CVM Instruction No. 586 amends registration rules for securities issuers17/07/2017
RFB establishes special rules to file Country by Country Statement28/07/2017
Provisional Measure No. 784 amends rules on punitive powers of the Securities Commission and to Brazil’s Central Bank
As an Agenda BC+ result, Provisional Measure No. 784 (MP 784), introduced in December 2016 to establish focus of actions to be deployed during 2017, amends rules on sanctioning proceedings of the Brazilian Securities Commission (CVM) and the Brazil’s Central Bank (Bacen), reviewing the legal disciplinary framework of the National Financial System (SFN) and the Brazilian Payment System (SPB), aiming to modernize the punitive administrative procedures. Previously, Law 4,595/64 and the CVM by Law 6,385/76 regulated Bacen’s sanctioning procedure.
MP 784 brings a great list of infractions, such as:conducting operations in violation of the principles governing the authorized activity, carrying out prohibited operations or activities unauthorized or not in accordance with the granted authorization, the embarrassment opposition to Central Bank inspection, securities trading, financial instruments and other assets and performing loans or leasing in discordant prices practiced in the market, in own or third parties prejudice, simulation or structuring of transactions with no economic
justification, in order to provide or obtain for themselves or others, unfair advantage, non-compliance with laws and regulations of the National Financial System and the Brazilian Payment System, among others.
Violations may be punished by fines, prohibition to exercise office, practicing certain activities or provide services for institutions supervised by Central Bank, operating license cassation, among other options.
Penalties under Bacen
The fine shall not exceed:
1) 0.5% (five tenths percent) from service revenue and financial products accessed in the year preceding the infraction consummation, or, in case of continued unlawful, from consummation of the last infraction ; or
2) BRL 2,000,000,000.00 (two billions of Brazilian).
Penalties under the CVM
The fine shall not exceed:
1)BRL 500,000,000.00 (five hundred million of Brazilian Reais);
2)Double of uneven the issuance or operation value;
3)Three times the total amount of obtained economic advantage or avoided loss from unlawful occurrence; or
4)Twenty percent of the of individual or total sales consolidated econ group value, obtained in year before the establishment of sanctioning administrative procedure, in case of company.
New tools in inspection
The PM allows new tools to be used to follow-up the operations, bringing more dynamism to the inspection processes of two municipalities:
a) Coercive and precaution measurements - requirement of information and necessary explanations for clearance of shares, or adoption of punitive measures before the administrative procedure, due to risk of default penalty.
b) Leniency agreements - According to individuals or companies confess offense to the legal standards or regulatory rules with extinction of punitive action or reduction of one or two thirds of the applicable penalty, by effective, full and permanent collaboration to determine facts, and which results in important data to process.
c) Terms of commitment - statements signed by the investigated to stop the harmful practice, correcting irregularities and compensate prejudices or meet establishments of agreed adjustment. It does not suspend the progress of administrative process.
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