Circular Letter CVM/SRE 03/24

SECURITIES AND EXCHANGE COMMISSION OF BRAZIL
Rua Sete de Setembro, 111/2-5th and 23-34th Floors, Center, Rio de Janeiro/RJ – ZIP: 20050-901 – Brazil - Tel.: (21) 3554-8686 Rua Cincinato Braga, 340/2nd, 3rd and 4th Floors, Bela Vista, São Paulo/ SP – ZIP: 01333-010 – Brazil - Tel.: (11) 2146-2000 SCN Q.02 – Bl. A – Ed. Corporate Financial Center, S.404/4th Floor, Brasília/DF – ZIP: 70712-900 – Brazil -Tel.: (61) 3327-2030/2031 www.cvm.gov.br Circular Letter No. 3/2024/CVM/SRE Rio de Janeiro, October 11, 2024. Subject: Guidelines on procedures to be observed by coordinators in public offerings of distribution of securities with tax benefits.

Dear Director,

1. This Circular Letter contains guidelines regarding the procedures to be observed by lead coordinators in public offerings of securities with tax benefits, in accordance with the provisions of Decree No. 11.964 of March 26, 2024 (“Regulation” or “Decree 11.964”), which regulated Laws No. 12.431/2011 and No. 14.801/2024, which in turn establish the securities that count with tax benefits when they are the subject of a public offering.

2. According to article 2 of the Regulation, the following are considered:
   Incentivized Debentures: the debentures referred to in art. 2 of Law No. 12.431/2011; Infrastructure Debentures: the debentures referred to in Law No. 14.801/2024; Securities with tax benefits: incentivized debentures, infrastructure debentures, real estate receivable certificates, and investment fund issuance shares in credit rights referred to in art. 2 of Law No. 12.431, of 2011.

3. § 1 of art. 3 of Decree 11.964 establishes that it is the responsibility of the issuer and the project holder to ensure the classification, the destination of resources, and the implementation of the project in accordance with the provisions of the Regulation, with the requirement of prior ministerial approval being waived, provided that projects involving public services owned by subnational entities may be subject to prior ministerial approval.

4. Item I of art. 8 of Decree 11.964 establishes that the request for registration of a public offering of securities with tax benefits must be preceded, in the case of investment projects not subject to prior ministerial approval, by the protocol at the responsible Sectoral Ministry, and such protocol must be proven when sending the registration request for the offering, as guided in section II of this Circular Letter.

5. It is important to point out that it is the responsibility of the issuer to ensure the classification, the destination of resources, and the implementation of the project in accordance with the provisions of the Regulation, with the bodies responsible for sectoral supervision, the Special Secretariat of the Federal Revenue of Brazil, and the Ministry of Finance being responsible for supervision regarding these aspects.

6. In this sense, lead coordinators of public offerings of securities with tax benefits must diligently monitor, even in the case of investment projects that do not have prior authorizing ordinance, the proper classification of investment projects with the responsible Sectoral Ministries, being responsible for suspending the public distribution, in accordance with articles 22 and 83, XII, both of CVM Resolution No. 160/2022, if the respective Bodies manifest regarding the non-classification of the respective projects.

I. Information to be provided in offerings of securities with tax benefits

7. Art. 8, item III of Decree 11.964 establishes the information that must be highlighted upon the public issuance of securities with tax benefits. The Regulation further provides that such information must be clear and easily accessible to investors, and must be made available in the Prospectus and the Start Announcement and, in the case of offerings intended exclusively for professional investors, in the Closing Announcement and the offering dissemination material.

8. The information required by Decree 11.964 is as follows:
   i. description of the project, with the following information:
   (a) business name and National Register of Legal Entities - CNPJ number, of the issuer and the project holder, when they are distinct legal entities; (b) priority sector in which the project is classified; (c) object and objective of the project; (d) social or environmental benefits arising from the implementation of the project; (e) estimated dates for the start and end of the project or, in the case of projects already in progress, the actual start date, the description of the current phase, and the estimated date for completion; (f) estimated volume of total financial resources necessary for the realization of the project; and (g) volume of financial resources estimated to be raised with the issuance of the securities or instruments, and the respective percentage against the total financial resource needs of the project;
   ii. commitment to allocate the resources obtained in the priority project; and
   iii. number and date of publication of the approval ordinance, when required.

9. In order to reconcile the determinations of Decree 11.964 with the regulation of public offerings, we guide participants to present the information as described below.

Start Announcement and Market Notice

10. Although CVM Resolution No. 160/2022 has provisions for maximum content for the Start Announcement and the Market Notice, the following information must be included in the Start Announcements and Market Notices in the case of offerings involving securities with tax benefits intended for any target audience. Number and date of publication of the approval ordinance, when required, or number of the protocol with the sectoral ministry responsible for the project, otherwise;
    Commitment to allocate the resources obtained in the priority project; Description of the project containing information (a) to (g) above, admitting in offerings that contain a Prospectus, only the information regarding the priority sector in which the project is classified, given that the other information will already be available in the Prospectus.

Prospectus

11. In offerings of securities with tax benefits where a prospectus is required, that is, in offerings intended for qualified investors and the general public, the information must be provided in the Prospectus as follows:

Cover
The cover of the Prospectus must contain (i) the number and date of publication of the approval ordinance, when required, or number of the protocol with the sectoral ministry responsible for the project, otherwise, (ii) the commitment to allocate the resources obtained in the priority project and (iii) the information regarding the priority sector in which the project is classified.

