company and a controlled company or companies under common control, the justification presented to the general meeting of the controlled company must contain, in addition to the information provided for in Articles 224 and 225, the calculation of the substitution ratios of the shares of the non-controlling shareholders of the controlled company based on the net asset value of the shares of the controlling and controlled companies, with both net assets evaluated according to the same criteria and on the same date, at market prices, or based on discounted cash flow, or any other criterion accepted by the Securities and Exchange Commission (CVM), in the case of publicly-held companies (Article 264 of Law No. 6,404/76 and Article 8 of CVM Instruction No. 565/15).

It is important to note that, in a meeting on 15.02.2018, within the scope of CVM Process No. 19957.011351/2017-21, by unanimous vote, the Collegiate Board expressed that Article 264 of Law No. 6,404/76 is inapplicable in operations involving the incorporation of a wholly-owned subsidiary by a publicly-held controlling company, since, in the absence of non-controlling shareholders, the fundamental condition provided for in the provision would not be present.

Regarding the publication in the press of the Relevant Fact referred to in Article 3 of CVM Instruction No. 565/05, it should be noted that the operation must be disclosed in accordance with the regulations in force, which currently include Law No. 6,404/76 and CVM Instruction No. 358/02, such that CVM Instruction No. 565/15 defines only the minimum content of the instrument that will disclose it, if such disclosure is necessary. Thus, it is up to the company's management to assess the convenience and opportunity of disclosing the aforementioned relevant fact.

CVM Instruction No. 565/05 also introduced an annex to CVM Instruction No. 481/09, regarding assemblies that may deliberate on merger, spin-off, incorporation, and share incorporation involving at least one issuer registered in Category A. This annex requires a series of information, which must be provided in the proposal, which must be disclosed by “IPE Online” in the Empresas.NET System, category “Assembly”, type “AGE” or “AGO/E”, species “Management Proposal”, subject “Merger”, “Spin-off”, “Incorporation” or “Share Incorporation”. Among such information, the following stand out:
a. the protocol and justification, which, according to usual practice of publicly-held companies, may be contained in a single document; b. copies of studies, presentations, reports, opinions, opinions or appraisal reports of the companies involved made available to the controlling shareholder;
c. financial statements used for the purposes of the operation; and
d. pro forma financial statements prepared for the purposes of the operation.

All documents and information pertinent to the matter to be debated at the extraordinary general meeting must be made available to shareholders. In this sense, in addition to the already mentioned documents, all relevant information must be disclosed so that shareholders can make an informed decision, such as (i) possible non-compete agreements; (ii) proposals to enter into contracts of any nature that have administrators or shareholders of the company as one of the parties and that bear any relation to the business combination; and (iii) proposal to modify the remuneration of administrators in the context of the corporate restructuring.

The substitution ratios and other conditions of the operation must be disclosed by the company both in the relevant fact (Annex 3 of CVM Instruction No. 565/15) and in the protocol (Article 224 of Law No. 6,404/76), highlighting that, in addition to the criteria used, the values that served as the basis for the calculation of the substitution ratios must also be disclosed.

In accordance with paragraph 2 of Article 264 of Law No. 6,404/76, the evaluation of the net assets of the companies in operations of incorporation or merger involving a controlling and controlled company or companies under common control will be carried out by a specialized company, in the case of publicly-held companies.

Regarding financial statements, note that Article 6 of CVM Instruction No. 565/15 provides that the companies involved must disclose statements whose base date is the same for all companies in question and that such date is not earlier than 180 (one hundred and eighty) days from the assembly that will deliberate on the operation. This latter deadline may be extended to 360 (three hundred and sixty) days, at the discretion of the administrators of the publicly-held companies involved, provided that the financial situation of the companies involved has not changed significantly after the base date of the statements and the administrators sign a declaration to this effect. Article 10 of this same Instruction further provided that the obligations provided for in Chapter III do not apply to incorporations or share incorporations of closed companies by an issuer of securities registered in Category A, if the operation does not represent a dilution greater than 5% (five percent).

The statements must be prepared in accordance with Law No. 6,404/76 and audited by an independent auditor registered with the CVM, even if some of the companies involved are not joint-stock companies or are subject to the rules issued by the CVM.

Additionally, pro forma financial statements must also be prepared for the companies that will survive or result from the operation, as if they already existed, referring to the date of the aforementioned financial statements. Likewise, such statements must be prepared in accordance with Law No. 6,404/76 and will be submitted to reasonable assurance by an independent auditor registered with the CVM.

It is worth highlighting, furthermore, the recommendations of Orientation Opinion No. 35/08 aimed at merger, incorporation and share incorporation operations involving a controlling company and its controlled companies or companies under common control.

Although the procedures described in the aforementioned opinion are not exclusive or exhaustive, the CVM understands that their adoption is an adequate way to comply with the fiduciary duties of administrators provided for in Articles 153, 154, 155 and 245 of Law No. 6,404/76. In this sense, the CVM has already manifested itself, in a Market Communication of 27.05.2009, in the sense that one of the recommendations contained in the aforementioned opinion concerns the constitution of an independent committee for negotiating the conditions of the operation, such that its constitution for mere confirmation of a previously established exchange ratio distorts the purposes of such body.

Additionally, it is recommended that the deliberations and negotiations related to the operation be duly documented, among other procedures, through the preparation of minutes of all meetings, in order to support any analysis of compliance with the fiduciary duties provided for by law by members of the Board of Directors and the independent committee.

It is not recommended to disclose any exchange ratio that the management or controlling shareholder considers applicable to the intended operation before the completion of the work of the independent committees, since this disclosure at an earlier time may, even, influence the quotation of the shares of the companies involved until the conclusion of the negotiations. In cases where this still occurs, the information provided for in Article 4 of CVM Instruction No. 565/15 must be disclosed.

Finally, in cases where the operation of incorporation, merger or spin-off gives rise to the right of withdrawal, publicly-held companies that have shares admitted to trading in regulated markets must, as provided for in Article 20 of CVM Instruction No. 481/09, disclose the information provided for in Annex 20 to the aforementioned instruction, in the manner described in this Circular Letter (see item 4.2). Note, however, that in cases of increase or reduction of capital exclusively due to operations of incorporation, merger or spin-off, it is not necessary to make available Annexes 14 and 16 of CVM Instruction No. 481/09.

Attention should be drawn to the fact that corporate restructurings of this nature, in addition to involving relevant values, significantly affect the rights of shareholders of the companies involved, including due to, in many cases, the compulsory migration to the share base of another company.

In this context, regardless of whether the operation falls under the hypotheses provided for in Article 264 of Law No. 6,404/76, administrators must act, in the exercise of their duties, with diligence and loyalty to the company and, consequently, to all its shareholders, observing, whenever applicable, the procedures recommended in item 3 of CVM Orientation Opinion No. 35/08, which deals with the Concretization of Fiduciary Duties, with respect to, for example: (i) obtain all necessary information to perform their function; (ii) have sufficient time to perform their function; (iii) have the deliberations and negotiations duly documented, for subsequent verification; (iv) assess the need or convenience of hiring legal and financial advisors; (v) have the work of hired advisors duly supervised; (vi) consider the possibility of adopting alternative forms to conclude the operation; (vii) express opposition to the operation if the exchange ratio and the other proposed terms and conditions are unsatisfactory.

7.11 Acquisition of a commercial company by a publicly-held company
Article 256 of Law No. 6,404/76 determines that the purchase, by a publicly-held company, of the control of any commercial company, will depend on the deliberation of the general meeting of the purchaser, especially convened to know the operation, whenever:
a) the purchase price constitutes, for the purchaser, a relevant investment (Article 247, sole paragraph); or b) the average price of each share or quota exceeds one and a half times the largest of the three values indicated below:
(i) average quotation of shares on the stock exchange or in the organized over-the-counter market, during the 90 (ninety) days prior to the date of the contract; (ii) net asset value (Article 248) of the share or quota, with the net asset evaluated at market prices (Article 183, paragraph 1); (iii) value of the net profit of the share or quota, which may not exceed fifteen times the annual net profit per share (Article 187, VII) in the last two fiscal years, monetarily updated.

In principle, the aforementioned article does not apply to operations in which publicly-held companies acquire commercial companies through their controlled, affiliated or wholly-owned subsidiaries, which are closed companies or present another corporate type.

Nevertheless, in the analysis of concrete situations, controlling shareholders and administrators may be held liable for abuse or deviation of power, respectively, if it is proven that the use of a certain “vehicle” company in the acquisition of control of other companies was to the detriment of the legitimate interests of the other shareholders of the publicly-held company.

Additionally, in its paragraph 2, Article 256 provides that “if the acquisition price exceeds one and a half times the largest of the three values referred to in item II of the caput [average quotation, net asset value adjusted to market and 15 (fifteen) times the average of the annual net profit per share of the last two fiscal years], the dissenting shareholder of the deliberation of the assembly that approves it will have the right to withdraw from the company through reimbursement of the value of its shares, in accordance with Article 137, observed the provisions of its item II”.

In view of the above, upon the disclosure of the acquisition of a commercial company, the publicly-held company must inform whether the acquisition was carried out by the publicly-held company itself or through a controlled, affiliated or wholly-owned subsidiary, as well as whether the operation will be submitted to the deliberation of the general meeting of shareholders and whether it will give rise to the right of withdrawal for its shareholders, as provided for in the aforementioned Article 256.

It should be noted that such disclosure must contain, at minimum, the information necessary to prove whether or not it is a case of holding an assembly and granting the right of withdrawal.

If the operation is to be the subject of assembly deliberation, the deadline in which the assembly is intended to be held must be informed. Companies registered in Category A to which CVM Instruction No. 481/09 applies must, as provided for in Article 19 of CVM Instruction No. 481/09, disclose, at minimum, the information provided for in Annex 19 to the aforementioned Instruction, in the manner oriented in this Circular (see item 4.2).

Even if CVM Instruction No. 481/09 does not apply to issuers registered in Category B and those registered in Category A not mentioned in the previous paragraph, they must send, on the same date of publication of the first announcement of the convocation of the assembly, by virtue of the provisions of paragraph 3 of Article 135 of Law No. 6,404/76 and item II of Article 31 of CVM Instruction No. 480/09, the documents and information necessary for the exercise of the right to vote.

It is worth highlighting that the report required by paragraph 1 of Article 256 of Law No. 6,404/76 is not confused with the evaluation required by paragraph 2 of the same article, since its function is to support the decision of shareholders to approve or not the operation, providing a benchmark or justifying the purchase price, and must be prepared by the criterion that the administrators consider to be the one that best evaluates that investment.

The appraisal report referred to in paragraph 1 of Article 256, as well as other reports eventually produced for the purposes of letters “a”, “b” and “c” of item II of the caput of the same article, must be sent, via “IPE Online” in the Empresas.NET System, in the category “Economic-Financial Data” and type “Appraisal Report”, identifying in the subject, whenever possible, the type of report and the operation to which they refer.

It is recommended that companies only carry out corporate restructurings involving acquired companies after the acquisition has been approved or ratified in a shareholders' assembly.

In the event of an operation subject to ratification by the general meeting of shareholders, it is recommended that such ratification, when possible, take place at the first general meeting to occur after the implementation of the operation.

If the operation gives rise to the exercise of the right of withdrawal, it must also be informed: (a) shareholders who may exercise the right of withdrawal, should they dissent from the deliberation of the Assembly, to be convened for the ratification of this acquisition (see item 7.13); (b) The reimbursement value, in reais (R$) per share; and (c) the deadline and procedures that dissenting shareholders must adopt to manifest themselves.

In these cases, publicly-held companies that have registration in Category A and to which CVM Instruction No. 481/09 applies must also, as provided for in Article 20 of CVM Instruction No. 481/09, disclose the information provided for in Annex 20 to the aforementioned instruction, in the manner oriented in this Circular (see item 4.2).

7.12 Conversion of shares
In cases of conversion of shares, without prejudice to the provisions of CVM Instruction No. 358/02, the management proposal, to be sent via “IPE Online” in the Empresas.NET System, category “Assembly”, type “AGO/E”, “AGE” or “AGESP”, species “Management Proposal”, subject “Conversion of shares”, must contain all relevant information, as well as be accompanied by all documents necessary for shareholders to make a decision, such as the reasons or purposes of the operation; the mandatory or optional nature of the operation and the eligibility for the right of withdrawal of dissenting shareholders (see item 7.5); the conversion ratio between the classes or species of shares; the criterion for determining the aforementioned conversion ratio; and the justification for adopting the aforementioned criterion in the conversion operation.

7.13 Right of withdrawal
Law No. 6,404/76 provides for the possibility of exercising the right of withdrawal in specific hypotheses, such as those provided for in Articles 137; 221; 223, paragraph 4; 252; 256 and 264. If the matter deliberated at the general meeting gives rise to the right of withdrawal, the company must inform, at minimum, the shares and classes to which withdrawal applies, the date that will be used to identify the shareholders who may exercise the right of withdrawal, the reimbursement value per share and its method of calculation, the deadlines and procedures that shareholders of this Company, dissenting from the deliberation of the aforementioned Assembly, must adopt to exercise the right of withdrawal, as well as (i) whether the exercise of the withdrawal right will be exclusively on the total number of shares or whether it will be permitted, even, the exercise on part of the shares held and (ii) whether for the exercise of the right of withdrawal uninterrupted ownership is required, from the date of identification of shareholders with the right to manifest their dissent until the day of exercise of such right.

