OREANDA-NEWS. March 28, 2011. Bradesco has won the third selection process for depositary institutions authorized for trading 10 Unsponsored Level I Brazilian Depository Receipt (BDR) programs, backed by shares issued by publicly traded companies with headquarters overseas. On Thursday, BM&FBOVESPA opened the proposals and announced the result of the process, in which four financial institutions participated.

Bradesco should simultaneously present BM&FBOVESPA and the Brazilian Securities and Exchange Commission (CVM), within 60 calendar days, with the necessary documentation for submission to register the 10 Unsponsored Level 1 BDR programs. The programs should include foreign companies that do not yet have BDRs traded on BM&FBOVESPA and which are headquartered in the United States and listed on U.S. stock exchanges.

There are currently 20 Unsponsored Level 1 BDR programs available for trading on BM&FBOVESPA. Ten of these have Deutsche Bank as their depositary institution and the other ten have Citibank Distribuidora de Titulos e Valores Mobiliarios S.A.. A third lot is in the registration phase and shall be presented to the market soon by Itau Unibanco, which won the second selection process.

The Unsponsored Level 1 BDR is a certificate representing stock issued by a foreign-headquartered publicly traded company or the like. It is thus considered a foreign investment from Brazil, in keeping with the definition of CVM Instruction 332/00.  The issue and registry of Unsponsored Level 1 BDRs is the responsibility of a depositary institution in Brazil in which none of the companies represented has a stake. BDRs can be traded by financial institutions, investment funds, portfolio managers and stock consultant authorized by the CVM. The last two in the list are only permitted to invest own capital.

The CVM published Instruction 493 on Thursday. This changes article 3 of CVM Instruction 332/00 and means that supplementary private pension plans (EFPC) and individuals and companies with financial investments of over BRL 1 million are also authorized to trade Level 1 BDRs, sponsored or not. The other individual investors can only participate in this instrument via funds.