CVM Resolution No. 4 of August 20, 2020

COMMISSION OF SECURITIES AND EXCHANGE COMMISSION (CVM) Rua Sete de Setembro, 111/2-5th and 23-34th Floors, Center, Rio de Janeiro/RJ – ZIP: 20050-901 – Brazil - Tel.: (21) 3554-8686 Rua Cincinato Braga, 340/2nd, 3rd and 4th Floors, Bela Vista, São Paulo/ SP – ZIP: 01333-010 – Brazil - Tel.: (11) 2146-2000 SCN Q.02 – Bl. A – Ed. Corporate Financial Center, S.404/4th Floor, Brasília/DF – ZIP: 70712-900 – Brazil -Tel.: (61) 3327-2030/2031 www.cvm.gov.br

CVM RESOLUTION NO. 4, OF AUGUST 20, 2020

Promotes temporary, experimental alterations to regulatory requirements established by CVM Instruction No. 588, of July 13, 2017.

THE PRESIDENT OF THE COMMISSION OF SECURITIES AND EXCHANGE COMMISSION – CVM, based on arts. 8, item I, and 16, item I, of Law No. 6.385, of December 7, 1976, observing the provisions of arts. 17 and 22 of CVM/TE/No. 190 Ordinance, of November 6, 2019, makes public that the Collegiate Body, in a meeting held on August 19, 2020, and considering:

a) on one hand, the maintenance of restrictive measures imposed due to the spread of the new coronavirus, cause of Covid-19, being notorious the severe impacts resulting from such measures on economic activity; b) the special vulnerability of micro, small and medium-sized enterprises (“MSMEs”) to the contraction of economic activity and the difficulty faced by them to finance their operations through obtaining credit from the banking system; c) that the access of MSMEs to the capital market can constitute an alternative or complementary source for financing working capital and for maintaining the operations of MSMEs during the critical context; and d) the duty of the CVM to, in light of the public interest, contribute to mitigating the adverse impacts mentioned above, while promoting the adequate functioning of the capital market through its regulation, supervision, and inspection activities;

APPROVED the following Resolution:

Art. 1st The following are authorized, on an experimental basis:

I – the use of an alternative method for calculating annual gross revenue for the purpose of characterizing a small business corporation, in substitution for the criterion established by item III of art. 2 of CVM Instruction No. 588, of July 13, 2017, so that business corporations that have earned gross revenue of up to BRL 5,000,000.00 (five million reais) in an interim balance sheet prepared between January 1, 2020, and June 30, 2020, and that are not registered as securities issuers with the CVM, may be eligible to conduct public offerings of securities through electronic investment participative platforms;

II – the use, in partial distributions of public offerings under CVM Instruction No. 588, of 2017, of a minimum target value equivalent to an amount equal to or greater than 1/2 (half) of the maximum target value, in substitution for the proportion of 2/3 (two-thirds) of the maximum target value established by item III of art. 5 of the aforementioned Instruction, provided that:
a) item “f” of section 2 of the document reflecting the provisions of Annex 8 (Essential Information of the Offering) indicates the estimated time, in months, of support for the company’s activities that would be achieved in the scenario of raising the minimum target value, and indicates whether there will be a need to complement financing in the short and medium terms to ensure the continuity of the company if the offering is distributed partially; b) section 6 of the document reflecting the provisions of Annex 8 (Essential Information of the Offering) contains a risk warning stating that partial distributions performed below the threshold of 2/3 (two-thirds) of the maximum target value may bring additional risk to investors; c) a new opportunity for withdrawal is granted to investors in cases where the partial distribution is in an amount between 1/2 (half) and 2/3 (two-thirds) of the maximum target value; and d) the offering is cancelled if the new withdrawals reduce the total of confirmed investments to a level below 1/2 of the maximum target value.

III – the provision of an additional lot in a public offering conducted through electronic investment participative platforms, limited to the amount of 20% of the maximum target value, provided that such possibility:
a) has been approved by the deliberative corporate body of the small business corporation; b) is provided for in the document reflecting the provisions of Annex 8 (Essential Information of the Offering) of CVM Instruction No. 588, of 2017; and c) respects the annual fundraising limit provided for in art. 3 of CVM Instruction No. 588, of 2017, considering the sum of the maximum target value and the approved additional lot.

Art. 2nd The measures provided for in this Resolution apply to offerings initiated in the interval between the entry into force of this Resolution and December 31, 2020.

Art. 3rd This Resolution enters into force on the date of its publication.

Electronically signed by
MARCELO BARBOSA
President