CVM Instruction 208 (Revoked) - Issuance and Distribution of Investment Certificates for Brazilian Audiovisual Works

Dispenses with the issuance and distribution of Investment Certificates for the production, distribution, exhibition, and technical infrastructure of Brazilian cinematic audiovisual works.

The PRESIDENT OF THE SECURITIES AND EXCHANGE COMMISSION makes public that the Collegiate Board, in a session held on this date, having in view the provisions of LAW NO. 6,385, of December 7, 1976, and based on article 1 of Law No. 8,685, of July 20, 1993, and article 2 of Decree No. 974, of November 8, 1993,

RESOLVED:

INVESTMENT CERTIFICATES

Art. 1. The Investment Certificates that characterize quotas representative of commercialization rights of specific works and 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, provided for in Decree No. 974, of November 8, 1993, which regulated Law No. 8,685, of July 20, 1993, shall have their issuance and distribution registered with the Securities and Exchange Commission - CVM.

Sole Paragraph. The total number of quotas subject to registration shall be representative of a percentage on the commercialization rights during the term and under the conditions established by the issuing company at the time of the registration request referred to in the "caput" of this article.

Art. 2. For the purposes of this Instruction, issuing companies are considered those dedicated to the independent production of Brazilian audiovisual works, as well as Brazilian national capital companies that present specific projects for exhibition, distribution, and technical infrastructure in the cinematic audiovisual area, as defined in the "caput" and in § 5 of article 1 of Law No. 8,685, of July 20, 1993.

Art. 3. The Investment Certificates, which may be registered or book-entry, shall contain:

I - the denomination "INVESTMENT CERTIFICATE Decree No. 974/93"; II - serial number of the Certificate; III - qualification of the issuing company with the registration numbers in the General Register of Taxpayers of the Ministry of Finance and the state registration;

IV - number of the project approval by the Ministry of Culture; V - denomination of the project approved by the Ministry of Culture; VI - number of the issuance and distribution registration at the CVM identifying the nature of the registration; VII - total number of quotas benefiting from tax incentives and respective percentage of participation in commercialization rights; VIII - number of quotas represented in each Investment Certificate; IX - identification of the investor; X - specification of the rights assured in the enterprise; XI - guarantees, if any; XII - deadline for project completion; XIII - place and date of issuance of the certificate; and XIV - authorized signature of the person responsible for the issuing company.

REGISTRATION OF ISSUANCE AND DISTRIBUTION OF INVESTMENT CERTIFICATE

Art. 4. The request for registration of issuance and distribution of investment certificates at the CVM shall be formulated by the issuing company together with the distribution leader, if any, accompanied by the following documents:

I - contract or articles of association of the issuing company; II - deliberative act of the issuance of investment certificates; III - indication of the director or managing partner of the issuing company responsible for the project; IV - contract identifying the rights and obligations of the issuing company and the subscribers of the certificates; V - copy of the payment slip for the inspection fee related to the registration of issuance of the investment certificates;

VI - copy of the distribution contract for the investment certificates and, if any, the subscription guarantee contract; VII - liquidity guarantee contract, if any; VIII - model of the Investment Certificate; IX - model of the subscription form with identification of its numbering, which shall contain:
a) - space for signature; b) - printed declaration by the investor of having taken knowledge of the existence of the prospectus and how to obtain it.
X - draft of the prospectus, which shall be prepared in the form of article 14 of this Instruction; XI - copies of the documents presented for appreciation by the Ministry of Culture in accordance with art. 7 of Decree No. 974/93; XII - number of the project approval registration at the Ministry of Culture; XIII - indication of the number of the financial application accounts and the branch of Banco do Brasil S/A where these were opened, as well as the names of the account holders, in accordance with article 22 of this Instruction.

SIMPLIFIED REGISTRATION

Art. 5. The issuance whose placement in the securities market does not use the means that characterize public distribution and that meets one of the following requirements shall be subject to simplified registration:

I - whose quotas subject to placement have a unit value equivalent to at least 35,000 UFIR, the respective Certificate representing at least one quota; or II - distribution restricted to persons with whom the issuing company maintains close and habitual commercial relations, and who have regular access to information about the project, similar to those that the issuance registration aims to ensure.

