CVM Resolution No. 84 of March 31, 2022

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

CVM RESOLUTION NO. 84, OF MARCH 31, 2022

Provides for the registration of trading and public distribution of Certificates of Additional Construction Potential – CEPAC and revokes CVM Instructions No. 401, of December 29, 2003 and No. 550, of July 17, 2014.

THE PRESIDENT OF THE SECURITIES AND EXCHANGE COMMISSION OF BRAZIL – CVM makes it known that the Board, in a meeting held on March 30, 2022, based on the provisions of arts. 2, § 3, 19 and 21 of Law No. 6.385, of December 7, 1976, and arts. 31, 32 and 34 of Law No. 10.257, of January 10, 2001,

APPROVED the following Resolution:

CHAPTER I – SCOPE AND PURPOSE

Art. 1. This Resolution provides for the registration of trading and public distribution of Certificates of Additional Construction Potential – CEPAC.

Sole Paragraph. For the purposes of this Resolution, the following are considered:
I – CEPAC: certificates of additional construction potential issued by Municipalities, within the scope of consolidated urban operations, as authorized by applicable legislation; II – intervention: set of urbanistic actions practiced by the Municipality through public works and expropriations; III – consolidated urban operation or operation: set of interventions and measures coordinated by the municipal public power, with the participation of owners, residents, permanent users and private investors, with the objective of achieving, in an area, structural urban transformations, social improvements and environmental valuation; and IV – representative: natural person specifically designated by the Mayor to represent him in the practice of acts provided for in this Resolution.

CHAPTER II – CEPAC

Art. 2. When publicly offered, CEPAC are securities subject to the regime of Law No. 6.385, of December 7, 1976.

Art. 3. CEPAC may be used by their holders to pay for the construction area that exceeds the standards established by land use and occupation legislation, up to the limit fixed by the specific law that approves the consolidated urban operation.

CHAPTER III – REGISTRATION OF THE CONSOLIDATED URBAN OPERATION FOR TRADING OF CEPAC IN THE SECURITIES MARKET

Art. 4. No CEPAC may be offered in the market without prior registration with the CVM of the operation to which it is linked.

Art. 5. The registration request for the operation must be filed by the issuing Municipality of the CEPAC and accompanied by the following documents:
I – registration request for the operation, signed by the Mayor or his representative; II – master plan approved in the Municipality providing for the operation; III – specific law with approval of the operation and authorization for the issuance of CEPAC; IV – specific municipal decree deliberating the issuance of CEPAC; V – draft prospectus, containing the requirements provided for in arts. 10 and 11 of this Resolution; VI – contract for the provision of registry services for CEPAC holders and transfers of CEPAC; and VII – proof of acceptance of the trading registration of CEPAC by a stock exchange or by an organized over-the-counter market entity, when applicable.

§ 1. The prospectus of the operation whose certificates are to be traded only in an unorganized over-the-counter secondary market must contain the following observation on its cover: “The securities subject of this offer will not be traded in organized stock or over-the-counter markets, and availability of information on prices practiced or on transactions carried out cannot be assured.”

§ 2. The trading registration of CEPAC is valid until its cancellation, in accordance with art. 8.

Art. 6. After the approval of the operation registration, any and all communications to the CVM, to CEPAC holders, to investors and, if applicable, to the administrative entities of organized markets in which the CEPAC are admitted to trading must mention the registration number granted by the CVM.

