Instruction 480 came into force at the start of the year, superseding former Instruction 202 in the task of disciplining security issuer registration, and is now starting to show its effects. The first-ever registration of a public company in category B – the subdivision newly created by the instruction to house all companies that do not issue shares or bonds convertible into shares - is scheduled for March. The first in line is a special purpose company (SPC) that is planning to issue debentures. Next, in April, it will be a receivables securitizer's turn.

It's true that Instruction 480 raised the bar for all issuers. But different from what many expected, the requirement of preparing Reference Forms (annual reports) and periodically updating them is sounding good to debt issuers. "The transparency of the process allows companies to consider accessing the capital market repeatedly", says lawyer Silvia Bugelli from the Bugelli & Valença Advogados law firm, which advises companies that are preparing to enter the market. "Issuers tend to want to benefit from that distinction", comments Jean Arakawa from the Mattos Filho Advogados firm.

At the same time as it encourages the entry of new issuers, the new instruction also paints a clearer exit sign for noncompliers. Agrenco, a category A company currently undergoing court-supervised reorganization, had its registration suspended by the Brazilian Securities and Exchange Commission (CVM). The autarchy invoked the new compliance periods established in Instruction 480 – 12 months for overdue information disclosures, instead of the former three years.

The problem is that because of the suspension, the company's shareholders were also left with no way out. With its business operations suspended, all of Agrenco's outstanding capital (until last year, half of the company's free float was in the hands of individual investors) will have to wait for information disclosure to be resumed before any transactions can be made. In the worst-case scenario, after 12 months of suspension, the company's public company registration will be cancelled and its shareholders will become partners in a private enterprise.