BRAZIL: Public Hearing proposed changes in rules of BDRs and foreign issuers

Friday October 21 2016

On 20th October 2016, the Securities and Exchange Commission (CVM) presented proposed amendments to the rules governing certificates of deposit, Brazilian Depository Receipts (BDRs) and foreign issuers (issuers that do not have head offices in Brazil or more than 50% of its assets located in Brazil, in accordance with CVM Instruction 480).

The main proposed change involves the inclusion of BDRs Sponsored Level I and Level II in the list of securities which may be subject to a public offer. Additionally, the CVM has identified the inclusion of BDRs on the list of assets that can compose the portfolio of investments within the 33% equity limit as removing potential regulatory barriers to market development of BDRs.

The changes are not intended to change the concept of a foreign issuer, but to provide greater supply of BDRs for investors who wish to increase their exposure to the securities.

Suggestions and comments regarding the draft amendments should be sent to the Market Development Superintendence (SDM), preferably by e-mail address audpublicaSDM0716@cvm.gov.br before 21 November 2016.

For more information on the CVM announcement, please click the link at the top of the page.