Official Letter Revolutionizes Brazilian Shareholders’ Meetings

In a landmark decision, CVM’s (the Brazilian Securities and Exchange Commission) Superintendência de Empresas – SEP (Office of the Superintendent of Companies) has included, in its Official Letter 01, a series of recommendations that will strongly impact on the next season of Shareholders’ Meetings in the country.
The regulatory agency clearly and objectively states that companies are to publish, by means of Notices to Shareholders, eventual independent candidacies filed by non-controlling shareholders to the corporate bodies of publicly-held companies – primarily their Board of Directors and Conselhos Fiscais.
For the past years, SEP’s Official Letter has become increasingly relevant in practical terms for Brazilian public-held companies’ governance systems once it has clearly shown the regulatory body’s position. Accordingly, the inclusion of such recommendation is likely to imprint a very different dynamics to the Shareholders’ Meetings of Brazilian companies.
The fact is particularly important when it comes to the operationalization of foreign shareholders’ voting processes. The system of international trustees requires that ‘official’ information is transmitted and included in the vote. Now, with CVM’s orientation, we will finally be able to have independent candidates in foreign shareholders’ votes.
To access the full Official Letter or read this specific recommendation on page 35, please visit:
http://amecbrasil.org.br/wp-content/uploads/2014/02/Oficio-Circular-SEP-n-01-2014-OrientacoesGerais.pdf