The objective of the above guidance is that all necessary information be provided for investors to make a reflective and informed decision, without prejudice to the possibility of the CVM coming to analyze the regularity of the procedures adopted by the company.

It is worth clarifying that, as provided for in paragraph 1 of Article 137 of Law No. 6,404/76, “the dissenting shareholder of the deliberation of the assembly, including the holder of preferred shares without voting rights, may exercise the right to reimbursement of the shares of which, it is proven, he was the holder on the date of the first publication of the call for the assembly, or on the date of communication of the relevant fact object of the deliberation, if earlier”.

By “date of communication of the relevant fact” must be understood the date of disclosure of the Relevant Fact in the electronic system available on the CVM website on the Internet and in the communication channels described in Article 3, paragraph 4, of CVM Instruction No. 358/02.

Thus, the right of withdrawal would only be due to shares acquired until the day prior to the publication of the first call for an assembly or to the disclosure of the relevant fact, whichever occurs first, regardless of the date of disclosure of the document via the Empresas.NET System.

Article 137, item II, of Law No. 6,404/76 reserves that, in the cases mentioned in items IV and V of Article 136 of the same Law, the holder of a share of species or class that has liquidity and dispersion in the market will not have the right to withdraw, considering that there is:
a) liquidity, when the species or class of share, or certificate representing it, integrates a general index representative of a portfolio of securities admitted to trading in the securities market, in Brazil or abroad, defined by the Securities and Exchange Commission; b) dispersion, when the controlling shareholder, the controlling company or other companies under its control hold less than half of the species or class of share.

In accordance with Article 9 of CVM Instruction No. 565/15, it is understood that the index considered for liquidity purposes must be the Ibovespa.

It is also worth noting that, in the 10 (ten) days subsequent to the end of the period referred to in items IV and V of the caput of Article 137 of Law No. 6,404/76, it is optional for the management bodies to convene the general assembly to ratify or reconsider the deliberation, if they consider that the payment of the reimbursement price of the shares to the dissenting shareholders who exercised the withdrawal right will put the financial stability of the company at risk.

For this reason, the management's decision to propose the reconsideration of the AGO and/or AGESP deliberation, in accordance with Article 137, paragraph 3, of Law No. 6,404/76, must, as a rule, be the subject of a Relevant Fact, within the aforementioned deadline. The management's decision to ratify the aforementioned deliberation must, as a rule, be the subject of a Market Communication.

Publicly-held companies registered in Category A to which CVM Instruction No. 481/09 applies must also, as provided for in Article 20 of CVM Instruction No. 481/09, disclose the information provided for in Annex 20 to the aforementioned instruction, in the manner oriented in this Circular (see item 4.2).

7.14 Capital increase by private subscription
In cases of capital increase, by private subscription, it is necessary that the management proposal contain all relevant information, as well as be accompanied by all documents necessary for shareholders to make a decision, such as:
a) justification regarding the need to carry out the operation; b) main characteristics of the operation:
i. quantity of shares to be issued by species (and class, if any) and potential dilution of shareholding. The potential dilution represents the maximum percentage of dilution suffered by the shareholder who fails to exercise their right of preference in the subscription of the new shares issued. The determination of this percentage can be obtained by dividing the quantity of new shares to be issued by the sum of this quantity with the initial quantity of shares before the capital increase, multiplying the quotient obtained by 100;
ii. issue price; criterion adopted for determining the issue price and detailed information on the economic aspects that underpinned the choice of this criterion;
iii. deadlines and procedures to be observed by shareholders in the exercise of the right of preference and in the subscription and payment of the issued shares: date to be considered for the identification of shareholders who will have the right to subscribe to the new shares and percentage that shareholders will have the right to subscribe with up to 10 decimal places, and start and end dates of the preference period if already defined;
iv. treatment regarding surplus shares not subscribed (in accordance with paragraph 7 of Article 171 of Law No. 6,404/76). In the case of allocation of surplus shares not subscribed, the percentage for the exercise of the right to subscribe to surplus must be obtained by dividing the quantity of unsubscribed shares by the total quantity of shares subscribed by subscribers who have expressed interest in the surplus during the preference period, multiplying the quotient obtained by 100. The company may allow shareholders who express interest in subscribing to surplus to indicate the quantity of additional surplus they wish to subscribe; and
v. in the case of new allocations, the percentage for the exercise of the right to subscribe to surplus must be obtained by dividing the quantity of unsubscribed shares by the total quantity of shares subscribed, in the right of preference and in the other allocations, by subscribers who have expressed interest in the surplus, multiplying the quotient obtained by 100.
c) Appraisal Report and other documents that supported the fixing of the issue price; d) copy of the opinion of the fiscal council, if it is functioning, with divergent votes, if any; and

e) inform whether the shares to be issued as a result of the increase in share capital will participate equally in all benefits, including dividends and any capital remuneration that may be approved in the fiscal year. If they participate on a pro rata temporis basis, inform from which moment they will fully participate in all benefits.

Public companies registered in Category A to which Instruction CVM No. 481/09 applies must, furthermore, as provided in Article 14 of Instruction CVM No. 481/09, disclose the information set forth in Annex 14 to said Instruction, in the manner guided by this Circular (see item 4.2), when the capital increase is deliberated in a general meeting. It should be noted that the disclosure of the information in this Annex is not necessary when the increase results exclusively from a merger, spin-off, incorporation, or share incorporation, in accordance with Article 20-A of Instruction CVM No. 481/09.

If the private subscription capital increase operation is to be deliberated in a Board of Directors meeting, public companies registered in Category A must, as provided in Article 30, item XXXII, of Instruction CVM No. 480/09, disclose the information set forth in Annex 30-XXXII to said Instruction, on the same date as the disclosure of the minutes of the board of directors meeting or within 7 (seven) business days from the date of the meeting of said body, whichever occurs first. This communication must be disclosed through “IPE Online” in the Empresas.NET System (category “Notice to Shareholders”, type “Capital increase by private subscription deliberated in BoD”), mentioning in the subject line the information disclosed.

The procedures set forth in the two preceding paragraphs also apply to the case of deliberation on capital increase in the context of conversion of debentures or other debt securities into shares, exercise of subscription rights or subscription bonuses, capitalization of profits or reserves, and splits of option plans.

Regarding the role of the Fiscal Council, in principle, it is not incumbent upon this body to express a prior opinion on statutory amendments related to authorized capital. However, in cases where the amendment of authorized capital is being deliberated in a General Shareholders’ Meeting (AGE) to enable the approval of a capital increase by the Board of Directors, whose main characteristics are already defined and known to shareholders, it is understood that the Fiscal Council should express its opinion on the capital increase prior to the AGE that will deliberate on the modification of authorized capital, in order to, in accordance with Article 163, item III, of Law No. 6.404/76, subsidize the decision of the shareholders.

In this regard, the opinion of the Fiscal Council, in cases of capital increase, must expressly contain the opinion of the body (favorable or unfavorable) on the proposed operation; it is not sufficient to simply mention the presence of necessary and sufficient information for shareholders to deliberate on the matter in a meeting.

It should be recalled that, in the understanding of the CVM Collegiate Body (see decision of 07.01.2014 – CVM Process No. RJ2013/6295 48), in line with the provisions of Instruction CVM No. 400/03 and CVM Orienting Opinion No. 08/81, in the case of capital increases with partial homologation, shareholders must be granted the right to condition their investment.

48 See http://conteudo.cvm.gov.br/decisoes/2014/20140107_R1/20140107_D01.html.

In this sense, once the possibility of partial homologation is provided for, the company must inform in Annex 14 of Instruction CVM No. 481/09 (item 5.r) or in Annex 30-XXXII of Instruction CVM No. 480/09 (Article 2, XVII) regarding the granting or not of a final deadline for investment review, in the case of partial placement of the shares subject to the increase in share capital, in which Articles 30 and 31 of Instruction CVM No. 400/03 were observed.

It is also worth highlighting that, on the same occasion, the CVM Collegiate Body understood that it is possible to effectuate homologation of a partially subscribed private capital increase, regardless of the realization of public distribution efforts for surplus shares. In the decision, the Collegiate Body summarized that the effectuation of a capital increase by private subscription of shares that has been partially subscribed requires:

a) that the deliberation of the increase (as well as the material disclosed to shareholders in the form of Instruction CVM No. 481/09, in cases where the general meeting is the competent body to deliberate on the matter) expressly:
(i) provides for such possibility of partial subscription; (ii) specifies the minimum quantity of securities that must be subscribed (or the minimum amount of resources that must be secured) for the increase to be effectuated; and (iii) specifies the maximum quantity of securities that may be subscribed (or the maximum amount of resources that must be secured) within the scope of the capital increase; and b) that all relevant information necessary for shareholders to evaluate the capital increase and its multiple outcomes be provided to shareholders, including, among others, information on (i) destination of resources; (ii) dilution; and (iii) subscription commitments; c) that shareholders be granted the right to conditional subscription of the increase; d) that at the end of the preference period, it is verified that the minimum amount indicated in the deliberation approving the increase has been subscribed, at least; and e) that the capital increase that admits partial subscription cannot be effectuated if the subscribed amount does not reach, at least, the minimum value indicated in the deliberation approving the operation.

In this scenario (and only in this scenario), there will be surplus shares, whose treatment must follow the provisions of Article 171, paragraph 7 (sale on Stock Exchange).

Finally, it is emphasized that there is no legal impediment for subscribers of shares who have the right to participate in the distribution of surplus shares to cede this right, for consideration or not, to other subscribers of shares or even to third parties.

7.14.1 Surplus shares in capital increase with credits
As provided in Article 171, paragraph 2, of Law No. 6.404/76, in a capital increase through capitalization of credits or subscription in goods, the right of preference is always ensured to shareholders, and, if applicable, the amounts paid by them will be delivered to the holder of the credit to be capitalized or the good to be incorporated.

According to the understanding of SEP, capitalization with credits does not exempt compliance with paragraph 7 of the same Article 171. However, in the sanctioning process CVM RJ2013/6294 49, the Collegiate Body concluded that the body that deliberated the realization of a capital increase in an amount equal to that of the credit to be capitalized or the good to be incorporated should not observe the provisions of Article 171, paragraph 7, and consequently is not obliged to promote the distribution of surplus shares among shareholders, being able to deliver them directly to the holder of the respective credit or good.

7.15 Capital Reduction
Law No. 6.404/76 regulates capital reduction in its Articles 173 and 174 and stipulates that a general meeting may deliberate the reduction of share capital in two scenarios: if there is a loss, up to the amount of accumulated losses, or if it is deemed excessive.

It is emphasized that capital reduction operations must observe the provisions of Article 174 of Law No. 6.404/76, which determines that the reduction of share capital with restitution to shareholders of part of the value of the shares, or by the decrease in their value, when not fully paid, to the amount of the contributions, only becomes effective 60 (sixty) days after the publication of the minutes of the general meeting that deliberated it.

Thus, the cut-off date, i.e., the date that will identify shareholders with the right to receive the value corresponding to the reduction of share capital, must be subsequent to the end of the period provided for in Article 174 of Law No. 6.404/76 (period for creditor opposition).

Whenever the general meeting is convened to deliberate on capital reduction, issuers registered in Category A to which Instruction CVM No. 481/09 applies must disclose, through “IPE Online” in the Empresas.NET System (see item 4.2.2) at minimum, the following information required by Instruction CVM No. 481/09: (a) value of the reduction and new share capital; (b) detailed explanation of the reasons, form, and consequences of the capital reduction; (c) copy of the fiscal council opinion, if it is functioning, when the proposal for capital reduction is initiated by the administrators; (d) as applicable: (i) the value of restitution per share; (ii) the value of the decrease in the value of shares to the amount of contributions, in the case of unpaid capital; or (iii) the quantity of shares subject to the reduction. It should be noted that the disclosure of this information is not necessary when the increase results exclusively from a merger, spin-off, incorporation, or share incorporation, in accordance with Article 20-A of Instruction CVM No. 481/09.

49 See http://www.cvm.gov.br/sancionadores/sancionador/2017/20171114_PAS_RJ20136294.html

It is emphasized that, even if Instruction CVM No. 481/09 does not apply to issuers registered in Category B and Category A not mentioned in the preceding paragraph, these must send, on the same date as the publication of the first announcement convening the meeting, by virtue of the provisions of paragraph 3 of Article 135 of Law No. 6.404/76 and item II of Article 31 of Instruction CVM No. 480/09, the documents and information necessary for the exercise of voting rights in General Shareholders’ Meetings.

7.16 Stock Grouping
In the case of stock grouping, in the Relevant Fact disclosing the operation, the grouping factor and the treatment to be given to the resulting fractions of shares must be informed.

