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April 02, 2020

COVID-19 | Corporate - Governance Report

Corporate - updated on Apr 02 at 06:00 pm

MP 931 and CVM extend deadlines for presentation of the “Corporate Governance Report”

On March 30, 2020, the Brazilian Federal Government issued Provisional Measure (MP) No. 931, granting extended deadlines for corporations to comply with several legal and regulatory obligations related to the 2020 fiscal year, as provided in the Brazilian Corporations Law (Law No. 6,404, of December 15, 1976, as amended). The purpose is to mitigate the effects of the dissemination of COVID-19.

Brazilian Securities and Exchange Commission (CVM), through the CVM Resolution No. 849 of March 31, 2020 (CVM Resolution No. 849), ruled upon these extended deadlines that apply specifically to publicly-held corporations. CVM Resolution No. 849 allows these companies to postpone submission of periodic information, such as financial statements, quarterly forms, registration form, and reference form and, especially, the Report on the Brazilian Corporate Governance Code – Publicly-held Corporations (Governance Report).

The Governance Report, governed by CVM Instruction No. 586 of June 8, 2017, must be submitted annually by corporations registered under the so-called “category A” (issuer of securities of any kind in the Brazilian stock market) within 7 (seven) months counted as of the end of their fiscal year, thus normally until July 31. The aforementioned regulatory change extends this obligation for two (2) months especially for 2020. Therefore, corporations may now present the Governance Report to CVM until September 30.

Despite these extensions granted on a provisional basis (the MP is still subject to scrutiny and approval/or not by the Brazilian Congress), it is key that publicly-held corporations seize the moment as an opportunity to prepare and update their Governance Report, using it as a communication tool with their stakeholders, especially in this year full of uncertainties and opportunities.

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