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The new securities law will enter into force at the end of January.  That's what's changing - the markets

The new securities law will enter into force at the end of January. That’s what’s changing – the markets

The CVM revision and new audit system will go into effect within a month, on January 30. After the testimony was issued by the President of the Republic, Marcelo Rebelo de Sousa, they were published on Friday in Diario da Republica.

“The changes have been published in Diário da República to three certifications necessary for the performance of CMVM and for the development of the Portuguese capital market,” the Securities Market Commission (CMVM) announced in a statement. Amendments to the Portuguese Securities Act, as well as the new legal regime for audit supervision (with the exception of an article) and also amendments to CMVM’s bylaws come into effect 30 days after publication, which occurred on Friday.

“The amendments, insofar as they were accompanied by CMVM’s proposals, reflect its commitment over the past few years to simpler, objective, clearer and proportional regulation, which enhances investor protection and encourages development, competitiveness and efficient markets,” notes the regulator, led by Gabriel Bernardino.

One of the main news he brought Code review It is the collective voting, which allows issuers to finance themselves with minimal loss of capital control. It also reduces requirements of a national nature and is betting on simplification, seeking to respond to some demands from market agents. The revision of the law aims to enhance competitiveness and develop the Portuguese capital market. For this you will achieve:

  • simplifies and reduces regulatory burdens and barriers, aligning the national legal framework with that of the European Union;
  • Eliminates increased requirements and national characteristics that may alienate international investors, including eliminating the publicly owned company number (regulating exclusively “listed” company number);
  • It also ends the 2% reference threshold for eligible properties;
  • In order to encourage market access, public issuance of shares becomes more attractive, addresses the fear of loss of control invoked by national entrepreneurs not to resort to the capital market, and for this reason it is accepted that companies that may be on the list may issue shares by voting collective, facilitating the maintenance of shareholder control by the founders or principal investors (who hold shares with increased voting power);
  • On the other hand, it is recognized that the successor takes over the pre-existing position of control without facing the alternative of launching a public takeover offer (OPA) or reducing his participation to a position that does not give him control.
  • In the same sense to facilitate entry of new firms into the market, a clear system of exit from the market through voluntary exclusion from circulation is expected;
  • The system for reviewing public offers was clarified by increasing the minimum amount that does not require the prospectus to be published in the public offer of €8 million (compared to the previous 5 million);
  • It also becomes possible to write introductory handouts in English, with summaries in Portuguese.
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In this regard, a comprehensive review of the system of public offerings of securities is being carried out, which limits the scope of application of the OPA to companies whose shares are allowed to be traded on a regulated market. Thus, public debt offerings are excluded from this legal framework, “another example of the Portuguese market aligning with the requirements applicable in most European jurisdictions,” says CMVM.

The procedure applicable to competing acquisition bids is explained in order, according to the supervisor, in favor of their appearance in the interest of the shareholders of the target companies. The period for obtaining authorizations to initiate a purchase offer is also shortened by including a maximum period.

“In the intersection of the relevant realities of issuers and financial intermediaries, and taking into account the objectives of efficiency and cost reduction, as well as the essential role of intermediaries in strengthening the capital markets ecosystem, the obligation to contract on the part of service issuers eliminates assistance and placement in public offerings,” explains CMVM. . The mandatory responsibility of financial intermediaries for the content of the prospectus no longer exists.

Shareholders have lower reporting obligations and fees
On the part of the contributors, there are also variations aimed at promoting active intervention in the life of societies. Therefore, changes are implemented in the exercise of rights, especially in the context of participation and voting at public meetings. On the other hand, it is no longer necessary to send two advertisements for participation, which only requires reporting them to the financial intermediary.

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On the other hand, with the provision of legality certificates issued by financial intermediaries, beneficial owners of shares that they do not own under Portuguese law will now be able to directly exercise their voting rights, without this incurring additional registration fees for intermediaries.. and without affecting the security of trading Money bills.

Finally, the costs of entities supervised by the Financial Reporting Supervisory Authority have been simplified and reduced, concentrating in a single rule the suspension of administrative procedures, the suspension, cancellation and cancellation of registration procedures, which are distributed over a dozen bases and through the introduction of an electronic notification system.

Audit oversight focuses on high-risk entities

In addition to the Securities Act and CMVM statutes, the Legal Audit Supervision Regulation (RJSA) will also go into effect at the end of the month. One of the main changes is the change in the categories of public interest entities, which aims to focus activity on high-risk entities.

Building on the principles of simplification and efficiency, the RJSA revision expects to reduce the number of public interest entity classes, allowing for more focused supervision of more complex entities with greater systemic risk, with efficiency gains and unnecessary cost reductions for the market while maintaining the quality of global supervision and investor protection. ‘,” explains CMVM.

The supervisor is now competent to oversee the suitability, qualification, and professional experience requirements of members of governing bodies and the suitability of non-statutory auditors (ROCs) for SROCs.

In addition, CMVM is authorized to establish the regulations necessary to oversee the suitability, qualifications, and professional experience of members of the governing bodies and the suitability of SROC partners. The rules for registering auditors with the CMVM and the relevant sanctions regime were also amended.

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