Disclosure of Material Act or fact and Tradig of Securities
|Version:||Date of Review:||History:|
|2||06/18/2015||Inclusion of items: Complementary Documentation (III), Concepts and Acronyms (IV), Responsibilities (V), Consequence Management (VII) and Exceptions (VIII).|
|3||05/18/2016||Merger of the Disclosure of Material Act or Fact Policy and the Trading of Securities Policy, updated according to new CVM Instruction 358 provisions|
|4||07/19/2018||Adequacy to the new rules of “Novo Mercado”|
Set forth the procedures for the disclosure of material act or facts and good conduct standards to be observed by Binding Parties, besides ensuring the compliance with laws and rules prohibiting the practice of Insider Trading and define the rules to assure the observance of the good practices when trading the Company’s securities.
a. For the purposes of this policy, we consider:
- Material Act or Fact: it means any Controlling Shareholder’s decision, resolution of the general meeting or the management bodies of the Company, or any other political-administrative, technical, business or economic-financial act or fact, occurred or related to the Company’s business which may considerably influence the quote of the Company’s securities or referenced thereto; investors’ decision to buy, sell or hold securities and investors’ decision to exercise any rights inherent to the condition as titleholder of securities issued by the Company or referenced thereto, taking into account especially, but not limited to, the acts or facts mentioned in Exhibit I hereto.
- Insider Information: any information related to the Company or its Subsidiaries that may significantly influence the Securities quote and not yet released to the market.
- Insider Trading: Trading of the Company’s Securities by Binding Parties who, due to circumstantial facts, have access to Insider Information referring to the Company’s business and situation, and use this information for their own benefit.
It shall apply to the Binding Parties, even those who did not expressly adhere hereto pursuant to Exhibit I and Related Parties.
1. Principles and Objectives:
1.1. The Disclosure and Trading Policy is based on the following principles and objectives:
1.1.1. Provide complete information to stakeholders and market entities;
1.1.2. Ensure broad and appropriate disclosure of Material Act or Fact, as well as preserve its confidentiality when not disclosed;
1.1.3. Consolidate the practices of good corporate governance;
1.1.4. Cooperate for the stability and development of the Brazilian capital markets.
2. Procedures for disclosure of material act or fact:
2.1. The immediate disclosure and communication to CVM and market entities of a material act or fact, as well as the adoption of other procedures provided for herein shall be incumbent upon the Investor Relations Officer, as follows:
2.1.1. The disclosure shall occur simultaneously with CVM and the market entities, before the opening or after the closing of trades at the market entities. When the Company’s securities are simultaneously traded on the Brazilian and foreign market entities, the disclosure shall occur, as a rule, before the opening or after the closing of trades in all the countries, prevailing, in case of incompatibility, the trading hours of the Brazilian market.
2.1.2. Publication on newspapers of wide circulation usually employed by the Company and availability of respective information on the World Wide Web (Internet), at www.cielo.com.br/ri/.
2.2. The Binding Parties with access to information on the material act or fact shall be liable for conveying this information to the Investor Relations Officer and shall verify if, after such communication, the measures described herein and in the laws applicable to disclose respective information were taken.
2.2.1. In the event the Binding Parties verify the omission of the Investor Relations Officer in the compliance with his duty of communication and disclosure, and provided that the confidentiality of the material act or fact has not been resolved to be maintained, pursuant to item 3 of this Disclosure and Trading Policy, shall immediately notify the material act or fact directly to CVM to be held harmless from the responsibility imposed by applicable rules in the event of non-disclosure.
2.3. Whenever the CVM or the market entities require from Investor Relations Officer additional clarifications to the notice and the disclosure of material act or fact, or in the event of atypical fluctuation in the quote, price, or quantity of the Company’s securities traded, or referenced thereto, the Investor Relations Officer shall inquire the persons with access to the material acts or facts, aiming at investigating whether they are aware of information which shall be disclosed to the market.
