Disclosure of Material Act or fact and Trading of Securities
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|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”|
|5||07/31/2019||Changed the disclosure procedure of Material Act or Fact, included provisions related to Training, Compliance and Violation of Disclosure and Trading Policy.|
|6||07/26/2021||Improved the rules and criteria related to procedures to disclose Material Facts.|
Establishing 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 Cielo’s securities (“Company”).
Applied to the Binding Parties, even those who did not expressly adhere hereto under Exhibit II and Related Parties.
1. Principles and Purposes:
1.1. The Disclosure of Material Act or Fact and Securities Trading (“Disclosure and Trading Policy”) is based on the following principles and purposes:
1.1.1.Ensuring transparency and equity when providing information to Stakeholders and Market Entities;
1.1.2. Ensuring the broad and appropriate disclosure of Material Act or Fact, as well as preserving its confidentiality when not disclosed;
1.1.3. Consolidating the practices of good corporate governance; and
1.1.4. Cooperating for the stability and development of the Brazilian capital markets.
2. Procedures for Disclosure of Material Act or Fact
2.1. The Investor Relations Officer is responsible for immediately disclosing and communicating to CVM and market entities a material act or fact, besides adopting other procedures provided herein, as follows:
2.1.1. The Investor Relations Officer must evaluate concrete situations that may arise in the transactions of the Company and its Subsidiaries, always considering their materiality, concreteness or strategic importance, besides disclosing practices adopted by the Company so far to verify if such situations are a Material Act or Fact, under the Brazilian Corporation Law and CVM Instruction 358.
2.1.2 The disclosure must occur simultaneously with CVM and the market entities before opening or closing trades at the market entities. When the Company’s securities are simultaneously traded on the Brazilian and foreign market entities, the disclosure must occur, as a rule, before or after the trading hours in all countries, prevailing, in case of incompatibility, the trading hours of the Brazilian market.
2.1.3. The Material Act or Fact will also be disclosed through (i) publication in a news portal with a page on the world wide web, which makes available, in a section for free access, the information in full, or (ii) newspapers of wide circulation, commonly used by the Company, and may be summarized, indicating the addresses on the world wide web where the information in full is available to all investors. The Material Act or Fact disclosure must also be made through the Investor Relations website at http://ri.cielo.com.br.
2.2. The Binding Parties with access to information on the material act or fact will be liable for conveying this information to the Investor Relations Officer and will 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 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, under item 3 of this Disclosure and Trading Policy, will 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 CVM or market entities require from Investor Relations Officer additional clarifications to the notice and the disclosure of a material act or fact, or in an atypical fluctuation in the price or number of the Company’s securities traded, or referenced thereto, the Investor Relations Officer must inquire people with access to the material acts or facts to investigate if they have information that must be disclosed to the market.
2.3.1. The Company’s Members of the Management and other Employees with Access to Inside Information inquired as provided for by this item will immediately answer the Investor Relations Officer’s request.
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 must prove for the Brazilian market entities that the lock-up requested also took place in the foreign market entities.
2.4. The Company has a Disclosure Forum, with its structure, assignments, and responsibilities defined in its charter, which, in the cases provided for in its charter, is responsible for giving an opinion, in a consultative and non-binding manner, and advising the Investor Relations Officer when evaluating public information flows and procedures to disclose information and communication by the Company to its shareholders and the market.
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 Members of the Management understands that disclosure will jeopardize the Company’s legitimate interest. In these events, the procedures outlined in Item 4 herein will be adopted to assure the confidentiality of this information.
3.1.1. Should the Material Act or Fact be related to transactions directly and/or only involving the Controlling Shareholder, the latter may recommend that the Investor Relations Officer not disclose the Material Act or Fact, exposing the reasons for their recommendation. In this case, the Investor Relations Officer will be responsible, considering the best interests of the Company and its shareholders, for deciding on the disclosure or not of the Material Act or Fact.
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 will be incumbent upon the Controlling Shareholder or the Company’s Board of Directors to adopt referred measures.
