On June 12, 2018, Decree 9,043/18, which regulates Law 5,895/17 "Which establishes rules of transparency in the regime of companies by shares", was enacted. The decree established mechanisms to ensure the availability, access, use and a proper destination of all the information required by the Corporate Surveillance Authority from companies by shares, which are relevant to achieve transparency in its operating regime. Specifically, it implemented formalities and enforcement mechanisms for the exchange of bearer shares for nominatives shares, the transfer of shares and the application of generated fines as a consequence of non-compliance with the established provisions.


Among the relevant formalities and mechanisms, there is a procedure for the exchange of shares. To carry it out, the amendment of the bylaws with the transcript of the minute of the Board of Directors’ with the number of shares subscribed and paid must be registered, and all this has to be communicated to the Corporate Surveillance Authority. Then the bearer shares can be exchanged for nominative shares, in the following way: (a) the bearer shares must be presented physically in the act; (b) the owner must indicate on what date, by virtue of which title and from whom he acquired the share to be exchanged; and (c) at the time of the exchange, the company must cancel the received bearer shares and file them. The entire procedure must be recorded in the Minutes of the Board of Directors, and the company must communicate fulfillment of the obligation to the Corporate Surveillance Authority within 15 days.

In addition, companies by shares must identify the final beneficiaries, keeping an updated register with the following information: name, identity card number or Taxpayer Registration Number (“RUC”); address; profession; and the reason why it is established as final beneficiary. The company must communicate this record to the Corporate Surveillance Authority at least once a year.

In turn, the companies by shares must communicate the Corporate Surveillance Authority all share transfers. If the company issues public-offering securities, the National Securities Commission is responsible for communicating the transfer.

If the requirements of the decree are not fulfilled, the RUC of a company may be blocked until the situation is cured. Additionally, the decree sanctions the following faults as indicated below:

a) Exchange of shares after the deadline:

(i) Up to 6 months after the required 24-month period: a fine of 100 minimum daily wages (approximately US $ 1,360).

(ii) Up to 12 months after the 24-month period: a fine of 200 minimum daily wages (approximately US $ 2,720).

(iii) Up to 18 months after the 24-month period: a fine of 400 minimum daily wages (approximately US $ 5,440).

(iv) From 18 months after the 24-month period: a fine of 500 minimum daily wages (approximately US $ 5,800).

b) Late communication of the exchange of shares: a fine of 100 minimum daily wages (approximately US $ 1,360).

c) Failing to preserve the required documentation: fine of 400 minimum daily wages (approximately US $ 5,440).