Joint Resolution No. 13 — Dispenses on Non-Resident Investment in the Financial and Securities Markets

Frequently Asked Questions Joint Resolution No. 13, of December 3, 2024 This document aims to assist in understanding Joint Resolution No. 13 of 2024, seeking to clarify the main doubts indicated throughout the social participation process. The information published here does not have a normative character and does not replace the regulatory provisions on the subject. Last update 12/30/2024.

1. What investments can be made by non-resident investors? Non-resident investors may make investments in the financial market and the securities market in the country, observing the provisions of Joint Resolution No. 13 of 2024. Financial assets and securities traded must, according to their nature, be book-entry, custodied, registered, or deposited in institutions authorized to provide these services. The acquisition and disposal of securities must always be carried out in organized markets, and may occur outside these organized markets in cases admitted by the Securities and Exchange Commission (CVM).

2. Must the non-resident investor previously constitute a specific custodian? There is no need for prior constitution of a specific custodian. However, investments made by non-resident investors must observe the same provisions and procedures applicable to the provision of custody services for resident investors.

3. How does the simplification work for investments made from non-resident real accounts maintained in the country? Own funds maintained by natural persons in deposit and prepaid payment accounts in reais maintained in the country by non-residents may be allocated to investments in financial assets or securities without the requirement of prior constitution of a representative and registration with the CVM, functioning under the same model as resident accounts. In the case of legal entities, the investment in securities of own funds maintained in these accounts requires the constitution of a representative and registration with the CVM, being exempt from such requirements only when invested in financial assets. The use of these real accounts maintained in the country by non-residents to facilitate investment by residents in the financial and securities markets is prohibited.

4. Which financial assets and securities are within the scope of the rule and whose investments can benefit from simplified treatment? Investments can be made in financial assets and securities that, according to their nature, are book-entry, custodied, registered, or deposited in institutions authorized to provide these services. The simplified treatment will depend on the nature of the investor and the origin of the funds, as summarized in the table below.

5. Is it possible for non-residents to invest in the financial and securities markets through real accounts maintained in the country and titled by foreign financial institutions for the purpose of moving third-party funds? Yes, investment through these accounts for the application of third-party funds is possible, also known as international banking correspondence. However, as they do not move own funds, they receive treatment equivalent to investments through traditional payment orders from abroad.

6. What is the treatment for investments made by natural persons regarding the request for prior constitution of a representative and registration with the CVM? The only requirement is the indication of a representative in cases of investment in financial assets with a total monthly contribution exceeding R$ 2 million per each intermediary, if made with funds remitted from abroad (i.e., without using own funds maintained in their non-resident account in Brazil). Investment in securities subject to the provisions of Law No. 6,385 of December 7, 1976, is not subject to this requirement.

7. Is the application of non-resident capital allowed in participatory investment platforms, also known as crowdfunding platforms, regulated by CVM Resolution No. 88? The possibility of application must consider the classification provided by the CVM for the acquisition or disposal of securities outside an organized market. Compliance with the provisions of Article 9 of Joint Resolution No. 13 of 2024 is mandatory. The treatment granted must correspond to the nature of the asset.

8. Who can exercise the function of representative for responsibilities before the BCB and CVM? Can the function of representative be accumulated with other functions? The function of representative may be exercised by a financial institution or any type of institution authorized to operate by the BCB, including payment institutions, or by clearinghouses and providers of clearing and settlement services that are under the supervision of the Central Bank of Brazil within the Brazilian Payments System. There is no prohibition on the accumulation of functions related to the flow of non-resident investment in the financial and securities markets in the country, provided that the institutions possess the specific authorizations for the provision of the respective service. There is also no prohibition for the same representative to be indicated for the purposes of tax legislation. The list of institutions authorized, regulated, or supervised by the BCB can be consulted here.

9. Do investments that do not require the constitution of a representative also need to comply with the provisions of Article 9 of the BCB-CVM Resolution? Yes, the obligation to comply with the provisions of Article 9 is independent of the participation of a representative in the investment. The treatment granted must correspond to the nature of the asset.

10. Is the private or bilateral negotiation of securities between non-resident investors, including the conversion of investment in the financial and securities markets into direct investment, compatible with operations considered as organized market or with the exceptions provided in the rule? Private or bilateral negotiations of securities are only possible in cases admitted by the CVM.

11. Can funds in registration accounts and graphical investment accounts in the financial and securities markets be used by the non-resident for other payments or receipts not related to investment operations? Deposit and prepaid payment accounts in reais of non-residents are freely movable. However, registration accounts and graphical accounts for investment in the financial and securities markets can only be used for the movement of funds related to investment and transfers between accounts of the same ownership – including deposit and prepaid payment accounts.

12. What procedures are necessary upon the change of the investor's condition from resident to non-resident or vice versa? Is there a need for redemption or closure of positions? The investor who changes their residency status must inform this new status to their relationship institutions, constitute a representative when necessary, and comply with the other requirements provided in the rule for their new status. Relationship institutions must provide for the update of the registry and present or make available to the investor the information and procedures pertinent to their new status. All operations related to the investment, including any operations in the foreign exchange market and movements in accounts in the country, must be carried out according to the investor's new residency status. There is no need for redemption of investments or closure of positions. The tax treatment of investments should be clarified with the Federal Revenue Service.

13. Must the representative or intermediary establish specific control to monitor the value of the non-resident's investment balance and the limit for financial transfers? The representative or intermediary must determine the value of the investment balance, which includes earned earnings, and the limits for financial transfers based on their controls and related documentation.

14. Do institutions maintaining non-resident accounts need to provide periodic information to the BCB regarding the movement of the holder's own funds? As provided in Annex II of BCB Resolution No. 277 of 2022, the total monthly value of credits and the total monthly value of debits of own movements equal to or greater than R$ 10,000 from accounts titled by an embassy, consular department, or international organization recognized by the Brazilian Government must be sent to the BCB. Additionally, if necessary, the BCB may request information about the operation and supporting documents, as provided in Articles 23 and 24 of Joint Resolution No. 13 of 2024, which regulates non-resident investments in the financial and securities markets. Information and supporting documents for the purposes of preventing money laundering, terrorist financing, and the proliferation of weapons of mass destruction (AML/CFT) must follow the specific regulation.

15. Is it possible to share registration information of non-resident investors between financial institutions? Yes. Natural and legal persons may share registration and financial product information between institutions participating in Open Finance with the aim of providing more favorable conditions to the client. For this purpose, the investor's consent is necessary, which can be revoked at any time at their request, and the institutions involved in the process must participate in the standardized sharing of data and services through the opening and integration of systems.