The Brazilian Securities and Exchange Commission (CVM) published a new Resolution n. 207/24 that modifies the daily fines for non-compliance with information disclosure obligations, as well as expands the list of market participants subject to sanctions.
Below, we highlight 3 key-points regarding the changes in the CVM’s sanctioning standards:
1. Inclusion of Participants in the List of Possible Sanctioned Parties: By amending Annex A of CVM Resolution 47/21, CVM Resolution 207/24 included public offering coordinators among the agents subject to daily fines. Now, delays in submitting the reference form may result in daily fines of R$ 600.00, and other essential documents may incur fines of R$ 500.00.
2. Changes to the Grounds for Applying Sanctions: Article 63 of CVM Resolution 80/22 was modified to allow the application of daily fines for delays in submitting event-related information, in addition to periodic information. This change reinforces the CVM’s commitment to ensuring the timely submission of relevant information, providing greater transparency and protection for the market and investors.
3. Alignment with Investment Fund Regulations: CVM Resolution reflects the changes introduced by CVM Resolution 175/22, which consolidated the periodic obligations of investment funds. These changes ensure that the fines applied are in line with the latest regulations, expanding the scope of oversight and ensuring compliance by market participants.
Although the new daily amounts remain low, CVM Resolution is important because it consolidates the CVM’s recent jurisprudence regarding the appropriateness of fine amounts in relation to their practical effect: which is to compel capital market participants to comply with disclosure obligations. Moreover, it requires special attention from those players who are now included as potential subjects of these sanctions.
