Gabriela de Ávila Machado
Lawyer at Marcos Martins Advogados
On August 20, 2020, the CVM published CVM Resolution 4, which relaxes the rules applicable to investment crowdfunding, as set out in CVM Instruction 588. Investment crowdfunding is, as defined by the CVM, the public offering of securities issued by small business companies. They can be made without registration, through an electronic participatory investment platform.
The Resolution authorizes alternative and complementary procedures to those of CVM Instruction 588, on an experimental basis and due to the crisis brought on by the pandemic. These are
1. Under item I of article 1 of the Resolution, the “use of an alternative method of calculating annual gross revenue for the purposes of characterizing a small business company”;
2. Under item II of article 1 of the Resolution, the use of “a minimum target value equivalent to an amount equal to or greater than 1/2 (half) of the maximum target value, replacing the proportion of 2/3 (two thirds) of the maximum target value, in the partial distributions of public offers, provided that additional rules related to the transparency of the offer, risk alerts and the conduct of the offer by the platform are observed”; and
3. Article 1(II) of the Resolution provides for the “provision of an additional lot, limited to 20% of the maximum target amount, provided that additional rules related to the approval and disclosure of the additional lot are observed, and the annual fundraising limit per issuer is observed”.
The rule came into force on the day of its publication, and the authorizations are valid for public offerings started by the end of the year.
