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The Brazilian Securities and Exchanges Commission (CVM) issued a Public Communication clarifying that shares borrowed through the Securities Lending Program (BTC) should be considered for the purpose of disclosing share ownership according to CVM Instruction 358/02
Considering recent inquiries made by investors, the Brazilian Securities Commission (CVM) stated, on November 8, 2006, that shares borrowed through securities lending programs should be considered for the purpose of disclosing share ownership according to CVM Instruction 358/02.
The CVM Instruction 358/02 establishes that investors or group of investors reaching a participation of five percent (5%) or more in each class or type of shares representative of a publicly-held company's capital shall disclose ownership of such shares through a written statement to the CVM.
The CVM clarified that the calculation of the amount owned should include shares borrowed through securities lending programs. The disclosure obligation is described in the article 12 of the CVM Instruction 358/02 (to read the CVM Instruction 358/02, please click on the link: www.cvm.gov.br/ingl/regu/cvm_358.ASP).
Likewise, the borrowed shares should be considered when calculating increases or reductions in the relevant participation, for the purposes of the paragraphs 1 to 4 of the same article of CVM Instruction 358/02.
The CVM further recommends that the statement referred to in article 12 of the Instruction 358/02 above mentioned, distinguishes the portion of shares held by the disclosing investor that has been acquired or disposed of by means of securities lending programs.
