After the introduction of the SAF Law (Law No. 14,193, of August 6, 2021) into the Brazilian legal system, creating new paths for making investments in the world of football, several questions arose about the view of the Securities and Exchange Commission (CVM) regarding the legal text and its practical application.
Part of these issues were addressed with the publication, on August 21st of this year, of CVM Guidance Opinion No. 41, bringing greater clarity to potential players in the area regarding accessibility to the capital markets and the standards to be followed.
Among the topics that were brought to light by the regulatory body are: (a) SAF’s share capital; (b) shares issued by SAF; (c) governance; (d) access to the capital markets; (e) publications and transparency; (f) communications to the market and relevant facts; (g) scope of CVM regulation; and (h) the Educational and Social Development Program – PDE.
In relation to the first topic, the CVM clarified that the formation of SAF’s share capital must comply with the rules of the Brazilian Corporation Law (Law No. 6,404, of December 15, 1976), mainly with regard to the valuation of assets to be paid in by investors. This assessment must be carried out by three experts or a specialized company, preferably by an auditor registered with the CVM, and in compliance with the applicable accounting rules.
The SAF Law, in relation to the issuance of shares, brought into its set of rules a true exception to the Corporations Law, enabling the issuance of different classes of common shares by subscribers, which is prohibited by the Corporations Law. CVM, which understands that SAFs that register with the CVM as publicly-held companies must have Class A common shares for exclusive subscription by the original club or legal entity and, if required, may create other classes of common shares for the subscription of any potential subscriber.
When dealing with the governance of SAFs, the CVM advises that internal monitoring systems be established for its shareholders, to avoid the possibility of a controlling shareholder holding a direct or indirect interest in another SAF, which is prohibited. by law. The body also points out that SAFs organized as publicly-held companies must observe: (i) the prohibition of accumulating the positions of chairman of the Board of Directors and chief executive officer, with the exception of smaller companies; and (ii) the mandatory participation of independent members on the Board of Directors.
In the event of an initial public offering of shares, the CVM establishes that SAFs will be subject to the same rules as publicly-held companies in general (CVM Resolution 80 and CVM Resolution 160). Likewise, in the case of issuing FUT debentures, an exclusive type of debentures for SAFs, these must comply, in addition to the SAF Law, with the provisions set out in the Corporations Law and the legal framework that the CVM has for the general regulation of debentures.
Guideline 41 also provides CVM’s view on Investment Crowfunding, investment funds, securitization, disclosure of information in the context of offers and suitability, with interested parties required to take a closer look at the CVM’s positioning.
As to marketing and publicity, the CVM was categorical: it is the obligation of publicly traded SAFs (i) to provide information to the Reference Form, updating the data on the occasion of its annual delivery and whenever the company is notified about changes; and (ii) promote, in accordance with current regulations, a communication to the market or notice of a material fact, as applicable, regarding the topics that arise on a specific matter. These topics are covered in detail in Guideline 41.
Guidelines on the scope of CVM regulatory standards for SAFs were also established, and it is not possible to apply these standards to issuance of assets that are not considered securities. These include Fan Tokens and sports betting, but new modalities could emerge in the future.
Finally, in relation to the mandatory agreement that SAFs must enter into with public educational institutions (the Educational and Social Development Program – PDE), the CVM recommends timely disclosure, through a communication to the market or notice of material fact, as appropriate, of the agreements signed, indicating the beneficiary entity, the reasons for the choice, deadlines and volumes of resources that will be allocated to the entity.
It is also recommended that SAFs internally stipulate maximum annual amounts to be used within the scope of the agreement and report these through the reference form and management report, enabling the monitoring of the use of resources by the market.
Although this first statement from the CVM brings several clarifications, points of attention to investors and also guidance to other players in the SAFs market, CVM admits the potential of the SAF Law to create a set of new demands and product offers not yet imagined or explored to date by the Brazilian capital markets. And, for this reason, it is up to the authority to continue studying the experience in Brazil and Worldwide so that new guidelines can be issued or even new regulations can be proposed.
