NOTE: Proposal of changes in those that have relevant participation of Own Social Security Regimes(Regimes Próprios de Previdência Social – “RPPS”)
The Brazilian Securities and Exchange Commission (“CVM”) in a public hearing, on July 24, 2018, proposes changes to “CVM” Instructions 356, 472, 476, 521, 555 and 578.
The purpose of the change is to improve governance issues and price formation in public offers directed to funds with relevant participation of Own Social Security Regimes (“RPPS”).
“CVM” intends to better discipline the application of investment funds that have “RPPS” as quota holders preponderant.
The Draft proposes that funds with “RPPS” that individually or joint, directly or indirectly, hold more than 15% of their net equity are prevented from acquiring securities that have not been object of a registered public offering.
The changes proposed in the Draft are divided into three groups:
- changes in instructions dealing with investment funds to restrict the acquisition of securities in certain situations.
- change of the instruction on restricted efforts, limiting the distributions of Certificates of Real Estate Receivables (Certificados de Recebíveis Imobiliários – “CRI”) e Certificates of Agricultural Receivables (Certificados de Recebíveis Agrícolas – “CRA”) to those issued by securitization companies registered as publicly-held companies.
- change in the instruction dealing with the investment fund and in the instruction dealing with the activity of credit risk classification to include new hypotheses of serious infraction.