Art. 6. The simplified registration request shall be exempt from presenting the documents listed in items VI, VII, VIII, IX, "b", X, and XI of art. 4 of this Instruction.

Art. 7. Investment certificates subject to simplified registration may only be traded privately.

GRANTING OF REGISTRATION

Art. 8. The registration shall become automatically effective if the request is not denied within 30 (thirty) days after its presentation to the CVM, via protocol, with the required documents and information.

§1. The 30 (thirty) day period may be interrupted only once, if the CVM requests, by official letter, additional documents and information.

§2. To meet any requirements, a period not exceeding 60 (sixty) days shall be granted, counted from the receipt of the respective correspondence.

§3. In the case where the CVM's requirements are met after 15 (fifteen) days have passed since the registration request, a new period of 30 (thirty) days shall begin to run, counted from the date of compliance with the requirements.

APPROVAL

Art. 9. The approval of the registration shall be communicated by official letter, which shall contain the main characteristics of the registered distribution.

DENIAL

Art. 10. The registration shall be denied when:

I - the issuing company fails to meet any CVM requirements within the period fixed in art. 8, § 2 of this Instruction; and II - the issuing company or its director or managing partner responsible for the project is in default with the CVM.

Sole Paragraph. In the event of denial, all documents accompanying the request shall be returned.

TRUTHFULNESS OF INFORMATION

Art. 11. The administrators of the issuing company are responsible for the truthfulness of the information sent to the CVM.

Sole Paragraph. The distribution leader, if any, is responsible for making efforts to verify the sufficiency and quality of the information provided to the market throughout the distribution period, necessary for investors to make a decision.

INTERMEDIARIES

Art. 12. Members of the distribution system may form a consortium for the specific purpose of distributing Investment Certificates in the market and/or guaranteeing the subscription of the issuance.

§ 1. The consortium shall be regulated by contract and subcontract from which the conditions and limits of co-obligation of each participating institution, and the grant of powers of representation of the consortium societies to the distribution leader, shall necessarily appear.

§ 2. The responsibility of each of the institutions participating in the consortium formed under the terms of this article corresponds to the amount of risk assumed in the contract instrument referred to in the previous paragraph, observing the provisions of article 13.

Art. 13. In addition to those provided in article 11, sole paragraph, the following obligations fall to the distribution leader:

I - evaluate, together with the issuing company, the feasibility of distribution, its conditions, and the type of contract to be entered into; II - formulate, together with the issuing company, the registration request (article 4), advising it in all stages of the issuance; III - form the launch consortium, if applicable; IV - inform the CVM of the participants in the consortium, as well as those who join it subsequently, discriminating the quantity of Investment Certificates initially attributed to each; V - communicate to the CVM, immediately, any eventual alteration in the distribution contract, or its termination; VI - be responsible for sending to the CVM, monthly, until the 10th day of the following month, in addition to its own, if applicable, report maps indicating the distribution movement of the Investment Certificates, which shall be prepared by each of the consortium participants, according to the type of contract. In any case, said maps shall be sent 15 (fifteen) days after the closure of the distribution; VII - prepare the prospectus (article 14);

VIII - deposit the captured resources, in accordance with article 4 of Law No. 8,685/93, within a maximum period of 48 hours after receipt of the amount; IX - control the issuance capture limit, respecting the maximum limit provided in art. 4, § 2, "b", of Law No. 8,685/93; X - control the subscription forms, returning to the issuing company those that are not used, within a maximum period of 30 (thirty) days after the closure of the distribution.

Sole Paragraph. The institutions participating in the consortium are obliged to keep the prospectus available to the public (article 14).

