The year 2022 has been a year of much news for Brazilian companies, and it should continue to be. We live in an environment of uncertainty in the market caused by the approaching presidential election and the unfolding of the conflict in Ukraine, associated with the downturn of the covid-19 pandemic. In scenarios like this, the market becomes more selective for equity transactions, which should lead to a reduction in the number of IPO and follow-on transactions in 2022 compared to 2021.
On the other hand, companies still need resources to finance their investment and growth needs, just as investors need to allocate their resources in search of good returns for their portfolios. We can therefore expect an increase in borrowing activity via debt in the capital markets. In line with this trend is the measure recently announced by the federal government to exempt capital gains for foreigners who invest in debt securities of Brazilian companies (the date of publication of the measure is still awaited).
From the regulatory point of view, the year began with waiving the need for corporations to publish legal publications in the official gazettes. It now suffices to carry out abridged publications in a large circulation newspaper, with full disclosure in the digital environment. The measure, challenged in court by the Brazilian Association of Official Press (Abio) through a direct action of unconstitutionality in the Federal Supreme Court, came into force in January of this year and was even the subject of guidelines from the CVM in its annual guidance letter to public companies.
Furthermore, CVM Resolution 60, which consolidates the rules regarding securitization companies and the operations of issuing CRIs and CRAs, enters into force in May. Among the news already disclosed and not yet in effect, the one with the greatest impact, however, is CVM Resolution 59, which amends CVM Instruction 480. This resolution comes into effect in January of 2023 and will impose a profound reform in the content of the reference form, one of the main instruments of disclosure of companies to the market. The document will become more objective and up-to-date, including, as a new feature, a specific section on the issuer's ESG practices.
Also expected for 2022 are the new CVM rules that will consolidate the public offering framework in Brazil, the object of a public hearing that ended in July of 2021 (see notice), which will also mean an important change in the framework currently in force. New rules are also expected for Brazilian Depositary Receipts (BDRs), which have recently undergone specific regulatory reforms (see notice).
All this news points to the need for publicly traded companies to prepare for changes in the short-term horizon. To help them in this process, they can count on Machado Meyer's team of specialized professionals.
