Today BM&FBOVESPA carried out the official opening of the bid proposals, and the disclosure of the winner of the bidding process selecting the depositary institution which is now authorized to request the registration of 10 (ten) Brazilian Depositary Receipts – Unsponsored Level I BDRs, backed by shares which are issued by publicly-held companies headquartered overseas. Three institutions participated in the bidding process and Citibank Distribuidora de Títulos e Valores Mobiliários S.A. was declared the winner.
This institution now has 60 (sixty) consecutive days to provide BM&FBOVESPA with evidence of applications to register the 10 (ten) Unsponsored Level I BDR programs with the Brazilian Securities and Exchange Commission (CVM). Once CVM registers the programs, the institution will have a period of 10 (ten) consecutive days to submit its application to BM&FBOVESPA in order to trade the BDRs.
Pursuant to CVM Instruction 332/00, Unsponsored Level I BDRs are certificates representing shares issued by publicly-held companies, or the equivalent thereto, which are headquartered overseas, and ownership of these BDRs is considered a foreign investment. Unlike the BDRs currently traded at BM&FBOVESPA, which are also issued by companies headquartered overseas, Unsponsored Level I BDRs are issued and registered under the responsibility of a depositary institution in Brazil, without the participation of the companies.
This was the first time the bidding process was used to select the depositary institution. In April, BM&FBOVESPA authorized Deutsche Bank S.A. – Banco Alemão to register the first 10 (ten) Unsponsored Level I BDRs in acknowledgement of that bank’s important contribution during the development phase of the operating procedures that were required for the launch of this product.
Unsponsored Level I BDRs can be traded by financial institutions and mutual funds. They can also be traded by portfolio managers and securities consultants authorized by CVM, provided that they use their own resources. Unsponsored Level I BDRs will be admitted to trading in the BOVESPA organized over-the-counter market segment.