Disclosure Requirements - Brazil
Disclosure Category: 1
CBL may fall under the obligation, to disclose information on the identity and holdings of customers under the legislation mentioned below.
In order to comply with the applicable legislation, customers entering into transactions in the Brazilian domestic market consent and are hereby deemed to consent to disclosure and to the appointment of the requestor for example judiciary authorities, CVM, the Central Bank, Federal Revenue and other governmental or regulatory entities (each of them, the “Requestor”) as their attorney-in-fact, under power of attorney, to collect from CBL directly or through the Custodian1 or the Representative2 such information as is required to be disclosed.
Background and legal basis
Applicable laws or regulations (together, the “Regulations”) may require CBL to disclose information concerning any non-resident Investors holding of a passenger account within the omnibus account held by CBL (such holders, together the “Investor”) including, but not limited to, their address or any change in their status as Investors.
Customers are advised that according to Resolution 4373 of the Central Bank and CVM Instruction 560, the Custodian (or the Representative) is authorised to request from CBL and to disclose to the relevant Requestor any data mentioned within the relevant Non-Resident Investor Registration Form (the 'Identity Data') as well as the information related to any securities or money market instruments the Investor respectively owns without further consent from CBL or the relevant Investor, to the extent that such disclosure is requested by applicable Regulations. In addition, customers acknowledge and agree that each of the Brazilian regulatory agencies, such as CVM, Federal Revenue and the Brazilian Central Bank may direct a request for information to them and, in such case, commit to answer such request.
Each Investor hereby acknowledges and agrees that CBL is authorised to deem any data mentioned within the Non-Resident Investor Registration Form (the “Identity Data”) with respect as true, complete, accurate and updated. Any change to the Identity Data must be notified to CBL without undue delay.
Obligation to report threshold crossings
The Brazilian legislation imposes to Investors, local and non-resident, certain restrictions on the participation of publicly held company.
For this purpose, there is a Brazilian regulatory requirement (under CVM Instruction 358 and 56825 and Circular Note CVM/SEP 01/2010) to disclose holdings in a listed company when such holdings reach, exceed or fall below 5 percent of the listed company (the “Threshold Crossing”). The Custodian (or Representative) shall monitor the securities holdings of each Investor and notify CBL immediately whenever a Threshold Crossing must be reported. The Custodian (or Representative) shall subsequently report the Threshold Crossing, together with the Investor's name, to the listed company.
Should the CVM, BOVESPA or the issuer request any additional information, the Custodian (or Representative) shall inform CBL accordingly. CBL shall relay the Investor's response (which shall be provided to CBL in a timely manner) back to the Custodian (or Representative) and the Custodian (or Representative) shall forward the response back to the requesting party.
Failure to disclose a substantial holding or comply with a disclosure notice from the regulatory authorities or the company may result in an administrative suit in order to obtain the requested information.
Investors that omit, unjustifiably delay, or falsely provide the information requested in accordance with Law may be subject to confinement from one to four years and a fine, and the applicable penalties prescribed by the Penal Code, without prejudice to other applicable sanctions.