CVM Instruction No. 331 of April 4, 2000, as amended by CVM Instructions No. 431/06 and 469/08

FULL TEXT OF CVM INSTRUCTION NO. 331, OF APRIL 4, 2000, WITH THE AMENDMENTS INTRODUCED BY CVM INSTRUCTION NO. 431/06 AND 469/08.

Provides for the registration of a company for the issuance and trading of securities deposit certificates – Level II and III BDR Programs backed by securities issued by open companies or similar entities, headquartered abroad.

THE PRESIDENT OF THE SECURITIES AND EXCHANGE COMMISSION - CVM makes public that the Collegiate Body, in a meeting held on March 24, 2000, based on the provisions of Articles 19 and 21 of Law No. 6,385, of December 7, 1976, HAS DECIDED to issue the following Instruction:

Art. 1 The trading of securities deposit certificates – Level II and III BDRs on a stock exchange, in the organized over-the-counter market, or in an electronic trading system, depends on the prior registration of the company with the CVM, in accordance with the norms provided for in this Instruction.

• Wording given by CVM Instruction 431, of May 29, 2006.

Art. 2 The company registration request must be submitted to the CVM together with the request for the public distribution of BDRs, and the approval, if any, must cover both requests.

ON THE RESPONSIBLE DIRECTOR AND THE LEGAL REPRESENTATIVE OF THE COMPANY

Art. 3 Company registration will only be granted when there is:
I - the indication, by the depositary institution, of a responsible director for the BDR program; and II - the designation of a legal representative of the company in Brazil, with full powers to handle any issues, who may be sued and receive initial summons by the company. II – the designation of a legal representative of the company in Brazil, with full powers to handle any issues, who may be sued and receive initial summons and notifications by the company.

§1 The legal representative must be domiciled and resident in Brazil, and their designation must be expressly and formally accepted by them, including indication of awareness of the responsibilities imposed by Brazilian law and regulation.
§2 In the event of resignation, death, incapacity, or permanent impediment of the legal representative, the company will have a period of 20 (twenty) days to promote their replacement, observing the formalities referred to in §1.

• Item II with wording given by CVM Instruction 431, of May 29, 2006.
• §§ 1 and 2 included by CVM Instruction 431, of May 29, 2006.

Art. 4 The legal representative referred to in the previous article is responsible for providing the information mentioned in Article 11 of this Instruction to investors, the CVM, the stock exchange, the organized over-the-counter market entity, or the electronic trading system, as well as keeping the company registration updated. Art. 4 The legal representative referred to in Article 3 is responsible, together with the company, for providing the information mentioned in this Instruction to investors, the CVM, the stock exchange, or the organized over-the-counter market entity, as well as for keeping the company registration updated.

• Wording given by CVM Instruction 431, of May 29, 2006.

ON THE DOCUMENTS NECESSARY FOR OBTAINING COMPANY REGISTRATION

Art. 5 The company registration request must be accompanied by the following documents and information:
I - document from the company's administration designating the legal representative and document from the depositary institution designating the responsible director; I – document from the company's administration designating the legal representative and document from the depositary institution designating the responsible director, observing the provisions of §1 of Article 3; II - application signed by the responsible director of the depositary institution containing information on:
a) the stock exchange, the organized over-the-counter market, or the electronic trading system where the company's securities are traded and volumes traded in each of the last twelve months; a) the stock exchange or the organized over-the-counter market entity where the company's securities are traded and volumes traded in each of the last twelve months; b) the controlling shareholders of the company; c) the administrators who manage the company's business; d) the company's consultants and independent auditors; e) the address of the company's headquarters; f) the location for shareholder service; g) the investor service for the BDR program; and h) issues of interest to investors pertinent to the BDR program and the services provided by the depositary institution. h) the legal opinion issued by a lawyer from the country where the securities are custodied regarding the legal environment of that country, especially regarding trading requirements and limitations, hypotheses for registration cancellation, and restrictions on the exercise of political or pecuniary rights, including, if applicable, due to the difference in headquarters between the company and the custodian; and i) issues of interest to investors pertinent to the BDR program and the services provided by the depositary institution. III - information about the company provided by its legal representative:
a) the articles of association or bylaws governing the company; b) the related legislation governing the company; c) shareholder agreements; d) the legal opinion issued by a lawyer from the country of origin regarding the rights of holders of securities issued by the company and regarding the legal environment of that country; and e) the minutes of all general meetings of shareholders and debenture holders and all meetings of the company's executive bodies, held in the twelve months prior to the date of registration with the CVM. IV - accounting information provided by the company's legal representative:

