CVM launched a public consultation for the FÁCIL regime, aimed at easing small companies' access to the capital market by reducing regulatory requirements and promoting simplified public offerings
Last Wednesday (11), the CVM published Public Consultation Notice SDM nº 01/2 on an experimental basis, suggesting simplified conditions for small companies to access the capital market.
The FÁCIL regime (Facilitating Access to Capital and Encouraging Listings) is a regulatory environment specifically designed for small companies, characterized by fewer requirements imposed on these companies.
Through this regime, the CVM aims to "encourage the use of the capital market as a way for companies to raise funds, targeting those between investment crowdfunding — which currently serves companies with up to BRL 40 million in gross revenue and offers up to BRL 15 million — and the traditional securities market, which, despite having no associated limits, attracts companies with billion-dollar revenues and public offerings starting at a few hundred million BRL."
The FÁCIL regime, still in its experimental phase, is open to market feedback so the CVM can assess the actual results of the proposed innovations and compare them with the current regulatory framework. The draft rule proposes establishing the experimental regime with the necessary flexibilities in an autonomous regulatory text rather than directly modifying the Resolutions that foresee the exempted or relaxed obligations.
When and if fully implemented, FÁCIL will allow companies with gross revenues below BRL 500 million to register with the CVM more quickly and be considered Small Companies (CMP).
Once registered, a CMP-classified company will benefit from a tailored regime with exemptions related to this classification. Without prejudice to new issuers who register and carry out public offerings, any already registered issuers classified as CMP can also join FÁCIL by meeting specific requirements.
The key innovations in the notice include the following:
- automatic issuer registration with the CVM after listing on an organized market administrator;
- replacing the reference form, prospectus, and sheet with a single form, presented annually or during public offerings;
- disclosing accounting information semi-annually, instead of quarterly;
- holding meetings without the requirement for distance voting rules;
- conducting public offerings of up to BRL 300 million under a "direct offer" regime, exempt from CVM registration and the need for a lead coordinator;
- obtaining registration cancellation through a public offer to acquire shares (OPA) with a success quorum equivalent to half the outstanding shares, instead of the current two-thirds of outstanding shares.
Public Offerings under FÁCIL
Registered companies classified as CMP may conduct public offerings in three different ways:
- without value limitation, if they fully comply with CVM Resolution 160 and provide the reference form and quarterly accounting information;
- following the public offering procedure under CVM Resolution 160, but replacing the prospectus and sheet with the FÁCIL Form;
- through a new and simplified public offering procedure called direct offering, in which the offer is made directly in an organized market, without the need for CVM registration or hiring an institution to coordinate the offering.
In any case, it's worth noting that in options II and III above, the offerings are subject to a combined limit of BRL 300 million over 12 months.
In our view, FÁCIL meets the market's desire for expansion and consolidation of the capital market in the country.
As highlighted by João Pedro Nascimento, current CVM President: "Through FÁCIL, we aim to include new public companies and encourage public offerings of securities by Small Companies (CMP), democratizing the Capital Market. Additionally, we seek to increase the relevance and participation of private credit in the segment regulated by the CVM, as the Capital Market offers multiple opportunities for new entrants, whether they are issuers or investors. Moreover, we reinforce two of our key commitments: demonstrating that the Capital Market is an essential tool for developing public policies and promoting initiatives within the scope of Open Capital Markets."
The public consultation is part of the CVM's regulatory agenda for 2024.
Suggestions and comments can be submitted until 12/06/2024 via email at conpublica0124@cvm.gov.br. You can find the full notice at this link.
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