3.4. The Investor Relations Officer will always be informed on the confidentiality of the Material Act or Fact, and they will 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 question on the legitimacy of not disclosing information by those aware of the confidential Material Act or Fact, 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 will 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 will also be observed:
4.2.1. Only involving people considered key in actions that may result in Material Acts or Facts;
4.2.2. Not discussing confidential information with third parties who are not aware thereof, even if the said third party cannot understand the conversation’s meaning;
4.2.3. Not discussing confidential information in conference calls when not sure who is effectively attending the call;
4.2.4. Keeping any document related to confidential information, including handwritten personal notes in a safe-deposit box, cabinet or closed file, to which only persons authorized have access;
4.2.5. Generating electronic documents and files referring to confidential information always in an electronic environment to which only key people have access;
4.2.6. Distributing the documents internally with confidential information in sealed envelopes or through electronic mail, always highlighting the document’s confidentiality, which must always be directly delivered to the addressee;
4.2.7. Without excluding the responsibility of the person sending confidential information, requiring the Company’s external third party who needs access to the confidential information to sign a confidentiality agreement specifying the information’s nature and with a statement that the third party acknowledges its confidentiality, undertaking not to disclose it to any other person, nor trade the Company’s securities before disclosing the information to the market.
4.3 All personal data must be processed in compliance with applicable privacy and data protection laws, especially Law 13709/2018 (“Personal Data Protection Law” or “LGPD”), including conveying or sharing personal data, requiring third parties who have access to this information that comply with the applicable legal requirements, the Company’s internal policies and the best market practices concerning information security.
4.4. 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 will certify that the receiver is aware of this Policy.
5. Securities Trading Prohibited:
5.1. The prohibitions outlined in this Disclosure and Trading Policy will 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 will also apply to trade carried out, directly or indirectly, by Binding Parties or Related Parties, inclusive in cases when these trades occur through:
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 this Disclosure and Trading Policy, trading made by investment funds whose shareholders are persons subject to this Policy will not be considered indirect trading, provided that these investment funds are not exclusive and shareholders cannot influence the trading decisions of the fund manager.
5.4. The prohibitions provided herein will apply to the loan transaction of securities executed by Binding Parties and/or Related Parties in the lender’s capacity. The Binding Parties and/or Related Parties will be forbidden to execute securities loan operations as borrowers.
6. Lock-Up Period
6.1. The Binding Parties are prohibited from trading Securities during the Lock-up Period.
6.2. The Investor Relations Officer is not required to inform the reasons for determining the Lock-up Period, and the persons above will keep this determination confidential.
6.2.1. Under this item, the Investor Relations Officer must indicate the initial and 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 358 and other CVM’s normative acts.
7. Exceptions to the General Restrictions on Securities Trading
7.1. The restrictions on trading provided herein will not apply to the Binding Parties when trades occur under the Investment Plan.
7.2. The restriction on trading provided for in item 9.1 below will not apply to the acquisition of shares held in treasury, through 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 above does not include any share traded after a call option is exercised or after shares are granted.
8. Investment Plan
8.1. The trades of the Binding Parties executed under the Investment Plan will 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 before 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. Provides a minimum period for the Investment Plan itself, amendments and cancellation to take effect, as per the period set in the current CVM’s rules.
8.2. The Investment Plan participants cannot:
8.2.1. Simultaneously hold more than one Individual Investment Plan; and
8.2.2. Carrying out any transactions to cancel or mitigate the economic effects of the operations to be established by the Individual Investment Plan.
8.3. The Board of Directors will verify and monitor at least half-yearly, through 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 will be executed substantially in the form of Exhibit IV to this Disclosure and Trading Policy and will necessarily be executed before the Investor Relations Officer, under CVM Instruction 358.
8.5. The restrictions provided for in items 9, 10 and 13 will 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 358 are complied with.
9. Trading Restrictions with a Pending Disclosure of Material Act or Fact
9.1. It is prohibited the Securities Trading 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 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. Trading Restrictions after Disclosing a 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 will prevail if it may remarkably interfere in the securities trading conditions, to result in damage to the Company or its shareholders, and the Investor Relations Officer will inform such additional restriction.
