Circular Letter CVM/SIN 04/17

SECURITIES AND EXCHANGE COMMISSION OF BRAZIL
Rua Sete de Setembro, 111/2-5th and 23-34th Floors – Center – Rio de Janeiro - RJ – CEP: 20050-901 – Brazil Tel.: (21) 3554-8686 - www.cvm.gov.br

Circular Letter No. 4/2017/CVM/SIN Rio de Janeiro, December 19, 2017

Dear investment fund administrators

1. As is known, expenses incurred by investment funds can be covered directly by the management fee, in which case they are generally associated with the hiring of service providers for the maintenance and operation of the fund; or as a charge on the fund, provided they can be qualified as included in the exhaustive list of Article 132 of CVM Instruction 555/14.

2. We understand that the manner in which expenses are accounted for directly influences how investors perceive costs associated with the investment, which is why we reinforce the importance of classifying them in one category or the other appropriately, considering the exhaustive nature of the provisions contained in the aforementioned Article 132.

3. Without prejudice to this, the interpretation of this technical area regarding the provisions of Article 132, VI, of CVM Instruction 555/14 is that the fees provided for therein include not only those arising from judicial actions in which the fund is a party, but also fees for lawyers and arbitrators in arbitral actions in which the fund is a party.

4. The relevance of this reading is corroborated by the provision in that article that the fees for lawyers, court costs, and procedural expenses provided for therein involve actions in court “or out of court”.

Sincerely,

DANIEL WALTER MAEDA BERNARDO
Superintendent of Institutional Investor Relations