PROSPECTUS

Art. 14. The prospectus shall contain the following information:

I - qualification of the issuing company;
II - deliberative act of the issuance of the Investment Certificates; III - information regarding the project that constitutes the object of the issuance of the Investment Certificates; IV - characteristics of the issuance, such as the total value of the issuance, quantity of quotas into which the issuance is divided, distribution period to the public, which may not exceed 120 days counted from the granting of the registration, and the deadline for delivery of the certificates, not exceeding 30 days after proof, to the CVM and the Ministry of Culture, of the obtaining of the total resources provided for in the global budget; V - value of the quota in current currency updated monetarily by the same index used for purposes of income tax payment; VI - number and date of registration at the CVM; VII - identification of the rights and obligations of the issuing company and the subscribers of the certificates as specified in the contract referred to in article 4, item IV, of this Instruction; VIII - distribution conditions concerning the placement of the certificates with the public and any subscription guarantee provided by the leader and consortium members; IX - statement of the distribution costs of the Certificates;

X - guarantees offered by the issuing company, if any.
XI - indication of the means that will be used to disseminate the information provided for in this Instruction.

Sole Paragraph. After these indications, the prospectus shall contain the following text:
"The registration of this issuance does not imply, on the part of the CVM, guarantee of the truthfulness of the information provided or judgment on the quality of the project, the issuing company, or the profitability and risk of the investment represented by the Investment Certificate".

Art. 15. The prospectus shall be available to the public for delivery, during the distribution period, in a sufficient number of copies, at the distribution locations of the issuance (article 13, sole paragraph).

Art. 16. The use of a preliminary prospectus is permitted in the phase preceding the Issuance Registration, provided that the information contained therein is that referred to in article 14.

Art. 17. In the prospectus mentioned in the previous article, the characterization "Preliminary Prospectus" shall appear on its cover, in addition to expressly mentioning the following:

I - "The information contained in this publication will be subject to analysis by the CVM, which will examine its adequacy to the requirements of the relevant regulation".
II - "The definitive prospectus will be available to investors for delivery, at the locations where the Investment Certificates will be placed with the public, during the distribution period".

ADVERTISING MATERIAL

Art. 18. The use of any advertising text for the offer, advertisement, or promotion of the distribution of the Investment Certificates may only be adopted after the granting of the registration and will depend on examination and prior approval by the CVM.

Sole Paragraph. The CVM, within a period of two business days, counted from the date of delivery, shall manifest its approval. Upon expiration of this period without any manifestation from the CVM, the advertising text shall be considered approved.

Art. 19. The advertising text may not diverge from the information in the prospectus.

DISTRIBUTION OF THE INVESTMENT CERTIFICATES

Art. 20. The distribution of the Investment Certificates may only begin after:

I - the granting of the registration by the CVM; II - the prospectus is available for delivery to investors.

SUSPENSION OF DISTRIBUTION

Art. 21. The CVM may suspend, at any time, the distribution that is being processed under conditions different from those contained in this Instruction and/or the registration, when it has been deemed illegal or fraudulent, or even after the respective registration has been made.

CLOSURE OF DISTRIBUTION

Art. 22. Upon closure of the distribution, the CVM shall communicate to the Ministry of Culture the result of the resource capture, for the purpose of starting the release of the amounts deposited in the financial application account referred to in article 4 of Law No. 8,685/93.¹

MOVEMENT OF RESOURCES

Art. 23. Projects linked to the issuance of Investment Certificates shall observe the following conditions:¹

I - proof of the contribution of own or third-party resources, not incentivized, corresponding to at least 40% of the global budget; II - proof of the subscription of the total number of quotas with incentivized resources.

§1. The resources mentioned in this article shall be deposited in separate accounts, depending on whether they originate from tax incentives or not.

§2. If the resources necessary for the viability of the project are not obtained, the deposited values, related to item II of the caput, shall be transferred to the Brazilian Institute of Art and Culture, in accordance with article 10 of Decree 974/93, in the form defined by the competent bodies, proceeding with the return of the values deposited based on item I, in the form provided in the prospectus.

