CVM Orienting Opinion 26

CVM ORIENTING OPINION NO. 26, OF APRIL 7, 1992.
SUMMARY: Impossibility of trading bearer and endorsement shares starting from April 14, 1992, in view of the provisions of Article 4 of LAW NO. 8,021, of April 12, 1990.

1. This opinion aims to clarify to open companies and members of the securities distribution system what interpretation should be given to certain provisions contained in LAW NO. 8,021, and the practical consequences that may arise from it.

2. The aforementioned LAW 8,021/90 provides, in its Articles 4 and 5, as follows:
   "Art. 4 - Art. 20 of LAW NO. 6,404, of December 15, 1976, shall be effective with the following wording:
   Art. 20 - Shares must be registered.
   Art. 5 - Joint-stock companies shall have a period of two years to adapt their bylaws to the provisions of the preceding article."

3. As can be inferred from reading the aforementioned legal provisions, and considering that the mentioned law was published in the Official Gazette of the Union on April 13, 1990, there is no doubt regarding the impossibility of trading, starting from April 14 of the current year, of bearer and endorsement shares, in view of the imperative nature of this form of public order.

4. On the other hand, according to the provisions of Article 5 of the aforementioned law, joint-stock companies shall, until the next day, April 13, proceed with the appropriate amendment of their bylaws, so that their respective bylaws become effective with the modification determined by law. In the event that the bylaws contain a provision for the issuance of registered or bearer shares, at the option of shareholders, such provision must be eliminated in view of the imperative nature of the norm.

5. The eventual non-compliance with the legal deadline, in the case of companies with an optional conversion clause, will not prevent the trading of shares, provided that shareholders holding bearer certificates request the conversion of these shares into registered shares with the company. However, for companies whose bylaws do not contain the conversion clause, the non-compliance with the legal adaptation deadline authorizes the trading of shares, starting from the next day, April 14.

6. Another aspect that arises is that of companies that, regardless of the existence of a conversion clause, have already approved in assembly the modification of their bylaws, without, however, complying with the formalities of filing and publishing the appropriate minutes within the two-year period referred to in the aforementioned Article 5 of LAW NO. 8,021/90.

CVM ORIENTING OPINION NO. 26, OF APRIL 7, 1992.
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7. The issue concerns the legal formality provided for in paragraph 1 of Article 135 of LAW NO. 6,404/76, which provides:
   "Art. 135 - .......
   Paragraph 1 - Acts related to bylaw reforms, to be effective against third parties, are subject to the formalities of filing and publication, however, the failure to comply with these formalities cannot be opposed, by the company or its shareholders, to third parties in good faith."

8. In this sense, the interpretation of the above-transcribed norm, based on the system of deliberation of corporate acts adopted by LAW NO. 6,404/76, authorizes the understanding that the effects of assembly approval are produced, within the company, at the moment that shareholders, duly summoned, approve the proposed amendment in general assembly. The filing and publication of the approved act generate erga omnes effects, clarifying the law, however, that the failure to comply with these formalities cannot be opposed to third parties in good faith.

9. Thus, the act of assembly approval of the bylaw reform provided for in LAW NO. 8,021/90 is already sufficient to authorize the company to publish a notice to shareholders and proceed with the replacement of old certificates, which will enable the immediate trading of registered shares, without causing any prejudice to investors.

10. Finally, note that in the case of societies that depend on prior authorization from the Public Power to operate, the filing of bylaw amendment acts at the Commercial Boards is only done after approval by the competent body, which, in this case, as it is a modification resulting from a public order norm, will have nothing to contest.
    Therefore, for these companies, the act of assembly approval of the bylaw reform is, in the same way, sufficient to allow the replacement of old certificates.

Signed Original by
SUELI DA SILVA
Lawyer
Signed Original by
MARIA ISABEL DO PRADO BOCATER
Legal Manager 1
Signed Original by
MOACIR ZILBOVICIUS
Head of the Legal Department

CVM ORIENTING OPINION NO. 26, OF APRIL 7, 1992.
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Approved By the Collegiate Body on 07/04/92.
Publish.
Signed Original by
ROBERTO FALDINI
President