From Monday (16th), companies with annual gross revenue of up to R$ 500 million will be able to access capital easily in the B3the São Paulo Stock Exchange, through the Easy Regime. A B3 received authorization from the Securities and Exchange Commission (CVM) this Tuesday to begin operations through the new modality, which aims to expand access for smaller companies to the capital market.
Initially, the program was scheduled to start on January 2nd of this year, but the CVM published in December the , which promotes specific adjustments to the regime, postponing the start of its validity to March 16th.
Despite the expectation that the regime will help move the IPO market in Brazil, which has been at a standstill since 2021, the B3 highlights that the eased rules will also apply to raising funds through debt, such as offering debentures and commercial notes.
“Sometimes we only think about offering shares, raising funds via equity, but, in reality, there is a great expectation for raising funds through corporate debt instruments. Perhaps this is the gateway for companies to test the capital market a little”, says Flavia Mouta, Director of Listing and Relationships at B3.
Will IPOs come back?
The executive believes that the regime will help to “open doors” for a resumption of the IPO market, but emphasizes that simplifying the entry of smaller companies on the stock exchange is something that has been studied by the B3 since before the pandemic. In other words, it was not necessarily related to the dry period that we have seen in the last five years.
The idea, according to Flavia, is to get closer to what already happens in other countries, in which investors have the opportunity to become shareholders in companies that are still at an early stage. And, therefore, with greater potential for appreciation in the long term.
Continues after advertising
For this to work, however, it will be necessary to invest in the education of both companies and investors. With historically high interest rates in Brazil, what we see are investors who are less willing to leave their capital invested for longer, resulting in a “short-term culture”, which prioritizes fixed income and, on the stock market, day trading.
“There is room for all types of investors in the Brazilian market. Recognizing the beauty of the various types of investors is also part of this work. Understanding what this group of investors who operate more regularly needs and what this group of investors who seek the long term needs”, points out Flavia.
A B3 calculates that there are currently around 150 thousand active companies that could be included in the Easy Regime. “If we convert 1% of this number, we are already on par with global initiatives that have been on the market for a long time”, says Felipe Lettiere, coordinator of Relationship with Closed Companies at B3.
Continues after advertising
Among the segments seen as most interested in this type of regime are technology companies, such as startups, as well as medium-sized companies in agribusiness, construction and infrastructure, health, among others. Furthermore, Flavia highlights that there are many companies interested in this model that are from outside the Rio-São Paulo axis.
“We have seen a lot of appetite from markets such as the Northeast, Central-West and South of Brazil wanting to understand and get closer, which is very positive, because it expands the reach of the capital market to other regions of Brazil”, he says.
Felipe highlights that the entry into force of the Easy Regime has the potential to bring more liquidity to Brazilian venture capital, which until now depended almost exclusively on mergers and acquisitions (M&As) to provide returns to investors.
Continues after advertising
“With this active market, we are able to serve as a recycling of capital for these funds – which means, in practice, more money entering the economy, so that more funds can also operate. It is a message of continuity, not a new pool”, he adds.
Also read:
Understand how it will work
of capital. The logic is to reduce bureaucracy and costs for companies that do not yet have the structure to meet all the requirements of a conventional public company.
Continues after advertising
Who can participate
Companies with annual gross revenue of less than R$500 million, as long as they are public limited companies, are registered with the CVM as a publicly-held company and constitute a Board of Directors.
How to raise funds
There are two options. The first is via traditional offers, with some regulatory exemptions. The second — and most relevant novelty of the regime — is the Direct Offerwhich allows you to raise up to R$300 million per year without having to hire a lead coordinator, a figure that usually makes the process of going public significantly more expensive. In addition to shares, companies will also be able to issue debt securities, such as debentures and commercial notes, with equally simplified procedures.
Lighter obligations
Instead of publishing results quarterly, Fácil companies will be able to do so every six months. The Reference Form — an extensive document required from traditional public companies — is replaced by a leaner model, the Easy Form. The presentation of a sustainability report is also exempt.
How the shares will be traded
The shares will be traded in the same environment and time as large companies listed on B3, with continuous settlement. The only distinction will be the acronym MP — smaller — added to the name of the paper in the auction.
Exit from the bag
If the company wants to end its participation in the market, it can cancel the registration through a Tender Offer with a reduced quorum, a more favorable condition than that required under the standard regime.
Content produced by .