2.3.1. The Company’s management and other employees inquired as provided for by this item shall immediately answer the Investor Relations Officer’s request. In the event they fail to contact him on the same day when they become aware of the respective requirement of CVM or market entities, management or employees shall send an e-mail containing relevant information to the address firstname.lastname@example.org.
2.3.2. If exceptionally, the disclosure of material act or fact is imperative to occur during trading hours, the Investor Relations Officer may, when informing the material act or fact, always request simultaneously to the Brazilian and foreign market entities to suspend the Company’s securities trading or referenced thereto for the time necessary to the adequate dissemination of respective information. The Investor Relations Officer shall evidence before the Brazilian market entities that the lock-up requested also took place in the foreign market entities.
3. Exception to the disclosure of Material Act or Fact
3.1. The Material Acts or Facts may, exceptionally, not be disclosed if the Controlling Shareholder or the Company’s Management understands that disclosure will jeopardize the legitimate interest of the Company. In these events, the procedures set forth herein shall be adopted in order to assure the confidentiality of this information.
3.1.1. Should the Material Act or Fact be related to operations directly and/or only involving the Controlling Shareholder, the latter may advise the Investor Relations Officer not to disclose the Material Act or Fact, exposing the reasons for his/her decision.
3.2. The Company’s Controlling Shareholders or Management are required, directly or through the Investor Relations Officer, to immediately disclose the Material Act or Fact in any of the following events:
3.2.1. The information has been known by third parties unrelated to the Company and eventual business characterizing the Material Act or Fact;
3.2.2. There is an underlying and substantiated suspicion that the confidentiality of the Material Act or Fact has been infringed; or
3.2.3. There is atypical fluctuation in the quote, price or volume traded of securities issued by the Company or referenced thereto.
3.3. If the Investor Relations Officer does not take the necessary measures for the prompt disclosure referred to in this item, it shall be incumbent upon the Controlling Shareholder or the Company’s Board of Directors, by means of its Chairman to adopt referred measures.
3.4. The Investor Relations Officer shall always be informed on the confidentiality of the Material Act or Fact, and he/she shall be liable, together with the other persons aware of such information, for ensuring the adoption of proper procedures to maintain referred confidentiality.
3.4.1. Whenever there is any doubt on the legitimacy of non-disclosure of information, by those aware of the Material Act or Fact maintained confidential, the matter may be submitted to CVM, as provided for in the applicable rules.
4. Procedures to preserve the confidentiality of Material Acts or Facts
4.1. The Binding Parties shall preserve the confidentiality of the information referring to the Material Acts or Facts of the Company, its parent companies, subsidiaries and associated companies, to which they have privileged access due to the position or title held, until its effective disclosure to the market, and ensure that subordinates and third parties of their trust also do the same, being jointly responsible in the event of non-compliance.
4.2. The following procedures shall also be observed:
4.2.1. Only involve those persons considered indispensable in the actions which may result in Material Acts or Facts;
4.2.2. Do not discuss the confidential information in the presence of third parties who are not aware thereof, even if we may expect that referred third party cannot perceive the meaning of the conversation;
4.2.3. Do not discuss confidential information in conference calls you are not sure who are the persons effectively participating therein;
4.2.4. Keep any type of documents related to the confidential information, including handwritten personal notes in a safe-deposit box, cabinet or closed file, to which only persons authorized to be aware thereof have access;
4.2.5. Generate documents and electronic files referring to confidential information always protected by passwords;
4.2.6. Circulate internally the documents containing confidential information in sealed envelopes, which shall always be directly delivered to the addressee;
4.2.7. Do not send confidential documents by facsimile, unless you are sure that only the person authorized to be aware of the information will have access to the facsimile;
4.2.8. Without prejudice of the responsibility of that person sending the confidential information, require to third party external to the Company who needs to have access to the confidential information to sign a statement of confidentiality which shall specify the nature of the information and contain a declaration that the third party acknowledges its confidentiality, undertaking not to disclose it to any other person, nor trade the Company’s securities before the disclosure of the information to the market.