a) the company's financial statements and consolidated statements as presented in the country of origin, relating to the last three fiscal years, accompanied, where applicable, by Management Reports and Independent Auditors' Opinions; b) the company's financial statements and consolidated statements, adjusted and adapted to the Brazilian accounting environment, accompanied by a special review report issued by an independent auditor registered with the CVM and the presentation of the Standardized Financial Statements form – DFP, filled out based on the cited report; b) the company's financial statements and consolidated statements, prepared in accordance with Brazilian accounting standards, accompanied by a special review report issued by an independent auditor registered with the CVM, and the presentation of the Standardized Financial Statements form – DFP, filled out based on the cited report; c) the company's financial statements and consolidated statements, adjusted and adapted to the Brazilian accounting environment, must be supplemented by additional Explanatory Notes to the statements cited in item "a" above, which describe:

1. the accounting environment of the company's headquarters country and a comparative analysis of the accounting principles and practices applicable in the country of origin with Brazilian accounting principles and practices;
2. accounting information disclosed in any other country other than the company's country of origin;
3. the reconciliation, in an explanatory note, of the asset and result elements with those determined in accordance with Brazilian accounting principles and practices;
4. the special review report issued by an independent auditor, registered with the CVM, regarding the sufficiency and adequacy of the explanatory notes mentioned in items "1" to "3" above;
   c) the quarterly balance sheet and income statement information, in accordance with Brazilian accounting principles and practices, accompanied by a quarterly performance report, regarding each of the first three quarters of the current fiscal year, provided that more than forty-five days have passed since the end of each quarter, or that they have already been disclosed in another country, accompanied by a special review report issued by an independent auditor registered with the CVM. d) the quarterly balance sheet and income statement information, in accordance with Brazilian accounting principles and practices, accompanied by a quarterly performance report, regarding each of the first three quarters of the current fiscal year, provided that more than forty-five days have passed since the end of each quarter, or that they have already been disclosed in another country, accompanied by a special review report issued by an independent auditor registered with the CVM; and

e) the information cited in items "b", "c", and "d" above must be converted into national currency according to the norms of the Brazilian Institute of Accountants - Ibracon and approved by the CVM.
V - qualitative information in the Annual Information form – IAN:
a) the history and development of the company, with the main events that determined the conduct of business, including corporate operations of merger, incorporation, and spin-off, investments and divestments in progress, and business policies; b) the organizational structure with a description of the business segments and subsidiaries of the company; c) the business scenario with a description of the nature of the company's operations and its main activities, the main categories of products and services sold in each of the last three years; description of the main markets in which the company competes, with a breakdown of revenues by activity category and geographic market in each of the last three years; description of the seasonality of the company's main businesses; description of the distribution channels used by the company, with explanations of the company's sales methods; summary of the status of patents, licenses, and trademarks; description of the substantial effects of the regulatory environment on the company's business; d) comments and operational and financial perspectives with the liquidity and profitability situation, generation and application of resources, by business segment of the company; the causes of variations in the items of the accounting statements from one year to another that are necessary for understanding the company's business as a whole; e) the economic-financial feasibility study of the project, indicating, including, the risk factors involved in the undertaking, prepared on a date that precedes by up to three months the entry of the request into the CVM, when it concerns a company in the pre-operational phase; and f) any other additional information disclosed in any other market where the company's securities are traded. f) indication of risk factors related to the limitation on the exercise of rights by BDR holders, including those resulting from the diversity between the company's headquarters and the country where the securities are traded, prepared on a date that precedes by up to three months the entry of the request into the CVM; and g) any other additional information disclosed in any other market where the company's securities are traded. Sole Paragraph. The company must disclose the deadline set for BDR holders to effect their participation in the relevant general meetings pertaining to the securities represented by the BDRs.

