Circular Letter CVM/SRE 01/22: Guidelines on the Incidence and Collection of the Securities Market Supervision Tax

SECURITIES COMMISSION OF BRAZIL
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Circular Letter No. 1/2022-CVM/SRE
Rio de Janeiro, January 14, 2022.

Subject: Guidelines on the incidence and collection of the supervision tax on securities markets governed by Law No. 7.940/1989 to be observed by issuers/offerors and intermediaries in public offerings of securities.

Dear Director,

1. This Circular Letter aims primarily to guide issuers/offerors of securities and intermediary institutions regarding the incidence and collection of the supervision tax on securities markets governed by Law No. 7.940/1989, considering: (i) the issuance, on October 1, 2021, of Provisional Measure No. 1.072, which provides for the alteration of the calculation method for the supervision tax on securities markets, thereby amending Law No. 7.940/1989, with financial effects produced from January 1, 2022; and (ii) the consequent issuance, on December 27, 2021, of CVM Resolution No. 61, which entered into force on January 3, 2022, and which, among other CVM norms, amended CVM Instruction No. 400/03, CVM Instruction No. 476/09, and CVM Resolution No. 6/21.

2. We present below the guidelines on the subject, in light of the main doubts that have been received by the SRE:

GENERAL ASPECTS

a. Calculation Base/Payment Method: The supervision tax must be paid on the total value of the operation and not on the individual values of the records of an offering, as provided for in item II of Article 4 of Law No. 7.940/1989[1].
In this sense, in offerings subject to registration, the tax payment can be made via a single GRU covering the total value of the offering (operation), observing item "b" below. For example, in the case of a public offering of debentures in series subject to registration, each series corresponding to a record, the supervision tax payment can be made via a single GRU or PagTesouro boleto covering the total value of the issuance. In the case of offerings with restricted efforts (exempt from registration), a payment must be made for each communication sent within the scope of the same offering (see items "f" and "g" below), based on the value actually placed, informed in that communication. For example, in the case of a public offering of debentures in series distributed with restricted efforts, each series corresponding to a communication in the Restricted Efforts System (SER), the supervision tax payment must be made via a GRU or PagTesouro boleto for each series, which allows for the generation of different reference numbers to be used exclusively in each communication.

b. Primary/Secondary Offerings: In the case of primary/secondary offerings, note that the supervision tax payments must be made by the respective taxpayers (issuer in the case of a primary offering and offeror in the case of a secondary offering) on the total value of the operation under their responsibility, and it is not possible to make a single payment (via GRU or PagTesouro boleto) encompassing both primary and secondary offerings.

c. Tax Rate: The rate is uniform for all public offerings of securities according to the table in Annex IV (rate of 0.03% on the total value of the offering/operation) of Law No. 7.940/1989[2]. There is no longer a provision for a cap limiting the amount due regarding the payment of the tax. The amount to be paid will always be the value of the operation multiplied by the rate, however, there is a minimum amount to be paid, which is equivalent to BRL 809.16, also according to Annex IV (in practice, offerings below BRL 2,697,200.00 must pay the minimum value of BRL 809.16).

REGISTERED OFFERINGS

d. Additional Tranches: The supervision tax now applies to the amount of the offering ("value of the operation") and no longer to the granted registration, which entails some relevant new interpretations. In this sense: (i) the supervision tax now also applies to the additional tranche, which is part of the value of the operation, and (ii) since in registered public offerings the moment of payment is upon filing the registration request, the calculation base must include the sum of the base, additional, and supplementary tranches (if any), according to Annex II of CVM Instruction No. 400/03[3], always considering the maximum amount for these tranches, as provided in the offering documentation.

e. Share Offerings with Bookbuilding: In the case of share offerings subject to registration, where the quantity and/or price are not known at the time of filing the registration request (offerings that include a bookbuilding procedure), the payment must be made based on the offeror's estimate of the total amount of the offering (already including the forecast for base, additional, and supplementary tranches).

