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Date: May 24, 2022
Posted by: CPDMA team

CVM Resolution No. 80 and the dissonance with the secrecy inherent to arbitration proceedings

Image of a calculator and pen on a spreadsheet suggesting CVM-related calculations.

In force since May 2, 2022, CVM Resolution No. 80 brings a new notice on corporate demands, regulating the registration and provision of periodic and occasional information from the issuers of securities. Such regulation was the subject of Public Hearing 1/21 and consolidated the content of CVM Instructions 367 and 480.

Thus, for the purposes of enforcing Resolution No. 80 of the CVM, a corporate demand is considered to be any judicial or arbitration process whose requests are, in whole or in part, based on corporate or securities market legislation, or on the rules issued by the CVM. Still, art. 2, §3 of the aforementioned Resolution indicates its inapplicability to investment funds, investment clubs and companies benefiting from resources arising from tax incentives.

In this sense, the Resolution imposes the duty of public companies to disclose corporate claims in which the issuer, shareholders or managers are included as parties and which involve homogeneous rights or interests, collective or individual, or claims in which the decision to be rendered has the potential to affect the legal sphere of the company or of other holders of securities issued by the issuer who are not parties to the process.

In view of the different procedural formalities, Resolution No. 80 lists the minimum requirements to be fulfilled when formalizing the communication in the context of arbitration and judicial proceedings separately. In both cases, the following must be informed: (i) the parties to the process; (ii) values, assets or rights involved; (iii) request or provision claimed; and (iv) any agreement that may be entered into in the course of the claim.

Specifically regarding the arbitration procedure, the company must inform about the submission of a response, execution of an arbitration term or equivalent document that reflects the stabilization of the demand, decisions on precautionary or urgent measures, jurisdiction of arbitrators, inclusion/exclusion of arbitrators and also partial or final arbitration awards.  

The disclosure obligation guided by the CVM cannot exempt the company from the disclosure duty provided for by provisions arising from an arbitration agreement, regulation of an arbitration body or specialized entities and other agreements, except for the legal limitations regarding secrecy resulting from the law - that is, only legal normative diplomas can constitute a limitation on the duty of disclosure, and infralegal diplomas do not have such a prerogative.

Regarding legal proceedings, decisions on requests for urgent relief and evidence, jurisdiction and competence, inclusion/exclusion of parties and judgments on the merits or dismissal of the process without resolution of the merits in any instance must be informed.

In this sense, even though arbitration agreements and arbitration body regulations are not considered by the CVM Resolution as instruments capable of exempting the company from the duty of disclosure within the prescribed limits and, therefore, to ensure the procedural secrecy of the demand, the Code of Procedure Civil, procedural diploma able to do so, provides, in its art. 189, Inc. IV, the procedure in court secrecy of the cases that deal with the arbitration, provided that the confidentiality stipulated in the arbitration is proven before the court.

In a comparative bias with the guidelines in force prior to Resolution No. 80, namely, Instructions No. 367 and 480 of the CVM, it appears that the disclosure of relevant processes and procedures occurred only annually through the presentation of the reference form - and still in a synthetic way, considering the traditional secrecy of justice and the secrecy of the arbitration procedure that involves corporate demands. In this way, the main normative features of the new Resolution are transparency towards investors and the immediacy of the information to be provided by the company, to be carried out within 7 (seven) business days. Furthermore, the disclosure duty provided for in the recent Resolution is not to be confused with the parameters established for the purpose of informing demands through the reference form, which had its content and model updated from Annex C of the Resolution.

It should be noted that the period of 7 (seven) business days, counted from the date of knowledge of the company and/or those involved and designated for the communication of corporate demands, does not apply to the mandatory disclosure of a material fact capable of affecting the decision of investors who trade securities or who exercise rights arising therefrom, as in this case there must be immediate disclosure. However, if the minimum information items provided for in Annex I of CVM Resolution No. 80 are present in the immediate disclosure, there is an automatic exemption from the presentation of the notice of corporate demands.

In conclusion, CVM Resolution No. 80 provides investor shareholders with access to a more complete set of information, but it does so in direct conflict with the traditional confidentiality of arbitration proceedings and, in an effort to minimize unintended procedural publicity by companies, provides that the presentation of information does not require the availability of the entire content of the documents. Such exemption, however, lacks practical relevance in harmonizing both normative provisions, given the extensive list of confidential information whose disclosure is required. 

By: Eduarda Jade Stümer Santos

CPDMA Team - Corporate

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