Brazil: Transactions Between Related Parties Must Be Reported By Brazilian Publicly-Held Corporations

Last Updated: 16 October 2014
Article by Walter Stuber

The Brazilian Securities and Exchange Commission (Comissão de Valores Mobiliários – CVM) decided to review the proposed criteria to determine the information that must be reported by the Brazilian publicly-held corporations (issuers) whenever there is any transaction between related parties. The matter is now regulated by Annex 30-XXXIII introduced by CVM Instruction No. 552, of October 9, 2014 (CVM Instr. 552/2014). Among other provisions, CVM Instr. 552/2014 amended CVM Instruction No. 480, of December 7, 2009 (CVM Instr. 480/2009), which deals with the registration of issuers of securities admitted to trading on regulated markets of securities.

The purpose of Annex 30-XXXIII is to allow shareholders of the issuer to monitor the most relevant transactions more closely and immediately. The term "issuer" also comprises companies directly or indirectly controlled by the issuer.

The definition of "related party transaction" is the same contained in the applicable accounting rules that govern this subject, which are outlined below.

Therefore, a "related party transaction" is a transfer of resources, services or obligations between related parties, regardless of whether a price is charged. A "related party" is a individual ("person") or legal entity ("entity") that is related to the entity that is reporting the information (the "reporting entity").

A person or a close member of that person´s family is related to a reporting entity if that person: (a) has control or joint control over the reporting entity; (b) has significant influence over the reporting entity; or (c) is a member of the key management personnel of the reporting entity or of a parent of the reporting entity.

An entity is related to a reporting entity if any of the following conditions applies:

  1. the entity and the reporting entity are members of the same group. This means that each parent, subsidiary and affiliate (fellow subsidiary) is related to the others;
  2. one entity is an associate or joint venture of the other entity or an associate or joint venture of a member of a group of which the other entity is a member;
  3. both entities are joint ventures of the same third party;
  4. one entity is a joint venture of a third party and the other entity is an associate of the third party;
  5. the entity is a post-employment defined benefit plan for the benefit of employees of either the reporting entity or any entity related to the reporting entity. If the reporting entity is itself such a plan, the sponsoring employers are also related to the reporting entity;
  6. the entity is controlled or joint controlled by a person (as identified in the previous paragraph);
  7. a person (as identified in item (a) of the previous paragraph) has significant influence over the entity or is a member of the key management personnel of the entity or of a parent of the entity;
  8. the entity, or any member of a group of which it is a part, provides key management personnel services to the reporting entity or the to the parent of the reporting entity.

Key management personnel are those persons having authority and responsibility for planning, directing, and controlling the activities of the entity, directly or indirectly, including any directors (whether executive or otherwise) of the entity.

Annex 30-XXXIII clarifies that the following are not to be deemed "transactions between related parties" and do not need to be disclosed:

  1. transactions between the issuer and its direct or indirect controlled companies, except in cases where there is participation in the share capital of the entity controlled directly or indirectly by the issuer, its administrators or related persons;
  2. transactions between entities controlled directly or indirectly by the issuer, except in cases where there is participation in the share capital of the entity controlled directly or indirectly by the issuer, its administrators or related persons; and
  3. remuneration of the administrators.

The term "related transactions" is defined as the set of similar transactions that have logical relationship to each other by virtue of its object or its parties, such as: (a) subsequent transactions arising out of an initial transaction already effected, provided that this initial transaction has established its main conditions, including the amounts involved; and (b) continuous duration transactions covering periodic installments provided that the amounts involved are already known.

The need of disclosure applies to:

  1. the transaction or set of related transactions, whose total value exceeds the lesser of the following amounts: (a) R$ 50 million; or (b) 1% of the total assets of the issuer; and
  2. at the discretion of the company´s administration, to the transaction or set of related transactions whose total value is less than the parameters referred to in item (i) above, taking into account: (a) the characteristics of the operation; (b) the nature of the relationship of the party related to the issuer; and (c) the nature and extent of the interest of the related party in the operation.

The value of total assets referred to in item (i) above shall be calculated on the basis of the latest financial statements or, whenever available, in the last consolidated financial statements published by the issuer.

The issuer must disclose to the market the following information relating to transactions with related parties that fit the criteria defined in the previous paragraph:

  1. description of the transaction, including: (a) the parties and their relationship with the issuer; and (b) the object and the key terms and conditions;
  2. if, when, how and to what extent the counterpart in the transaction, its partners or administrators participated in the process of: (a) decision of the issuer about the transaction, describing such participation; and (b) negotiation of the transaction with the issuer representatives, describing such participation; and
  3. detailed justification of the reasons why the administration of the issuer considers that the transaction noted commutation conditions or provides adequate compensatory payment, stating for example: (a) if the issuer has requested proposals, performed some procedure of making prices, or tried in any other way to carry out the transaction with a third party, explaining, if not, the reasons why it did not do so or, if so, the procedures performed and their results; (b) the reasons that led the issuer to perform the transaction with the related party and not with third parties; and (c) the detailed description of the measures taken and procedures adopted to ensure the commutability of the operation.

If the transaction in question is a loan granted by the issuer to the related party, the above information must necessarily include: (i) the explanation of the reasons why the issuer has chosen to grant the loan, indicating the guarantees eventually required; (ii) a brief analysis of the credit risk of the borrower, including the independent classification of risk, if any; (iii) a description of how the interest rate was fixed, considering the market risk-free rate and the credit risk of the borrower; (iv) a comparison of the rate of interest on the loan with other similar applications on the market, explaining the reasons for any discrepancies; (v) a comparison of the interest rate of the loan with rates for other loans received by the borrower, explaining the reasons for any discrepancies; and (vi) a description of the impact of the transaction on the condition of financial liquidity and the level of indebtedness of the issuer.

This communication to the market must be made by the issuer within seven working days of the occurrence of the transaction between related parties, pursuant to item XXXIII of article 30 of CVM Instr. 480/2009, as amended by article 2 of CVM Instr. 552/2014.

The new rules mentioned herein will be in full force and effect as of January 1st, 2015.

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
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”

Related Topics
Related Articles
Related Video
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
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

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