CHAPTER IV – PERIODIC AND EVENTUAL INFORMATION

Art. 7. To update information during the validity period of the operation registration, the Municipality must, through the Mayor or his representative:
I – send to the CVM, quarterly, within 45 (forty-five) days after the end of each quarter of the civil year, the following periodic information:
a) report informing the progress of the operation and its respective interventions, the current situation of the areas where CEPAC can still be used, the estimated deadline for its completion, the costs already incurred, the quantity of CEPAC distributed publicly and privately and any other elements that, directly or indirectly, affect the execution of the projects; b) report from the institution referred to in art. 9 of this Resolution, covering facts related to the application of resources and the progress of the operation; c) breakdown of the quantity of CEPAC used, the area available for the use of CEPAC and the remaining stock of these certificates; II – immediately communicate to the CVM and the market the existence of studies, draft laws or any initiatives that may modify the master plan or aspects of the operation; III – widely and immediately disclose any act or fact related to CEPAC operations that may, directly or indirectly, influence in a considerable manner:
a) the quotation of CEPAC or other securities referenced to it; b) the decision of investors to buy, sell or hold CEPAC or other securities referenced to it; or c) the decision of investors to exercise any rights inherent to the condition of holder of such securities or other securities referenced to it.

Sole Paragraph. The Mayor must assign to some body of the City Hall the responsibility for the analysis and monitoring of all aspects of the operation and for the provision and technical clarification to the institutions contracted in the form of arts. 9 and 18, to the CVM, to CEPAC holders, to investors and, if applicable, to the administrative entities of organized markets in which they are admitted to trading.

CHAPTER V – CANCELLATION OF OPERATION REGISTRATION

Art. 8. The operation registration is cancelled upon request by the City Hall to the CVM.

§ 1. The cancellation of the operation registration cannot occur in a period less than one year after its completion.

§ 2. The completion of the operation occurs when all planned interventions are concluded.

§ 3. The City Hall must publicly disclose the completion of the operation and the cancellation of the respective registration, including, if applicable, through a notice to the administrative entities of organized securities markets in which the CEPAC are admitted to trading.

CHAPTER VI – SUPERVISION OF THE APPLICATION OF RESOURCES

Art. 9. The Municipality must hire an institution that is part of the distribution system, which cannot be the intermediary institution provided for in art. 19, to:
I – exercise the function of supervising the use of resources obtained with the public distribution of CEPAC in the interventions of the consolidated urban operations; and II – monitor the progress of said interventions and ensure the sufficiency and veracity of the information that will be periodically provided by the Municipality to the market.

§ 1. The institution referred to in the caput of this article must maintain a technical department qualified to provide services of analysis and monitoring of the urban projects referred to in this Resolution, or hire such services externally.

§ 2. The services, if contracted externally, must be provided by a company duly registered with the Regional Council of Engineering and Architecture – CREA, with experience in services of analysis and monitoring of the urban projects referred to in this Resolution.

CHAPTER VII – PROSPECTUS

Art. 10. The prospectus is the document that contains the basic data about the operation and the total quantity of CEPAC that can be issued for alienation or direct use in payment of the interventions of the operation itself.

Art. 11. The prospectus must present, at least:
I – on its cover, the name of the operation and indication of the issuance of CEPAC for financing the interventions provided for therein, as well as the ISIN code of the security; II – the detailed description of the interventions provided for within the scope of the operation, as well as their respective execution deadlines and estimated costs, observed the provisions of §§ 2 and 3 of art. 14; III – deadline provided for the execution of the operation; IV – the total quantity of CEPAC that can be issued in the operation; V – the characteristics of the CEPAC issued within the scope of the operation, especially the table of conversion of the construction potentials and modification of use, guaranteed to their holders, the existence of a minimum price for alienation or direct use in payment of the interventions; VI – the form of placement of the CEPAC, whether public, private, or both; VII – indication of the main legal references related to the operation and the issuance of CEPAC, among which the Law that authorized the issuance of CEPAC and the Municipality's master plan that provides for the possibility of the operation, highlighting, with emphasis, the articles related to CEPAC; VIII – indication of the website page and other locations where the legal instruments cited in item VII can be consulted; IX – feasibility study, containing at least the following information: market value of the properties contained within the perimeter of the operation, effects of the interventions on the properties, analysis of demand for construction additions in the area, environmental and neighborhood impact study, and method of determining the maximum quantity of CEPAC that can be issued within the scope of the operation; X – indication of risk factors, including those of a political or economic nature, and other facts that may lead to the modification of the characteristics of the operation, the non-realization of the planned interventions, or the existence of difficulties in exercising the rights guaranteed by the CEPAC at the time of issuance; XI – the indication of the specific account in which the resources obtained with the alienation of the CEPAC will be kept; XII – the indication of the institution referred to in art. 9 of this Resolution and the terms of the respective contract; and XIII – information on other forms of fundraising provided for to achieve the objective of the operation, in the case where only part of the resources is obtained through the issuance of CEPAC.