OFFERINGS EXEMPT FROM REGISTRATION (RESTRICTED EFFORTS)

f. Moment of Tax Payment: Offerings exempt from registration now pay supervision tax, in accordance with item II of Article 4 of Law No. 7.940/1989[1]. Thus, offerings distributed with restricted efforts (exempt from registration) must pay the supervision tax. For these offerings, the supervision tax payment must occur by the closing date of the offering, as provided in Article 8 of CVM Instruction No. 476/09, § 3rd[4], always on the total amount actually raised, and the reference number of the payment made must be informed in the closing communication.

g. Payment Reference Number: The reference number of the supervision tax payment must be informed at the time of sending the closing communication in a specific field of this form. The reference number appears in the "Information for the Beneficiary's Responsibility" field of the boleto, if the payment was made via GRU. In the case of payment via PagTesouro, the reference number appears on the payment confirmation screen. In the case of payment via GRU, it is necessary to wait for the business day following the payment for compensation and sending of the closing communication.

h. Offerings started but not closed in 2021: Still in the case of offerings distributed with restricted efforts (exempt from registration), according to Law No. 7.940/1989, the payment is due upon the realization of the offering, and the CVM clarified in CVM Resolution No. 61/2021 that this moment occurs upon the closing of the same. Thus, even if the offering started before 1/1/2022, if the closing occurs in the year 2022, the payment is due on the closing date on the total amount actually raised, as informed in the closing communication provided for in Article 8 of CVM Instruction No. 476/09 [5].

i. Payment made after the closing date: The payment of the supervision tax must be made by the closing date of the offering, as per item 'f' above. However, if the payment is not made by the closing date of the offering, it may be made, with the applicable additions provided in § 1st of Article 5 of Law No. 7.940/1989, by the date of the offering's closing communication. The correct dates of the offering's closing, the tax payment, and the payment reference number (even with additions, if late) must be informed in the closing communication.
The calculation of these additions can be performed with the help of the "charge calculation tool" available on the CVM website at https://cvmweb.cvm.gov.br/SAR/FormCalcEncarg.aspx (go to the site www.gov.br/cvm, open the menu next to "Securities Commission" and choose "Content Centers" and then "CVM System Center". On the next screen, select "Supervision Tax and Fines" in the left menu and, subsequently, select "Calculation Tool" on the right). We highlight that the closing communication of an offering conducted with restricted efforts must be made within 5 calendar days of the closing of the offering, in accordance with Article 8 of CVM Instruction No. 476/09 [5], and failure to communicate to the CVM within this period constitutes a serious offense, in accordance with Article 18 of the same Instruction.

OFFERINGS NOT SUBJECT TO REGISTRATION

j. Offerings not subject to registration/CVM Instruction No. 400/03, Article 5: Public offerings provided for in Article 5 of CVM Instruction No. 400/03[6] are not subject to registration with the CVM, and therefore do not entail the payment of supervision tax.

k. Offerings not subject to registration/CVM Resolution No. 6/2020: Public offerings of CAV provided for in CVM Resolution No. 6/2020 are also not subject to registration with the CVM, in accordance with Article 1 of CVM Resolution No. 6/2020[7], and therefore do not entail the payment of supervision tax.

INQUIRIES FROM REGULATED ENTITIES (issuers, offerors, and intermediaries)

l. As disclosed in Circular Letter No. 1/2021-CVM/SRE, of 1/3/2021, simple inquiries, which do not require in-depth analysis by the SRE, may be sent to the email sre-consultas@cvm.gov.br. If the topic involves doubts and questions related to offerings with restricted efforts and communications related to such offerings, the service will be provided via the email sre-suporte476@cvm.gov.br. It is worth noting that the submission of an inquiry by a regulated entity does not exempt it from fulfilling, within the appropriate deadlines, the legal and regulatory obligations, even if they are the subject of the formulated inquiry.

