I attended the conference in São Paulo of Brazil's CODIM, another spaghetti acronym, this time for Market Information Disclosure Guidance Committee (Comitê de Orientação para Divlugação de Informações ao Mercado), aimed at IR pros.
CODIM is celebrating five years and getting to grips with issues that dog the industry worldwide from the use and abuse of quiet periods, dealings between IR and the media, when to use blackouts, the use of guidance and how to deal with rumours.
Highlights included the spirited attack by Marcelo Mesquita, a manager at Leblon equities, on the use of quiet periods during share offers. He pointed out that restrictions are antiquated in the Information Era and noted that roadshows continue to benefit only the largest investors. More needs to be done to publish roadshows and investor meetings online, panelists agreed.
Geraldo Soares, a coordinator of CODIM, discussed just how few Brazilian companies are up to par in their IR efforts. He estimated that of the roughly 400 listed companies, 150-200 comply with the bare bones legislation, but offer little or nothing more. That lack of commitment compromises all Brazilian listed companies and justifies the need for efforts to improve disclosure and add more codes, he notes.
The controversy over the distortions in the publication of relevant facts continues. In Brazil, these must be widely disseminated in the media at costs that are exorbitant with R$50,000 cited as typical. That is driving companies to seek ways to get round the law and make greater use of press releases.
Lastly, Lucy Souza, the president of APIMEC, the association of certified investment analysts, discussed how the market regulator had delegated responsibility for monitoring sell-side analysts' reports to the body. APIMEC is looking into whether they should be able to attend roadshows and will pronounce on this soon. APIMEC also plans to keep a tight watch on conflicts of interest and privileged information, she said.
Brazil's rapidly emerging governance world is an area that I cover frequently. Most recently, I touched on it when I wrote about the emergence of the group that aims to promote São Paulo as a hub . I will be revisiting the issue in December.