Circular Letter No. 4/2020/CVM/SIN/SPREV ("Circular Letter") provides guidance on situations and deadlines in which the funds of Special Social Security Systems (RPPS) may be held in investment funds that are not compliant with applicable legislation.
The investments of RPPSs in non-compliant investment funds could be maintained for a period of 180 days, from the entry into force and under the terms of CMN Resolution No. 4,604/17, published on October 23, 2017, which amended CMN Resolution No. 3,922/10.
The Circular Letter clarifies that RPPS investments could be maintained for longer, for funds with a fixed term of maturity, redemption, grace period or conversion, whose terms were defined prior to CMN Resolution No. 4,604/17.
The managers and administrators of investment funds, under the terms of the Circular Letter and in compliance with the duty of diligence, must act in order to warn the RPPS, as well as disapprove or abstain from proposing changes in the regulations, in order for the non-compliance of the investment fund to persist.
According to the Circular Letter, the liquidation of investment funds that do not comply with the legislation on investments of RPPS funds does not impose a new situation of noncompliance of the RPPS portfolio or irregularity in the conduct of the regime's management.
Once in liquidation, based on a corresponding plan approved by the quota holders, the investment fund should be conducted with the exclusive purpose of closing its activities, and the extension of its term beyond that necessary for the liquidation of the assets or their delivery to the quota holders is forbidden.
To access the full Circular Letter: https://bit.ly/3b0i0o7
The Corporate Law team of Barcellos Tucunduva Advogados is available to clarify any doubts related to the above topic, at the e-mail [email protected]"