4.3. When the confidential information needs to be disclosed to the Company’s employee or another person holding title, duty or position in the Company, its parent company, subsidiaries or associated companies, rather than Manager or member of the Fiscal Council or members of any Company’s bodies with technical or advisory duties, created by bylaws provision, the person in charge of conveying the confidential information shall certify that the receiver is aware of this Policy, also requiring him to sign the Statement of Adhesion included in Exhibit I before authorizing him access to information.
5. Trading of Securities Forbidden:
5.1. The prohibitions outlined in this Disclosure and Trading Policy shall apply to trades held in the Market Entities, organized or not, as well as trades carried out without the intervention of an institution composing the distribution system.
5.2. The rules of this Disclosure and Trading Policy shall also apply to trade carried out, directly or indirectly, by Binding Parties or Related Parties, inclusive in cases when these trades occur by means of:
5.2.1. a company directly or indirectly controlled by the binding or related parties;
5.2.2. third parties with whom they have executed an agreement of management, trust or investment portfolio management in financial assets;
5.2.3. Attorneys-in-fact or agents;
5.2.4. Spouses from whom they are not legally separated, partners and any dependents included in their annual income tax return; and
5.2.5. Any person aware of the Insider Information through any person impeded from trading, knowing that it has not been disclosed to the market yet.
5.3. For the purposes of this Disclosure and Trading Policy, trading made by investment funds whose quotaholders are persons subject to this Policy will not be considered indirect trading, provided that these investment funds are not exclusive and the trading decisions of the fund manager cannot be influenced by quotaholders.
5.4. The lock-up provided for herein shall apply to the loan operations of securities executed by Binding Parties and/or Related Parties in the capacity of the lender, and the Binding Parties and/or Related Parties shall be forbidden to execute securities loan operations as borrowers.
6. Lock-Up Period
6.1. The Binding Parties are prohibited from trading Securities during Lock-up Period.
6.2. The Investor Relations Officer is not required to inform the reasons for determining the Lock-up Period, and the aforementioned persons shall keep this determination confidential.
6.2.1. For the purposes of this item, the Investor Relations Officer shall clearly indicate the initial term and the final term of the Lock-up Period.
6.2.2. The Investor Relations Officer’s on-communication on the Lock-up Period will not exempt anyone from complying with this Disclosure and Trading Policy and the provisions of CVM Instruction No. 358 and other CVM’s normative acts.
7. Exceptions to the general restrictions on the trading of securities
7.1. The restrictions on trading provided for herein shall not apply to the Binding Parties when trades occur in accordance with the Investment Plan.
7.2. The restriction on trading provided for in item 9.1 below shall not apply to the acquisition of shares held in treasury, by means of private trading, arising from the exercise of call option according to the stock option granting play approved at the Company’s General Meeting, or when referring to the grant of shares to managers, employees or service providers as part of the compensation previously approved at the Company’s general meeting. The exception mentioned above does not include any share traded after the exercise of call option or after the grant of shares.
8. Investment Plan
8.1. The trades of the Binding Parties executed in accordance with the Investment Plan shall be included in the scope of this Disclosure and Trading Policy, provided that:
8.1.1. the investment plan is formalized in writing with the Investor Relations Officer prior to any trading;
8.1.2. the plan establishes, irrevocably and irreversibly, the dates and the values or the volume of trades to be made by participants; and
8.1.3. it provides for a minimum period of 6 (six) months, so that the Investment Plan, any amendments or cancellation become effective.
8.2. The Investment Plan participants cannot:
8.2.1. simultaneously hold more than one Individual Investment Plan; and
8.2.2. perform any operations to cancel or mitigate the economic effects of the operations to be determined by the Individual Investment Plan.
8.3. The Board of Directors shall verify and monitor at least half-yearly, by means of the report of the Statutory Executive Board, the participants’ adhesion to the Investment Plans formalized by them and their trading.
8.4. The Investment Plans shall be executed substantially in the form of Exhibit III to this Disclosure and Trading Policy and shall necessarily be executed before the Investor Relations Officer, pursuant to CVM Instruction No. 358.
