We understand that capital markets face difficulties in broadening their access to medium-sized companies with high growth potential in various countries.
Presentation made by the attorneys Iris Bennett, Partner of the US Law Firm Smith Pachter McWhorter PLC, and her associate Paulo Gusmão, together with André de Almeida and Leonardo B. Leite, partners of Almeida Advogados.
Brazil’s rapidly expanding capital market is without precedent. The number of public offerings (IPOs) has increased significantly over the past three years, both as a result of publicly held companies re-entering and new participants joining the market.
One current challenge for the Brazilian capital markets lies in improving access for medium-sized companies with high growth potential. Since the Brazilian capital market’s evolution, big companies have largely dominated the country’s stock exchanges.
Recently, the State of Sao Paulo’s Stock Exchange recently created the “Bovespa Mais” program in order to encourage greater capital market participation by medium-sized companies.
Despite the ongoing international crisis, the Brazilian Securities and Exchange Commission (CVM) has registered interest by numerous companies seeking to carry out IPOs.
Established by Law 6385/76 on December 7, 1976, the CVM oversees market participant operations, including all stock market-related matters.
The CVM’s responsibilities also cover registration of publicly-held companies, marketable securities and independent auditors/administrators of marketable securities portfolios; organization and transactions on stock exchanges; negotiation and intervention in the securities market; management of portfolios and marketable securities; discontinuity or cancellation of records, registries or authorizations; and termination of the issuance, distribution or negotiation of specific securities or stoppage of operations on stock exchanges.
According to risk rating agency Standard & Poor’s, Brazil received an “investment grade” in 2008, meaning that it represents a lower investment risk. As a result, analysts foresee significant foreign investment in the country, including the stock market.
The main securities traded on the capital market are shares, representing companies’ capital (or borrowed funds) through the market, including debentures convertible into shares, subscription bonuses and commercial paper.
Capital markets also include certificates of deposit, with rights and receipts for subscription of marketable securities and other derivatives.
Almeida Advogados has many collective years of experience in domestic and international capital market transactions, securities, public offerings and representation for going public and private. The firm also offers representation in interpreting and working with the ever-changing regulatory framework established by the Central Bank of Brazil and by the Brazilian Securities and Exchange Commission.