Alert: New CVM Resolutions 166 & 168
As per new CVM Resolution 166:
Smaller publicly held companies (with annual gross revenue of up to BRL 500 Mi) are exempt from the summary publication of minutes of meetings and financial statements in a printed newspaper.
On the other hand, CVM Resolution 168 regulates several matters:
- Prohibition of positions accumulation of (i) chairman of the board of directors and (ii) chief executive officer (not applicable to companies with annual gross revenue of up to R$500 Mi);
- Requirement of the presence of independent directors in publicly held companies that cumulatively (i) are registered in category A; (ii) have securities admitted to trading on the stock exchange by an organized market management entity; and (iii) have outstanding shares or share deposit certificates;
- The number of independent directors on the board of directors must correspond to at least 20% of the total number of directors;
- Definition of an independent director should consider: (i) his/her relationship with the company, company’s controlling shareholder and managers; and (ii) subsidiaries, affiliates or companies under common control, providing criteria for verifying such independence (they are not considered independent if: him/her is the controlling shareholder, has a vote bound by a shareholders’ agreement, is in any way related to the controlling shareholder, the company’s administrator or also the manager of the controlling shareholder, is or was an employee of the company or of the controlling shareholder or of affiliated/controlled companies or under common control, holds a position of decision-making power, is a founding partner or has significant influence over the company);
- The plural vote shall not apply to votes resolving about transactions with related parties whose value exceeds BRL 50Mi or 1% of the issuer’s total assets.