Corporate Counseling & Governance


Contributed by Bruno von Dreifus, associate from Trench Rossi Watanabe*

As the Brazilian economy continues to be affected by political uncertainties, securities market players and the Brazilian capital markets regulator (Comissão de Valores Mobiliários or CVM) have seized the opportunity to promote the growth of corporate governance practices in the Brazilian securities market.

As part of this wave, the main securities market associations in Brazil formed a working group with the participation of the CVM and the Brazilian Bank for Economic Development (BNDES) as observers and on 16 November 2016, published the Brazilian Corporate Governance Code (Código Brasileiro de Governança Corporativa – Companhias Abertas—the “Code”). The Code promotes various recommendations to listed companies, including composition and periodic reviews of the management, independence in the running of the business, protection of minority investors and ethics and compliance.

On June 1, the U.S. Public Company Accounting Oversight Board adopted a new auditing standard that will require auditor’s reports filed with the Securities and Exchange Commission to include a discussion of critical audit matters (CAMs) that arose during the audit. Auditor reports will also be required to include the year in which the auditor began serving as the company’s auditor. While the traditional pass-fail auditor’s opinion will also be retained, the addition of CAM reporting will fundamentally change the auditor’s report from a standardized document, with little variation across clients, to an individually-tailored report highlighting the most challenging aspects of each specific audit.


On 14 February 2017, amendments to the securities disclosure regulations on continuous disclosure requirements for listed companies in Japan were published and came into immediate effect. Under the Japanese disclosure framework, companies listed on a securities exchange in Japan are required to comply with disclosure obligations under two separate rules. The first is under the Financial Instruments and Exchange Act of Japan (FIEA) and the second is under the listing regulation of the Tokyo Stock Exchange (TSE). Each set of rules requires listed companies in Japan to prepare and disclose similar information but in different formats, and this incurs significant time and cost. The amendments seek to streamline and rationalize these rules.

On 14 March 2017, Indonesia’s Financial Services Authority (Otoritas Jasa Keuangan or OJK) issued new rules for public companies. Below are highlights of what the new rules say: Reporting of Share Ownership in Public Companies (OJK Rule No.11/POJK.04/2017) There are three significant changes introduced by the new rule: The new rule now officially recognizes the “indirect” share ownership concept. This is different with the previous rule, which, on the face of it, may be interpreted…