It should be noted that the controlling shareholder, if any, must ensure shareholders the option to remain part of the shareholder register with, at least, one new unit of capital. In this sense, the following procedures may be adopted: (i) donation of shares in order to complete the participation of shareholders holding fractions, regardless of the number of shares they held before the grouping; or (ii) granting a period for shareholders to compose whole lots multiples of the grouping, in which case, once such period is concluded, the sum of the fractions will be subject to a stock exchange auction and the proceeds from the sale distributed proportionally among the holders of the fractions.

The administration’s proposal to be submitted to the meeting must contain the entire procedure proposed for the grouping, the grouping factor used, the treatment that will be given to the fractions, and the composition of the share capital after the grouping.

7.17 Trading Ban Period
Article 13 of Instruction CVM No. 358/02 establishes that, prior to the disclosure to the market of a relevant act or fact, trading with securities issued by the company, or referenced to them, is prohibited:

a) by the public company itself, by controlling shareholders, direct or indirect, directors, members of the board of directors, the fiscal council, and any bodies with technical or consultative functions, created by statutory provision, or by anyone who, by virtue of their position, role, or status in the public company, its parent, its subsidiaries, or affiliates, has knowledge of the information regarding the relevant act or fact; b) by anyone who has knowledge of information regarding a relevant act or fact, knowing that it is information not yet disclosed to the market, especially those who have commercial, professional, or trust relationships with the company, such as independent auditors, securities analysts, consultants, and institutions part of the distribution system, who are responsible for verifying regarding the disclosure of information before trading with securities issued by the company or referenced to them; c) by administrators who leave the administration of the company before the public disclosure of a business or fact initiated during their management period, with the prohibition extending for a period of six months after their departure.

The trading ban will also prevail when there is the intention to promote a merger, total or partial spin-off, consolidation, transformation, or corporate reorganization.

The ban period applies regardless of the form by which the information is disclosed by the Company. In the supervision of SEP, the disclosure through “Market Notice – Other Notices Not Considered Relevant Facts” of information that falls under the concept of relevant fact contained in Article 2 of Instruction CVM No. 358/02, due to having the potential to produce impacts on the trading of securities issued by the company, may be treated as a relevant fact for the purposes of Article 13 of Instruction CVM No. 358/02, in addition to resulting in the assessment of liabilities for non-disclosure of the information in the form of a relevant fact.

The above prohibitions will cease to be in force as soon as the company discloses the relevant fact to the market, unless trading with the shares could interfere with the conditions of the referred businesses, to the detriment of the company’s shareholders or the company itself.

Furthermore, it is worth highlighting that the prohibition cited in letter “a” above does not apply to the acquisition of treasury shares, through private negotiation, resulting from the exercise of a purchase option according to the stock option grant plan approved in a general meeting.

Instruction CVM No. 358/02, in its Article 13, paragraph 3, item II, also prohibits trading with securities issued by the company, or referenced to them, by controlling shareholders, direct or indirect, directors, and members of the board of directors, whenever the acquisition or alienation of shares issued by the company, its subsidiaries, affiliates, or another society under common control is in progress by the company itself, or if an option or mandate has been granted for the same purpose.

To ensure full compliance with this rule, considering the terms of Article 13, paragraph 3, item II of Instruction CVM No. 358/02, in the approval and execution of share repurchase programs, companies must establish clear and objective mechanisms to prevent that transactions carried out by it in organized markets (i) have as counterparty its controllers, directors, and members of the board of directors, members of the fiscal council, or members of statutory bodies with technical and consultative functions; and (ii) produce atypical effects on price, volume, or liquidity, which could be exploited by controllers, directors, members of the board of directors, members of the fiscal council, or members of statutory bodies with technical and consultative functions in their negotiations with other market participants.

It should be noted that the existence of a central counterparty in organized markets is not sufficient to ensure compliance with this rule, in cases where the principals of the transaction in question are, on one side, the company, and on the other, its controllers, directors, members of the board of directors, members of the fiscal council, or members of statutory bodies with technical and consultative functions.

In the supervision exercised by SEP, the mechanisms adopted by companies and the impacts of the repurchase will be examined in each concrete case. Provided that the above-established guidelines are observed, it is not necessary for administrators and controlling shareholders to abstain from trading during the entire validity of the repurchase program. In any case, it is worth emphasizing that the acquisition, by a public company, of its own issued shares is prohibited when it has as its object shares belonging to the controlling shareholder, in accordance with Article 7 of Instruction CVM No. 567/15.

It is worth noting that in the case of a share repurchase program, as well as in the other prohibitions cited above, the prohibition of trading will not extend to transactions that are carried out in accordance with investment plans that satisfy the requirements provided in Article 15-A of Instruction CVM No. 358/02.

Likewise, regarding the prohibition of trading in the 15 (fifteen) day period preceding the disclosure of accounting information, the rule establishes that such prohibition will not apply to transactions of shares issued by the company that are carried out in accordance with an investment plan previously approved by the company, in the manner provided in paragraph 2 of Article 15-A of said instruction.

For the determination of the ban period, the counting of the 15 calendar days period must be done excluding the day of disclosure (for example, for an ITR with a disclosure date scheduled for 05/10, the ban period will be comprised between the days 04/25 and 05/09). It should be noted that trading on the day of disclosure itself is prohibited, before the information becomes public.

It is also worth remembering that, regardless of the objective ban period on trading established in paragraph 4 of Article 13 of Instruction CVM No. 358/02 (15 days prior to the date of disclosure of quarterly and annual information), trading is prohibited by those who have knowledge of the content of the financial statements before their disclosure.

Attention is drawn to the fact that share lending is an operation that is also covered by the prohibition provided in Article 13, including in cases where the person acts as the donor of the loan. This is not only because this operation consists, legally, of a transfer of ownership (even if temporary), but also because the loan contract allows the donor to opt for the incidence of the remuneration rate on the quote valid on the date of closing or maturity of the contract.

Additionally, the prohibition on trading provided in Article 13 also applies to private negotiations.

It should be recalled that, in the event of advance disclosure of financial information, the ban period on trading provided in Article 13, paragraph 4, of Instruction CVM No. 358/02 is also advanced.

The company must maintain controls with supporting documentation, to make available to CVM, if requested, the indication of who had access to the disclosed relevant information, as well as the moment of such access, in accordance with Instruction CVM No. 358/02.

It is recommended that the Company’s Investor Relations Director inform the persons mentioned in the caput of Article 13 of Instruction CVM No. 358/02 and, if possible, all company employees, regarding the occurrence of ban periods.

It should be observed that the trading bans contained in Article 13, caput and paragraph 4, of Instruction CVM No. 358/02, apply to members of a Committee created by statutory provision, even if they are not administrators of the company, as per decision of the CVM Collegiate Body, in meetings held on 13.12.2016 and 02.05.2017 (CVM Process No. 19957.006290/2016-08) 50 .

50 See http://conteudo.cvm.gov.br/decisoes/2016/20161213_R1/20161213_D0378.html and http://conteudo.cvm.gov.br/decisoes/2017/20170502_R1/20170502_D0378.html.

Finally, it is worth highlighting that the provision of Article 13, paragraph 4, of Instruction CVM No. 358/02 prohibits only the trading of securities by the persons cited, not constituting a ‘silence period’, which applies to public distribution offerings, in accordance with item IV of Article 48 of Instruction CVM No. 400/03. Thus, the disclosure of information by the Company in the 15-day period preceding the disclosure of DFP and ITR must remain regular, observing the provisions of Instruction CVM No. 358/02.

7.18 Related-Party Transactions
In accordance with Articles 153 to 156 of Law No. 6.404/76, administrators must conduct corporate business with diligence and loyalty, abstaining from interfering in operations in which they have a conflict of interest.

There are precedents from CVM in the sense that the administrator’s conflict is “presumed, i.e., its application does not depend on the analysis of the concrete case, leaving the company’s administrators impeded from participating in any negotiation or deliberation regarding a specific operation in which they appear as a counterparty to the company or through which they are benefited, regardless of whether the social interest is being pursued or not”. In this sense, “the existence of a parallel interest of the administrator who will command or actively participate in the negotiations may influence the very bases of the business, its conditions, given the economic interest of the administrator, in opposition or in parallel to that of the company. [...] The fact that the administrator is impeded from ‘intervening in any corporate operation in which they have an interest conflicting with that of the company’, as stated in the caput of Article 156 of Law No. 6.404/76, prevents them not only from voting, if the operation must be approved by a collegial administration body, but also from participating in the negotiations”.

Furthermore, even if the administrator does not intervene in operations in which they have a conflicting interest with that of the company, by virtue of Article 156, paragraph 1, of Law 6.404/76, such operations can only be carried out under reasonable or equitable conditions, identical to those prevailing in the market or in which the company would contract with third parties.

Article 245 also provides that administrators must ensure that operations between the company and its affiliates, subsidiaries, and parent companies observe commutative conditions or with adequate compensatory payment.

To ensure compliance with such provisions, it is recommended that issuers draft and disclose a Related-Party Transactions Policy, approved by the Board of Directors, which provides for procedures and criteria that allow the safe (i) identification of related parties; (ii) identification of suppliers, service providers, and clients who have transactions with parties related to the Company; (iii) criteria and procedures related to the selection of the counterparty, evaluation, and approval of contracts, with the objective of mitigating potential conflicts of interest and ensuring that all transactions with related parties are carried out in the interest of the Company.

51 Votes of Reporting Director Wladimir Castelo Branco and President Marcelo Trindade in CVM Process No. RJ2004/5494, on 14.12.2004. Vote of Reporting Director Pedro Marcilio de Souza in CVM PAS No. 12/2001. Vote of Director Pablo Renteria in CVM PAS No. RJ2011/11073.

Whenever such a document exists, it must be forwarded via the Empresas.net System, under the category "Policy on Transactions with Related Parties" (see 4.16).

The Brazilian Corporate Governance Code provides suggestions of practices to be adopted by issuers with the objective of ensuring the equity of operations. According to the aforementioned document, the Board of Directors must approve and implement a policy on transactions with related parties, which shall include, among other rules:
a) provision that, prior to the approval of specific transactions or guidelines for the contracting of transactions, the Board of Directors requests from the management market alternatives to the transaction with the related party in question, adjusted by the risk factors involved; b) prohibition of forms of remuneration for advisors, consultants, or intermediaries that generate conflicts of interest with the company, the administrators, the shareholders, or classes of shareholders; c) prohibition of loans in favor of the controlling shareholder and the administrators; d) the scenarios of transactions with related parties that must be supported by independent appraisal reports, prepared without the participation of any party involved in the transaction in question, whether it be a bank, lawyer, specialized consulting firm, among others, based on realistic premises and information endorsed by third parties; and e) that corporate restructurings involving related parties must ensure equitable treatment for all shareholders.

Considering the set of attributions of the members of the administration and the constant need to adopt mitigating and preventive measures for potential conflicts, it is considered a good corporate governance practice that councilors do not act as paid consultants or advisors of the organization, as pointed out in the Code of Best Corporate Governance Practices of the Brazilian Institute of Corporate Governance (5th Edition - item 2.3.e).

Still regarding the attributions of the members of the Board of Directors, although, as a rule, negotiations of contracts involving related parties are not attributed to them, it is not possible to dissociate them completely from the responsibilities inherent to the celebration of such transactions, notably due to the obligation of monitoring the directors, conferred upon the Board of Directors by article 142, item III, of Law No. 6.404/76.

In this sense, it is worth highlighting the vote of Rapporteur Director Gustavo Gonzalez delivered in the context of the judgment of PAS 19957.010686/2017-22, which occurred on 07.07.2020, in which he states that "in summary, although not the primary responsible for negotiating, approving, and monitoring the execution of contracts with related parties, the Board of Directors has an extremely important role, due to its legal attribution to monitor the management of directors, in adopting measures aimed at ensuring that such contracts observe the specific regulation dedicated to them in corporate law".

Regardless of the Company's decision regarding the consolidation of internal norms into a policy on transactions with related parties, it is important that there are well-defined rules for each step of the process of contracting related parties. Furthermore, especially with regard to this type of transaction, it is fundamental that the controlling shareholder and the administrators of the Company develop a culture of integrity, based on principles that seek to preserve the interest of the society. Attention is called to some situations that may emerge from the analysis of these operations:
a) contracting of a society belonging to statutory administrators or relatives of administrators, without there being documentary evidence of the service provider selection process; b) loans from the open company to administrators with charges incompatible with those of similar transactions between the individual debtor and financial institutions; c) in cases where there is approval authority, due to the value of the business, the fragmentation of the transaction into several contracts and among different societies of the group, so as not to submit the business to the deliberation of the competent body; d) alteration of contractual conditions through an addendum, without the same approval procedures of the original contract being adopted for the celebration of the addendum; e) contracting of a service provider, usually of an intellectual nature (consulting, advertising, law firms), which, in turn, maintains concomitant contracts, including consulting, with related parties; f) service contract (i) defined in a comprehensive manner, (ii) varied, (iii) unrelated to each other, and (iv) of long duration, making it difficult to identify the values due and the corresponding counterparty; g) consulting contract signed with a statutory administrator, having as its object activities that could be inserted in the context of its attributions; h) still with regard to the relationship of the administrators with the Company, without failing to observe that any benefit received by the administrator in exchange for their services must be understood as remuneration, attention is called to the following situations:
i. use of the Company's assets and services for private purposes, for example, aircraft, vehicles, legal services, etc.;
ii. receipt of commissions on businesses signed by the Company, for example, alienation of a subsidiary, which are not formally provided for in the administrator remuneration policy;
iii. receipt of extraordinary values, for the practice of an act that is included in their attributions and which are not formally provided for in the administrator remuneration policy.