11. Trading Prohibition before Disclosing Quarterly Earnings Release and Standardized Financial Statements
11.1. The Binding Parties cannot trade Securities within a fifteen-(15) calendar day period before 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 will 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. Trading Prohibition to Former Members of the Management
12.1. The Former Members of the Management 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 remarkably interfere in the conditions of referred trades, in detriment of the Company or its shareholders, the former Members of the Management are prohibited from trading securities for a minimum period of six (6) months after their withdrawal.
12.3. The restrictions provided for in items 12.1 and 12.2 above will not apply in the assumption of Investment Plan, provided that the requirements of Article 15-A, Paragraphs 1 and 3 of CVM Instruction 358 are complied with.
13. Additional Prohibitions
13.1. Besides prohibitions provided for above and in CVM Instruction 358, Binding Parties may not trade, directly or indirectly, securities issued by the Company before disclosing a decision taken by the Controlling Shareholders on the matters below, or any other political-administrative, technical, business or economic-financial act or fact related to the matters below:
13.1.1. Change of the Company’s share capital through 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 shareholders’ equity;
13.1.4. Transfer of controlling interest.
13.2. In the assumptions provided for above, the Controlling Shareholders will inform the Investor Relations Officer 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 through a resolution of the Board of Directors in the following situations:
14.1.1. When expressly resolved on this issue by CVM;
14.1.2. Given a modification of applicable legal rules and regulations so that to implement the necessary adjustments; and
14.1.3. When the Board of Directors, while assessing the efficacy of the procedures adopted, verifies the need for amendments.
14.2. The amendment to this Disclosure and Trading Policy will be notified to CVM and the Market Entities by Investor Relations Officer, as required by applicable rules and the persons mentioned in the list referred in the item below.
14.3. This Disclosure and Trading Policy cannot be amended upon pending disclosure of Material Fact.
15. Policy Compliance Agreement
15.1. The Company will send, via registered mail or electronic mail with receipt confirmation, 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. On the date of the election of new members of the Management, the instrument’s signature included in Exhibit II will be required, who will take cognizance of the Company’s Disclosure and Trading Policy.
15.1.2. The communication of this Disclosure and Trading Policy to people not mentioned above will be made through the training described in item 16.1.
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 will sign the Statement of Adhesion under Exhibit II, and the Declaration, the template of which is in Exhibit III, in case of trades to change their Relevant Shareholding, and will forward them to the Investor Relations Officer.
16.1. Compulsory training through e-learning, available on the Intranet via Cielo’s University Portal, must be carried out periodically to raise awareness and reaffirm the commitment of Related Persons and other employees regarding the guidelines and guidance outlined in this Disclosure and Trading Policy.
17. Compliance with the Disclosure and Trading Policy
17.1. The Company monitors the compliance with the Disclosure and Trading Policy through its Investor Relations department, which is responsible for verifying transactions during trading prohibition periods and reporting any violations to the Ethics Forum.
17.2. To monitor the trading of the Company’s securities, the Company adopts the following practices: (a) the Company’s employees and Members of the Management who hold securities will be blocked by the securities broker hired by Cielo during systemic lockout periods; and (b) the Company evaluates a consolidated report on the transactions of employees and Members of the Management who own shares of the Company, sent by the book-keeping bank hired by Cielo.
18. Breach of the Disclosure and Trading Policy
18.1. After finding any breaches of this Disclosure and Trading Policy, under the procedures described in item 17 above, and without prejudice to the procedures and penalties established by law and other Company’s rules, the person who violated the provisions of this Disclosure Policy and Trading will be subject to disciplinary sanctions, including, for example:
18.1.1. Legal notice in the first and second breach to the provisions of this Disclosure and Trading Policy, as well as reporting the case to the Company’s Ethics Forum and, as the case may be, fair dismissal in case of a third breach or other disciplinary action, to be resolved by the Ethics Forum, in compliance with the Company’s Management of Consequences Standard and the provisions of this Disclosure and Trading Policy.
18.1.2. Exceptions to the application of disciplinary measures provided in item 18.1.1 will be resolved by the Ethics Forum.
19. Clarification and Guidance
19.1. Any question concerning the provisions of this Disclosure and Trading Policy, or the application of any of its provisions, must be sent directly to the Investor Relations Officer, who will provide the due clarification or guidance.