8.5. The restrictions provided for in items 9, 10 and 13 shall not apply in the assumption of trades executed within the scope of the Investment Plan, as long as the requirements provided for in Article 15-A, Paragraphs 1 and 3 of CVM Instruction No. 358 are complied with.
9. Restrictions on the trading upon pending disclosure of material act or fact
9.1. It is prohibited the trading of Securities by Binding Parties in the assumption of existence and access or knowledge of Insider Information until the Company discloses the Insider Information to the market as a Material Act or Fact. This rule also applies:
9.1.1. when (a) the acquisition or disposal of securities by the Company, its subsidiaries or other company under common control is underway, or an option or power of attorney has been granted with this purpose, and in these cases, the prohibition will be effective solely on the dates when the Company itself trades its shares; and
9.1.2. if there is the intention of promoting merger, full or partial spin-off, incorporation, transformation or corporate restructuring of the Company.
10. Restrictions on trading after the disclosure of material act or fact
10.1. In the assumptions provided for above, even after the disclosure of Material Act or Fact, the restrictions on trading shall prevail if it may interfere in the securities trading conditions, so as to result in damage to the Company or its shareholders, and such additional restriction shall be informed by the Investor Relations Officer.
11. Prohibition on trading prior to the disclosure of quarterly information and standardized financial statements
11.1. The Binding Parties cannot trade Securities within a fifteen-(15) day period prior to the disclosure or publication, when applicable, of the Company’s interim financial information (ITR); or the Company’s standardized financial statements (DFP).
11.2. The restrictions provided for in item 11.1 above shall not apply to the assumption of trades made within the scope of the Investment Plan, as described in item 8 above, provided that:
11.2.1. the Company has approved a schedule setting specific dates for the disclosure of the Company’s interim financial information (ITR) and the Company’s standardized financial statements (DFP); and
11.2.2. the Investment Plan obliges its participants to revert to the Company any losses prevented or gains earned on the trading of the Company’s shares, resulting from any change on the dates of disclosure of the Company’s interim financial information (ITR) and the Company’s standardized financial statements (DFP), as verified through reasonable criteria defined in the Individual Investment Plan.
12. Prohibition on trading applicable to former officers
12.1. The Former Officers withdrawing from the Company’s management before the public disclosure of the Material Act or Fact related to business or fact initiated during their management period cannot trade Securities within a six-(6) month period after their withdrawal or until referred Material Act or Fact is disclosed to the market, whichever occurs last, also observing the provisions of item 12.2 below.
12.2. If the trading of Securities, even after the disclosure of the Material Fact, may interfere in the conditions of referred trades, in detriment of the Company or its shareholders, the former officers are prohibited from trading securities for a minimum period of six (6) months after his/her withdrawal.
12.3. The restrictions provided for in items 12.1 and 12.2 above shall not apply in the assumption of Investment Plan, provided that the requirements of Article 15-A, Paragraphs 1 and 3 of CVM Instruction No. 358 are complied with.
13. Additional Prohibitions
13.1. Besides the prohibitions provided for above and in CVM Instruction No. 358, the Binding Parties cannot directly or indirectly trade securities issued by the Company in the period preceding the decision made by the Controlling Shareholders by means of resolution at a general meeting or the Company’s management bodies, or any other political-administrative, technical, business or economic-financial act or fact referring to:
13.1.1. modification of the Company’s capital stock through the share subscription;
13.1.2. approval of the program for the purchase and sale of the Company’s shares;
13.1.3. distribution of dividends or interest on equity;
13.1.4. transfer of controlling interest; and
13.1.5. the disclosure of referred decisions/resolutions by means of a notice to the market, material fact or publication of respective corporate acts and notices.
13.2. In the assumptions provided for above, the Controlling Shareholders shall inform the Investor Relations Officer for him to notify the Binding Parties on the prohibition to trade securities issued by the Company.
14. Amendments to the Disclosure and Trading Policy
14.1. This Disclosure and Trading Policy may be amended by means of Board of Directors’ resolution in the following situations:
14.1.1. when expressly determined in this regard by CVM;
14.1.2. in view of a modification of applicable legal rules and regulations, so that to implement the necessary adjustments; and
14.1.3. when the Board of Directors, during the process of assessing the efficacy of the procedures adopted, verifies the need for amendments.