It is also recommended that transactions with related parties be analyzed by the Statutory Audit Committee, when present, or another specific independent body, which would be responsible for evaluating the conditions under which such transactions are established and ensuring that they are carried out in the best interest of the company. The approval of these operations must be preceded by effective negotiation, in which persons without personal interests in the matter participate on behalf of the company, and it is also advisable to create approval authorities according to the relevance of the transaction.

Finally, transactions between related parties and the entire decision-making process that precedes them must be documented in a way that allows for subsequent verification, when necessary.

It is worth reiterating that CVM Orienting Opinion No. 35/08 enumerates guidelines that may be applicable to various transactions between related parties, and not only those that take the form of mergers, incorporations, and share incorporations. It is up to the administrators to evaluate, due to the nature and relevance of the transaction, whether and to what extent the measures listed in the aforementioned opinion must be observed.

As determined by article 30, item XXXIII, of CVM Instruction No. 480/09, open companies registered in Category A must disclose communication on transactions between related parties (see item 4.16), without prejudice to the proper disclosure in the financial statements and in the Reference Form.

7.19 Indemnity Commitments
On 25.09.2018, CVM Orienting Opinion No. 38/18 was issued, which provides for the fiduciary duties of administrators within the scope of indemnity contracts celebrated between open companies and their administrators.

In accordance with the aforementioned Orienting Opinion, there is no legal obstacle to the provision, in an indemnity contract, of the right to indemnification in favor of administrators for expenses suffered due to their position or function. Notwithstanding, the granting of indemnification to administrators based on the indemnity contract should not occur in all cases, such as, for example, in those where the legal standards of conduct to which they are subject were not observed.

In this sense, it is understood that the following are not subject to indemnification, among others, expenses resulting from acts of administrators practiced:
a) outside the exercise of their attributions; b) with bad faith, intent, gross negligence, or through fraud; or c) in their own interest or that of third parties, to the detriment of the social interest of the company.

Furthermore, the CVM understands that, given the risks of conflicts of interest inherent to indemnity contracts, to fulfill their fiduciary duties, administrators must ensure that the company develops procedures capable of guaranteeing that decisions authorizing the expenditure of resources are taken with independence and always in the best interest of the company.

For this reason, the company's administration must ensure that the contract includes clear and objective rules, specifying:

a) the body of the company that will be responsible for evaluating whether the administrator's act falls under any of the exclusions referred to in item 2 of this Opinion; and b) the procedures that will be adopted to exclude the participation of administrators whose expenses may come to be indemnified in the evaluation process referred to in item 'a' above, in accordance with article 156 of Law No. 6.404/76.

Regarding the minimum information to be disclosed by companies upon the celebration of indemnity contracts, the CVM recommends that, at a minimum, the following information be made available:
a) whether there is a statutory provision regarding indemnification and, if affirmative, its terms; b) whether the contract must provide for a limit value for the indemnification offered and, if positive, what is this value; c) the coverage period that may be covered by the contract; d) the administrators who may celebrate an indemnity contract with the society; e) the scenarios excluding the right to indemnification; f) the types of expenses that may be paid, advanced, or reimbursed based on the contract; and g) the procedures regarding decisions concerning the payment, reimbursement, or advance of expenses resulting from the indemnity commitment, indicating: (i) the body of the company that will be responsible for decisions regarding its granting; and (ii) the rules and procedures that will be adopted to mitigate conflicts of interest, ensure the independence of decisions, and ensure that they are taken in the interest of the company.

Without prejudice to the guidelines and recommendations contained in the opinion, in the understanding of SEP, it is also desirable that the following information about the provision of indemnity commitment be disclosed to the market:
a) for what reason the administration preferred to adopt the provision of indemnity commitment instead of the celebration of a civil liability insurance contract with similar coverage (CVM Process No. RJ2009/8316) 52; b) the quoted value of the civil liability insurance premium that provides for coverage similar to the proposed indemnity commitment; c) whether the guarantee offered by the provision of indemnity commitment includes the payment or reimbursement of indemnifications that administrators are obliged to pay when held liable for damages caused to third parties or to the company as a result of illicit acts practiced before the provision of the indemnity commitment;

52 See http://conteudo.cvm.gov.br/decisoes/2011/20110119_R1/20110119_D02.html.

d) whether the guarantee offered by the provision of indemnity commitment includes the payment or reimbursement of fines resulting from conviction in a criminal action or in an administrative process or pecuniary obligations provided for in agreements to close administrative processes supported by administrators; and e) in case of a positive response to at least one of the two previous items, why the administration believes that such guarantee would be in the best interest of the company.

With regard to the provisions of the previous paragraph, it should be clarified that the provision by the company of the guarantees mentioned in items "c" and "d" or other guarantees not previously mentioned may be considered a violation of the duty of loyalty of the shareholders who approve the indemnity commitment, in accordance with corporate legislation, if the benefit of the commitment to the company is not proven.

The above-mentioned information shall be included (i) in the administration's proposal to the general meeting, whenever it is convened to deliberate on indemnity commitments; and (ii) in item 12.11 of the Reference Form, when the company has indemnity commitments in force.

It is also worth emphasizing the recommendation that contracts be forwarded, within 7 (seven) business days from the date of their signing, noting that the category "Indemnity Contracts" has already been created in "IPE Online" in the Empresas.NET System for the sending of said contracts.

Finally, it is informed that on 29.10.2018, SEP issued Circular Letter No. 9/2018/CVM/SEP, available on the CVM website, orienting how indemnity contracts, their addendums, and any other documents that also reflect the terms and conditions applicable to the indemnity regime should be made available.

7.20 Negotiation with Own-Emission Shares
The legal principle instituted through article 30 of Law No. 6.404/76 is that the company cannot negotiate with its own-issued shares, except for the exceptions enumerated in its paragraph 1.

Moreover, in paragraph 2 of the cited article, the Law provided for the regulation of the acquisition of shares by the issuing company itself by the CVM, which issued CVM Instruction No. 567/15, which, in turn, revoked CVM Instructions No. 10/80 and 390/03.

It is worth noting that the aforementioned CVM Instruction No. 567/15 does not contain any command that restricts its provisions to companies registered in Category A. Therefore, even companies registered in Category B must observe the commands set forth in the cited Normative Instruction.

It is recalled that the acquisition of the company's shares for treasury or cancellation, and the alienation of shares thus acquired is one of the scenarios for the disclosure of Relevant Fact, established in article 2, item XV, of CVM Instruction No. 358/02. In the case of approval by the Board of Directors, the information provided for in Annex 30-XXXVI of CVM Instruction No. 480/09 must be provided, as an annex to the meeting minutes of the Board of Directors that deliberates on the subject, concomitantly with the disclosure of the Relevant Fact.

7.20.1 Competence for Approval
CVM Instruction No. 567/15 disciplines conditions under which companies may deliberate on the negotiation of shares of their own issuance and derivatives referenced therein.

In most cases, the negotiations can be approved by the Board of Directors. However, as provided for by article 3 of this Instruction, the negotiation must be submitted to the approval of the shareholders when:
a) carried out outside organized securities markets, it involves, even through several isolated operations, more than 5% (five percent) of species or class of shares in circulation in less than 18 (eighteen) months; b) carried out outside organized securities markets and at prices more than 10% (ten percent) higher, in the case of acquisition, or more than 10% (ten percent) lower, in the case of alienation, than market quotes; c) its objective is to alter or preserve the composition of shareholding control or the administrative structure of the society; and d) the counterparty in a business carried out outside organized securities markets is a related party to the company, as defined by the accounting rules dealing with this subject, without prejudice to the prohibition of business with the controlling shareholder.

In addition to these cases, the articles of association may provide for additional scenarios in which prior approval by the general meeting is necessary.

Regarding the submission of the issue to the shareholders, it should be emphasized that this is a condition of efficacy of the negotiation of own-issued shares in the above cases, although it does not necessarily need to occur at a moment prior to the celebration of the business. Thus, it is possible for a transaction to be carried out and shareholder approval to be obtained subsequently, provided that the transaction does not produce effects until such approval occurs.

With regard to scenario "c" above, its incidence is limited to cases of possible modification in the control or administrative structure, such as in situations, for example, of possible imminent realization of a public offer for the acquisition of shares representing shareholding control or negotiations of participations that will allow their holders to indicate members to the Board of Directors. The mere fact that the acquisition removes shares from circulation, thereby reinforcing a control structure already defined and without perspective of modification, does not trigger the need for approval in a general meeting.

With regard to scenario "d", it is worth highlighting that cases of alienation or transfer of shares to administrators, employees, and service providers of the open company, its affiliates, or controlled companies resulting from the exercise of share options or other models of remuneration based on shares are excepted from the need for approval in a general meeting. For this, however, it is necessary that the parameters for calculating the exercise price of the options or the price of shares be contained in the plan or remuneration model in question and that these have been approved in a general meeting.

In cases where shareholder approval is necessary, a general meeting must be convened to address the topic, and the proposal of indication must contain the information indicated in article 20-B of CVM Instruction No. 481/09, and be sent via "IPE Online" in the Empresas.NET System under the category "Assembly", type "AGO/E", "AGE", species "Administration Proposal", subject "Acquisition of shares issued by the company itself" or "Alienation of shares issued by the company itself", as applicable.

In the case of approval by the Board of Directors, the information provided for in Annex 30-XXXVI of CVM Instruction No. 480/09 must be provided, as an annex to the meeting minutes of the Board of Directors that deliberates on the subject, which will be sent via "IPE Online" in the Empresas.NET System under the category "Administration Meeting", type "Board of Directors", species "Minutes", subject "Acquisition of shares issued by the company itself" or "Alienation of shares issued by the company itself", as applicable.

7.20.2 Limitations
Article 6 of CVM Instruction No. 567/15 establishes a temporal limitation on the negotiation of own-issued shares (and derivatives referenced therein) by providing that such negotiation must be settled within 18 months counted from the approval by the Board of Directors or the general meeting.

It is clarified that the period in question seeks to prevent the approval from remaining open indefinitely. This period does not coincide with the 2 (two) day settlement period to which operations with shares in the spot markets are normally subject, so that buy and sell negotiations in such markets in the last days of the 18-month period will not be considered infractions to the aforementioned provision.

In accordance with paragraph 1 of article 7, the acquisition of own-issued shares presupposes the existence of available resources, thus considered all profit reserves or capital, except for (i) legal, (ii) unrealized profits, (iii) undistributed mandatory dividends, and (iv) tax incentives. The result of the ongoing social exercise is also considered an available resource, segregated from the destinations to the reserves mentioned above.

The existence of available resources must be verified based on the last available financial statements disclosed before the effective transfer, to the company, of the ownership of its own-issued shares. Therefore, an acquisition can be approved without such resources existing, provided that the effective transfer only occurs when the resources exist.

The last available financial statements referred to by CVM Instruction No. 567/15 can be annual, interim, or quarterly. Such statements serve as a reference to verify both whether a company that previously did not have available resources has come to have them, as well as to determine whether a company that previously held them has ceased to have them. Thus, available resources must be verified on a continuous basis with each new financial information disclosed.

If an excess is found, due to subsequent financial information, the company must alienate or cancel the shares above the limit in question within a period of 6 months, admitting the possibility that this measure may prove unnecessary if new financial information is disclosed in this interval based on which the existence of available resources is verified.

Without prejudice to the need for available resources, expressed in accounting terms as mentioned above, administrators must take necessary diligence to ensure that (i) the company's financial situation is compatible with the settlement of the acquisition at its maturity without affecting the fulfillment of obligations assumed with creditors nor the payment of mandatory dividends; and (ii) there are no foreseeable facts capable of causing significant changes in the amount of available resources over the remaining period of the fiscal year.

According to Article 8, treasury shares cannot exceed the threshold of 10% of shares in circulation, thus considered all shares minus those held by the controlling shareholder, persons linked to them, and administrators.

Included in the aforementioned percentage are (i) shares held not only by the open company itself but also by its controlled and affiliated companies, and (ii) shares of its own issuance corresponding to the economic exposure assumed due to derivative contracts or deferred settlement agreements entered into by the company or by its controlled and affiliated companies.

Regarding specifically such shares referred to by derivative contracts, all shares that the company has the right or obligation to acquire (for example, long positions in call options or short positions in put options) must be considered, as well as the quantity of shares whose positive return serves as the basis for determining payment flows in favor of the company (for example, Total Return Equity Swaps contracts). Inverse positions in similar contracts, such as those that ensure the right or obligation to sell the company's own shares, must be disregarded in verifying the aforementioned 10% limit.

As already decided by the Collegiate Board on 11.11.2008 (Process CVM RJ2008/9839) 53, the Board of Directors itself may deliberate on the cancellation of treasury shares held, provided there is statutory authorization for the board of directors to deliberate on the acquisition of the company's shares (for purposes of cancellation or subsequent alienation) and that an extraordinary general meeting is subsequently convened to deliberate on the alteration of the statutory clause regarding the social capital of the respective company.

