Circular Letter CVM/SRE 09/23

SECURITIES AND EXCHANGE COMMISSION OF BRAZIL
Rua Sete de Setembro, 111/2-5th and 23-34th Floors, Center, Rio de Janeiro/RJ – CEP: 20050-901 – Brazil - Tel.: (21) 3554-8686 Rua Cincinato Braga, 340/2nd, 3rd and 4th Floors, Bela Vista, São Paulo/ SP – CEP: 01333-010 – Brazil - Tel.: (11) 2146-2000 SCN Q.02 – Bl. A – Ed. Corporate Financial Center, S.404/4th Floor, Brasília/DF – CEP: 70712-900 – Brazil -Tel.: (61) 3327-2030/2031 www.cvm.gov.br Circular Letter No. 9/2023/CVM/SRE Rio de Janeiro, August 21, 2023. Subject: New guidelines on procedures to be observed by coordinators in requests for automatic registration of public offerings of securities - CVM Resolution No. 160/2022.

Dear Director,

1. This Circular Letter complements the previous Circular Letters No. 3/2022-CVM/SRE (Circular Letter CVM/SRE 03/22), published on 12/30/2022, No. 1/2023-CVM/SRE (Circular Letter CVM/SRE 01/23), published on 01/13/2023, No. 2/2023-CVM/SRE (Circular Letter CVM/SRE 02/23), published on 01/19/2023, No. 3/2023-CVM-SRE (Circular Letter CVM/SRE 03/23), No. 7/2023/CVM/SRE (Circular Letter CVM/SRE 07/23) and No. 8/2023/CVM/SRE (Circular Letter CVM/SRE 08/23), and should be read together with those documents, for the purpose of clarifications regarding the registration of public offerings of securities that follow the automatic registration procedure, provided for in art. 26 of CVM Resolution No. 160/22 (“RCVM 160”), carried out through the SRE System.

2. In particular, we highlight the revision of the guidance contained in Circular Letter No. 2/2023-CVM/SRE regarding the case of offerings with communicating vessels and without bookbuilding, so that paragraphs 6th to 10th of that circular are to be disregarded from now on.

Offerings with communicating vessels and without bookbuilding

3. Given the experience of using the SRE System and aiming to facilitate the filling out of the Electronic Request Form for the Offering ("Electronic Form", item "b" of paragraph I of art. 27 of CVM Resolution 160/23) in the case of offerings that take the form of communicating vessels exclusively for the purpose of quantity allocation throughout the distribution, therefore after registration (offerings in which there will be no period on the market), specific requests were created, still last January, for use in such situations: "OPD Aut Professional - communicating vessels without bookbuilding" and "OPD Aut Qualified - communicating vessels without bookbuilding".

4. However, we have observed recurrent filling errors in such cases, which led us to reevaluate the way of presenting offerings in such situations. Thus, the aforementioned requests were discontinued on this date, and in parallel, the parameterization was adjusted so that the dropdown box "Has Communicating Vessels?*" (located in the "Securities Characteristics" tab, as highlighted below) appears in non-bookbuilding requests in the case of quota offerings of FII, FIP, FIDC, Fiagro FII, Fiagro FIP and Fiagro FIDC.

6. Thus, in the case of offerings that take the form of communicating vessels exclusively for the purpose of quantity allocation throughout the distribution, in this new system, the total amount of the offering will be informed in the initial base lot field and each series specified from the "+ Add" button, illustrated above. The registered base lot amount will not be segregated in the series, only the eventual additional lot should be divided equally among the number of series the offering has, informing each of them.

7. Thus, in the example below for illustrative purposes, the non-bookbuilding offering provides for the distribution of the 2 series in a communicating vessel system, with an additional lot of 25%. The lead coordinator must, when specifying the characteristics of each series, divide the additional lot among them.

