Ministry of Finance and CVM create working group to protect minority shareholders

The Ministry of Finance and the Brazilian Securities and Exchange Commission – CVM – created a working group to “study and recommend measures to enhance mechanisms to protect investors and minority shareholders.” The administrative rule, signed by the Minister of Finance Eduardo Refinetti Guardia, and by CVM’s Chairman Marcelo Barbosa, was published in the Federal Official Gazette (DOU) on April 11.
The working group will be composed of eight civil servants, four of whom to be nominated by the CVM. The only information given by the regulator is that the measure is recent and “members have not been nominated yet and the work plan has not been defined.” The other four members will be nominated by the Ministry of Finance, two of whom civil servants from the Secretariat of Productivity and Competition Advocacy – Seprac, as set forth in the administrative rule. The work group will be coordinated by one member to be appointed by the CVM and one member to be appointed by Seprac.
The working group will have 180 days (extendable for a further period of 180 days) to complete the task. After that, a detailed report with an analysis and measures to enhance the protection of minority shareholders shall be sent to CVM’s Chairman and to the Minister of Finance.
The creation of the working group, an unheard-of initiative in the market, has also been a surprise as it is Seprac’s first effort in the capital market sphere. Related to the Ministry of Finance, the Seprac replaced the former Secretariat for Economic Monitoring – SEAE – through the administrative rule 9.266, as of 18 January 2018. Among several other duties, Seprac works to promote the competition in the federal public administration, encourage efficiency and competitiveness and analyze the regulatory impact of public policies at the sector level.
Click here to access the Joint Administrative Rule No. 92 published in the Federal Official Gazette (portuguese).