CVM Instruction 429 (Revoked) - Automatic Registration of Public Distribution Offers of Securities

Institutes the automatic registration of public distribution offers of securities in the specified cases, and amends CVM Instructions No. 400, of December 29, 2003, and No. 155, of August 07, 1991.

The PRESIDENT OF THE SECURITIES COMMISSION – CVM makes public that the Collegiate Body, in a meeting held on 22/03/2006, based on the provisions of Articles 8, item I, and 19 of Law No. 6,385, of December 07, 1976, resolved to issue the following Instruction:

Art. 1. This Instruction provides for the automatic registration procedure for public distribution offers of securities.

Art. 2. Without prejudice to other cases established in current regulations, the registration of a public distribution offer of securities will be granted automatically, upon request by the offeror and the Lead Intermediary Institution of the offer, in the following cases:

I – public offers of simple debentures, with or without guarantee, and without a clause for exchange for shares or other securities, whose registration request is submitted based on a Securities Distribution Program previously filed with the CVM, in the manner of CVM Instruction No. 400, of December 29, 2003, provided that the offer is carried out in accordance with the provisions of the Self-Regulation Code of the National Association of Investment Banks – ANBID for Public Offers of Securities and Financial Instruments;

II – public distribution offers of commercial promissory notes with a unit value of at least R$ 500,000.00 (five hundred thousand reais), provided that summary information about the offer is disclosed, in the manner of the Annex to CVM Instruction No. 155, of August 07, 1991; and

III – provided that they are intended for acquisition or subscription by no more than 20 (twenty) investors, public distribution offers of the following securities:

a) simple debentures, with or without guarantee, and without a clause for exchange for shares or other securities, issued outside of a Securities Distribution Program; b) Real Estate Receivables Certificates; c) quotas of Real Estate Investment Funds; and d) quotas of Investment Funds in Emerging Companies.

§1. The registration request must be accompanied by the documents and information required by CVM Instruction No. 400, of 2003, and other applicable normative acts, in their final version, and the submission of a request for waiver of requirements provided for in CVM Instruction No. 400, of 2003, is prohibited.

§2. In the case of item III of the main text:

I – no investment vehicles or collective investment entities, such as investment funds of any type and closed complementary pension entities, may appear among the subscribers of the securities referred to therein, except for exclusive investment funds that do not have a vehicle or collective investment entity as a quota holder;

II – if the offer is made with the objective of reaching previously determined investors, the distribution plan must contain the names of the investors, the portion of the securities to be subscribed or acquired by them, and the other terms and conditions of this negotiation, including other agreements made between the parties that relate to or have influenced the decision of these investors, such as debt contracts, renegotiation of existing debts, contracts for the purchase and sale of assets, or service contracts; and

III – the securities acquired or subscribed may only be traded by the holder before 18 (eighteen) months have elapsed since the end of the distribution, if the trade occurs between the holders of these securities, or if the holder alienates all securities acquired or subscribed to a single investor who meets the requirement of item I of this paragraph.

§3. In the cases of items “a” and “b” of item III of the main text, the registration referred to in this Instruction does not remove the need for prior registration of the open company.

Art. 3. The registration of a public distribution offer of securities in the cases provided for in Article 2 of this Instruction will take effect after five (5) business days have elapsed following the adoption of the following measures:

I – filing of the request with the CVM;
II – publication of the Distribution Start Notice; and III – availability of the Final Prospectus for investors.

§1. It is prohibited to carry out any placement or sales effort, or the acquisition or subscription of securities, before the period specified in the main text has elapsed.

§2. The CVM may, at any time, require the adequacy of the information provided to the relevant legal and regulatory provisions, as well as suspend or cancel the registration that was obtained without compliance with the provisions of this Instruction and other legal and regulatory norms.

§3. The registration will not take effect when the offeror is in arrears with the obligation to provide eventual or periodic information to the CVM, and its effects will be cancelled if it is verified that such information is inconsistent with the information contained in the prospectus.

Art. 4. In public distribution offers of securities registered in the manner of this Instruction, the use of advertising material is not permitted.

Art. 5. Article 11 of CVM Instruction No. 400, of 2003, shall be amended to read as follows:

“Art. 11. ...
...
§5. The CVM will analyze the request to file a Distribution Program, formulate requirements, and verify their compliance, in the shortest time possible.

