CVM publishes Guideline Opinion indemnity agreements

Guideline Opinion 38 of the Securities and exchange Commission (CVM)1 provides on the fiduciary duties of the managers in indemnity agreements between listed companies and their managers. In contracts of this nature, companies undertake to guarantee the payment, reimbursement or advance payment of expenses related to arbitration, administrative or judicial proceedings involving acts practiced by their officers, in the exercise of their duties or authority.

The Guideline Opinion 38 brought, primarily, guidelines for officers on important issues that should be observed while preparing, approving and executing indemnity agreements, especially with regard to:

– the acts of the administrators that should not be subject to indemnification, and what needs to be observed in the definition of the scope of coverage;

– the need for implementation of procedures that ensure decisions regarding the expenditure of resources based on these contracts are taken with independence and always in the best interest of the company; and

– information that must be disclosed, so that shareholders and the market know the terms and conditions of the agreement, and assesses the possible consequences of assets for the company.

Read the full story on CVM's website.

Indirect investment in Cryptoassets by Funds

CVM issued Official Letter SIN 11/2018 on September 19 2018, addressed to administrators, managers, and auditors of investment funds. In addition to clarification about investments in cryptoassets by funds regulated by CVM Instruction 555, there are 2 conditions for this to be possible:

– that such investment be indirect; and

– that due diligence practices are observed.

The Official Letter SIN 11/2018 provides several practices to be observed in these cases, with the main objective of protecting the shareholders of the funds and give them notice of the existence of specific risks related to investments of this nature.

Madrona Advogados published an article about this topic on September 24, 2018.

Read the full story on CVM's website.

Public hearing for amendments to to CVM Instruction 555

CVM put public hearing on September 27, 2018, draft of Instruction that amends CVM Instruction 555. The draft intends to include provisions about Infrastructure Incentivized Funds (FI-Infrastructure)2.

The draft intends for investors that are not considered qualified according to the specific regulation to be able to invest in these funds, to allow individuals to have professional management for better assessment of the risks and returns associated with these assets, and also allow greater diversification of portfolio.

Comments may be submitted by November 26, 2018.

Read the full article on CVM's website.

The Central Bank of Brazil submitted proposed amendment to Circular 3,876/18 to Public Hearing.

The Notice of the Public Hearing 69 of the Central Bank of Brazil3 proposes to have Circular 3,876/18 amended. It provides methodologies and procedures for the evaluation of the sufficiency of the value of Reference Assets (PR) kept to hedge the risk of variation of interest rates in instruments rated in the bank portfolio (IRRBB), the identification, measurement and control of IRRBB and public disclosure and submission to the Central Bank of Brazil.

The draft regulation proposed by the Notice basically aims to include specific requirements for the institutions in Segment 3 (S3), composed by the institutions smaller than 1% and equal to or greater than 0.1% of the GDP, and in Segment 4 (S4), composed by the institutions smaller than 0.1% of the GDP. Circular 3,876/18 currently applies only to Segments 1 and 2.

Suggestions and comments may be sent by November 5, 2018.


1 Published on September 25, 2018.

2 Provided in art. 3 of Law no. 12,431/11.

3 Released on September 20, 2018.

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