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Public hearings for rules of autonomous agents and remote voting will also be a priority in regulation
The Securities and Exchange Commission announces today, 10/12/20, its Regulatory Agenda for 2021. Among the priorities, are the conclusion of the public hearings (AP) started in 2019 and 2020, highlighting:
(i) AP SDM 09/19: proposed changes to CVM Instruction 461, Instruction 505 and the creation of a single self-regulator, in the context of competition between trading environments.
(ii) AP SDM 02/20: proposed amendment to ICVM 588, which deals with improvements in the regulation of investment crowdfunding.
(iii) AP SDM 05/20: regulation proposal for insurance companies.
(iv) AP SDM 06/20: proposal to amend CVM Instruction 358, to update the standard with the current interpretation as to the existence of presumptions regarding the possible practice of improper use of privileged information.
(v) AP SDM 07/20: proposal to amend CVM Instruction 308, related to the corporate type of independent auditors and the liability regime of its partners.
(vi) AP SDM 08/20: proposal for general regulation of investment funds, with the inclusion of innovations brought by the Economic Freedom Law and consolidation of the Credit Rights Investment Funds standard.
(vii) AP SDM 09/20: proposal to revise the Reference Form, with a focus on reducing compliance costs, improving the information regime and including ESG aspects.
“The agenda has extremely relevant and structural themes for the development of the Brazilian capital market. The proposed changes underscore the CVM’s commitment to continuous improvement and updating of the regulation of our market ”.
Marcelo Barbosa, President of CVM.
Target of Public Hearings in 2021
Among the six topics listed for public consultation in 2021, we highlight the changes already discussed conceptually with the market involving the review of the regulation of autonomous investment agents.
“The proposal will reflect the CVM’s position regarding the comments received at the conceptual public hearing to change relevant aspects of CVM Instruction 497, held in 2019. After the conclusion of the regulatory impact study on the exclusivity of commercial ties, the Autarchy is ready to take the next step and propose changes to the standard ”.
Antonio Berwanger, Market Development Superintendent at CVM.
As highlighted by Superintendent Antonio Berwanger, the study released in 2020 by the Advisory for Economic Analysis and Risk Management (ASA / CVM) is fundamental support material for carrying out the regulatory reform.
It is worth remembering that the vast research work of ASA / CVM included interviews with market participants, evaluation of experiences in foreign jurisdictions, review of the literature regarding the rules of remuneration and analysis of cost and benefit under two distinct prospective scenarios: relaxation or expansion of the exclusivity rule.
Check out the other Public Hearings prioritized by CVM in 2021:
- Regulation of non-legal aspects arising from the effort linked to the Doing Business.
- Revision of CVM Instruction 481 to expand the possibilities of using the remote voting ballot.
- Improvements to the BDR standard due to recent cases.
- Update of the non-resident investor standard.
- Regulation on the prohibition on the use of privileged information for Real Estate Investment Funds.
The new regulation that deals with public offerings is also on the radar. The public hearing will take place at the beginning of 2021. The Municipality intends to consolidate CVM Instructions 400, 471 and 476 and establish single regime for offers.
“The standard seeks to modernize the regime applicable to offers and establish different registration rites, which vary according to the target audience of the offer, the type of issuer and the security offered”, explained Antonio Berwanger, Market Development Superintendent.
Regulatory Studies and Regulatory Impact Analysis (AIR)
The conduct of studies continues to be stimulated by the CVM, showing itself as a relevant initiative to support normative discussions and analyzes at the institution.
For 2021, ASA / CVM intends to continue the study on the revision of the Informational Regime for Investment Funds governed by CVM Instruction 555, initiated in 2020, and to complete the following works:
(i) Begin the second phase of the study on Internalization of Orders rules.
(ii) Rules and operationalization of Securities Custody Transfer by Brokers.
(iii) Standards and availability of information related to Sustainability (ESG).
(iv) Liquidity protection mechanisms, rules and procedures in the context of takeover bids.
It is important to highlight that in 2020 research was carried out to build the study on normative requirements for investments in securities. The action, which received more than 5,000 contributions, revealed valuable data, such as the growth and popularization of the capital market, especially in the digital environment.
The area has already made the preliminary results of the survey available to investors, according to news released on 10/26/2020, on the CVM website. And the full result is expected to be released in January / 2021.
“The study themes chosen are extremely current and important for CVM regulation. I highlight the work on rules and procedures for the transfer of custody of investors’ assets, which is one of the subjects with the highest number of complaints received by the CVM today, and deserves a special look in a scenario where the number of investors in the market has been increasing. We will still do our first job focused on making information related to Sustainability available ”.
Bruno Luna, Head of ASA / CVM.
CVM President Marcelo Barbosa also points out the importance of regulatory advances in 2020 for the preparation of the 2021 Agenda.
“A large part of the items listed in CVM’s Regulatory Agenda 2021 are derived from work begun in 2020, showing the Autarchy’s commitment and efforts to follow its agenda with a focus on normative development and, consequently, on the capital market. We have three main pillars in our Strategic Map: guaranteeing integrity, stimulating efficiency and promoting market development. And the construction of a strong Regulatory Agenda, aligned with the needs of the market and successful is essential to achieve these objectives ”.
Marcelo Barbosa, President of CVM.