20.1. 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, is strictly forbidden.
- Binding Parties: Observing and ensuring the compliance with this Disclosure and Trading Policy and applicable laws, and whenever necessary, prompt the Investor Relations area for consultation on situations involving conflict with this Policy or through the occurrence of situations described therein.
- Investor Relations Superintendency: Complying with and ensuring compliance with the guidelines laid down in this Disclosure and Trading Policy, ensuring 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 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, under the Brazilian Corporation Law.
- Members of the Management: Members of the Company’s Board of Directors and Statutory Executive Board.
- 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, in a non-binding way and not limited to the acts or facts mentioned in Exhibit I hereto.
- B3: B3 S.A.- Brasil, Bolsa, Balcão.
- Company: Cielo S.A.
- Board of Directors: Board of Directors of the Company.
- Members of the Fiscal Council: Sitting and alternate members of the Company’s Fiscal Council, when installed, elected by the Shareholders’ Meeting that installed the Council.
- Fiscal Council: Fiscal Council of the Company, when installed.
- CVM: Brazilian Securities and Exchange Commission.
- Investor Relations Officer (IRO): The Company’s Officer is responsible for providing information to investors, CVM and market entities, updating the Company’s registration as a publicly-held company with CVM and enforcing and monitoring this Disclosure and Trading Policy.
- Statutory Executive Board: Statutory Executive Board of the Company.
- Market Entities: 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 Members of the Management: Members of the Management who no longer are part of the Company’s Management.
- Employees with Access to Insider Information: The Company’s employees who, due to their job, position or duty in the Company, have access to any Insider Information.
- Insider Information: Any information related to the Company or its Subsidiaries that may significantly influence the Securities price and were 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 on the Company’s business and situation and use this information for their benefit.
- CVM Instruction 358: CVM Instruction 358 of January 3, 2002, as amended.
- Brazilian Corporation Law: Law 6404 of December 15, 1976, and its further amendments.
- Significant Equity Interest: Business or set of businesses through which Binding Parties’ direct or indirect interest exceeds, up or down, five percent (5%), ten percent (10%) fifteen percent (15%), and so on successively, of type or class of shares representing the Company’s share capital.
- Lock-Up Period: Any period in which the Securities Trading is suspended by regulatory or the Investor Relations Officer’s decision.
- Binding Parties: People with the following relationship with the Company’s Controlling Shareholders, Members of the Fiscal Council and Management: Spouse not legally separated, partner; any dependent included in the individual annual income tax statement; and companies directly or indirectly controlled by the Members of the Management, Controlling Shareholders, Members of the Fiscal Council, or spouses and dependents mentioned above.
- Binding Parties: People indicated in Article 13 of CVM Instruction 358, including the Company, the Controlling Shareholders, Members of the Management, Members of the Fiscal Council, Employees with access to Insider Information, or members of any of the Company’s bodies with technical or advisory duties created by corporate provisions, and any person who, due to their title, position or duty in the Controlling Shareholders or its Subsidiaries, have signed an Agreement, may be aware of Insider Information on the Company.
- Investment Plan: Individual investment plan formalized by the Binding Parties under Article 15-A of CVM Instruction 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, owns rights as a partner or shareholder that permanently ensure the voting majority on corporate resolutions and power to elect the majority of members of the Management.
- Compliance Agreement: An instrument stating the commitment to comply with this Disclosure and Trading Policy to be signed according to the template included in Exhibit II, under Articles 15, Paragraph 1, Item I, CVM Instruction 358.
- Stakeholders: All relevant stakeholders with the Company’s interests or individuals or entities undertaking any direct or indirect risk against the company. Amongst others, we point out: shareholders, investors, employees, society, customers, suppliers, creditors, governments and regulatory agencies, competitors, press, professional associations and entities, users of electronic payment means and non-governmental organizations.
- Securities: Any shares, debentures, real estate receivables certificates, warrants, subscription receipts and rights, promissory notes, call or purchase 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 resolution are deemed as a “security”.
This Disclosure and Trading Policy becomes valid when approved by the Board of Directors and has an indefinite term until otherwise resolved.