CVM Instruction No. 433 of June 5, 2006

CVM INSTRUCTION NO. 433, JUNE 5, 2006.
Amends CVM Instruction No. 260 of April 9, 1997.

The PRESIDENT OF THE SECURITIES AND EXCHANGE COMMISSION – CVM makes public that the Collegiate Board, in a meeting held on May 26, 2006, based on the provisions of Articles 8, item I, and 19 of Law No. 6,385 of December 7, 1976, and considering the provisions of Article 1 of Law No. 8,685 of July 20, 1993, Article 2 of Decree No. 974 of November 8, 1993, Article 1 of Decree No. 4,456 of November 4, 2002, and Joint CVM-ANCINE Decision No. 1 of July 9, 2004, has resolved to issue the following Instruction:

Art. 1. Articles 3, 4, 10, 11, 19, 20, 24 and 25 of CVM Instruction No. 260 of April 9, 1997, shall enter into force with the following wording:

“Art. 3. ...
...
IV – number of the project approval by the National Cinema Agency – ANCINE; V – denomination of the project approved by ANCINE; ...” (New)

“Art. 4. ...
...
XI – copies of the documents submitted for ANCINE review, in accordance with Article 7 of Decree No. 974 of 1993; XII – copy of the document approving the project at ANCINE containing the respective registration number; and ...
Sole Paragraph. The documents described in items IV, VIII, IX and X above must contain an item explicitly stating that the placement may or may not reach the total number of registered quotas, considering the possibility of reallocating resource sources to carry out the project, with a decrease in resources from the incentive established by Law No. 8,685 of 1993, and the corresponding increase in resources from the incentive established by Law No. 8,313 of 1991, or the unnecessary nature of the total resources originally planned.” (New)

“Art. 10...
...
§2. Quotas of projects may only be traded in the secondary market after the release, by ANCINE, of the raised resources and the registered distribution has been fully placed.” (New)

“Art. 11...
...
IV ...
... c) period of distribution to the public, which may not exceed 360 (three hundred and sixty) days counted from the granting of the registration, automatically extendable for an equal period, upon filing with the CVM a copy of the publication in the Official Gazette of the Union of the ANCINE Deliberation that approved the extension of the period for raising resources. d) period for delivery of the Certificates not exceeding 30 (thirty) days after proof, to the CVM and to ANCINE, of the raising of the total resources provided in the global budget, except in the case of the existence of a firm guarantee; ... §1. The prospectus must contain, on its cover, the following statements: “The registration of this issuance does not imply, on the part of the CVM, a 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”. §2. The extension referred to in item “c” of item IV of this article shall not take effect when the issuing company, together with the lead distribution institution, is in arrears with the obligation to provide 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.” (New)

“Art. 19. Upon closing of the distribution and full payment, the CVM shall communicate the result of the raising to ANCINE.” (New)

“Art. 20. If the raising of sufficient resources for the realization of the project is not completed within the period provided in item “c” of item IV of Article 11 of this Instruction, the registration shall be cancelled by the CVM.
§1. In the cases provided for in Article 18, the CVM may cancel the registration of the public offering for distribution of investment certificates, when it concerns uncurable illegality or violation of regulations.
§2. In the case referred to in the caput, the lead distribution institution:
I – shall take all necessary measures to reimburse subscribers for the invested values; or II – shall arrange, at the option of each subscriber, the transfer of these values to the financing of another work or project approved by ANCINE, in accordance with Law No. 8,685 of 1993, or Law No. 8,313 of 1991.” (New)

“Art. 24...
§1. The monthly report and the report on the evolution of the project shall be placed at the headquarters of the issuing company, available to the quota holders, with copies sent to the CVM and to ANCINE.
...
§3. ... a) the dates planned for the start and end of each phase of the project, as approved by ANCINE; ...” (New)

“Art. 25...
§1. The semi-annual report shall be made available to the holders of the Investment Certificates, at the headquarters of the issuing company, and copies sent to the CVM and to ANCINE, on the same date of its disclosure, which may not exceed 30 (thirty) days elapsed since the end of the semester. ...” (New)

Art. 2. The following Articles 20-A and 20-B are added to CVM Instruction No. 260 of 1997:

“Art. 20-A. In the event of reallocation of resource sources for the realization of the project, with a decrease in the value from the incentive established by Law No. 8,685 of 1993, and the corresponding increase in resources from the incentive established by Law No. 8,313 of 1991, the issuing company and the lead distribution institution shall communicate such fact to the CVM within 5 (five) days after the publication in the Official Gazette of the Union of the ANCINE authorization, attaching to the communication a copy of said publication.” (New)

“Art. 20-B. In the event of partial cancellation of quotas, resulting from a reduction in the global budget of the project or substitution by another resource source other than that provided in Law No. 8,313 of 1991, the issuing company and the lead distribution institution shall update the documents referred to in items IV, VIII, IX and X of Article 4, with all pertinent information, as well as send a copy of the ANCINE publication in the Official Gazette of the Union that authorized the reduction of the global budget of the project or substitution by another resource source. Sole Paragraph. The distribution must be suspended while the documents containing the aforementioned updates are not made available to the public.” (New)

Art. 3. Items 2.1.1 and 2.1.2 of the title “Filling Instruction: Audiovisual Physical Information – IFA” of Annex II to CVM Instruction No. 260 of 1997, shall enter into force with the following wording:

“2.1.1 - START DATE
Planned date for the start of the phase, according to the project approved by ANCINE.” (New)

“2.1.2 - END DATE
Planned date for the end of the phase, according to the project approved by ANCINE.” (New)

Art. 4. The sole paragraph of Article 11 of CVM Instruction No. 260 of April 9, 1997, is revoked.

Art. 5. This Instruction enters into force on the date of its publication in the Official Gazette of the Union.

Original signed by
WLADIMIR CASTELO BRANCO CASTRO
Acting President