Amec expresses its opinion again about ‘creative’ securities, a problem that persists

Amec’s  members have reanalyzed the topic on “the losses to minority shareholders in public exchange offers and distributions of rights in differentiated assets” in the President Letter 15/2014, sent to the Brazilian Securities and Exchange Commission (CVM) on October 24.
Amec has already dealt with the subject in two letters previously sent to the regulator (President Letters 02/2014 and 12/2014), which objectively addressed the losses suffered by minority shareholders in specific public exchange offers, in which the assets offered had different characteristics from those of the underlying asset – many times with ‘creative’ or ‘unusual’ characteristics.
Since then, such practice has become more and more common and harmful for institutional investors regulated by CVM. With this in mind, the association has decided to make additional contributions involving two new suggestions on regulatory changes: one to CVM Instruction 361, and the other one to CVM Instruction 323.
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