Sole Paragraph. In addition to the information requested in the caput of this article, the prospectus must contain, on its cover, the following text: “The registration of the present consolidated urban operation, for the trading of CEPAC, does not imply, on the part of the CVM, guarantee of the veracity of the information provided or judgment on the quality of the security issued to finance the planned interventions.”

CHAPTER VIII – REGISTRATION OF THE PUBLIC DISTRIBUTION OF CEPAC

Art. 12. The Municipality, together with the leading institution of the distribution, contracted in accordance with art. 19, may request the registration of public distribution for the realization of the CEPAC auction.

§ 1. The public distribution registration request may contemplate a single intervention or a set of interventions, composed of a single work or expropriation, or set of works or expropriations, and must be the object of a specific supplement, which must be attached to the prospectus, becoming part of it.

§ 2. The public distribution registration request of CEPAC must be signed by the Mayor or his representative, together with the leading institution of the distribution, and accompanied by proof of payment of the market supervision fee related to the registration of CEPAC issuance.

Art. 13. The resources earned by the Municipality with the public distribution of CEPAC must be applied, exclusively, in the operation registered with the CVM to which they are linked, with the following purposes:
I – land regularization;
II – execution of social interest housing programs and projects; III – constitution of land reserve; IV – ordering and directing urban expansion; V – implementation of urban and community equipment; VI – creation of public leisure spaces and green areas; VII – creation of conservation units or protection of other areas of environmental interest; or VIII – protection of areas of historical, cultural or landscape interest.

Art. 14. The prospectus supplement must present, at least:
I – on its cover, the name of the operation and the registration number with the CVM; II – the indication of the interventions subject to the distribution registration, contained in the prospectus, as well as the respective estimates of execution deadlines and costs, observed the provisions of §§ 2 and 3 of this article; III – the total quantity of CEPAC that can be issued to finance the interventions; IV – indication of the means used for the public distribution of the CEPAC; V – the indication of the leading institution of the distribution, in accordance with art. 19; VI – update of the other information contained in the prospectus referred to in art. 11, any information already presented to the CVM and available to the public, whether periodic or eventual, may be included by reference;

§ 1. In addition to the information requested in this article, the prospectus supplement must contain the following alerts on its cover:
I – “The registration of the present public distribution offer does not imply, on the part of the CVM, guarantee of the veracity of the information provided or judgment on the quality of the consolidated urban operation, as well as on the CEPAC to be distributed”; and II – “Investors must read the risk factors section, on pages [•] to [•]”.

§ 2. The cost of the works included in the operation is the one defined in the bidding notices, and the supplement must be adjusted when the contract with the person responsible for carrying out the works is signed.

§ 3. The cost of the expropriations included in the operation must be defined by the administrative or judicial evaluation of the value of the properties, and the public placement of the CEPAC can only be carried out after the publication of the expropriatory decree, which must be mentioned in the supplement to the prospectus, with indication of the locations and the website page where it can be consulted.

§ 4. The Municipality may add to the costs provided for in the previous paragraphs, expenses demonstrably incurred in the preparation of projects, studies and other measures necessary for the realization of the interventions provided for in the operation, for reimbursement through the alienation of CEPAC, provided that it includes in the supplement to the prospectus the information about these expenses and their respective supporting documents, with indication of the locations where they can be inspected.

Art. 15. The approval of registration of a new distribution of CEPAC linked to the same operation is possible only after:
I – the interventions covered by the previous distribution have been concluded; II – the previously approved distribution of CEPAC has been exhausted; or III – the resources necessary for the conclusion of the interventions object of the previous distribution have been raised, demonstrably.

Art. 16. The prospectus and its supplements must be permanently available to the public for consultation, on a website page to be designated by the Municipality.