§1 The company must disclose the deadline set for BDR holders to effect their participation in the relevant general meetings pertaining to the securities represented by the BDRs.
§2 The company's financial statements and consolidated statements referred to in item "b" of item IV of the caput must be supplemented by additional Explanatory Notes to the statements cited in item "a" of the same item, which describe:
I – the accounting standard of the company's headquarters country and a comparative analysis of the principles and practices applicable in the country with Brazilian accounting principles and practices; II – accounting information disclosed in any other country other than the company's country of origin; and III – the reconciliation of the asset and result elements with those determined in accordance with Brazilian accounting principles and practices. §3 The information cited in items "b" and "c" of item IV of the caput, as well as those provided in §2 of this article, must be converted into national currency according to the norms of the Brazilian Institute of Accountants – IBRACON and approved by the CVM. §3 The information cited in items "b" and "c" of item IV of the caput, as well as those provided in §2 of this article, must be presented in national presentation currency according to Technical Pronouncement 2 of the Accounting Pronouncements Committee approved by CVM Deliberation No. 534, of January 29, 2008.

• §3 with wording given by CVM Instruction No. 469, of May 2, 2008.
  §4 If the statements referred to in item "a" of item IV of the caput are prepared in consonance with international accounting standards issued by the International Accounting Standards Board – IASB:
  I – the presentation of the statements and quarterly information provided for in items "b" and "c" of item IV of the caput is waived; and II – the requirements contained in items I to III of §2 and in §3 apply to the statements and quarterly information prepared in consonance with international standards, which must be accompanied by a special review report issued by an independent auditor registered with the CVM, regarding the sufficiency and adequacy of the explanatory notes referred to in items I to III of §2. §5 The provisions of §4 apply even in cases where only the consolidated statement is prepared and disclosed in consonance with international accounting standards.

• Wording given by CVM Instruction 431, of May 29, 2006.

• §§ 1 to 5 included by CVM Instruction 431, of May 29, 2006.

Art. 6 In the presentation or disclosure of business projections, the company must adopt the following procedures:
I - clearly demonstrate, for each of the projected items and periods, the assumptions and calculation memos used; II - demonstrate, when providing quarterly information, the comparison between the projections prepared and the results actually obtained in the quarter, clearly indicating the reasons that led to deviations from the previously made projections; III - when, in the judgment of the administrators, and based on solid reasons, the projections cease to be valid or are modified, the fact must be disclosed to the market immediately.

ON THE EXAMINATION OF COMPANY REGISTRATION

Art. 7 The registration will be considered automatically granted if the request is not denied within thirty days after its presentation to the CVM, via protocol, with the required documents and information.
Sole Paragraph. The failure to present all documents provided for in Article 5 of this Instruction will result in the disregard of the request and consequent cancellation of the protocol at the CVM.

Art. 8 The thirty-day period may be interrupted only once, if the CVM requests the company to provide additional documents and information, related to the company registration request, after which the period will run for fifteen days, after compliance with the requirements, for the analysis of the registration request. Sole Paragraph. To meet any requirements, a period not exceeding sixty days will be granted, counted from the receipt of the respective correspondence, under penalty of the registration request being disregarded.

Art. 9 After thirty days of the denial of the registration request, all documents that accompanied it will be available to the company, for a period of ninety days, after which they may be destroyed by the CVM.

Art. 10. Under no circumstances shall the voting rights of the securities represented by the BDRs be conferred, without a specific power of attorney instrument, to the administrator of the issuing company, its controlling shareholder, or a person designated by them.

