CVM Instruction No. 297 of December 18, 1998 (Revoked)

FULL TEXT OF CVM INSTRUCTION NO. 297, OF DECEMBER 18, 1998, WITH CHANGES INTRODUCED BY CVM INSTRUCTION NO. 461/07. Establishes norms and procedures relating to the suspension of trading with securities in secondary markets.

THE PRESIDENT OF THE SECURITIES AND EXCHANGE COMMISSION - CVM makes public that the Collegiate Body, in a meeting held on this date, in accordance with the provisions of Arts. 4º, items III and IV, 9º, items I and III, of Law No. 6,385, of December 7, 1976, and Resolution CMN No. 702, of August 26 1981, RESOLVED to issue the following Instruction:

Art. 1º This Instruction establishes norms and procedures relating to the suspension of trading, in secondary markets, of securities issued by publicly-held companies, in the event of abnormal market situation, as defined in Resolution CMN No. 702, of August 26 1981.

Art. 2º The stock exchange or organized over-the-counter market entity must suspend the trading of a security when news or information becomes public that is vague, incomplete, or that raises doubt regarding its content or origin, which may come to influence in a relevant manner the quotation of any security or induce investors to error.

Sole Paragraph. The suspension must be maintained for the period necessary for the clarification or confirmation of the information, up to a maximum period of sixty days, and such period may be extended, exceptionally, at the discretion of the CVM.

Art. 3º The suspension of trading of a security in a stock exchange or organized over-the-counter market entity entails the suspension of trading of this same security in other venues or systems where it is traded.

Art. 4º The suspension of trading may cover only one or more species, classes or series of a specific security.

Art. 5º The CVM's determination to suspend the trading of securities must be transmitted to the stock exchange or to the organized over-the-counter market entity where such securities are most traded, which must communicate the determination to similar institutions and promote wide dissemination of the suspension and its justification.

Sole Paragraph. The CVM's determination to suspend the trading of a security traded in an unorganized over-the-counter market must be published in a notice in a newspaper of circulation.

Art. 6º The determination of the stock exchange or organized over-the-counter market entity to suspend the trading of a specific security must be immediately communicated to similar entities and to the CVM, with wide dissemination of the suspension and its justification.

CVM INSTRUCTION NO. 297, OF DECEMBER 18, 1998.
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Art. 7º The stock exchange or organized over-the-counter market entity that suspends the trading of securities must request from its issuer information about the facts that motivated the suspension.

§1º The information provided must be disseminated to the market, after which the trading of the securities must be resumed.

§2º The failure to provide or the insufficiency of the information provided within the suspension period (Art. 2º, sole paragraph) must be communicated to the market, resuming at its end the trading of the securities, without prejudice to the penalties provided for in Article 14.

• Articles revoked by CVM Instruction No. 461, of October 23, 2007.

Art. 8º The stock exchange and the organized over-the-counter market entity must promote the suspension of trading of securities, when informed of the existence of a petition for bankruptcy or judicial reorganization that demonstrates signs of insolvency of the issuing company.

§1º The suspension of trading must be limited to the maximum period established in the sole paragraph of Art. 2º.

• Caput and § 1º revoked by CVM Instruction No. 461, of October 23, 2007.

§2º In the case of a publicly-held company with bankruptcy decreed, the trustee must make public the report mentioned in Art. 63, item XIX, of Decree-Law No. 7,661, of June 21, 1945, as well as the other reports that come to be prepared for the purpose of informing the bankruptcy judge.

§3º The company that requests the granting of judicial reorganization must make public the financial statements referred to in Art. 159 of Decree-Law No. 7,661/45 and, if the judicial reorganization is granted, the report of the commissioner mentioned in Art. 169, item X, of said decree-law.

§4º The provisions of the previous paragraph apply equally to the report mentioned in Art. 178 of Decree-Law No. 7,661/45, in cases of request for suspensive judicial reorganization, as well as the other reports that come to be prepared for the purpose of informing the judge of the judicial reorganization.

Art. 9º The decree of intervention, extrajudicial liquidation or temporary special administration, by the Central Bank, in a publicly-held company with securities listed on a stock exchange or in an organized over-the-counter market, entails the immediate suspension of its trading, and the intervenor, the liquidator or the board of directors, as the case may be, must communicate the measure to the institution where its securities are most traded, which must proceed in accordance with the provisions of Arts. 6º and 7º of this Instruction.

Sole Paragraph. The intervenor, the liquidator or the board of directors, as the case may be, must make public the report mentioned in Art. 11 of Law No. 6,024, of March 13, 1974, as well as the other reports that come to be prepared for the purpose of informing the Central Bank of Brazil.

CVM INSTRUCTION NO. 297, OF DECEMBER 18, 1998.
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Art. 10. Transactions with securities issued by a company subject to the provisions of Arts. 8º and 9º must, for disclosure purposes, be listed separately from other transactions carried out on the stock exchange or in the organized over-the-counter market.

• Article revoked by CVM Instruction No. 461, of October 23, 2007.

Art. 11. The company that has been declared bankrupt or in a regime of extrajudicial liquidation will have its registration as a publicly-held company cancelled in the cases provided for in CVM Instruction No. 287, of August 7 1998.

Art. 12. Any measure adopted with the aim of organizing or reorganizing the company for continuation of the business or activity, generally or partially, in the form of Art. 31 of Law No. 6,024/74, and of Art. 6º, item III, of Law No. 9,447, of March 14, 1997, must be communicated to the stock exchange or to the entity of the organized over-the-counter market where its securities are most traded.

§1º The company with registration for trading in an unorganized over-the-counter market that falls under the provisions of this article must communicate the adoption of the referred measures to the CVM.

§2º The provisions of this article apply equally to the company whose bankruptcy has been decreed.

Art. 13. When the trading of a security is suspended in the spot market, the trading with its derivatives must be suspended, in the manner provided for in the regulations of the respective stock exchange or the organized over-the-counter market entity.

• Article revoked by CVM Instruction No. 461, of October 23, 2007.

Art. 14. The failure to provide information requested in the form of Art. 7º constitutes a serious offense, for the purposes of the provisions of Art. 11 of Law No. 6,385, of December 7, 1976.

Art. 15. Trading with securities that are suspended on the date of publication of this instruction must be resumed within a maximum period of sixty days, observing the provisions of Art. 2º.

Art. 16. This Instruction enters into force on the date of its publication in the Official Gazette of the Union, with the provisions of CVM Circular Letter No. 304, of December 14, 1978, being revoked.

• Articles revoked by CVM Instruction No. 461, of October 23, 2007.

Original signed by
FRANCISCO DA COSTA E SILVA
President