This post was translated by Regulatory.News for informational purposes only; the content below is not an official translation from the regulator. See the content in its original language here.
Reducing the cost of regulatory compliance and including ESG information are the main objectives
The Securities and Exchange Commission (CVM) puts into public hearing today, 7/12/2020, proposed reform of CVM Instruction 480. The main objective is to reduce the cost of regulatory compliance by issuers of securities, continuing the efforts already made in this direction, inserted in the strategic planning of the Autarchy.
Changes to the reference form
The measures designed to simplify and rationalize the provision of information by issuers mainly concern the content of the reference form.
Check out the changes:
- Elimination of information already provided by issuers in other documents that must be made public, such as financial statements, bylaws and shareholders’ agreements.
- Reduction, from three to one fiscal year, the period that should be covered by most of the information provided for in the document.
- Reordering the fields of the reference form, with the objective of making the more intuitive information sequence.
- Exemption from disclosure of successive communications on related transactions involving related parties when carried out on a routine basis, in the normal course of business and subject to the same approval process.
- Harmonization between the reference form and the statement of transaction reporting criteria with related parties (provided for in art. 30-XXXIII).
Likewise, another important objective of the reform is to improve the provision of information related to environmental, social and governance (ESG) issues, in order to meet the growing demand from investors for the topic.
See the main innovations contained in the reform:
- Greater emphasis on disclosure of social, environmental and climatic risk factors
- Requirement for issuers to position themselves on Sustainable Development Goals relevant in the context of your business.
- Need for issuers that do not disclose sustainability reports or do not adopt key performance indicators for environmental and social issues to explain the reason for not doing so (“practice-or-explain”).
- Diversity information in management positions and among issuers’ employees.
Finally, the proposal contemplates several improvements to CVM Instruction 480, the result of the Municipality’s experience with its supervision and application.
“The progressive reduction in the cost of regulatory compliance aimed at with the reform tends to make the capital market an increasingly attractive option for current and future issuers of securities. At the same time, investors will continue to have access to important information that is better adapted to their current needs ”.
Antonio Berwanger, Market Development Superintendent at CVM.
Sending statements and suggestions
The new public hearing is part of the CVM Regulatory Agenda 2020.