Is Trading Permitted During Public Offers In Brazil?

The Brazilian Securities and Exchange Commission (Comissão de Valores Mobiliários – CVM) decided to amend and add provisions to CVM Instruction No. 400, of December 29, 2003 (CVM Instr. 400/2003), that regulates public offers for the distribution of securities in the primary and secondary markets in Brazil, by means of CVM Instruction No. 533, of April 24, 2013 (CVM Inst. 533/2013).

As a general rule, trading with securities issued by the issuing company (emissora) or the issuer (ofertante) is prohibited during a public offer in Brazil, except in the cases expressly listed in item II of article 48 of CVM Instr. 400/2003, as subsequently amended by CVM Instruction No. 482, of April 5, 2010. This restriction was imposed by CVM because the corporate brokers would have knowledge of a range of detailed information from the issuing company not publicly disclosed and therefore they should refrain from trading with the securities of the company during the course of the offer¹