Strategic Overview of the Reference Form: Why is this document so relevant to the Brazilian capital market? 

The Reference Form (“FRE”) is today one of the most important pillars of transparency for publicly traded companies, asset managers, and fiduciary administrators in Brazil. More than a regulatory requirement, it functions as an X-ray of market entities, allowing investors, analysts, regulators, and other stakeholders to understand, in a transparent and standardized way, the structure, risks, governance, and operations of a company. Although considered only as an annual obligation, the FRE is, in practice, an instrument that combines corporate governance and strategic communication with the market.

What does FRE really represent? 

As stipulated in CVM Resolution 80/2022 and CVM Resolution 21/2021, the FRE consolidates essential information about a company and other players, including the control structure, management, main business risks, share capital structure, and interaction with related parties. 

The FRE (Report Form) has a technical focus; its intention is not to be promotional material but rather a detailed, normative document, integrating the continuous information disclosure regime in the Brazilian capital market. Previously submitted forms can be consulted directly in the CVM's (Brazilian Securities and Exchange Commission) public database, promoting greater transparency and comparability between companies. 

How and where is it delivered? 

Delivery is carried out exclusively through the Empresas.NET System, the official platform of the CVM (Brazilian Securities and Exchange Commission). After submission, the document is available both on the regulator's website and in the Investor Relations section of the company, allowing investors to consult previous versions and identify any updates. This visibility increases the importance of a well-prepared, coherent, and up-to-date FRE (Financial Reporting and Responsibility). 

Who needs to submit the FRE? 

All publicly traded companies, managers, and fiduciary administrators registered with the CVM, including those with securities admitted for trading on the B3 or that conduct public offerings (debentures, CRI, CRA, etc.). 

Simply put: if the company is subject to the CVM's information regime, it needs to keep its FRE (Financial Reporting System) updated. 

What are the delivery times? 

For companies with a fiscal year ending on December 31, the usual calendar is submitted in the fiscal year following the one immediately ended: (i) until March 31st the disclosure of audited financial statements; (ii) until April 30th, the holding of the Ordinary General Meeting (“OGM”); (iii) until the end of May, The delivery of the updated annual version of the FRE (Financial Report) is required. The AGO (Annual General Meeting) precedes the delivery, since certain resolutions from this meeting, such as the approval of the accounts and the remuneration of the administration, must be included in the FRE.

The FRE structure is extensive and standardized, in order to provide clarity and... Among the main topics in the form are... (i) Corporate structure, with details of the controlling shareholder, corporate structure, economic group, and share capital composition; (iiRisk factors, This being one of the most sensitive and relevant points of the form, the company must describe specific and material risks, avoiding general risks and addressing operational, regulatory, financial, environmental, and social risks, notwithstanding the need to include risks that are specific to the company's activity; (iiiAdministration and governance, containing the composition of the board, management and committees, Compensation policy and governance practices; (ivRelated parties, considering relevant transactions with controlling shareholders, directors, entities within the economic group, and other related parties, highlighting potential conflicts of interest; and (v) Securities and capital structure, indicating information about issuance, trading, share classes and foreign operations. 

What happens if the FRE is not delivered? 

Failure to meet the deadline may result in (i) daily penalty imposed by the CVM; (ii) obstacles to conducting public offerings; (iii) impacts on the market's perception of governance; and (iv) risks of administrative sanctioning proceedings. In addition to being a formal obligation, the FRE is seen as an indicator of informational discipline, so it is an instrument that conveys the essence of the company and how it conducts itself in relation to its governance and transparency to the market.  

What if there are changes after delivery? 

The Reference Form must be updated within the deadlines stipulated in the relevant Resolutions if there is a significant change in the information previously provided, by resubmitting the document itself in the Empresas.NET System by publicly traded companies and other participants regulated in the CVM Web system.  

Any changes in control, significant corporate reorganizations, changes in share capital, changes in management, or new material risks are considered relevant and require the form to be resubmitted as indicated.  

Preparation should follow the corporate calendar and be coordinated between areas such as legal, investor relations, accounting, auditing, and governance. 

What does ideal flow include? 

FRE (CVM) x Form 20-F (SEC) 

Brazilian publicly traded companies must file a Reference Form with the Securities and Exchange Commission. In the United States, foreign issuers with securities registered or listed on the NYSE or Nasdaq must file Form 20-F with the Securities and Exchange Commission (“SEC”), generally within four months of the end of the fiscal year. 

Practical checklist for delivery 

✔ Audited financial statements completed 

✔ Risk factors revised and updated. 

✔ Updated compensation policy 

✔ Consolidated related party transactions 

✔ AGO held 

✔ FRE protocol submitted on time.