m. Doubts regarding the payment of the supervision tax may also be sent to the Collection and Collection Management (GEARC) of the CVM via the email gearc@cvm.gov.br. The CVM also maintains a dedicated page to disclose various aspects related to the supervision tax, available at: https://www.gov.br/cvm/pt-br/assuntos/regulados/taxa-de-fiscalizacao.
Finally, given the recent legal and regulatory updates, with the issuance, on 01/10/2021, of Provisional Measure No. 1.072, and the issuance, on 27/12/2021, of CVM Resolution No. 61, we request that you disregard section 2.1.5 of Circular Letter No. 1/2021-CVM/SRE, of 1/3/2021. We further inform that this section will be updated in the next annual Circular Letter from the SRE to be made available shortly.

Sincerely,

LUIS MIGUEL R. SONO
Superintendent of Securities Registration

[1] Law No. 7.940/1989 as amended by Provisional Measure No. 1.072/2021

Article 4. The Tax is due:
(...)
II - upon the realization of a public offering of securities, including the hypotheses of exemption from registration by the CVM, with incidence on the value of the operation, as established in Annex IV;

[2] ANNEX IV of Law No. 7.940/1989 included by Provisional Measure No. 1.072/2021 (Included by Provisional Measure No. 1.072, of 2021) Production of effects INCIDENT RATE ON THE VALUE OF THE OFFERING MINIMUM VALUE OF THE TAX INCIDENT ON THE OFFERING (BRL) Public offering of securities 0.03% BRL 809.16

1. The minimum value of BRL 809.16 will prevail in the event that the application of the 0.03% rate on the value of the offering is lower.

[3] Annex II of CVM Instruction No. 400/03 as amended by CVM Resolution No. 61/2021 (...)
13. proof of payment of the tax provided for in Annex IV of the law that deals with the supervision tax on securities markets, including any additional tranches, provided for in Article 14, § 2nd, and supplementary tranches, provided for in Article 24;

[4] Article 8 of CVM Instruction No. 476/09 as amended by CVM Resolution No. 61/2021 (...)
§ 3rd The payment of the tax provided for in Annex IV of the law that deals with the supervision tax on securities markets must be made on the closing date of the public offering distributed with restricted efforts closed successfully, and the reference number of the payment must be informed in the communication referred to in the main text." (NR)

[5] Article 8 of CVM Instruction No. 476/09
Article 8. The closing of a public offering distributed with restricted efforts must be informed by the lead intermediary to the CVM, within 5 (five) days, counted from its closing.

[6] Article 5 of CVM Instruction No. 400/03 as amended by CVM Resolution No. 61/2021
Article 5. The following public distribution offerings are not subject to the registration referred to in Article 2:
(...)

[7] Article 1 of CVM Resolution No. 6/2020 as amended by CVM Resolution No. 61/2021
Article 1. The public distribution offering of investment certificates that characterize quotas representing rights to commercialization of works and specific projects in the Brazilian independent cinematic audiovisual area, as well as those for exhibition, distribution, and technical infrastructure, presented by a Brazilian national capital company ("Audiovisual Investment Certificates" or "CAV"), is not subject to registration with the CVM, observing the terms of this Resolution.

Document electronically signed by Luis Miguel Jacinto Mateus Rodrigues Sono, Superintendent of Registration, on 14/01/2022, at 06:39, based on Article 6 of Decree No. 8.539, of October 8, 2015.
The authenticity of the document can be verified on the site https://sei.cvm.gov.br/conferir_autenticidade, by informing the verification code 1425212 and the CRC code 69BCB023.
This document's authenticity can be verified by accessing https://sei.cvm.gov.br/conferir_autenticidade, and typing the "Verification Code" 1425212 and the "CRC Code" 69BCB023.
Reference: Process No. 19957.010621/2021-63 SEI Document No. 1425212 Circular Letter 1 (1425212) SEI 19957.010621/2021-63 / pg. 6