14.2. The amendment to this Disclosure and Trading Policy shall be notified to CVM and the Market Entities by Investor Relations Officer, as required by applicable rules, as well as to the persons mentioned in the list referred in item 15.1.3 below.
14.3. This Disclosure and Trading Policy cannot be amended upon pending disclosure of Material Fact.
- Binding Parties: The shall observe and ensure the compliance with this Disclosure and Trading Policy and applicable laws, and whenever necessary, prompt the Investor Relations Officers for consultation on situations involving conflict with this Policy or by means of the occurrence of situations described therein.
- Investor Relations Officer: he shall comply with and ensure the compliance with the guidelines laid down in this Disclosure and Trading Policy, also guarantee that any changes in the Company’s direction are incorporated thereto and clarify the doubts referring to its content and application.
V. Additional Documentation
- Instruction No. 358/02 issued by the Brazilian Securities and Exchange Commission (CVM)
- Brazilian Corporation Law
VI. Concepts and Acronyms
- Controlling Shareholder: the shareholder or group of shareholders bound by a shareholders’ agreement or under common control exercising the power of direct or indirect control of the Company, pursuant to the Brazilian Corporate Law.
- Management: members of the Company’s Board of Directors and Statutory Board of Executive Officers.
- Material Act or Fact: it means any Controlling Shareholder’s decision, resolution of the general meeting or the management bodies of the Company, or any other political-administrative, technical, business or economic-financial act or fact, occurred or related to the Company’s business which may considerably influence the quote of the Company’s securities or referenced thereto, the investors’ decision to buy, sell or hold securities and investors’ decision to exercise any rights inherent to the condition as titleholder of securities issued by the Company or referenced thereto, taking into account especially, but not limited to, the acts or facts mentioned in Exhibit II hereto.
- B3 S.A.- Brazil, Stock Exchange, OTC: The Securities, Commodities, and Futures Exchange, and any other stock exchanges or organized OTC markets where the Company’s securities are accepted for trading, in Brazil or abroad.
- Company: Cielo S.A.
- Board of Directors: the Company’s Board of Directors.
- Fiscal Council Members: the sitting and alternate members of the Company’s Fiscal Council, when instated, elected by resolution of the Annual General Meeting.
- Fiscal Council: the Company’s Fiscal Council, when instated.
- CVM: Brazilian Securities and Exchange Commission.
- Investor Relations Officer (IRO): the Company’s Officer in charge of providing information to investors, CVM and the market entities, and for updating the Company’s registration as a publicly-held company with the CVM and for executing and monitoring this Disclosure and Trading Policy.
- Statutory Board of Executive Officers: the Company’s Statutory Board of Executive Officers.
- Market Entities: a combination of stock exchanges or entities of the organized over-the-counter market where the Company’s securities have been accepted or will be accepted for trading, as well as related entities in other countries.
- Former Officers: the Officers who no longer compose the Company’s management.
- Employees with access to Insider Information: the Company’s employees who, due to their title, position or duty in the Company have access to any Insider Information.
- Insider Information: any information related to the Company or its subsidiaries which may significantly influence the securities quote and not yet disclosed to the market.
- Insider Trading: the trading of the Company’s securities by Binding Parties who, due to circumstantial facts, have access to Insider Information concerning the Company’s business and situation, and use this information for their own benefit.
- CVM Instruction No. 358: the Instruction No. 358 of January 3, 2002, issued by the Brazilian Securities and Exchange Commission, as amended.
- Brazilian Corporation Law: Law No. 6.404 of December 15, 1976, and its further amendments.
- Relevant Shareholding: business or set of businesses through which Binding Parties’ direct or indirect interest exceeds, up or down, the levels of five percent (5%), ten percent (10%) fifteen percent (15%), and so on successively, of type or class of shares representing the Company’s capital stock.
- Lock-up Period: any and all period in which the trading of Securities is suspended by regulatory decision or of the Investor Relations Officer.
