Brazilian securities commission enacts rule for digital general meetings of debt securities’ holders

The Brazilian Securities Commission (“CVM”) enacted on May 14th, 2020 the Instruction No. 625 (“ICVM 625”), which provides for the remote attendance and vote in general meetings of debentures’ holders and amends provisions of the CVM Instruction No. 476 enacted on January 16th, 2009 (“ICVM 476”), and of the CVM Instruction No. 583 enacted on December 20th, 2016 (“ICVM 583”).

In accordance with past publications aiming to reduce the impacts of COVID-19 in the corporations’ operations, ICVM 625 has the purpose to provide the rules for remote attendance and voting in general meetings of holders of debentures issued by corporations and publicly offered or admitted to trading on regulated securities market, also providing for the attendance in a semi-presential or entirely remote format.

With respect to the convocations of such meetings, ICVM 625 presents, in its Chapter III, the mandatory formalities that must be complied with in the call notices for remote or semi-presential meetings, also clarifying the applicable rules and procedures for voting. Nevertheless, according to paragraph third of Article 3 of ICVM 625, meetings with attendance of the totality of the debentures’ holders will be considered valid regardless of compliance with the formalities related to the call notice.

In addition to the changes mentioned above, ICVM 625 also: (i) broadens the scope of the rule to encompass the securities issued by corporations that are not registered with CVM and that had been object to public offers with restrict efforts, as set forth by ICVM 476; (ii) expressly mentions the applicability of the rules to meetings of holders of certificates of real estate or agribusiness receivables and of promissory notes; (iii) clarifies that the responsibilities conferred to the issuer corporation or to the fiduciary agent are related to whoever among them has made the call for the meeting; (iv) sets forth that the meeting minutes shall indicate the quantity of votes given in favor or against and the abstentions regarding each propose included in the agenda, indicating the division by classification, when applicable; and (v) includes a provision regarding the treatment to be granted to the remote votes instructions in cases of justified postponing or suspension of the meeting.

It is important to point out that the corporation must take all the measures to ensure that the electronic system chosen for semi-presential or entirely remote meetings will aptly register the debentures’ holders attendance and their respective votes, will permit communications between the debentures’ holders and will allow simultaneous access to documents presented during the meeting, as well as full recording of the meeting. With respect to the registration of the debentures’ holders attendance, it can be made by the chairman or by the secretary of the meeting by means of digital certificate or duly recognized by other means that guarantee its veracity and integrity in compatible format with the one adopted by the meeting.

The corporate and capital market team of Costa Tavares Paes Advogados is available to provide any further information regarding ICVM 625 and to assist with your meetings.

This bulletin is meant for information purposes only and should not be construed as a legal opinion.

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.