Brazil: Participation And Remote Voting In General Shareholders’ meetings In Brazil

Last Updated: 13 April 2015
Article by Walter Stuber

On April 4, 2015 the Brazilian Securities and Exchange Commission (Comissão de Valores Mobiliários – CVM) issued CVM Instruction No. 561 (CVM Instr. 561/2015), that regulates the participation and remote voting in general shareholders' meetings of publicly-held corporations.1

CVM Instr. 561/2105 aims to facilitate the participation of shareholders in general meetings either through the vote or through the submission of proposals, as well as to enhance the corporate governance instruments available in the Brazilian market. The facilitation of the process of voting was a strong demand on the part of both non-resident shareholders (foreign investors) and Brazilian residents (individuals). With the admission of the remote electronic voting CVM answered the questions addressed by these two audiences, finding a relatively simple solution.

For this purpose, this new regulation provides the following:

(a) the creation of a remote voting bulletin through which shareholders may exercise their right to vote prior to the date the general meeting is held;

(b) the possibility of inclusion of candidates and proposals of deliberation of minority shareholders in that bulletin, with due observance of certain percentages of equity interest, in order to facilitate the shareholders' participation in general meetings; and

(c) the deadlines, procedures and ways of sending this bulletin, which may be forwarded by the shareholder: (i) directly to the company; or (ii) to the custodian (if the shares held by the shareholder are kept at a centralized deposit) or to the book-entry agent of the shares issued by the company (if such shares are not kept at a centralized deposit).

The bulletin will have to be available to the shareholders until one month before the date scheduled for the general meeting and the receipt of the bulletin by the company must occur with a maximum of seven days in advance of the meeting.

Initially the bulletin system may only be used in ordinary meetings, both for the vote on the topics on the agenda as to the prior presentation of proposals from shareholders, and also for meetings in which there is election of members of the Audit Committee (Conselho Fiscal) and in certain cases of the Board (Conselho de Administração).

These cases comprise the following situations: (i) when the election is needed by vacancy of most of the offices of the Board; (ii) for vacancy of the office of the Board when the member has been elected for multiple voting; or (iii) for filling the slots dedicated to separate election as provided for in articles 141, paragraph 4, and 239 of the law No. 6,404, of December 15, 1976 (the Brazilian Corporation Law - BCL).2

In order to propose and include topics to be discussed on the agenda of the general meeting or indicate council members, the shareholders will have to achieve certain equity percentages stipulated by CVM, varying pursuant to capital stock tracks, depending on the size of the company, in accordance with the table indicated below.

Capital Stock


Council Member

Up to R$ 500 million



Above R$ 500 million and up to R$ 2 billion



Above R$ 2 billion and up to R$ 10 billion



Above R$ 10 billion



CVM has limited the requirement of this bulletin to the general meetings because it is a new voting system that needs to be tested. For this reason at first CVM cautiously decided to restrict it only to those meetings that are more predictable both in relation to the occurrence and in relation to the matters discussed. When this new mechanism is tested and improved, CVM can assess the extent of the remote electronic voting system to the extraordinary meetings.

With the bulletin CVM eliminates the need for proxies and ensures that the shareholder will exercise his/her/it voting right personally. The use of the bulletin will be valid as of January 1, 2016 for companies with at least one species or class of shares listed in the Bovespa index (Ibovespa) and the Brazil 100 index (IBrX-100), and as of January 1, 2017 for all companies registered with CVM in category A and authorized by an entity that manages the regulated market represented by shares traded in the stock exchange.


1. CVM Instr. 561/2015 amends CVM Instruction No. 480, of December 7, 2009 (CVM Instr. 480/2009), that deals with the registry of issuers of securities admitted to trading on securities regulated markets, and CVM Instruction No. 481, of December 17, 2009 (CVM 481/2009), that contains rules on information and requests of public proxy for exercise of voting rights at shareholders' meetings.

2. An English free translation of article 141, § 4º, and article 239 of the BCL is transcribed below for ease of reference:

"Article 141. Whether or not provided for in the bylaws, when electing the members of the Board, shareholders representing at least one-tenth of the voting capital may request that a multiple voting procedure be adopted to entitle each share to as many votes as there are council members and to give each shareholder the right to vote cumulatively for only one candidate or to distribute his votes among several candidates.

Paragraph 4. Shareholders representing the majority of the following shares shall have the right to elect and remove from office a member and his substitute from the board of directors, in a separate election at the general meeting, being excluded from such election the majority shareholder:

I – shares issued by a publicly-held corporation which represent at least fifteen percent (15%) of shares with voting rights; and

II –preferred shares without voting rights or with restricted voting rights, issued by a publicly-held corporation, which represent at least ten percent (10%) of the share capital, provided that they have not exercised the right set forth in the bylaws under the terms of Article 18."

"Article 239. Mixed-economy corporations are obliged to have a Board and to guarantee the minority the right to elect one council member, if a larger number is not attributed to them by the multiple vote procedure.

Sole Paragraph. The officers of mixed-economy corporations shall have the same duties and responsibilities as the officers of publicly held corporations."

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.

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Walter Stuber
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