- Related Parties: persons maintaining with the Company’s Controlling Shareholders, management, and fiscal council members the following relationship: (i) spouse, of whom he/she is not legally separated, partner; any dependent included in the individual annual income tax return; and companies directly or indirectly controlled by the management, controlling shareholders, fiscal council members or spouses and dependents mentioned above.
- Binding Parties: persons indicated in Article 13 of CVM Instruction No. 358, including the Company, the controlling shareholders, officers, fiscal council members, employees with access to Insider Information, or members of any of the Company’s bodies with technical or advisory duties created by bylaws provisions, and any person who, due to his/her title, position or duty in the controlling shareholders or its subsidiaries, have signed the Statement of Adhesion, may be aware of Insider Information on the Company.
- Investment Plan: individual investment plan formalized by the Binding Parties pursuant to Article 15-A of CVM Instruction No. 358.
- Disclosure and Trading Policy: this Policy for the Disclosure of Material Act or Fact and Trading of Securities issued by Cielo S.A. (also referred to as “Policy”)
- Subsidiaries: the companies in which the Company, directly or through other entities own the rights of a partner or shareholder that permanently ensure them the majority of votes on corporate resolutions and the power to elect the majority of management’s members.
- Statement of Adhesion: an instrument of adhesion to this Disclosure and Trading Policy to be signed according to the template included in Exhibit I, pursuant to Articles 15, Paragraph 1, item I of CVM Instruction No. 358.
- Stakeholders: all relevant stakeholders with interests in the company, or also individuals or entities assuming any type of direct or indirect risk against the company. Amongst others, we point out: shareholders, investors, employees, society, customers, suppliers, creditors, governments and regulators, competitors, media, associations and professional associations, user of the electronic means of payment and non-governmental organizations.
- Securities: any shares, debentures, real estate receivables certificates, warrants, subscription receipts and rights, promissory notes, call or put options or derivatives of any kind, or also any other security or collective investment agreements issued by the Company or referenced thereto, which by legal determination are deemed as a “security”.
15.1. The Company shall send, via registered mail, to the Controlling Shareholder, officers and members of the Board of Directors and the Fiscal Council, a copy of this Disclosure and Trading Policy, requesting to return to the Company the statement of adhesion duly signed as per Exhibit I hereto, which will be filed at the Company’s headquarters.
15.1.1. Upon signature of the instrument of investiture by new Officers, the signature of the instrument included in Exhibit I shall be required, who will take cognizance of the Company’s Disclosure and Trading Policy.
15.1.2. The communication on this Disclosure and Trading Policy, as well as the requirement to sign the instrument mentioned in Exhibit I to the persons not referred to in item 1 above, shall be made before this person trading any securities issued by the Company.
15.1.3. The Company will maintain at its headquarters, available to CVM, a list of the persons mentioned in this item 1 and respective qualifications, indicating title or position, address and their corporate taxpayer’s ID or individual taxpayer’s register, immediately updating it whenever a modification occurs.
15.1.4. The Controlling Shareholder, officers, members of the Board of Directors, the Fiscal Council and any bodies of the Company with technical or advisory duties created by bylaws provisions, and those to be vested in such position shall sign the Statement of Adhesion in accordance with Exhibit I, and the Declaration, the template of which is in Exhibit II, in case of trades to change their Relevant Shareholding, and shall forward them to the Investor Relations Officer.
15.2. Any doubt concerning the provisions of this Disclosure and Trading Policy, or the application of any of its provisions, shall be directly sent to the Investor Relations Officer, who will give proper clarification or guidance.
15.3. The unauthorized disclosure of Insider Information not publicly disclosed on Cielo is a harmful practice to the Company, its shareholders and the market in general, being strictly forbidden.
15.4. Persons who violate the provisions of this Disclosure and Trading Policy shall be subject to the procedures and penalties established by laws and other Company’s rules.
15.5. This Disclosure and Trading Policy shall take effect on the date of its approval by the Board of Directors, and shall remain effective for an indeterminate duration until otherwise resolved.