Destination of Resources
The destination of resources section of the Prospectus must contain:
(a) business name and National Register of Legal Entities - CNPJ number, of the issuer and the project holder, when they are distinct legal entities; (b) priority sector in which the project is classified; (c) object and objective of the project; (d) social or environmental benefits arising from the implementation of the project; (e) estimated dates for the start and end of the project or, in the case of projects already in progress, the actual start date, the description of the current phase, and the estimated date for completion; (f) estimated volume of total financial resources necessary for the realization of the project; and (g) volume of financial resources estimated to be raised with the issuance of the securities or instruments, and the respective percentage against the total financial resource needs of the project;

12. In the case of offerings for professional investors, which do not contain a Prospectus, these same information must be provided in the offering documents to be made available to investors.

Closing Announcement

13. Item III of art. 8 of Decree 11.964 further provides for the need to make information available in the Closing Announcement in the case of offerings intended exclusively for professional investors. Since this is a determination of the Regulation, even if such availability ends up being redundant, it cannot be omitted, and the Closing Announcement must contain the same information provided in paragraph 8 above, repeating the information provided in the Market Notice and/or Start Announcement.

II. Automatic registration request for public offerings of securities with tax benefits

14. In public offerings that follow the automatic registration procedure, the registration requests for public offerings must be filled out with the information requested by the SRE System, as follows.

15. In the case of public offerings of incentivized debentures, real estate receivable certificates, and investment fund issuance shares in credit rights referred to in art. 2 of Law No. 12.431, of 2011, the option "yes" must be selected in the field "Incentivized Title - Law 12.431/11". Also in these cases, the field "Authorizing Ordinance of the Incentivized Project - Law 12.431/11" must be filled with the number of the authorizing ordinance of the responsible Sectoral Ministry. If no such ordinance exists, the number of the protocol of the investment project with the responsible Sectoral Ministry must be informed in the field "Number of the protocol of the investment project in the sectoral ministry".

16. In the case of public offerings of infrastructure debentures referred to in Law No. 14.801/2024, the option "yes" must be selected in the field "Infrastructure Debentures - Law 14.801/24". Also in these cases, the field "Authorizing Ordinance of the Incentivized Project - Law 12.431/11" must be filled with the number of the authorizing ordinance of the responsible Sectoral Ministry. If no such ordinance exists, the number of the protocol of the investment project with the responsible Sectoral Ministry must be informed in the field "Number of the protocol of the investment project in the sectoral ministry".

17. In public offerings of incentivized investment fund shares (infrastructure funds, investment funds in infrastructure participations, or investment funds in participations in research, development, or innovation), the option "yes" must be selected in the field "Incentivized Title - Law 12.431/11".

18. Finally, in cases where there is no provision for the issuance of an authorizing ordinance by the responsible Sectoral Ministry, but only the protocol of the investment project with said Body, in accordance with art. 3 [1] c/c art. 8, I [2] of Decree No. 11.964/2024, the lead coordinator must attach to the registration request for the public offering the proof of this protocol, as provided in art. 8, § 1 [3] of the same Decree, in the document named "Proof of protocol of the project in the Sectoral Ministry if Incentivized Title or Infrastructure Debentures".

III. Support Contact

19. Questions regarding Section I of this Circular Letter should be sent to the email sre-consultas@cvm.gov.br.

20. We reiterate the guidance that inquiries regarding the SRE - Offering Registration System (Section II of this Circular Letter) should be directed exclusively to the email suportesistemasre@cvm.gov.br. Only electronic messages directed to this address will be answered, and it is not necessary to send a copy to any other address.

Sincerely,

LUIS MIGUEL R. SONO
Superintendent of Securities Registration _________________________________________

[1] Art. 3 It is considered classified as priority the project that, on the date of presentation of the registration request for the public offering of securities with tax benefits, meets the criteria and general conditions established in this Decree and the criteria and complementary conditions established in the respective ministerial ordinance of the sectoral ministry referred to in art. 15.

[2] Art. 8 For the purposes of monitoring, inspection, and compliance with the provisions of § 5 of art. 2 of Law No. 12.431, of 2011, and § 6 of art. 2 of Law No. 14.801, of 2024, regardless of the waiver or not of prior ministerial approval, the issuer must:
I - protocol at the sectoral ministry, prior to the presentation of the registration request for the public offering of securities with tax benefits, documentation with the individualized description of the investment project, including, at a minimum, the following information:

[3] § 1 The issuer must present to the Securities and Exchange Commission - CVM the proof of the protocol of the information referred to in item I of the caput, for the purposes of presenting the registration request for the public offering of securities with tax benefits.

Document electronically signed by Luis Miguel Jacinto Mateus Rodrigues Sono, Superintendent of Registration, on 10/11/2024, at 15:02, based on art. 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 verifier code 2167376 and the CRC code 55255E14. This document's authenticity can be verified by accessing https://sei.cvm.gov.br/conferir_autenticidade, and typing the "Código Verificador" 2167376 and the "Código CRC" 55255E14. Reference: Process No. Circular Letters SRE 2024 SEI Document No. 2167376