CVM releases a new Official Letter about Resolution 175

On May 3, 2023, Brazil’s Securities and Exchange Commission (Comissão de Valores Mobiliários/CVM) released CVM/SIN Official Letter 2/2023, which clarifies and discloses new interpretations on the provisions of Normative Annex I of CVM Resolution 175, of December 23, 2022, entitled “Regulatory Framework for Investment Funds.”

The Official Letter presents 39 answers to questions received by the Superintendency for Supervision of Institutional Investors (Superintendência de Supervisão de Investidores Institucionais/SIN). The questions were divided into 17 topics, namely:

Exposure to capital risk;

Portion of the performance fee to be paid to the distributor;

Exception for restricted classesInvestment abroad;

Dialogue between essential providers and the CVM;

Disqualification and deadlines for communication;

Verification required by the Administrator;

Limits per issuer;

Share investment class;

Custodians' responsibilities;

ISIN and other codes;

Maximum time limits to reach the limits applicable to the classes;

Single class distributionExposure of management fee;

Cryptoactive Carbon Credit;

We emphasize that this Official Letter must be read and interpreted alongside Joint Official Letter 1/2023/CVM/SIN/SSE, published on April 11, 2023 and dealing with joint SIN and Superintendency for Supervision of Securitization (Superintendência de Supervisão de Securitização/SSE) interpretations regarding the general part of CVM Resolution 175.

To access the full Official Letter, please click  here.

For further information, please contact our Capital Markets team at our office([email protected]).