It is recalled that, in addition to the limitations provided for in Articles 7 and 8 of CVM Instruction No. 567/15, the norms referred to in Article 11 of the same Instruction must be observed, including those that seek to prevent the creation of artificial conditions of demand, supply, or price, price manipulation, fraudulent operations, and unfair practices.

Therefore, companies should not act in the direction of providing liquidity to specific shareholders or sustaining a certain quotation level.

It is worth noting that Law No. 6.404/76 provides, in its Article 30, that the acquisition of shares of its own issuance by an open company will be subject to the norms issued by the CVM under penalty of nullity.

Attention is drawn to the fact that CVM Instruction No. 567/15 was published on 17.09.2015 and does not apply to operations announced before that date, which must observe CVM Instruction No. 10/80.

Finally, Article 13 of the norm establishes that the transgression of its Articles 2 to 8 constitutes a serious offense, for the purposes of paragraph 3 of Article 11 of Law No. 6.385/76.

53 See http://conteudo.cvm.gov.br/decisoes/2008/20081111_R1/20081111_D12.html.

7.20.3 Economic and political rights of treasury shares

In accordance with Article 10 of CVM Instruction No. 567/15, treasury shares have no right to vote nor to monetary dividends of any nature, which does not prevent them from being entitled to stock bonuses or being subject to grouping and splitting.

It should be emphasized that the exclusion of economic and political rights does not extend to shares held by the company's counterparties in derivative contracts or deferred settlement agreements, as such shares are not effectively in treasury, although they are included in the calculation of the 10% limit provided for in Article 8. Attention is drawn, however, to the need that, in the event of any voting agreement, even if informal, between the company and the counterparty, such circumstance must be disclosed in accordance with Annex 20-B of CVM Instruction No. 481/09 and Annex 30-XXXVI of CVM Instruction No. 480/09, as applicable.

7.20.4 Monthly information on transactions carried out

It is reiterated that, from 17.09.2015, there has been a monthly obligation to report transactions carried out with own-issued shares by the company, its controlled and affiliated companies.

With regard to this, reference is made to item 4.8 of this circular letter, which contains guidelines on the method of sending such information through the Empresas.NET System.

7.21 Dividends on preferred shares (Article 203 of Law No. 6.404/76)

Article 203 of Law No. 6.404/76 determines that the provisions in Articles 194 to 197 and 202 will not prejudice the right of preferred shareholders to receive fixed or minimum dividends to which they have priority, including arrears, if cumulative.

Consequently, the reserves mentioned in Articles 194 to 197, and that referred to in paragraph 5 of Article 202 of Law No. 6.404/76, cannot be constituted to the detriment of fixed or minimum dividends. Thus, if there is profit, even if unrealized, fixed or minimum dividends must be distributed.

7.22 Communication on the non-payment of mandatory dividend due to the company's financial situation

Article 202, paragraph 4, of Law No. 6.404/76 establishes that the mandatory dividend may cease to be distributed in the fiscal year in which the administration bodies inform the General Shareholders' Meeting (AGO) that it is incompatible with the company's financial situation. The fiscal council, if in operation, must issue an opinion on this information, and administrators must send to the CVM, within 5 (five) days of the holding of the general meeting, a justified explanation of the information transmitted to the meeting.

The justified explanation required in Article 202, paragraph 4, of Law No. 6.404/76 must be sent via "IPE Online" in the Empresas.NET System (category "Notice to Shareholders", type "Other notices"), mentioning in the subject the information disclosed.

7.23 Late, corrective, or complementary declarations of dividends

In the case of late, corrective, or complementary declarations of dividends (or other benefits) due by open companies, payment must be made to the persons holding the shares on the date of the late, corrective, or complementary declaration, or on another subsequent date, made public concomitantly with the declaration, and not to the holders of shares at the time of the original declarations.

It is worth highlighting that this orientation is in line with the decision of the Collegiate Board in a meeting on 03.05.2006 (Process CVM SP2004/0381) 54, in response to the consultation from SEP regarding the shareholder base to be used in the cited cases.

7.24 Competence of the board of directors to deliberate on the issuance of debentures

Law No. 12.431/11 gave a new wording to Article 59, paragraph 1, of Law No. 6.404/76, so that this provision now establishes that, in the open company, the board of directors may deliberate on the issuance of debentures not convertible into shares, unless there is a contrary statutory provision.

Regarding this, according to the Collegiate Board's decision of 13.12.2011 (Process CVM RJ2011/8312) , this new wording has immediate and unconditional applicability. That is, in the absence of a statutory provision that prevents deliberation by the board, the new legal text is in force and is capable of producing all its effects, so that the boards of directors of open companies can already, immediately, deliberate on the issuance of debentures not convertible into shares.

7.25 Composition of the board of directors

When consolidating the articles of association, companies must pay attention to the provisions of Article 143 of Law No. 6.404/76, regarding the composition of the board of directors of a corporation.

According to this legal command, the articles of association must establish: (a) the number of directors, or the maximum and minimum allowed; (b) the duties and powers of each director; (c) term of office, not exceeding three years, reelection permitted; and (d) the method of replacement.

Therefore, it is recommended that those companies whose statutes are out of compliance with the Law take the necessary measures (including timely convening of a general meeting, including in its notice the alteration of the statutes in question) to correct any gaps that may exist in their respective articles of association.

54 See http://conteudo.cvm.gov.br/decisoes/2006/20060503_R1/20060503_D02.html.
55 See http://conteudo.cvm.gov.br/decisoes/2011/20111213_R1/20111213_D02.html.

7.26 Request for certificates of entries in the social books (Article 100 of Law No. 6.404/76)

Article 100, paragraph 1, of Law No. 6.404/76 regulates the option to obtain a certificate of the entries in the Register of Registered Shares, the Register of "Transfer of Registered Shares", the Register of "Registered Beneficiary Parts", and the Register of "Transfer of Registered Beneficiary Parts".

Such certificate may be provided to any person provided that the purpose is the "defense of rights and clarification of situations of personal interest or of shareholders or of the securities market".

In this sense, it must be observed that, according to decisions of the Collegiate Board on the matter (see, for example, Processes CVM RJ2003/13119 and RJ2003/7260) 56, the company exercises, with regard to certain records, a public function equivalent to that of agents delegated with state power (such as real estate registry offices), given that the transfer of ownership of shares, and the constitution of real liens on them, is only completed with the transcription in the social books, or in the records that serve as their substitute.

However, conditioning access to the shareholder list to the purpose described in paragraph 1 of Article 100 implies a judgment by the company's administration regarding the presence of a right to defend, or a situation to clarify, with recourse to the CVM in case of denial of the request by the company's administration.

In a decision of 08.12.2009 (Process CVM RJ2009/5356) 57, the CVM Collegiate Board expressed its understanding, in response to a consultation formulated by a market agent, regarding the main conditions for the granting of the certificate of entries in the social books in question, as well as regarding its content, highlighting the main aspects:

a) the provision in Article 100, paragraph 1, does not oblige the open company to provide a certificate of the entries in the social books when the request is justified to facilitate the mobilization of shareholders to discuss topics related to the company and to participate in general meetings;

b) the request formulated based on this provision must present specific justification, even if brief, to legitimize its approval, and such justification must identify (i) the right to be defended or the situation of personal interest to be clarified, and (ii) to what extent the disclosure of the entries in the social books is necessary for the clarification of the situation of personal interest or defense of the right in question;

c) the company is obliged to provide a certificate of the entries that are necessary and sufficient for the clarification of the situation of personal interest or the defense of the right identified in the request;

56 See http://conteudo.cvm.gov.br/decisoes/2004/20041123_R1/20041123_D08.html.
57 See http://conteudo.cvm.gov.br/decisoes/2009/20091208_R1/20091208_D24.html.

d) the provision of the complete list of shareholders, based on the provision in paragraph 1 of Article 100 of Law No. 6.404/76, is only imposed in cases where it is duly justified that the violated or about to be violated right is inherent to the quality of shareholder, and its defense is of interest to all shareholders;

e) thus, the provision of the complete list of shareholders is imposed, based on this provision, in the hypotheses where shareholders must act jointly to defend some right, due to the law or the statute establishing a minimum quorum for petitioning before the Judiciary, the Public Administration, or the company's bodies. Examples of this would be the liability action to be proposed by shareholders (Article 159, paragraph 4, of Law No. 6.404/76), the action for full exhibition of the company's books (Article 105, paragraph 4, of Law No. 6.404/76), and, furthermore, the request for a list aimed at facilitating the formation of the quorum necessary for the convening of the general meeting, provided that, in the latter example, it is demonstrated that the deliberation on some matter to be included in the agenda has the clear character of defense of rights.

f) for the same reason, the granting of the complete list is also justified, in light of the provision in Article 100, paragraph 1, in cases where the shareholder has legitimacy to act individually to defend a right, which belongs, however, to every and any shareholder.

g) outside the hypotheses of defense of a collective or homogeneous individual right, the request for the provision of a certificate of the entries in the social books formulated with the purpose of facilitating the mobilization of shareholders to defend their interests does not meet the requirements established in Article 100, paragraph 1, of Law No. 6.404/76.

In light of this, it must be emphasized that it is not up to the applicant to invoke Article 100, paragraph 1, to gather non-controlling shareholders in order to complete the legal quorum for: (a) adoption of multiple voting, in accordance with Article 141; (b) separate election of members of the Board of Directors, in accordance with Article 141, paragraph 4; (c) separate election of the Fiscal Council, according to Article 161, since, as it is a matter to be submitted to the shareholders' meeting, the appropriate path for this is Article 126, paragraph 3.

Furthermore, the mere commercial interest in obtaining the certificate, such as the offering of service provision, finds no support in paragraph 1 of Article 100 of Law No. 6.404/76.

It is worth citing that the CVM Collegiate Board, in meetings held on 23.02.2010, 20.07.2010, 19.11.2013, and 19.07.2016 (Processes CVM RJ2010/2689, RJ2010/0620, RJ2012/13291, and SP2016/89) 58 reiterated the understanding described above, established in the meeting of 08.12.2009.

58 See http://conteudo.cvm.gov.br/decisoes/2010/20100223_R1/20100223_D07.html, http://conteudo.cvm.gov.br/decisoes/2010/20100720_R1/20100720_D06.html, http://conteudo.cvm.gov.br/decisoes/2013/20131119_R1/20131119_D02.html and http://conteudo.cvm.gov.br/decisoes/2016/20160719_R1/20160719_D0166.html.

It is worth remembering the decision of the CVM Collegiate Board in the meeting held on 28.05.2013 (Process CVM RJ2012/13291) 59, in which, among other things, it reiterated the understanding pronounced in the already cited decision of 08.12.2009, and also emphasized that paragraph 1 of Article 100 of the S.A. Law does not require the applicant to have any participation in the company's capital, after all, even a non-shareholder can request the certificates of the entries in the books mentioned in items I to III of Article 100 of Law No. 6.404/76, observing the requirements established therein.

In meetings held on 09.05.2017 and 11.07.2017, the Collegiate Board, when analyzing a shareholder's complaint against the company's denial of a shareholder list request (Process CVM SP2016/0174) 60 , expressly noted the need for a new CVM evaluation of the cited precedent established in Process CVM RJ2009/5356, highlighting that the reading of Article 100, paragraph 1, does not necessarily lead to the conclusion that "outside the hypotheses of defense of a collective or homogeneous individual right, the request for the provision of a certificate of the entries in the social books formulated with the purpose of facilitating the mobilization of shareholders to defend their interests does not meet the requirements established in Article 100, paragraph 1, of Law No. 6.404/76", as well as the need to interpret Law No. 6.404/76 systematically, which contains another provision, Article 126, paragraph 3, specifically intended to protect the right of shareholders to access the company's shareholder list, as a necessary instrument for collective mobilization; and the possibility that, independently of the use of Article 126, paragraph 3, which has its own regime, there may be situations where the defense of rights or clarification of situations of personal interest will occur, precisely within the scope of a conclave, which will depend on a case-by-case analysis.

On 07.11.2017, the Collegiate Board again reviewed the matter (Process CVM No. 19957.006319/2017-24), this time in a request made by a non-shareholder. On that occasion, the Reporting President Marcelo Barbosa referred to the reanalysis initiated within Process SP2016/0174 mentioned above, highlighting that the decision pronounced in Process CVM RJ2009/5356, which has been carried over to the SEP Circular Letters since then, should not be read restrictively and literally.

This is because the 2009 decision would have referred specifically to one of the purposes provided for in the device in question, namely the "defense of rights and clarification of situations of interest [...] of shareholders", carried out by a shareholder based on a collective or homogeneous individual right of the shareholders of a certain company. With regard to this hypothesis, the understanding prevailed that the requesting shareholder must pursue a collective or homogeneous individual right of all shareholders of a certain company.

Examples of this type of request would be those aimed at exercising the mechanisms provided for in Article 123, sole paragraph, in Article 105, in Article 206, or in Article 159, paragraph 4 of the S.A. Law, that is, cases where both the requesting shareholder and any other shareholder would have legitimacy to make the claim.