RETURN OF RESOURCES

Art. 24. The non-compliance of projects with resources already available arising from the incentives created by Law No. 8,685/93, in its article 1, and the non-effectuation of the investment or its realization in disagreement with what is stipulated, imply the return, by the issuing company responsible for the project, of the resources received, plus monetary correction, interest, and other charges identical to those provided for in the income tax legislation.

Sole Paragraph. The form of this return shall be regulated through a specific act issued by the competent bodies.

OBLIGATIONS OF THE ISSUING COMPANY

Art. 25. It is incumbent upon the issuing company, directly or indirectly: to arrange for the acquisition of rights of literary works, scripts, and screenplays necessary for video-cinematographic productions; the hiring of directors, technical personnel, and artistic services; the purchase or rental of equipment and materials; the hiring of financial and administrative advisory services; as well as all other activities necessary for the execution of the enterprise.

Art. 26. The issuing company shall maintain transfer registration books for the investment certificates or hire a service for this purpose from a financial institution authorized by the CVM.

Art. 27. The accounting of commercialization rights shall be carried out in specific books and separately.

Art. 28. The issuing company shall prepare, monthly, until the 10th day of the following month, a report on the evolution of the project.

Sole Paragraph - The reports shall be placed, at the headquarters of the issuing company, available to the holders of the investment certificates and a copy shall be sent to the CVM within the period stipulated in the caput of this article.

Art. 29. Once the project is completed, the issuing company shall prepare and disseminate, at least semi-annually, a report containing information regarding the earnings resulting from the commercialization rights of the project.

Sole Paragraph. The semi-annual report shall be sent to the CVM on the same date of its dissemination, which may not exceed 30 days elapsed since the end of the period.

Art. 30. The issuing company shall also provide the following information:

I - communication regarding relevant acts or facts, in accordance with article 157, § 4 of LAW NO. 6,404/76 and INSTRUCTION CVM NO. 31/84, on the same day of its dissemination by the press; II - bankruptcy petition, its grounds, and financial statements especially prepared for obtaining the legal benefit;

III - bankruptcy granting sentence;
IV - bankruptcy petition or confession, on the same day of its knowledge by the company, or of the entry of the petition in court as the case may be; V - bankruptcy declaratory sentence, with indication of the trustee of the bankrupt estate, on the same day of its knowledge by the company; and VI - other information requested by the CVM, within the period it indicates.

Sole Paragraph. The provisions contained in INSTRUCTION CVM NO. 31/84 shall apply to the issuing company and its administrators.

ASSEMBLY OF CERTIFICATE HOLDERS

Art. 31. The holders of the investment certificates may hold an assembly to elect a representative to whom the issuing company shall guarantee access to the accounting referred to in article 27.

Art. 32. Only a natural or legal person who meets the following requirements may exercise the function of representative of the Certificate holders:

I - be a Certificate holder;
II - not hold a position or function in the issuing company or provide it with advisory or services of any nature.

Art. 33. The assembly may be convened by any of the Certificate holders.

Sole Paragraph. The deliberation quorum shall be that of an absolute majority of the quotas represented by the Investment Certificates.

PENALTY FINE

Art. 34. Non-compliance by the issuing company with the obligations and respective deadlines provided for in the articles of this Instruction shall entail the application of a daily fine in the amount of 69.20 (sixty-nine point twenty) daily UFIR, without prejudice to the responsibility of the administrators of the issuing company, in accordance with articles 9, item V, and 11, of LAW NO. 6,385 of December 7, 1976.

SERIOUS INFRACTION

Art. 35. For the purposes of § 3 of art. 11 of LAW NO. 6,385/76, without prejudice to the fine provided for in § 1 of the same article, a serious infraction is considered to be the distribution:

I - that is being processed under conditions different from those contained in the registration; II - carried out without prior registration at the CVM; and III - carried out without the intermediation of the institutions mentioned in article 4 of this Instruction, except in the case of art. 5.

EFFECTIVENESS

Art. 36. This Instruction shall enter into force on the date of its publication in the Official Gazette of the Union.

Original signed by
THOMAS TOSTA DE SÁ
President