| Income tax exemption |
Income tax exemption on capital gain for 5 years for investing individuals purchasing shares of companies eligible in initial (IPO), subsequent (Follow On) offerings or secondary market, on the stock exchange. |
Law No. 13043 published on 11/13/2014, determining the income tax exemption on capital gains on the sales of shares in the Stock Exchange market, until 2023, for investing individuals who purchase shares from eligible companies in initial (IPO), subsequent (Follow On) offerings or secondary market. |
| Closed FIA |
Create specific investment vehicle, exempting the shareholders of income tax on capital gain.
How it was:
- Targeted at qualified investors.
- Time limit established by regulation from the fund.
- Investment in publicly held companies.
- Income tax of 15% on the redemption of the quotas.
How it would look like:
- Targeted at qualified and non-qualified investors.
- Minimum of 8 years.
- Minimum of 2/3 invested in eligible companies and permission to invest up to 1/3 on FIP or closed companies, as long as it participates in the management.
- Income tax exemption in the redemption of quotas if the composition of the investment is 2/3 of the equity* invested in eligible companies and the remaining 1/3 in FIP, closed companies or fixed income companies.* The deadline for the qualification of the fund is of 3 years or 50 eligible companies listed, whichever occurs first. |
CVM has edited instruction 409 with Instruction 549, allowing the creation of share funds aimed at qualified or non-qualified investors, who:
- have the designation "Shares - Access Market";
- have at least 2/3 of its net assets in shares listed in the segment aimed at the access market; and
- can have up to 1/3 of their net assets in shares, debentures, subscription warrants or other bonds/securities convertible or exchangeable into shares from closed companies adopting certain corporate governance practices, with participation in their management.
Law No. 13043, published on 11/13/2014, did not grant income tax exemption at source on income earned by individuals for the redemption of closed FIA quotas (only open FIA, according to item below). |
| Open FIA |
Reduce income tax rate on capital gain.
How it was:
- income tax of 15% in the redemption of quotas, with no minimum term for redemption.
How it would look like:
- Income tax exemption in the redemption of quotas if the investment composition is 2/3 of the equity invested in eligible companies and minimum limit for redemption of 180 days.
or
- Income tax of 10% if the fund has 1/3 of the assets invested in eligible companies and minimum limit for redemption of 90 days. |
Publication of law No. 13043 on 11/13/2014, determining exemption of income tax at source on income earned by individuals on the redemption of quotas from open investment funds that:
- have at least 67% of its equity applied in shares from eligible companies;
- have a minimum of 180 days for redemption;
- have the designation "FIA - Access Market"; and
- have a minimum of 10 shareholders, each shareholder, either individually or together with persons linked to it, may not hold more than 10% of the shares issued. |
| FIP |
Allow that Equity Investment Funds (FIP) have participation in eligible companies without the obligation to participate in the management. |
CVM issued instruction 540, which allows the manager to have up to 35% of the Fund's equity in companies listed in the "Access Market" or in the divestiture phase without the need for participation in the management. |
| PGBL/VGBL |
Increase the share investment limit on the Free Benefit Generator Plan (PGBL) and Free Benefit Generator Life (VGBL).
How it works:
Share investment limit of up to 49%.
How it would look like:
Share investment limit of up to 100%. |
Forwarded to the Ministry of Finance. |
| Simplify the process and reduce the cost of offer |
Simplification of the offer process:
- Exemption from publication of notices/announcements and printing of offer prospectus from eligible companies.
- Standardized advertising material content waived from prior analysis.
Publication of initial announcement:
- Exemption from the requirement of publication in a newspaper of the announcement of Initial distribution in the case of public offering of shares from eligible companies. |
CVM edited instruction 548, waiving the publication in newspaper of compulsory notices concerning the public offering for all listed companies. |
| Reduce the maintenance cost of the condition of publicly held company |
- Extension of deadlines for publication of audited quarterly financial statements of eligible companies from 45 to 65 days after the end of the quarter.
- Exempt the eligible companies from updates, in 7 days, for 11 specific items in the reference form.
- Removal of the requirement for the publication of annual financial statements, minutes from the Annual and Extraordinary Shareholders’ Meeting in Official Gazette for eligible companies and establish the obligation of publication through specific system at CVM, Stock Exchange and the issuer’s own webpage. |
CVM edited instruction 547, waiving the publication in newspaper of act or relevant fact, for all listed companies. Publication of law No. 13043, on 11/13/2014, determining the withdrawal of the requirement for publication of financial statements and corporate acts in the Official Gazette for these companies, replacing this obligation by a summarized publishing in a mass circulation newspaper and full publication in the same journal's website and also on the CVM and exchange websites for the eligible companies. |
| Develop training program for entrepreneurs |
- Conduct research and diagnosis on the main obstacles and difficulties for the development of access of small and medium companies to capital market in Brazil.
- Identify the best practices for the access of small companies to the capital market.
- Indicate a set of measures to develop an agenda of articulated actions to streamline access to the stock exchange by companies of all sizes. |
The survey from Fundação Dom Cabral (FDC) was completed and published on April 14, 2014 at the ABVCAP conference in Rio de Janeiro. |
| Apply training program for entrepreneurs |
Partnership between Fundação Dom Cabral and B3 Education:
- Structure a "workshop” model containing "step-by-step" instructions for companies to be listed on the stock exchange and/or to do initial public offering of shares.
- Disseminate the training program in all regions of Brazil.
- Create a community for exchanging experiences through cooperation agreements between stakeholders. |
A first Training Workshop took place in São Paulo in April 2015. The pilot project was supported by ABDI, B3 Educacion and Fundação Dom Cabral. After some improvements, a second workshop was held in Fortaleza in august 2015.
|
| Regulate public offering procedure with restricted efforts |
- Offer targeted at super professional investors (along the lines of CVM Instruction 476 on debentures).
- Applicable to initial and subsequent offers, which can be primary or secondary.
- General rule:
- Consultation to 50 investors.
- Offer can be signed by up to 20 investors.
- Special rule for eligible companies:
- Consultation to 100 investors.
- Offer can be signed by up to 20 investors. |
CVM has edited Instruction 551, changing instructions 332, 400 and 476, allowing the offering of shares targeted at professional investors, with consultation to 75 investors, which can be signed by up to 50 investors. Investment funds from the same manager will be considered as a single investor and the investors exercising the right of priority or preference will not be considered for the purposes of the limits established in the instruction. |
| Support and incentive initiatives to distribution channels |
- Incentive program to brokers.
- Courses and seminars with the aim of enhancing the training of autonomous agents. |
The participation of intermediaries in small offers is being discussed in the WG in the intermediation sector, composed by B3, ANBIMA and ANCORD. |
| Access Market |
Studies on an alternate access market with additional discounts in governance, restricted to super qualified investors. |
Formation of a work group between B3 and CVM to assess the alternative market for the OTC market. |