8. We reiterate that the above guidelines refer exclusively to non-bookbuilding offerings, i.e., those that will receive immediate registration upon presentation of the Electronic Form, in which there is the distribution of 2 or more series in communicating vessel systems throughout the offering placement period. We also reinforce that the guidance contained in item "Offerings with communicating vessels" of Circular Letter No. 2/2023-CVM/SRE is to be disregarded from this date.

Update of the Relationship Matrix available in the SRE - CVM System (Request x Security - VM)

9. The Relationship Matrix available in the SRE - CVM System, accessible via the "Help" link located in the blue upper bar of the System screen, has been updated for the discontinuation of the aforementioned requests ("OPD Aut Professional - communicating vessels without bookbuilding" and "OPD Aut Qualified - communicating vessels without bookbuilding") and also to encompass the relationships created from the parameterization of the security "Convertible Debentures", as informed in Circular Letter No. 7/2023/CVM/SRE.

10. We remind you that it is extremely important to consult the matrix as a way to identify the appropriate request for the situation of the offering to be initiated. Errors in choosing the request are the most frequent and require the adoption of the cancellation procedure for operational error.

Recurrent errors in Electronic Request Forms for Registration

11. Having passed more than 8 months of use of the SRE System, we have verified that errors persist in the presentation of Electronic Forms, many of which are also due to a misunderstanding of regulatory aspects.

12. For example, we have verified several public offerings intended for professional investors in which the Start of Distribution Announcement was not presented at the beginning of the distribution period. As per the device highlighted below, this document is mandatory in any public distribution offering, and the fact that it is not parameterized as mandatory in the Electronic Form merely reflects the prerogative that the Start of Distribution Announcement can be published up to 2 days later, in the case of offerings that have had a Preliminary Prospectus, or up to 90 days in other cases, as per art. 47 of RCVM 160.

Art. 59. The distribution period, characterized by the possibility of effective settlement of the subscription or acquisition operation of the securities object of the public offering, can only begin after observing, cumulatively, the following conditions:
...
§ 3rd The start of distribution announcement is a summary notice that communicates the start of the distribution and gives wide publicity to the definitive prospectus, in cases where such document is required by this Resolution, and must contain, at most, the following information:
I – the security offered and identification of the offeror; II – the indication of the form of obtaining the definitive prospectus and the offering sheet, observing item VII; III – the registration procedure adopted for distribution; IV – the offering schedule; V – clarification that more information about the distribution can be obtained with the coordinators and other institutions participating in the distribution consortium, or with the CVM; VI – number and date of registration at the CVM, in a prominent manner; and VII – if it is the case of an offering intended exclusively for professional investors, the following notice: “Disclosure of a prospectus for the realization of this offering was waived”.

13. Not only the Start of Distribution Announcement, but in several offerings it is recurrent to observe that documents mandatory for the purposes of RCVM 160 are not presented in the Electronic Form when made available within the offering. We reiterate: for the purposes of compliance with art. 13, item V of RCVM 160, according to which the disclosures required by the aforementioned norm must be made, among other places, on the CVM page, the offering documents must be submitted in the Electronic Form, simultaneously with the disclosure in the other required places. The fact that a certain document parameterized in the "Document Submission" tab, section "Offering Documents" is not mandatory for the initial presentation of the Electronic Form, whether in obtaining registration in a non-bookbuilding offering, or when the offering goes to market in distributions that involve bookbuilding, does not mean that it should not be inserted therein when disclosed, in accordance with RCVM 160.

14. On the other hand, in the "Additional Documents" section, we sometimes verify the presentation of a series of documents that are not mandatory for the purposes of automatic registration of public offerings, nor that have mandatory submission to the CVM as is the case of advertising materials. We reinforce: in this section, strictly advertising materials or eventual documents regarding which there is specific guidance for inclusion in the Electronic Form due to interaction with the SRE, in a specific concrete case, must be presented.

15. Another frequent error is the incorrect identification of offerors, especially in offerings of closed-end fund quotas, causing the offering to be characterized as a secondary offering. We remind you that this subject was the object of clarification still in February, through Circular Letter No. 3/2023/CVM/SRE (Circular Letter CVM/SRE 03/23).