§6. If, before the end of the analysis of the Distribution Program, a request for registration of a public distribution offer of a security to be issued based on the Program is submitted, the analysis periods, formulation of requirements, and verification of their compliance, whether regarding the Distribution Program or the registration request for the public distribution offer, shall be those established in Articles 8 and 9 of this Instruction.

§7. Upon completion of the analysis, or its deadline, the CVM will send a letter to the Lead Intermediary Institution, with a copy to the offeror, informing the approval or denial of the request to file the Distribution Program.

§8. The Distribution Program will be cancelled:

I – upon request by the issuing company;
II – by decision of the CVM, if an offer linked to it is carried out under conditions different from those stated in the registration, without prejudice to the provisions of Article 60; and III – automatically:
a) upon the closure of a public offer that represents the exhaustion of the value provided in the Distribution Program; b) if the Prospectus and other information related to the Distribution Program are not updated on the due dates; and c) by the filing of a new Distribution Program by the CVM.” (NR)

Art. 6. Article 2 of CVM Instruction No. 155, of 1991, shall be amended to read as follows:

“Art. 2. ...

I – have as its object promissory notes whose unit nominal value is, at minimum, R$ 500,000.00 (five hundred thousand reais); and ...

§1. In public distribution offers of commercial promissory notes carried out in accordance with the provisions of this Instruction, the disclosure of summary information about the offer will be permitted, in accordance with the form contained in Annex I.

§2. The company intending to use the form referred to in § 1 must attach it to the registration request for the offer and make it available in the manner of § 3 of Article 42 of CVM Instruction No. 400, of 2003.” (NR)

Art. 7. Item 14-A is added to Annex II of CVM Instruction No. 400, of 2003, as follows:

“14-A. If applicable, declaration from the stock exchange or the organized over-the-counter market entity informing of the approval of the request for admission to trade of the security, conditioned only on obtaining registration with the CVM.” (NR)

Art. 8. The Annex to CVM Instruction No. 155, of 1991, is added, as attached to this Instruction.

Art. 9. Non-compliance with the provisions of Articles 3 and 4 of this Instruction constitutes a serious offense, for the purposes of the provisions of § 3 of Article 11 of Law No. 6,385, of December 07, 1976.

Art. 10. The sole paragraph of Article 2 of CVM Instruction No. 155, of August 07, 1991, is revoked.

Art. 11. This Instruction enters into force on the date of its publication in the Official Gazette of the Union.

Signed by
MARCELO FERNANDEZ TRINDADE
President

Annex added to Instruction No. 155, of August 07, 1991.

“Annex
Summary Information on Public Distribution Offer of Promissory Notes

1. Main Characteristics of the Operation
   1.1. Identification of the issuing company (name and headquarters address);
   1.2. Corporate act that authorized the issuance of the title;
   1.3. ISIN Code;
   1.4. Issuance Value;
   1.5. Number of series;
   1.6. Quantity;
   1.7. Unit nominal value;
   1.8. Form of the title;
   1.9. Subscription and payment procedures;
   1.10. Pricing method;
   1.11. Remuneration conditions;
   1.12. Maturity term;
   1.13. Placement regime;
   1.14. Guarantees, if any, and declaration by the lead distribution institution that it verified the regularity, sufficiency, and enforceability of their constitution.
   1.15. Early maturity scenarios;
   1.16. Allocation procedure;

1.17. Trading location, if any;
1.18. Note Agent, if any;
1.19. Risk rating, if any;
1.20. Identification of the institutions forming the distribution consortium; and
1.21. Destination of the resources.

2. Summary description of the Company's activities.
3. Identification of guarantors, stating their corporate type and general characteristics of their business.
4. Selected Financial Information (comprising the last three fiscal years, and quarterly information for the current year, compared with the same period of the previous year):

• Main Asset/Liability Accounts
  Asset
  Total current assets
  Total long-term realizable assets
  Total permanent assets
  Total assets
  Liability
  Total current liabilities
  Total long-term liabilities
  Total equity
  Total liabilities

• Main Income Statement Accounts
  Net operating revenue
  Cost of services rendered
  Gross profit
  Operating result
  Non-operating result
  Net profit or loss for the period

4.1. Identification of the independent auditor, or, if the statements have not been audited, explicitly state this condition.
5. Operation risk factors.
6. Relationship of the Offeror with the intermediary institutions forming the consortium.
7. Declaration by the offeror and the lead institution regarding the veracity, consistency, quality, and sufficiency of the information provided.”