CVM Prior Authorization for Depositary Receipts Programs No Longer Required

On March 17, 2020, the Brazilian Securities and Exchange Commission (“CVM“) repealed CVM Rule No. 559 (“CVM Rule 559“), which determined the approval of Depositary Receipts (DR) programs for negotiation abroad.

The decision is a result of Resolution No. 4,761/19 of the National Monetary Council, which has repealed CVM’s assignment to approve the Depositary Receipts programs, as established in Resolution No. 4373/14 of the Brazilian Central Bank.

CVM declared that this repeal has the purpose of maximizing the efficiency of the regulation, as well as the economic well-being in the competition among its participants. Moreover, CVM informed that it will discontinue the page on its website that contains DR programs already approved, in order to avoid their outdated information remaining in light of any potential upcoming changes.

From April 1, 2020, financial institutions based in Brazil must request authorization from the Brazilian Central Bank to participate in DR programs, without the need for prior approval by the CVM.

CVM Rule 559 submitted DR programs to CVM’s approval, which was automatically granted upon request sent to the CVM’s Securities Registration Department – SRE.

The effects of the request for automatic approval were produced within 5 (five) business days from the date of the protocol of the request made at the CVM and it was also allowed to make requests to modify the conditions of the DR program through the SRE, with due regard to the conditions set forth by CVM Instruction 559.