CVM Explanatory Note 11

CVM EXPLANATORY NOTE NO. 11/79.
Ref.: Resolution of the National Monetary Council No. 512, of January 24, 1979, which deals with the restructuring of the Capital Market Disclosure Committee - CODIMEC.

Law No. 6.385/76, in its art. 4, items I and II, provided that the CVM, in the exercise of its duties, shall stimulate the formation of savings and their application in securities, and promote the expansion and efficient and regular functioning of the stock market, stimulating permanent applications in shares of the social capital of open companies under the control of national private capital.

Conscious that to achieve these objectives, it would be entirely convenient to obtain an intensive, coordinated, and continuous participation of the market participants themselves, the CVM advocated for the creation of an organism that would represent a meeting of the permanent nature of its members, with a view to coordinating the efforts of awareness, education, research, and disclosure of the securities market.

As a result of these efforts, the Capital Market Disclosure Committee - CODIMEC was constituted on 28.11.77, by decision of ten market entities - ABAMEC/RJ, ABAMEC/SP, ABRASCA, ADEVAL, ANAAI, ANBID, BOVESPA, BVRJ, CNBV and CVM - who were signatories of a Declaration of Principles and Norms.

Seeking to make this communion of interests a reality, the CVM also advocated for the existence of institutional resources for CODIMEC, giving rise to Resolutions Nos. 464, item II, 470, item VII and 504, item VI, letter "b", approved by the National Monetary Council, through which financial resources were allocated to special funds that would be managed by the collecting entities (Stock Exchanges, ANBID and ABRASCA), and applied in programs that would be approved by CODIMEC.

The implementation of the measures embodied in the aforementioned resolutions, and the application of resources, revealed some problems related to the management, separately, by each of the collecting entities. In light of this, the 1st Extraordinary Meeting of Presidents of the Member Entities of CODIMEC, held on 27.06.78, recommended the "creation of a Capital Market Disclosure Fund, which would be constituted by the compulsory and voluntary contributions of capital market agents, and whose administration will be exercised by CODIMEC, in the manner to be agreed upon by its members". This decision was confirmed in the 2nd Extraordinary Meeting of Presidents held on January 12, 1979.

Aiming to overcome these difficulties, the measures contained in this Resolution allow for the unification of the various funds, whose administration will be carried out by CODIMEC itself in the manner established by its members. In fact, it will be up to the member entities, with the CVM as the conductor of the understandings, to fix, through an agreement, the procedures for the administration and application of the resources contributed to the fund, always aiming for greater agility in the execution of the programs that CODIMEC members deem appropriate to approve.

Finally, it is worth remembering that the CVM was given competence to establish controls, verify the regularity of its collection and even collect resources from those in arrears, without this implying additional power regarding their application, which will be carried out in accordance with what CODIMEC members approve.

RIO DE JANEIRO, JANUARY 26, 1979.
Signed original by
ROBERTO TEIXEIRA DA COSTA
President