Brazil: The Use Of The Internet In Brazil To Disclose Material Events

On February 5, 2014, the Brazilian Securities and Exchange Commission (Comissão de Valores Mobiliários – CVM) issued CVM Instruction No. 547 (CVM Instr. 547/2104), amending CVM Instruction No. 358, of January 3, 2002, that deals with the dissemination and use of information about relevant acts or facts (CVM Instr. 358/2002), and CVM Instruction No. 480, of December 7, 2009, that governs the registry of issuers of securities admitted to trading on regulated securities markets (CVM Instr. 480/2009).

CVM Instr. 547/2014 modernizes the regime for disclosure of information about relevant acts or facts (material events), adapting it to the current days, in which the Internet presents itself as an efficient and affordable means of disseminating news. In summary, the publicly-held corporations are exempted from publishing information about material events in newspapers of mass circulation, provided that such information is disclosed through news portals available on the World Wide Web.

The definition of material events is contained in article 2 of CVM Instr. 358/2002. Material events are any decisions taken by majority shareholders, general shareholders' meetings, or by officers of publicly-held corporations, as well as any other acts or facts of a political-administrative, technical, business or financial nature related to the relevant business that may significantly influence: (a) the market price of the securities issued by the relevant corporation or backed on them; (b) investors' decisions as to buy, sell, or preserve those securities; and (c) investors' decision as to exercise any rights inherent to titleholders of securities issued by the relevant corporation or backed on them.

According to the aforesaid definition, material events may include, but are not limited to: (i) signature of agreements or contracts regarding the transfer of the control of the company, even if under conditional provisions; (ii) changes in the control of the company, including entering into shareholders agreements and any amendment or cancellation thereof; (iii) signature, amendment, or cancellation of a shareholder agreement in which the company takes part in or is an intervenient party, or if such shareholder agreement has been registered in the appropriate book maintained by the corporation; (iv) admission or departure of shareholders maintaining contracts or operational collaboration regarding financial, technological or administrative issues with the company; (v) authorization for listing securities issued by the company in any domestic or foreign market; (vi) decision to go private; decision to promote the cancellation of the publicly-held corporation's register; (vii) amalgamation, merger or split-up involving the company itself or linked corporations; (viii) transformation or dissolution of the company; (ix) changes in the company's assets; (x) changes in accounting criteria; (xi) renegotiation of debts; (xii) approval of stock options plans; (xiii) changes of the rights and privileges of the securities issued by the company; (xiv) splits, reverse splits or the issue of share dividends; (xv) acquisition of shares for the purpose of increasing treasury stock or cancellation, and the selling of shares so acquired; (xvi) amount of profits or losses and the distribution of dividends; (xvii) signature or termination of contracts, or failure to close a deal, when the expectation for such is of public knowledge; (xviii) a project's approval, alteration or abandonment, as well as a delay in its implementation; (xix) starting, retaking or suspending the manufacturing or commercialization of products or of services rendered; (xx) discoveries, changes or developments regarding technology or companies' resources; (xxi) modification of disclosed projections by the company; and reorganization arrangements, bankruptcy, or any lawsuit that alters the corporation's financial situation.

Although the Brazilian Corporation Law (Law No. 6404, of December 15, 1976), do not order the publication of the material events, requiring only the dissemination of the information by the press, CVM traditionally demanded that the publicly-held corporations disclose their relevant information in the same newspaper of mass circulation which they usually use for their publications.

CVM acknowledged that, over the past few years, the electronic means of dissemination of news were gradually assuming the role of main mechanism of dissemination of information. The popularization of the Internet and mobile devices (smart phones and tablets) changed the way people communicate1. The Internet enables a large amount of information to be disseminated in a manner extremely fast and fair to a lot of people. Such characteristics make it an important channel to modernize the way through which the publicly-held corporations communicate with their shareholders and the market in general, thus allowing that the obligation of full and fair disclosure of the information, which is a basic principle of the capital markets regulation, be completely fulfilled.

The advancement of the Internet produced deep changes in the press in general. The main communication vehicles began to serve news not only for printed media, as well as by electronic means, notably on their own webpage. The press specialized in economic coverage developed new channels for dissemination of news, which reproduce almost in real time the information disclosed by companies on the Internet. Some of the main press vehicles have developed sophisticated tools that offer their customers a wide array of news (reports, articles, reviews) and data (such as, for example, the monitoring of stocks traded on the stock exchange daily). Such services are used by a significant portion of the market participants, mostly by intermediaries and professional and institutional investors2.

The ease of dissemination of news created by the Internet has reinforced the importance of specialized sources for maintaining a healthy capital market. The Internet has changed the way companies communicate with their shareholders and the market in general. The Internet is one of the communication tools used by the publicly-held corporations, initially with the construction of their own webpage and more recently through the various social networks.