16. Also, we frequently verify the non-inclusion of any other intermediaries that will act in the offering as coordinators, information to be provided in the "Contacts" tab including all coordinators signatories of the distribution contract, not encompassing the consortium institutions.

17. Up to the present date, more than 80 requests had to be cancelled due to operational error in order to present new Electronic Forms properly. This quantity does not include errors such as those regarding documents, previously cited, since such errors can be corrected without the need to redo the request. It also does not include several other information errors in the "Offering Information" and "Securities Characteristics" tabs, whose fields are editable until the end of the offering, even if only by the CVM. It is also worth pointing out that more than 400 attendances were made through the channel for doubts and requests related to the SRE System (email suportesistemasre@cvm.gov.br).

18. We assess that the numbers described above are excessively high, even if one considers the recent implementation of the system as well as its entry into operation together with the entry into force of the reform of the regulatory framework for public offerings of distribution.

19. In this sense and understanding that the adaptation phase of use of the SRE System should be approaching the end of the learning curve, we reinforce the need for constant instruction and monitoring of the team that uses the System not only in operational matters, but also regarding regulation. It is worth remembering that in accordance with art. 70 of RCVM 160, item I, the SRE may at any time suspend the offering that is being processed under conditions different from those contained in the resolution or registration.

20. We also inform that we are starting risk-based supervision of offerings submitted to the automatic procedure, which reinforces the need for correct use of the SRE System, with a view to avoiding sanctioning procedures.

Offering of incentivized debentures issued by non-registered issuers

21. In accordance with art. 26, item IX, the public offering of debentures, eligible for the tax benefit provided for in Law No. 12.432/11, issued by non-registered issuers, may be directed to qualified investors, being the only hypothesis in which an offering of debentures from non-registered issuers is directed to a target audience that is not exclusively composed of professional investors.

22. Thus, such offerings presuppose the preparation of a prospectus, a document only waived when it comes to offerings intended exclusively for professional investors. In turn, the prospectus has as an annex the Reference Form ("FRE"), a document prepared through Empresas.net and incorporated by reference to the prospectus, through the indication of the page on the worldwide web where it can be consulted, as provided for in Annex B of CVM Resolution No. 160 of 07/13/2022.

23. Aiming to facilitate the preparation of the prospectus for the non-registered issuer, B3, the entity responsible for the development and maintenance of the Empresas.net system, made available the possibility for non-registered issuers, who already provide information through the aforementioned system, to also access the functionality that allows the preparation of the FRE, previously available only for registered issuers.

24. The new functionality must be accessed, in the Empresas.Net system, through the menu “Document Submission”, option “FRE OnLine”. In case of doubts regarding its filling, we guide you to consult item 10 (“Guidelines for the Preparation of the Reference Form”) of the ANNUAL CIRCULAR LETTER-2023-CVM/SEP of 02/28/2023, insofar as applicable.

Support Contact

25. We reiterate the guidance that inquiries regarding the SRE - Offering Registration System should be directed exclusively to the email suporte-sistemasre@cvm.gov.br. Only electronic messages directed to such address will be answered, it being unnecessary to send a copy to any other address.

Sincerely,

LUIS MIGUEL R. SONO
Superintendent of Securities Registration

ANNEXES:
Annex 1 - Relationship Matrix available in the SRE - CVM System (Request x Security - VM)

Document electronically signed by Luis Miguel Jacinto Mateus Rodrigues Sono, Superintendent of Registration, on 08/21/2023, at 17:48, based on art. 6º of Decree No. 8.539, of October 8, 2015.
The authenticity of the document can be verified on the site https://super.cvm.gov.br/conferir_autenticidade, informing the verification code 1838563 and the CRC code 336A9C26.
This document's authenticity can be verified by accessing https://super.cvm.gov.br/conferir_autenticidade, and typing the "Verification Code" 1838563 and the "CRC Code" 336A9C26.

Reference: Process No. SRE Circular Letters 2023 SEI Document No. 1838563