However, this possibility does not rule out the others that were positivized in the law, such as the defense of rights and clarification of situations of personal interest or of the securities market, which may be alleged by both shareholders and non-shareholders. In this sense, the decision taken in Process CVM SP2015/0208, judged on 24.10.2017 61, was cited, in which the Collegiate Board granted the appeal filed by a shareholder based essentially on circumstantial personal interest.

59 See http://conteudo.cvm.gov.br/decisoes/2013/20130528_R1/20130528_D11.html.
60 See http://conteudo.cvm.gov.br/decisoes/2017/20171107_R1/20171107_D0795.html.
61 See http://conteudo.cvm.gov.br/decisoes/2017/20171024_R1/20171024_D9774.html.

Finally, it is important to mention that in Process CVM No. 19957.006319/2017-24, the CVM Collegiate Board analyzed an issue that had not yet been explored in depth: a request for access to the content of corporate books made by a non-shareholder person, under the justification of supporting their action in defense of shareholders and the market.

With regard to this, the Reporting President Marcelo Barbosa highlighted in his vote, having been accompanied by the unanimity of the Collegiate Board, that access to the social books should only be granted if the applicant demonstrates having a legitimate interest in the right to be defended and in the situation to be clarified, and that the proof of the applicant's legitimacy involves the analysis of the ownership of the right object of the request.

In this regard, it was explained that in the case of a shareholder making a request for certificates of social books based on the defense of rights arising from their quality as a shareholder, the demonstration of legitimate interest is, in principle, facilitated, as it is a situation where the applicant is simultaneously the holder of the right and interested in the situation in which this is inserted. However, if the applicant is a third-party non-shareholder, their subjective relationship with the right pointed out is not so evident. Indeed, in the decision of 07.11.2017, the Collegiate Board also highlighted that, in the case of requests made by non-shareholders, the analysis of the legitimacy and justification presented will be more complex and not so evident, and one must pay even more attention to the occurrence of possible abusive situations.

In this sense, the Collegiate Board expressed the understanding that a request made by an association or similar entity, with the purpose of interest of the shareholders of a certain company, should only be granted if the applicant proves that it has in its roll of associates persons holding the right to be defended and legitimate interest in the situation to be clarified – who have granted the association powers of representation, and clarifies to what extent the requested information will serve the desired purpose.

Finally, it is worth highlighting that Law No. 13.709/18, known as the General Data Protection Law (LGPD), brings a series of restrictions on the processing of personal data, including in digital media, by natural person or by public or private legal entity, without, however, affecting the availability of the shareholder list referred to in Article 100 of Law No. 6.404/76, when the requirements listed in the Corporate Law are present.

7.27 Admission of shareholders in a wholly-owned subsidiary (Article 253 of Law No. 6.404/76)

Article 253 of Law No. 6.404/76 establishes that, in proportion to the shares they hold in the company's capital, shareholders will have the right of preference to (i) acquire shares of the capital of the wholly-owned subsidiary, if the company decides to alienate them in whole or in part; and (ii) subscribe to a capital increase of the wholly-owned subsidiary, if the company decides to admit other shareholders.

The CVM Collegiate Board, in meetings held on 29.03.2011 and 16.08.2016 (Process CVM No. RJ2010/13425 and Process CVM No. 19957.003452/2016-48) 62, understood that the provision in this article only applies to companies converted into wholly-owned subsidiaries due to an operation of share incorporation (Article 252 of Law No. 6.404/76).

62 See http://conteudo.cvm.gov.br/decisoes/2011/20110119_R1/20110119_D02.html and http://conteudo.cvm.gov.br/decisoes/2016/20160816_R1/20160816_D0307.html.

Additionally, in the aforementioned meeting of 29.03.2011, the CVM Collegiate concluded that, in cases where the social capital of the subsidiary is distributed among two or more shareholders, the specific regime for wholly-owned subsidiaries, provided for in article 253, would only be applicable if it were evidenced that the shareholding structure was constituted to defraud the law.

Issuers registered in Category A, when disclosing to the market the admission of shareholders in a wholly-owned subsidiary, must inform whether their shareholders will be granted the right of preference in the subscription or acquisition of the wholly-owned subsidiary's shares, and, if such right is not preserved for their shareholders, they must inform the reasons why article 253 of Law No. 6,404/76 will not be observed.

In the management proposal to be submitted to the shareholders' meeting, issuers registered in Category A that are authorized by a market administrator for the trading of shares on a stock exchange and have shares in circulation must disclose, through the Empresas.NET System (see item 4.2.2), at minimum, the following information: (a) quantity of new shares to be issued by the wholly-owned subsidiary or quantity of shares of the wholly-owned subsidiary to be alienated; (b) unit price for subscription or acquisition of the shares; (c) date to be considered for the identification of shareholders who will have the right to subscribe or acquire the shares and (d) percentage that shareholders will have the right to subscribe or acquire.

7.28 Acquisition of own-issued debentures

On 18.03.2020, CVM Instruction No. 620/20 was issued, which provides for the acquisition, by issuing companies, of debentures of their own issuance, in accordance with article 55, paragraphs 2 and 3, of Law No. 6,404/76.

The aforementioned instruction regulates the acquisition of a) debentures issued by issuing companies that have been the subject of a public distribution offer registered or exempted from registration by the CVM; and b) debentures issued by an issuing company that are admitted for trading in regulated securities markets.

Without prejudice to the provisions of CVM Instruction No. 358/02 regarding the management's judgment on the need to disclose a material fact, upon approving the acquisition, by the company, of debentures of its own issuance, the board of directors or the board of administrative counselors, as the case may be, must provide the information contained in Annex 30–XLII of CVM Instruction No. 480/09.

If the acquisition depends on approval by the general shareholders' meeting, when convening it to deliberate on such acquisition, the board of administrative counselors must indicate the information contained in Annex 20-C of CVM Instruction No. 481/09.

If the acquisition price is higher than the updated nominal value, the issuing company may only acquire debentures of its own issuance through the procedure provided for in Section II of Chapter III of CVM Instruction No. 620/20.

If the acquisition price is equal to or lower than the updated nominal value, the issuing company may acquire debentures of its own issuance:

I – through operations in the securities market in which it is admitted for trading; or II – through the procedure provided for in Section II of Chapter III of CVM Instruction No. 620/20.

Regardless of the price practiced, the issuing company must inform the acquisition of debentures of its own issuance in the management report and in the financial statements.

The indentures of the debentures may prohibit the operations provided for in CVM Instruction No. 620/20 or establish more restrictive conditions for their implementation.

7.29 Duties and Responsibilities of Administrators and Controlling Shareholders

The duties and responsibilities of administrators and controlling shareholders of companies are provided for in articles 153 to 160 and 116 and 117 of Law No. 6,404/76, respectively.

The duty to inform (article 157) and conflict of interest (articles 115 and 156) are addressed in several items of this Circular Letter, but it is also opportune to highlight that the administrator elected by a group or class of shareholders has, with respect to the company, the same duties as the others, not being able, even to defend the interest of those who elected him, to fail in these duties (paragraph 1 of article 154), as well as that the controlling shareholder must use power with the purpose of making the company achieve its object and fulfill its social function, and has duties and responsibilities towards the other shareholders of the company, those who work in it, and for the community in which it operates, whose rights and interests it must loyally respect and attend to (sole paragraph of article 116).

8 Complaints and Reports, Appeals, Consultations, Requests for Interruption or Suspension of Assemblies, Hearings, and Requests for Review of Processes, Proposals for Commitment Terms, Counting of Deadlines, Requests for Information Access and LGPD

8.1 Complaints and reports involving companies

Consultations, complaints (with the exception of those cited in item 8.4), and reports filed by investors or the general public, involving open, foreign, and incentivized companies, must be sent to the Investor Protection and Guidance Superintendence – SOI, through the Citizen Service – SAC, available on the CVM website and accessible via the link https://www.gov.br/pt-br/servicos/realizar-consultas-reclamacoes-denuncias-e-solicitar-orientacoes-junto-a-cvm.

Initially, these consultations, complaints, and reports are analyzed by the SOI, which, if necessary, forwards them for analysis by the SEP.

Consultations, complaints, and reports filed by administrators and fiscal councilors of companies must be sent directly to the SEP through the Digital Protocol service, accessible on the CVM website, at the link https://www.gov.br/pt-br/servicos/protocolar-documentos-junto-a-cvm.

The flowchart of procedures followed after the receipt of complaints (with the exception of item 8.4) or reports, involving companies, is presented below.

8.2 Appeals against decisions or understanding manifestations of the SEP

Appeals to the Collegiate against decisions or understanding manifestations of the SEP must be filed through the CVM Digital Protocol, respecting the deadline of 15 (fifteen) business days, counted from its knowledge by the interested party, as established in CVM Deliberation No. 463/03.

The Superintendent must, within a period of 15 (fifteen) business days from the receipt of the appeal, reform or maintain the appealed decision and, in the second case, forward the process to the Collegiate even if he has understood the appeal as untimely or inadmissible.

The appeal will be received with devolutive effect and, if there is just fear of damage of difficult or uncertain repair resulting from the execution of the decision, the Superintendent may, ex officio or upon request, give suspensive effect to the appeal.

If there is a denial (total or partial) of the request for suspensive effect, the Superintendent must, immediately, notify the appellant and send a copy of the appeal and the decision to the President of the CVM, who will be responsible for the re-examination of the decision denying the suspensive effect, in accordance with the aforementioned Deliberation.

The Superintendent will notify the appellant regarding the Collegiate's decision within a period of 5 (five) business days.

It is also highlighted that the request of a member of the Collegiate, of the Superintendent who issued the appealed decision, or of the appellant himself, the Collegiate will appreciate, within the scope of a request for reconsideration, the allegation of existence of omission, obscurity, contradiction, or material or factual error in the decision.

Complaint by Investor
Complaint by
Administrator
Analysis by SOI
Analysis by SEP
Presentation of accusation term or issuance of Alert Letter Institution of administrative inquiry Archiving of the process without the presentation of accusation term, Alert Letter, or opening of inquiry Response to the investor in cases of lower complexity

The request for reconsideration must be presented within a period of 15 (fifteen) business days counted from the notification made to the appellant regarding the decision issued by the Collegiate and must be directed to the superintendence that analyzed the appeal or to the member of the Collegiate who drafted the leading vote, if any.

It is finally recalled that the provisions of paragraphs 4 and 5 of article 4 of CVM Instruction No. 607/19 must be taken into consideration.

Regarding appeals against the application of coercive fines, see item 2.6.1.

8.3 Consultations by open, foreign, and incentivized companies

Consultations regarding the application of norms and regulations issued by the CVM and the understanding of provisions of Laws No. 6,385/76 and 6,404/76 and subsequent amendments, must be sent, by the DRI or person equivalent to the SEP, with the identification of the issuer, through the CVM Digital Protocol (http://conteudo.cvm.gov.br/menu/atendimento/protocolodigital.html). If the consultation is carried out by legal representatives of the issuers, it must be accompanied by their respective powers of representation.

The formulation of the consultation must be clear regarding its object, avoiding generic form and theoretical consultations. The consultation must be accompanied by all elements and arguments deemed important for the conclusive manifestation of the CVM.

Consultations on accounting matters must be accompanied by a manifestation of the independent auditor on the subject.

It is worth highlighting that the presentation of a consultation by the issuer does not exempt it from compliance, within the due deadlines, with legal and regulatory obligations, even if object of the formulated consultation.

Furthermore, it is requested that the consultation be sent in a file in .pdf format with searchable content or that has been digitized with OCR (“Optical Character Recognition”) technology, which allows recognizing text characters.

Point doubts of open and foreign companies regarding the application of corporate legislation and regulation, understood as those that do not require analysis in specific administrative processes given their complexity, must be sent to the emails gea1@cvm.gov.br or gea-2@cvm.gov.br (according to the sector of activities in which the consultant is included – see item 1 of this Circular Letter).

For its part, the point doubts of incentivized companies must be sent to the email sep@cvm.gov.br.

It is fundamental that before sending the doubt to the indicated emails, the responsible person certifies that there are no orientations on the subject in question in this Circular Letter.

8.4 Requests for interruption or suspension of the deadline for calling an assembly

Requests for interruption or suspension of the deadline for calling an extraordinary general assembly must be sent, in accordance with CVM Instruction No. 372/02, to the SEP, through the Digital Protocol Service (http://conteudo.cvm.gov.br/menu/atendimento/protocolodigital.html), and, concomitantly, to the electronic address sep@cvm.gov.br.

The request for interruption or suspension must be sent to the SEP at least 8 business days in advance of the date initially established for the holding of the general assembly.

It is highlighted that requests filed without observing the mentioned deadline will not be disregarded, but will be treated as investor complaints, ceasing to follow the procedure provided for in CVM Instruction No. 372/02.

After receiving the request, the SEP will notify the company in question to manifest itself within an irrevocable period of 48 hours. Subsequently, the SEP will analyze the request and forward its opinion to the CVM Collegiate to deliberate on the interruption or suspension.

Unlike complaints and consultations, the SEP and the Collegiate have a maximum deadline to manifest themselves regarding the request for interruption or suspension, which is the date of the assembly itself. However, it is important to observe that the scope of analysis in interruption requests is restricted to the legality of the proposals submitted to the assembly and, in suspension requests, to the need for more time for the analysis of especially complex proposals and the sufficiency of the documents related to them.

8.5 Communications with the SEP

In the case of sending responses to Letters, companies must use the Digital Protocol (http://conteudo.cvm.gov.br/menu/atendimento/protocolodigital.html) on the CVM website, except when directed otherwise by the SEP.

In this sense, it is worth highlighting that the sending of these correspondences through the Empresas.NET System, when not expressly requested by the SEP, has been used by some companies, causing, at times, embarrassment to their own administration or difficulty in tracking responses to requests or manifestations of this Superintendence.

It is highlighted that the deadlines for attending to the requests contained in letters sent by the SEP must be counted as specified in the dispatch itself. When not specified, the deadline must be counted from the date of receipt of the Letter (date of sending the email or, if the Letter was sent only by postal mail, the date of signing the AR).

The SEP should not be copied in emails and exchanges between administrators, fiscal councilors, and shareholders, in which questions are addressed to the administration of the open company.

8.6 Requests for hearings with private individuals

In line with Decree No. 4,334/02, requests for scheduling meetings with organizational components of the CVM must be sent electronically, through the CVM page on the worldwide computer network, selecting, for this purpose, the option AUDIENCE WITH PRIVATE INDIVIDUALS (http://sistemas.cvm.gov.br/?Audiencia). It is recommended that the issuer fill out the object of the hearing as completely and detailed as possible, as well as inform, in the "Subject" field, whenever possible and if applicable, the number of the Letter, Instruction, or other CVM act to which the subject of the hearing refers.

In this request, there must be a clear specification of the subject to be treated, having as a necessary condition, in the case of consultations by issuers, their prior forwarding, as described in this Circular Letter (see item 8.3). It is also recommended that the issuer contact the SEP by phone before scheduling the hearing with private individuals in the system, aiming to verify the availability of the agenda.

In the last five fiscal years, one of the initiatives of the CVM Risk-Based Supervision Plan (available on the worldwide computer network) has been the opening of an administrative process with the objective of analyzing financial statements accompanied by an auditor's report or special review report issued with a modified opinion.

We have observed an expressive increase in the quantity of meeting requests made to the SEP, with the objective of informing the technical area of the existence of an auditor's report/special review report with modified opinion before the disclosure of financial information to the market.

It is recalled that for all processes of this nature, the SEP sends a letter to the Companies requesting a manifestation regarding the reasons that motivated the auditor's modified opinion.

In light of this, it is recommended that Companies evaluate the need to schedule meetings only after notification by the SEP regarding the subject, avoiding the request for a meeting before the disclosure of financial information to the market, taking into account, also, the observance of rules regarding the treatment of material information provided for in CVM Instruction No. 358/02.

8.7 Request for review of process

In accordance with paragraph 2 of article 8 of Law No. 6,385/76, all documents and records of administrative processes that are pending or archived at the CVM are public, except those whose confidentiality is indispensable for the defense of intimacy or social interest, or whose confidentiality is assured by express legal provision.

Article 46 of Law No. 9,784/99 – which regulates the administrative process within the Federal Public Administration – must also be kept in mind, which guarantees interested parties the right to review the process and to obtain certificates or reprographic copies of the data and documents that integrate it, except for data and documents of third parties protected by confidentiality or by the right to privacy, honor, and image.

In the case of an administrative process to ascertain illegal acts and unfair practices that is preceded by an investigative stage, the confidentiality necessary for the elucidation of facts or required by public interest will be assured, as provided for in paragraph 2 of article 9 of Law No. 6,385/76.

In 2005, the Autarchy regulated, through CVM Deliberation No. 481/05, the granting of review of records of administrative processes of any nature instituted within the scope of the CVM. Requests for review of processes pending in this Autarchy must be sent by presenting a signed request, specifying that it is a request for review and/or copies, with the qualification of the signatories and, in the case of company representatives, accompanied by their respective powers of attorney.

In accordance with paragraph 1 of article 3 of CVM Deliberation No. 481/05, the request must specify the interest of the requester in obtaining access to the records, except if it is an accused in a sanctioning administrative process, in which case the granting of review will always be assured.

The granting will depend on the authorization of the head of the Superintendence responsible for conducting the administrative process or the Relator, if there is a pending appeal or decision by the Collegiate, and the postponement of the granting of review is permitted in the interest of the service when such measure would hinder the realization of an act or the adoption of measures necessary for the conduct of the process.

In administrative processes instituted due to requests for postponement of general assemblies of open companies or interruption of the flow of the deadline for calling them, in accordance with CVM Instruction No. 372/02, the granting of review will not be admitted while the process is pending decision, except for the right of access to the records by the company within the deadline for its manifestation, as provided for in article 4 of CVM Deliberation No. 481/05.

Furthermore, processes instituted with the purpose of verifying the possible occurrence of infractions to legal or regulatory norms whose supervision is incumbent upon the CVM will be conducted under confidentiality, except in cases where the requester has been publicly indicted by the CVM as a possible author of the infraction under investigation, in which case the granting of review will be considered mandatory.

It is worth noting that the confidentiality of the process may be lifted by decision of the Superintendent, when he deems it unnecessary for the elucidation of facts and there are no data or information in the records protected by cases of confidentiality assured by express legal provision or for the defense of intimacy or social interest.

As stated in paragraph 2 of article 5 of CVM Deliberation No. 481/05, the provisions in the two paragraphs above, regarding processes of ascertaining irregularities, apply to complaints filed by investors and any other market participants, including regarding requests for review filed by them.

In sanctioning administrative processes, the accused will be admitted the granting of review through a request addressed: (i) to the Process Control Coordination (CCP), in processes governed by CMN Resolution No. 454/77; or (ii) to the Superintendence that instituted the process, until the eventual filing of an appeal to the Collegiate, in processes governed by CMN Resolution No. 1,657/89, or to the CCP, after the eventual filing of appeals to the Collegiate.

Requests for review will be analyzed on a case-by-case basis, and in the event of denial of the request, the requester may appeal to the CVM Collegiate, in accordance with CVM Deliberation No. 463/03.

According to article 3, paragraph 3, of CVM Deliberation No. 481/05, if the denial decision is issued by the Relator, an appeal of his decision to the Collegiate will be available within a period of 5 (five) days, counted from the date of knowledge by the interested party.

For approved requests, the processes will be made available at the Consultation Center – SOI/CDC of this Autarchy, with the indication of the availability period through a letter or email in response to the request. Sanctioning administrative processes will be made available at the Process Control Coordination – CCP.

For requests for review, it is necessary to contact the responsible area by email dinf@cvm.gov.br or through the Digital Protocol System, available on the CVM website.

The CVM Digital Protocol has been fully automated to allow for the agile and efficient processing of documents filed with the Autarchy. In the current version, it is possible to track the progress of requests during all stages. For more information, one must access the link http://conteudo.cvm.gov.br/menu/atendimento/protocolodigital.html.

If necessary, the tracking of requests can be done by the emails: centrodeconsultas@cvm.gov.br (processes and documents in general) or ccp@cvm.gov.br (inquiries and sanctioning processes).

Without prejudice to the above, requests for access to information may also be made, based on the “Access to Information Law” (see item 8.10).

8.8 Commitment Term

The Commitment Term may be signed between the investigated or accused and the Securities and Exchange Commission, at the discretion of the CVM, observing the public interest, in accordance with paragraphs 5 to 8 of article 11 of Law No. 6,385/76 and CVM Instruction No. 607/19.

According to article 82 of CVM Instruction No. 607/19, the interested party in the celebration of a commitment term may present a written proposal to the CVM, in which he commits to:

I – cease the practice of activities or acts considered illicit, if applicable; and II – correct the irregularities pointed out, including indemnifying the damages.

The interested party must manifest his intention to celebrate a commitment term within the deadline for the presentation of defense.

The presentation of a proposal for the celebration of a commitment term will be admitted even before or in the preliminary fact-finding phase, which, in this case, must be sent to the superintendence responsible for the investigation.

According to article 11, paragraph 5, of Law No. 6,385/76, the aforementioned proposal must be sent in the name of the investigated or accused himself, and should not be sent in the name of the company, except in cases where the company itself appears as investigated or accused.

In exceptional cases, in which it is understood that the public interest determines the analysis of a proposal for the celebration of a commitment term presented outside the deadline referred to in article 82 of CVM Instruction No. 607/19, such as those involving an offer of full indemnification to those harmed by the conduct object of the process and modification of the factual situation existing at the end of the aforementioned deadline, the analysis and negotiation of the proposal may be carried out by the Relator Director.

Pursuant to Article 88 of CVM Instruction No. 607/19, the execution of a commitment term has the following effects:
I – the suspension of the ongoing administrative proceeding, for the period stipulated for the fulfillment of the commitment; or II – the non-institution of a sanctioning administrative proceeding, in cases where the proposal is presented still in the investigation phase or before it.
Information regarding commitment terms, including those already executed with the CVM, which may serve as examples for the presentation of proposals, is available on the CVM website on the worldwide web, at the link “Sanctioning Action – Commitment Terms” (http://conteudo.cvm.gov.br/termos_compromisso/index.html).
Finally, it is worth highlighting that, according to Article 81 of CVM Instruction No. 607/19, the execution of a commitment does not imply a confession regarding the factual matter, nor a recognition of the illicit nature of the conduct analyzed in the proceeding that gave rise to it.

8.9 Calculation of Deadlines
In the calculation of deadlines, the rule established by Article 66 of Law No. 9.784/99, which regulates the administrative proceeding within the federal public administration, must be observed. In this sense, the calculation of deadlines in the aforementioned proceedings occurs in a manner similar to that established by Article 224, caput, of Law No. 13.105/15. Thus, in the calculation of the deadline, the day of commencement must be excluded and the day of maturity included. Deadlines begin to run from the moment of official notice, which may be carried out through the sending of a letter with Acknowledgment of Receipt, fax, or electronic message, with the deadline starting to count from whichever occurs first. In the case of coercive fines, the provisions of Articles 14 and 15 of CVM Instruction No. 608/19 must be observed. In the event that the maturity date falls on a day when there is no business at the CVM, such as Sundays and national, state, or municipal holidays, the term is extended to the next business day. Additionally, as determined by Article 23 of Law No. 9.784/99, the acts of the proceeding must be carried out on business days, during the normal business hours of the agency in which the proceeding is processed. Thus, on dates when the business at the CVM headquarters is partial, with closure before normal hours, deadlines will be extended until the next business day. On the other hand, when there is partial business hours at the CVM headquarters and the business ends at the normal hour, in accordance with the provisions of Article 66, paragraph 1, of Law No. 9.784/99, this day will be considered in the deadline in progress. The deadlines established in CVM norms that impact the activities of the SEP will be considered from the date of complete protocol of the documents, provided that the completion of the procedure occurs by 11:59 PM.

8.10 Request for Access to Information
Through CVM Deliberation No. 481/05, the CVM regulated the granting of inspection of records of administrative proceedings of any nature instituted within the scope of the CVM (see item 8.5).
Additionally, CVM Deliberation No. 710/13 establishes the procedures for access to information provided for in Law No. 12.527/11 (“Access to Information Law”), regulated by Decree No. 7.724/12, within the scope of the CVM.
Pursuant to Article 2 of the aforementioned Deliberation, the request for access to information must be made electronically on the CVM website on the worldwide web, or physically, at the Citizen Information Service – SIC of the CVM, by filling out a Standard Form.
In the case of partial or total denial of access to information or failure to provide the reasons for the denial of access, the applicant may file an appeal, within ten days, counted from the notice of the decision, to the General Superintendent. If such appeal is denied, the applicant may file an appeal within ten days, counted from the notice of the decision, to the President of the CVM (Article 3 of CVM Deliberation No. 710/13). As provided in Article 4 of the aforementioned Deliberation, in the case of omission of response to the request for access to information, the applicant may file a complaint, within ten days, to the General Superintendent. The deadline to file a complaint begins thirty days after the presentation of the request for access to information. If the appeals provided for above are denied or the complaint mentioned in the previous paragraph is unsuccessful, the applicant may file an appeal within ten days, counted from the notice of the decision, to the Office of the Comptroller General of the Union. It is important to highlight, based on Article 13 of Decree No. 7.724/12 transcribed below, that the Access to Information Law does not serve to impose the obligation to consolidate or interpret data that are in the possession of the Autarchy, in the event of a request for information about them. “Article 13. Requests for access to information will not be attended to:
I - generic;
II - disproportionate or unreasonable; or
III - that require additional work of analysis, interpretation, or consolidation of data and information, or a service of production or processing of data that is not within the competence of the agency or entity.
Sole paragraph. In the case of item III of the caput, the agency or entity shall, if it has knowledge, indicate the location where the information from which the applicant can perform the interpretation, consolidation, or processing of data is located.”

