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The Brazilian Securities and Exchange Commission (CVM) opened, on September 17, Public Consultation SDM No. 04/2025, aimed at reviewing and improving the rules applicable to share buybacks by publicly held companies. Contributions may be submitted until November 17, 2025.

The topic is currently governed by CVM Resolution No. 77/2022, which regulates the trading of shares and debentures issued by the company itself. In practice, a buyback allows a company to repurchase its own shares traded on the stock exchange, adjusting its capital structure and strengthening its market strategy.

This mechanism may serve different purposes: reducing the number of outstanding shares (which may increase share value and earnings per share), improving investor returns, and signaling market confidence in the company’s performance and prospects.

Included in the CVM’s 2025 Regulatory Agenda, the proposal is structured around three main pillars:

Clearer and more objective rules

The CVM aims to define more transparent parameters on how and when companies may repurchase shares, including daily trading limits, timing restrictions, and maximum financial amounts.

Adjustment of free float and treasury stock thresholds

The draft proposes that at least 15% of each class of shares remain in free float, and increases the limit of shares held in treasury from 10% to 12%.

Possibility of buybacks via public tender offers (OPA)

Companies may conduct share repurchases through public offerings, provided they comply with applicable legal requirements.

The proposed changes are based on the Regulatory Impact Analysis (RIA) titled “Impacts of stock buybacks on long-term liquidity in the stock exchange”, conducted by the CVM in 2017, as well as international best practices and contributions from previous consultations.

The full text of Public Consultation SDM No. 04/2025 is available on the CVM website.