Gabriela de Ávila Machado
Lawyer at Marcos Martins Advogados
On June 23, 2020, the CVM published CVM Instruction 627, following a public consultation held in 2019. The new Instruction sets a new scale, as authorized by Law 6.404/76 (Brazilian Corporate Law), reducing, depending on the share capital, the minimum percentages of shareholding required to exercise the rights provided for in the Brazilian Corporate Law (such as a judicial request for full disclosure of the company’s books, calling a shareholders’ meeting, the right to file a derivative action against managers and to file a liability action against the controlling company without providing a bond, among others).
The rule, which comes into force on July 1, 2020, “brings Brazil closer to other countries in which private means of redress for shareholders are more developed (…),” commented CVM Director Gustavo Gonzalez.
From the date the Instruction comes into force, the following percentages will apply to the exercise of these rights:
Finally, the Instruction states that non-compliance with the new percentages could be considered a serious infraction.
This is a big step towards protecting investors, especially minority shareholders.
See the Instruction here: http://www.cvm.gov.br/legislacao/instrucoes/inst627.html