8.11 General Law for the Protection of Personal Data (LGPD)
In the course of its activities, the CVM processes personal data to serve citizens, supervise companies, investigate illicit acts, develop partnerships, manage people, and outsource services, in compliance with Law No. 13.709/18 (General Law for the Protection of Personal Data – LGPD).
The processing of personal data, considering current processes and technologies, is restricted to the minimum necessary for the qualified provision of its services, and the rights of data holders are described in the privacy policy available at http://conteudo.cvm.gov.br/menu/acesso_informacao/planos/politicas/politicadeprivacidade/politicadeprivacidade.html.
On the other hand, with a view to the security of data flowing in its environments, the CVM defined an Information and Communications Security Policy (POSIC), available at https://www.gov.br/cvm/pt-br/acesso-a-informacao-cvm/acoes-e-programas/politica-de-seguranca-da-informacao-e-dascomunicacoes/posic-cvm.pdf, conceived to promote best practices in security, such that information assets are protected according to their levels of criticality. The CVM develops a continuous privacy program focused on the assessment of operational risks and the adoption of internal controls that include: (i) the adequacy of processes; (ii) the adjustment of systems; and (iii) the training of people, in consonance with the guidelines issued by the Secretariat of Digital Government (SGD/ME).

9 Empresas.NET System for the Preparation and Delivery of Information The Empresas.NET System is a system developed in partnership with B3 with the aim of facilitating compliance, by companies, with regulatory obligations to disclose information to participants in the capital market.
The information covered by the Empresas.NET System is provided for, notably, in CVM Instructions No. 480/09, 481/09, and 358/02. Additional documents and information are disclosed by virtue of other CVM normative acts, listing segment norms of B3, or by virtue of corporate governance best practices.
The Empresas.NET System is a program that must be used by companies registered or intending to register with the CVM – Securities and Exchange Commission – to generate and send the Registration Form, Reference Form, ITR, and DFP to the CVM – Securities and Exchange Commission and to B3, in the case of companies listed in the markets administered by it.
As a result of the unification of the platforms of the IPE and Empresas.NET Systems, all periodic and occasional information began to be forwarded through the Empresas.NET System, even those that were previously sent through the IPE System.
The Empresas.NET System is the only means of forwarding to the CVM and to B3, in the case of companies listed there, of the periodic and occasional information of companies, and it is not accepted that the documents listed in Empresas.NET be delivered in protocols or sent by registered mail.
Since March 2019, the sending of periodic and occasional information, with the exception of structured forms (Reference Form - FRE, Registration Form – FCA, Quarterly Information – ITR, Standardized Financial Statements – DFP, and Quarterly Report of Securitization Company – SEC), has occurred through the “IPE Online” functionality, dispensing with the procedure of filling out and generating the document on the client. In this sense, to send these documents (in .pdf format exclusively), one must access the Empresas.NET System through the address https://www.rad.cvm.gov.br/ENET, and then select, in the “Document Sending” menu, the “IPE Online” option. It is emphasized that, in the case of requests for registration of public offering of distribution of shares for issuers already registered with the CVM, carried out under the reserved analysis regime provided for in CVM Deliberation No. 809/2019, of 19.02.2019, its initial petition, the Reference Form (although prepared in the Empresas.NET System), and the other documents of the already registered issuer must be forwarded through the CVM Digital Protocol System, and not through the Empresas.NET System, pursuant to Circular Letter No. 02/2019/CVM/SEP. It is also emphasized that the reply letter to the requirements formulated by the SEP, during the request for registration of public offerings of distribution of securities of already registered companies, must be forwarded through the CVM Digital Protocol System. The documents and information sent through the Empresas.NET System will be available for public consultation simultaneously on the CVM website and on the B3 website in the case of companies listed there, with the exception of the communication form provided for in Article 11 (individual) of CVM Instruction No. 358/02. The download of the Empresas.NET System can be done through the CVM website on the worldwide web at the link http://conteudo.cvm.gov.br/menu/regulados/companhias/progempnet.html, as well as on the B3 page (http://www.b3.com.br/pt_br/produtos-e-servicos/solucoespara-emissores/sistema-empresas-net/). Questions regarding the installation, use, and operation of the Empresas.NET System, as well as the report of problems or difficulties in sending documents, must be forwarded to the Listing and Issuer Supervision Superintendency of B3. Contact with the Listing and Issuer Supervision Superintendency can be made by phone 0800-770-3030 or by email to emissores.empresas@b3.com.br, during the following hours:
a) Normal Service: on business days, from 8 am to 8 pm, by email or phone. b) On-Call Service: on business days, after 8 pm or on weekends and holidays, exclusively by email.
Issues received after 8 pm on business days and on weekends and holidays will be treated after 8 am on the next business day, except those related to system availability for receiving information, which will be treated immediately.
It is absolutely indispensable to read the document “Manual for Sending Periodic and Occasional Information”, available on the CVM page, at the link: https://www.gov.br/cvm/pt-br/assuntos/regulados/consultas-porparticipante/companhias/envio-deinformacoes/ManualSistemadeEnviodeInformacoesPeriodicaseEventuais.pdf, which presents a list of the associations (categories, types, and species) of documents provided for in the Empresas.NET System, classified by the obligation or not of sending, by the periodicity of their disclosure, and by the need or not of publication by the press, as well as bringing guidance on the procedure to access the system (sending and cancellation of data). The limitation on the size of files to be included in the Empresas.NET System is imposed by the system itself and aims to facilitate investors' access to information archived in the Empresas.NET System, since, in turn, it is dependent on file download processes, which are unfeasible in many cases. The imposed limitation aims for the best performance of the system and the site itself, thereby generating better access for users, especially for the shareholder, the final recipient of the information. Before requesting the expansion of the limit of the Empresas.NET System, the company must make efforts to reduce the size of the file to be made available, given that it is an imposition existing for all companies. The issuer must try solutions with its IT area, with the aim of reducing the size of the file. The use of compression algorithms is suggested to try to reduce the space occupied by images and texts to be placed in the files. In this sense, it is warned that the files to be attached to the documents created in the system must not be protected or digitized in a way that does not allow them to be searched. It is worth highlighting that the CVMWEB System continues to be used to access the functionality of appeal against coercive fines, on the CVM website. See item 2.6.1.

10 Guidelines for the Preparation of the Reference Form
10.1 Guidelines applicable to the entire Reference Form
10.1.1 General rules on the preparation and disclosure of information
CVM Instruction No. 480/09 incorporates certain general rules on the preparation and disclosure of information that must be observed by issuers in the preparation and updating of the Reference Form. They are as follows:
a) the issuer must disclose true, complete, consistent information that does not mislead the investor (Article 14); b) all information disclosed by the issuer must be written in simple, clear, objective, and concise language (Article 15); c) the information provided by the issuer must be useful for the assessment of the securities issued by it (Article 17); d) whenever the information disclosed by the issuer is valid for a determinable period, such period must be indicated (Article 18); e) factual information must be differentiated from interpretations, opinions, projections, and estimates (caput of Article 19); f) whenever possible and appropriate, factual information must be accompanied by the indication of its sources (sole paragraph of Article 19). In this sense, it is important that the issuer avoids including information that is not important for the understanding of its activities, its financial and economic situation, and the risks involved, pursuant to Annex 24 of CVM Instruction No. 480/09. The Empresas.NET System incorporates both structured fields and free text fields for the presentation of the information required in the Reference Form. In order to ensure better understanding and comparability by investors, it is warned that whenever the required information is provided in free text fields, the issuer must, nevertheless, organize and present the information according to the structure and organization provided for in Annex 24 of CVM Instruction No. 480/09. In the unstructured fields of the Reference Form, whenever the presentation of a table is required, the information must be provided in this way (such as, for example, in items 3.4, 4.3, 13.2, 13.3, 13.5, 13.6, and 13.7 of the Form). Considering that the Reference Form is a mandatory document for the purpose of requesting the registration of an open company, the company that was constituted in the same fiscal year in which its request for registration as an open company was made must, in the creation of version 1.0 of its Reference Form, inform in “FRE Data/Fiscal Years”, in the fields “Start Date” and “End Date” of the line of the last fiscal year, respectively, the date of constitution of the company and the date of closure of the period used for the preparation of the financial statements for registration purposes.

10.1.2 Field “other information deemed relevant"
Annex 24 provides in several sections of the Form open fields for the presentation of “other information deemed relevant”. The objective of these fields is to allow the issuer to provide other information not requested in the Reference Form, deemed important to support the investment decision or to ensure the correct understanding, by investors, of the information provided in the Form regarding its economic-financial situation, its business, and the risks inherent to its activities and the securities issued by it.
Therefore, the insertion of repetitive information in these fields or information that should be included in another specific field of the Reference Form, or text of a promotional nature, should be avoided, limiting its use to strictly necessary clarifications that actually add knowledge about the situation of the company and the securities offered by it for public trading.

10.1.3 Scope and content of information provided
Annex 24 includes notes that specify the scope or content of the information to be provided in some of the items that must be carefully observed by issuers when preparing, updating, and resubmitting the Reference Form.
Issuers are advised that it is unnecessary to include in the Reference Form information that is not important to ensure that the document is a true, accurate, and complete portrait of its economic-financial situation and the risks inherent to its activities and the securities issued, such as repetitions of legal texts, explanatory notes, and complete texts of other documents already disclosed by the Company. In the annual presentation of the Reference Form, the information provided regarding items 3.1, 7.2, 10.1, and 10.2 must refer to the 3 (three) last financial statements closing the fiscal year. When presenting the Reference Form due to a request for registration of public distribution of securities, the information requested in these items must refer to the 3 last financial statements closing the fiscal year and to the latest accounting information disclosed by the issuer, such as, for example, the information regarding the last Quarterly Information Form – ITR disclosed by the issuer. It is also warned that, in the annual presentation of the Reference Form, the information provided regarding items 3.7, 3.8, 7.4, 7.6, 9.1, and 10.6 must refer to the last financial statements closing the fiscal year. When presenting the Reference Form due to a request for registration of public distribution of securities, the information requested in these items must refer to the last financial statements closing the fiscal year and to the latest accounting information disclosed by the issuer, such as, for example, the information regarding the last quarterly information form – ITR disclosed by the issuer. It is also highlighted that, in the annual presentation of the Reference Form, the information provided regarding items 2.1, 8.1, 8.2, 8.3, 10.4, 11.1 “d”, 14.1, 15.6, 15.7, 17.2, 17.3, 17.4, 18.9, 18.10, 19.1, and 19.2, must refer to the 3 last fiscal years. When presenting the Reference Form due to a request for registration of public distribution of securities, the information requested in these items must refer to the 3 last fiscal years and to the current fiscal year.

10.1.4 Information not applicable
If information requested in the Reference Form is not applicable to the issuer due to its characteristics, this fact must be expressly stated in the Form, accompanied by a justification explaining the reason why the requested information is not applicable to it.
Regarding the free text fields of the Empresas.NET System, if the information is not applicable, the issuer must indicate in the field itself the reasons that justify the non-presentation of the required information.
For example, if the issuer has not carried out a public offering of distribution of securities in the last 3 fiscal years, it must inform in items 18.10 “a”, 18.10 “b”, and 18.10 “c” that these are not applicable, given that the issuer has not carried out a public offering of distribution of securities in the last 3 fiscal years. It is emphasized that the mere declaration that the information is “not applicable” does not meet this purpose. In the case of the structured fields of the Empresas.NET System, if the information is not applicable, the issuer must, instead of filling them out, disclose the reasons for the non-presentation of the required information, through the “Justify” icon.

10.2 Guidelines for filling out the Reference Form
10.2.1 Identification of the persons responsible for the content of the Form (section 1)
In this item, the issuer must identify and present the declaration of its President and its DRI attesting that:
a) they reviewed the Reference Form; b) all information contained in the document complies with the provisions of CVM Instruction No. 480, especially Articles 14 to 19; c) the set of information contained therein is a true, accurate, and complete portrait of the economic-financial situation of the issuer and the risks inherent to its activities and the securities issued by it. It is emphasized that the aforementioned declaration must be provided by the two persons indicated in the norm (President, or equivalent position, and DRI), with the exception of the case where the same person holds both positions listed in the Instruction. Furthermore, in the declarations of the President and the DRI, their respective signatures must be included. In the presentations of new versions of the Reference Form, due to the update provided for in CVM Instruction No. 480/09, Article 24, paragraph 3, item I, or paragraph 4, item I, due to a change in the President or the Investor Relations Director, and those subsequent to this presentation, due to the other deliveries provided for in the cited article, the declaration provided for in item 1.2 must be sent, which provides for an individual declaration of a new occupant of the position of President or Investor Relations Director, in case of a change in the President or DRI after the delivery of the Reference Form, attesting that:
a) they reviewed the information that was updated in the reference form after the date of their appointment; b) all information that was updated in the form in the manner of item “a” above complies with the provisions of CVM Instruction No. 480/09, especially Articles 14 to 19.

It is important to highlight that Table 1.3 of the document should reflect only a single declaration when the positions of Chief Executive Officer and Investor Relations Director are held by the same person. Comment: This guidance already exists higher up in the text.

10.2.2 Auditors (Section 2)

a. Information about independent auditors (Item 2.1)

Circular Letter CVM/SEP 01/21

CIRCULAR LETTER/CVM/SEP/No. 1/2021

Table of Contents

Lineage: In force