CVM/SMI Circular Letter 03/2015

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Headquarters: Rua Sete de Setembro, 111/2-5th and 23-34th Floors – Center – Rio de Janeiro - RJ – ZIP: 20050-901 – Brazil – Tel.: (21) 3554-8686 – http://www.cvm.gov.br.
São Paulo Regional Office: Rua Cincinato Braga, 340/2nd, 3rd and 4th Floors – Bela Vista – São Paulo – SP – ZIP: 01333-010 – Brazil – Tel.: (11) 2146-2000 Brasília Regional Office: SCN Q.02 – Bl. A – Ed. Corporate Financial Center – S.404/4th Floor – Brasília – DF – ZIP: 70712-900 – Brazil – Tel.: (61) 3327-2030/2031 CIRCULAR LETTER/CVM/SMI No. 03/2015 São Paulo, February 4, 2015. Subject: Mandatory pre-registration in debenture operations in organized securities markets.

Dear Responsible Directors under CVM Instruction No. 505, of September 27, 2011,

1. Ensuring public access to information is a critical aspect of the regulation of the secondary securities market. The adequate level of market transparency, as well as timely information to investors, are objectives dear to the regulator, sought not only through direct action but also through permanent dialogue and partnership with self-regulatory entities and market participants.

2. In this way, the Securities and Exchange Commission (CVM) has increasingly emphasized the role of self-regulation and its integration into the regulatory regime, with new responsibilities. The dialogue between the regulator and self-regulatory entities has been a constant, and invariably, such partnership has led to improvements in the distinct markets under the competence of the Autarchy.

3. In consonance with such objectives, this Superintendence of Market and Intermediary Relations (SMI) recently directed Organized Securities Markets to amend their regulations to require the pre-registration of conditions relating to bilateral definitive purchase and sale operations of debentures in the organized over-the-counter market, aware that the deadline for public disclosure of transaction information is essential to transparency, discovery, and price formation in the said secondary market.

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

4. It is worth emphasizing that the issue regarding the enforcement of the debenture pre-registration rule is also the responsibility of Organized Securities Markets, in their capacity as auxiliary bodies of the Securities and Exchange Commission, in the exercise of self-regulation activity (§ 1 of art. 17 of Law No. 6.385/76). Such role, performed through Self-Regulation Directors (art. 36 of CVM Instruction No. 461/07), refers to guiding secondary market debenture participants on the need for connection to the pre-registration system, correcting any non-compliance with pre-registration rules, and, eventually, applying autonomous sanctions to market participants.

5. This enforcement work of the pre-registration rule executed by self-regulation has been closely followed by the CVM, which may propose new measures to improve the transparency of this market.

Sincerely,

WALDIR DE JESUS NOBRE
Superintendent of Market and Intermediary Relations