ON THE UPDATE OF COMPANY REGISTRATION

Art. 11. Once registration is granted, the company's legal representative must adopt the following procedures:
I - send to the CVM the information referred to in Article 5, via magnetic media, according to the computer programs provided, the Standardized Financial Statements forms – DFP, Annual Information – IAN, and Quarterly Information – ITR, within five days; II - proceed to update, with the CVM and the market, its registration data, up to five days after the occurrence of any change; III - disclose, simultaneously, to all markets it participates in, relevant information, including regarding the company's business, changes in the articles of association or bylaws, profitability perspectives, sales, cost and expense behavior, disseminated by any means of communication or in meetings of class entities, in order to guarantee its broad and immediate dissemination. IV – the information provided for in items II and III above must be registered with the CVM through the re-presentation of the Annual Information form – IAN;

Art. 12. The legal representative must provide the following periodic information, within the specified deadlines:
I - the financial statements and, if applicable, the consolidated statements, prepared in the manner of item IV of Article 5 of this Instruction, on the day of their disclosure in any other country or market; I – the financial statements and, if applicable, the consolidated statements, prepared in the manner of item IV of Article 5 or §4 of the same article, on the day of their disclosure in any other country or market; II - the Standardized Financial Statements form - DFP, which corresponds to the set of financial statements provided for in the previous item, on the day of its disclosure in any other country or market; III - the Annual Information form - IAN, on the day of disclosure in any other country or market, of information of similar content; IV - the summary of decisions taken at the ordinary general meeting, on the day following its holding; V - the minutes of the ordinary general meeting, on the day of disclosure in any other country or market; and

VI - the Quarterly Information form – ITR accompanied by a special review report issued by an independent auditor registered with the CVM, within a maximum period of forty-five days after the end of each fiscal year, except for the last quarter of the fiscal year or on the day of disclosure in any other country or market, of information of similar content. §1 If the company is in the pre-operational phase, it must provide, together with the Annual Information form - IAN, updated information on the progress of the project presented to the CVM at the time of the registration request. §2 If the company enters a legal situation different from the normal operating condition, the legal representative must provide quarterly information on deadlines set, stages reached, assets sold, amounts raised, amounts disbursed, and other information considered relevant for the securities market, on the day of disclosure in any other country or market.

• Item I with wording given by CVM Instruction 431, of May 29, 2006.

ON EVENTUAL INFORMATION

Art. 13. The legal representative must provide the following eventual information, within the specified deadlines:
I - the notice of convocation for an extraordinary or special general meeting, on the day of disclosure in any other country or market; II - the summary of decisions taken at the extraordinary or special general meetings, on the day following their holding; III - the minutes of the extraordinary or special meeting, on the day of disclosure in any other country or market; IV - the shareholder agreement, on the day of disclosure in any other country or market or on the day following that it was filed at the company's headquarters; V - the communication regarding a relevant act or fact, on the day of disclosure in any other country or market; VI - the information regarding the modification of the company's legal condition, its foundations, financial statements specifically prepared for the alteration of the previous legal condition, and, if applicable, the situation of security holders, on the day of disclosure in any other country or market; and VII - other information requested by the CVM, within the deadlines it establishes.

ON PENALTIES

Art. 14. The company that fails to keep the registration of the open company subject to the BDR program updated, in accordance with this Instruction, will be subject to a daily penalty fine of R$ 500.00 (five hundred reais).

• Article revoked by CVM Instruction 431, of May 29, 2006.

Art. 15. Violation of the provisions of this Instruction constitutes a serious offense for the purposes provided for in § 3 of Article 11 of Law No. 6,385, of December 7, 1976.

ON GENERAL PROVISIONS

Art. 16. Registration with the CVM does not imply any assessment of the company, and its administrators, its legal representative, and the responsible director for the BDR program are responsible for the veracity of the information provided.

Art. 17. The provisions of this Instruction apply, where applicable, to depositary institutions that have already issued and publicly distributed securities deposit certificates – BDRs backed by securities issued by open companies or similar entities headquartered abroad.

Art. 18. This Instruction enters into force on the date of its publication in the Official Gazette of the Union.

Signed original by
JOSÉ LUIZ OSORIO DE ALMEIDA FILHO
President