We are arriving at that time of the year when most companies are preparing to have their annual ordinary shareholders’ meeting in order to (i) receive the accounts rendered by the companies officers and to examine, discuss and vote on the financial statements, (ii) decide on the destination of net profits of the fiscal year and on the distribution of dividends, and (iii) elect the officers, directors, and the members of the statutory audit committee, if it is the case.
According to article 1 of Instruction 570/2015 of the Brazilian Securities and Exchange Commission (CVM), which amends article 11 of the CVM Instruction 561/2015, this year the publicly-held companies registered in Category A (subject to CVM’s regulations, the companies authorized to negotiate any of their securities in securities regulated markets) shall adopt in their ordinary shareholders’ meeting the remote voting as provided for in CVM Instruction No. 481/2009.
Even for those companies that have already had the experience of adopting the remote voting (whether voluntarily or because they were required to, as in the case of companies that have at least one class or type of shares which are part of the “Brasil 100 – IbrX-100” or “IBOVESPA” indexes, which had to adopt the remote voting in connection with their annual shareholders’ meetings as from January 1st, 2017), it is important to remark that on December 20, 2017 CVM issued CVM Instruction No. 594, which amended the chapter of CVM Instruction No. 481, which governs the remote participation and voting in general shareholders’ meetings. Among the amendments introduced by CVM Instruction No. 594, we deem important to highlight the following:
a. CVM Instruction No. 481/2009 shall not apply to publicly-held companies that do not have outstanding shares (all company’s shares except those held in treasury and by the controlling shareholder, parties related to the controlling shareholder and the company’s management);
b. the remote voting card is mandatory when an extraordinary shareholders’ meeting takes place on the same date of an ordinary shareholders’ meeting;
c. the deadline for the indication of candidates to the board of directors and statutory audit committee is now up to 25 days prior to the date of the shareholders’ meeting (the deadline was up to 45 days in case of ordinary shareholders’ meetings and 35 days in case of extraordinary shareholders’ meetings, so now the non-controlling shareholders have more time to indicate their candidates);
d. addition of a provision allowing the company to resubmit the remote voting card (i) up to 20 days prior to the shareholders’ meeting for the inclusion of candidates to the board of directors and statutory audit committee indicated by the non-controlling shareholders and (ii) in exceptional cases, for the correction of relevant errors that affect the understanding of the matters to be decided by the shareholders or to adjust the proposal to regulations or by-laws provisions. The resubmission of the voting card shall be immediately disclosed to the market, and such disclosure shall inform (i) the reason for the resubmission and the proposal that has been changed, (ii) that the votes already casted in connection with the amended deliberation shall be considered invalid in case of correction of relevant errors that affect the understanding of the matters to be decided by shareholders or to adjust the proposal to regulations or by-laws provisions, (iii) the deadline for the shareholder to issue a new voting instruction, and (iv) that in order to avoid conflicting voting instructions, it is recommended that the shareholder issues his/her/its new voting instruction to the same services renderer that was used for the original voting instruction;
e. within seven business days counted as from the date on which the shareholders’ meeting takes place, the company shall disclose through the electronic system in CVM’s webpage and on its own internet webpage the detailed final voting map consolidating the votes casted remotely and in person as computed in the meeting, and informing the first five numbers of the shareholder’s individual (CPF) or corporation (CNPJ) enrollment with Federal Revenue Services, the vote casted in relation to each matter and respective shareholding equity stake.