Art. 17. The public distribution of CEPAC can only be carried out in the market with the intermediation of institutions that are part of the securities distribution system.

§ 1. In the event of private distributions of CEPAC occurring within the scope of the registered operation, the Municipality must inform the CVM, the administrative entities of organized markets in which the CEPAC are admitted to trading and the entity responsible for the registry of the CEPAC:
I – the quantity of CEPAC distributed; and
II – the value of the CEPAC adopted as reference.

§ 2. The Mayor or his representative are responsible for the veracity, quality and sufficiency of the information provided to the CVM and to the market, as well as for any damages caused to third parties, due to fault or intent, arising from the falsity, imprecision or omission of such information.

§ 3. For the realization of the CEPAC auction, the Notice must be published in the Official Gazette in which the Municipality regularly publishes its acts, in the informative bulletins of the administrative entities of organized markets in which they are admitted to trading, and on a website page.

Art. 18. The subscription or acquisition of the CEPAC object of public distribution offer must be carried out within a maximum period of 2 (two) years, counted from the date of publication of the announcement of the start of distribution.

Art. 19. The Municipality must hire an institution that is part of the securities distribution system that, in the capacity of distribution leader, will act, together with the Municipality, in the registration requests, in the placement of the CEPAC in the market, and in communications with the CVM and with the market.

CHAPTER IX – OFFENSES AND PENALTIES

Art. 20. The following is considered a serious offense, for the purposes of § 3 of art. 11 of Law No. 6.385, of December 7, 1976, without prejudice to the provisions of the CVM Resolution regarding public distribution registrations:
I – the untrue statement regarding the destination of the resources obtained with the alienation of CEPAC, as well as the omission in exercising supervision and monitoring of the intervention by the institution contracted by the Municipality, in the form of art. 11 of this Resolution; II – non-compliance with the provisions contained in arts. 7, items II and III, 9 and 19;

CHAPTER X – PENALTY FINE

Art. 21. The Municipality is subject to the daily fine provided for in the specific norm that deals with penalty fines due to non-compliance with the deadlines provided for in art. 7 of this Resolution, without prejudice to the provisions of art. 11 of Law No. 6.385, of 1976.

CHAPTER XI – FINAL PROVISIONS

Art. 22. The provisions contained in the norm that deals with public distribution offers apply to CEPAC, insofar as applicable, especially with regard to:
I – registration analysis deadlines;
II – responsibilities of the offeror and the leading institution of the distribution; III – approval or disapproval of the registration; and IV – suspension or cancellation of the distribution registration.

Sole Paragraph. The deadlines for analysis and approval of the registration request by the CVM are doubled for CEPAC distribution registrations intended for secondary trading outside organized securities market environments.

Art. 23. The CVM may determine that the information provided for in this Resolution be presented electronically.

Sole Paragraph. For the purposes of this Resolution, electronic mail is considered a valid form of correspondence between the Municipality and CEPAC holders.

SECURITIES AND EXCHANGE COMMISSION OF BRAZIL
Seven de Setembro Street, 111/2-5th and 23-34th Floors, Center, Rio de Janeiro/RJ – ZIP Code: 20050-901 – Brazil - Tel.: (21) 3554-8686 Cincinato Braga Street, 340/2nd, 3rd and 4th Floors, Bela Vista, São Paulo/ SP – ZIP Code: 01333-010 – Brazil - Tel.: (11) 2146-2000 SCN Q.02 – Bl. A – Ed. Corporate Financial Center, S.404/4th Floor, Brasília/DF – ZIP Code: 70712-900 – Brazil -Tel.: (61) 3327-2030/2031 www.cvm.gov.br CVM RESOLUTION NO. 84, OF MARCH 31, 2022 Art. 24. The following are revoked:
I – CVM Instruction No. 401, of December 29, 2003; and II – CVM Instruction No. 550, of July 17, 2014.
Art. 25. This Resolution enters into force on May 2, 2022.
Signed electronically by
MARCELO BARBOSA
President