COVID-19 – Capital Markets

Capital markets’ agents will face several challenges to overcome the turbulences brought by the COVID 19 – coronavirus – pandemic. In view of this, the Comissão de Valores Mobiliários (“CVM”) — equivalent to the Securities and Exchange Commission in Brazil — provided a quick response and enacted, in the past few days, several guidelines to market participants, as well as measures to adapt the CVM’s procedures, and issuer companies and other market participants’ procedures due to the pandemic.


As an immediate response, CVM, by means of the Ofício-Circular 2/2020-CVM/SRE — an internal resolution — made clear that, as an exceptional measure, requests for modification of offerings related to registered and ongoing public offerings due to the deterioration and volatility of the investment scenario will be automatically granted by the Office for Companies Relations (Superintendência de Relações com Empresas – “SRE”), meaning a ninety-day extension for the distribution, under Article 25, §2 of CVM Instruction 400/03. The abovementioned modifications may be immediately applied upon the filing of the modifications-related documents before the SRE and proper announcement to the market. Issuers must allow investors who have already adhered to the offering to withdraw within five days from the receipt of the notice of the modification. Issuers must also ensure that new investors be aware of the notice of the modification, especially by means of the statement of acceptance.


Later, under the Deliberation 846 issued on March 16, 2020, CVM decided for the modification of two important deadlines: (i) the interruption period for the analysis, by the Office for Registration of Securities (Superintendência de Registro de Valores Mobiliários), of requests for public offerings set out on Article 10 of CVM Instruction 400/03, which was extended to 180 business days — other provisions contained in the article remained unchanged; and (ii) the length of the interruption period for the analysis, by SRE, of the request for issuer registration set out on Article 6 of CVM Instruction 480/09, when such request was filed concomitantly to the request for registration of public offering, which was also extended to 180 business days — other provisions contained in the article remained unchanged.

In view of the changing scenario, CVM will revise the abovementioned procedures within 30 days from the publication of Deliberation 846.


CVM has also issued the Ofício-Circular 3/2020-CVM/SRE to clarify that, considering how lengthy the interruption period may become, for offerings in which a request for interruption was already filed, under Article 10 of CVM Instruction 400/03 and Deliberation 846, the expression “decided or projected” set out on Article 48 of CVM Instruction 400/03 ought to be considered, exceptionally, as the moment when the issuer decides to resume the analysis of the request for the public offering. Thus, in deciding for the interruption of the offering, besides the filing of a request before CVM, the offeror must announce such a decision to the market, through proper media. The offeror shall also adopt the same procedure if it decides to resume the offer or to cancel it. If the offeror decides to resume the offer, the announcement to the market will be considered for purposes of the limitation provided by Article 48 of CVM Instruction 400/03.


On March 25, 2020, CVM published Resolution No. 848, with the purpose of extending several regulatory deadlines set out in CVM rules to which market participants are subject, as well as extending deadlines regarding sanctions and administrative proceedings, for as long as the state of emergency referred to in Legislative Decree No. 6, 2020 remains in effect.

In what regards administrative sanctioning proceedings, CVM determined the suspension of deadlines applicable to defendants and postponed (i) the due date for payment of debts related to CVM’s inspection fee; (ii) debt notices, until July 31, 2020; and (iii) the deadline for compliance with obligations undertaken by sanctioned persons before CVM for 120 days.

For issuers of securities with restricted efforts under the terms of ICVM 476, CVM suspended for 4 months the forbiddance of engaging in a new public offering of the same type of security by the same issuer following the completion or cancellation of the previous offer. Therefore, a new public offer of securities with restricted efforts is allowed in less than 4 months from the completion or cancellation of the previous one.

The resolution also suspended the requirement of filing with CVM a registered version of the corporate resolution authorizing the issuance of promissory notes with the juntas comerciais (Register of Commerce), in view of the limited operation of such bodies.

In addition, investment funds and securitization companies are granted a 30-day extension of the deadline for sending their audited financial statements and the statement of segregated assets applicable to issuances of CRIs (certificates of real estate receivables) and CRAs (certificate of agrobusiness receivables), respectively.

We point out that CVM Resolution 848 suspended or extended deadlines applicable to several other market participants, such as independent auditors, regular investment funds, FIDCs (investment funds in credit rights), FIPs (investment funds in equity interest), FIIs (investment funds in real estate), custodians, bookkeepers, securities portfolio managers and non-resident investors, among others.

Please note that CVM Resolution 848 does not affect deadlines defined by law or those associated with legal proceedings, which cannot be modified by CVM regulation. This is the case, for example, of the deadlines set forth in Brazilian Corporations Law (Law 6404/76) for the preparation and publication of financial statements, which must be submitted to the ordinary shareholders’ meetings of publicly held companies.

The abovementioned measures are essential for companies and other market participants to assess the real impacts that governmental restraining measures may have over the economic activity. We expect that, soon, legislation will be enacted momentarily to free issuer companies from complying with requirements provided by Law 6404/76 to issue securities, in light of the limited operation of the juntas comerciais (Register of Commerce).

CVM also clarified that, currently, there are no discussions related to the interruption of deals closed at the Stock Market (B3). Further, CVM interrupted in-person assistance; thus, market participants may contact CVM through e-mail only.

O Costa Tavares Paes Advogados nasceu em 2010 e conta com escritórios em São Paulo, Rio de Janeiro e Brasília. Saiba mais sobre a banca e nossos serviços.