The facts commented herein led CVM to re-examine the costs currently imposed on publicly-held corporations due to the obligation to publish material events in mass circulation newspapers and conclude that this requirement is no longer a proportionate and appropriate mechanism to ensure the wide dissemination of information. Furthermore, the replacement of the printed media by electronic means of dissemination of news do not cause any damage to the investors and the elimination of the requirement of publication of material events brings undeniable benefits to the publicly-held corporation.

These benefits are the following:

  1. firstly, the modernization of rules of disclosure of material events tends to reduce the costs of maintenance of publicly-held corporations, thereby increasing the attractiveness of the capital markets as an alternative of financing; and
  2. secondly, the flexibility now introduced by CVM has advantages of operational order, considering that to be published in the newspapers the announcements have to be sent to the agencies until a certain time limit, which often could not be fulfilled by the companies.

CVM Instr. 547/2014 is inspired in the legislation of other countries, like the United States of America, the United Kingdom and France, in which there is no obligation to publish information about material acts or facts in newspapers of mass circulation, without prejudice to the requirement that mechanisms be adopted to ensure rapid, complete and non-discriminatory dissemination of market-relevant information.

As already mentioned, the main change made by CVM in the applicable regulation consists in easing the rule of disclosure of information about material events, which will be disseminated not only in the newspapers of mass circulation normally used by the company but also cumulatively or alternatively by means of at least one new portal in webpage that provide full information in section available for free access (article 3, § 4th, items I and II of CVM Instr. 358/2002, as amended by CVM Instr. 547/2014)3.

CVM sought to prevent that such easing in disclosure of material events creates uncertainties for investors as to the place where such information can be found. In this sense, CVM requires that the disclosure policy and the registration form (formulário cadastral) include information about the channel(s) of communication which the company uses to disclose relevant facts. Any change in the communication channel used to disseminate information about any change to be implemented must be preceded by the disclosure of such in the form hitherto employed by the company to disclose its material events (article 3, paragraph 7th of CVM Instr. 358/2002, as amended by CVM Instr. 547/2014)4. Therefore, in that way investors can be sure if the material events will be published in the newspaper where the company makes its publications or will be made available in any electronic new portal, hypothesis in which the disclosure policy and the registration form should indicate which portal will be used.

These changes do not modify in any way the company´s obligation to forward to CVM notice of material events by means of the electronic system available in the CVM´s webpage. Material events may be disseminated by other means of communication, provided that the information is previously or simultaneously disclosed by the press (either the printed press or any electronic portal, in accordance with the company´s dissemination policy) and sent to CVM through its webpage.

To conclude, the changes introduced by CVM Inst. 574/2014 are limited to ease the means of communication to disseminate material events. All the other rules of CVM Instr. 358/2002 such as content and moment of disclosure of the material fact, for example, are the same and continue to be in full force and effect without any modification whatsoever. Furthermore, the criteria of relevance listed in article 2 of CVM Instr. 358/2002, which defines material events, remains unchanged.

Finally, CVM is perfectly aware that the use of the social media by the publicly-held corporations may also constitute another important contribution for a more transparent market, but it raises new concerns and specific discussions related to the use of these vehicles, which are presently being analyzed by a parallel and separate study of the regulator.


1. According to a recent estimate, approximately 34% of the world's population (2.4 billion people) had Internet access in June 30, 2012. On the same date, it has also been estimated that approximately 46% of the Brazilian population (88.5 million people) had access to the Internet and that 30% (55.6 million people) had a Facebook account.

This information is available at

2. In order to ensure the maximum flexibility in the coverage of market agents, some news agencies have developed software designed to permanently access the pages of CVM and the Brazilian exchange on the Internet, to check if new information were filed by publicly-held corporations. Additionally, other initiatives have been taken to facilitate the flow of information among the disseminators of news. The Brazilian exchange, for example, instituted a news agency that evaluates the information filed by the listed companies and disseminates this information at a free Internet portal, as well as posts such news to some accredited institutions, including news portals and intermediaries. This information is available at

3. This provision reads as follows:

"§ 4th The disclosure of material act or fact shall occur by means of at least one of the following communication channels:

I - mass circulation newspapers usually used by the company; or

II - at least 1 (one) news portal with page on the World Wide Web that provide full information in a section available for free access."

4. The new wording of article 3, § 7th establishes that:

"§ 7th Changes in the channels of communication used must be preceded by the:

I - update of the policy of disclosure of material act or fact pursuant to art. 16 of this Instruction;

II - update of the registration form of the company; and

III - disclosure of the change to be implemented in the form hitherto employed by the company for disclosure of its material facts."

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Walter Stuber
Adriana Maria Gödel Stuber
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions