By: Antonio Mazzuco and Luiz Gustavo Doles

The beginning of 2023 brought several new dynamics to the Brazilian capital market, especially when we talk about securities issuances, since CVM Resolution No. 160, of July 13, 2022, came into force on January 2, 2023, bringing innovations in the issuance of securities in regulated markets.

It is important to highlight that the offers that are already underway on this date will be finalized in accordance with the old rules (ICVM 400 and 476), and all new securities issues must comply with the new rules.

The Resolution established a new registration regime for coordinators (leaders) of public offerings for the distribution of securities, representing a shift of part of the CVM's supervisory effort to intermediation service providers, as a result of a number of offers that will undergo prior registration analysis due to the new automatic registration regime for offers created by CVM Resolution No. 160.

These coordinators have certain obligations, such as assigning responsibility for intermediation activities in public offerings of securities and compliance with rules of compliance, the maintenance of adequate human and technological resources to guarantee protection against adulteration and inspections, the adoption of mechanisms to control non-public information, the provision of a code of ethics, internal control rules and trading subscription policies, the delivery of a reference form, the observation of rules for the segregation of activities to be formalized, among others.

Furthermore, coordinators also have some rules of conduct that must always be observed, such as the due precautions that must be taken and their respective due diligence standards ensuring that the information provided is true, the constant publication of the offers under their coordination, the disclosure of any conflicts of interest, ensuring that the investment is adequate in terms of sophistication, in addition to always complying with the maintenance of the updating of all documentation related to the operations involved, ensuring that the parties involved do not overlap each other, not making profitability projections that are at odds with the offer documents, among other rules of conduct.

Such obligations and rules of conduct for coordinators became of utmost importance with Resolution 160, with the possibility of suspension of the coordinator's registration if they are not complied with for a period longer than 12 months, the obligations to provide a reference form and maintain the code of ethics, internal control rules and negotiation policy.

In this regard, it is important to highlight the important role of the fiduciary agent with the innovation of this Resolution, which can be either a financial institution or an entity authorized for this purpose, as long as it represents the community of investors before the issuing company. Its main function is to defend the interests and rights of investors, and must always be authorized by the Central Bank of Brazil.

Another major improvement of this Resolution was the introduction of standardized prospectus models, reduced in size by the security offered, in a more objective and relevant manner to investors. Thus, the prospectus may only be dispensed with in offers aimed exclusively at professional investors, in order to provide greater agility in the placement of securities. For other offers aimed at qualified investors or the general public, they are strictly necessary, with the Resolution itself containing models for offers of shares in closed-end investment funds and in credit rights.

It is important to highlight some principles that guide CVM Resolution 160 and that are of utmost importance and that must always be observed in any case, which are found in art. 12 of this Resolution. They are: the principle of quality, transparency and equality of access to information.

In this sense, communications must be consistent with the content of the prospectus and the issuer's periodic information, use clear and moderate language and observe the principles of quality, transparency and fair access to information, in addition to refraining from, for example, adopting language that does not adequately reflect the existence of risks, or even omitting them, containing language that implies the perception of tacit consent and using false, inaccurate or misleading information.

The Resolution also introduced significant changes regarding the silent period, that is, a period of time during which a company must be absent from the media during a public offering to avoid the risk of market manipulation. This period ends when the Announcement of Closing of the offering is published. Among the changes introduced by this Resolution, it is worth highlighting greater clarity regarding the beginning of the period, starting on the earliest date between the corporate act that resolves on the offering or engagement of the lead coordinator and the thirtieth day preceding the filing of the application for registration of the offering with the CVM, in addition to the permission for communications that give broad publicity to the offering from the moment the offering is brought to the market, including interviews in the media, general media and digital media about the products and services offered by the issuer or by the fund's essential service providers, as long as they do not mention a public offering of securities.

Therefore, communications that are permitted during this silent period must be carried out in a manner consistent with the prospectus and other periodic information of the issuer, in addition to following the principles mentioned above. Furthermore, the CVM also has the prerogative to, at any time, by reasoned decision, require changes or cessation of advertising, suspend the offering for the period necessary to request clarifications or allow the dissemination of information that was not included in the offering documentation if irregularities are found in the advertising carried out during the silent period.

This Resolution also brought some main differences between the automatic registration procedure and the offer with restricted efforts, as observed in the table below:

Finally, the reforms introduced by Resolutions 160 are profound and aim to facilitate the registration processes for Public Offerings, as well as making them faster and more simplified. However, it is not yet possible to say whether the new regime will achieve its objectives and aspirations, since it still needs to be tested.

With the collaboration of Andrea Carvalho