THE BRAZILIAN
REGULATOR REFINES RULE FOR INVESTMENT CONTRACTS OFFER IN
HOTELS
Walter Stuber
Walter Stuber Consultoria Jurídica
São Paulo, SP
The Brazilian Securities and Exchange Commission (Comissão de Valores Mobiliários
– CVM) adopted measures to expedite the public offering of the collective investment
contracts (contratos de investimento coletivo - CICs). These instruments have been
distributed by the hotel segment and offer investors the opportunity to buy a room in a
hotel or fractions of the entire hotel project. The remuneration is linked to the results
(profit) of the hotel project.
In these cases, the public offering is made with borrowings from a pool of investors. For
this reason, the operations are subject to the analysis of and registration with CVM and
CVM has granted registry exemption in certain cases. Therefore, the exempted
operations are not obligated for instance to have a minimum distribution period or to
rely on a financial adviser. The consideration which has been required for this
exemption is that the offerors make sure that the product be exclusively offered to
qualified investors.
So far the analysis of these operations was made by the Board of CVM, which caused
the delay of the process of granting the registry exemption. There was a general
consensus among the real estate companies that the process within CVM could be
faster, to avoid the lost of windows of opportunity for that kind of offer.
To speed the process, CVM decided to transfer the analysis from the Board to the
Securities Registration Superintendence (Superintendência de Registro de Valores
Mobiliários), by means of CVM Deliberation No. 734, of March 17, 2015 (CVM Del.
734/2015).
According to CVM Del. 734/2015, investors who buy real estate autonomous units in
hotel projects must invest at least R$ 300 thousand or have a minimum net worth of R$
1 million. For those interested to acquire fractions of the hotel project, they must invest
at least R$ 1 million or have a minimum net worth of R$ 1.5 million.
CVM will continue conducting internal studies on the regulation that best meets public
offerings linked to developments in the hotel sector, in order to verify the need for any
adjustments in the current rules. If CVM chooses to work in a specific regulation for
this type of investment, it will discuss the regulations with the market in a public
hearing.
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