Circular Letter CVM/SIN 08/2020

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. 8/2020/CVM/SIN Rio de Janeiro, May 18, 2020

To securitization companies
Subject: Securitization companies of financial credits and the competence of the Securities and Exchange Commission of Brazil (CVM)

Dear Sirs,

1. As is known, Law No. 9,613, of March 3, 1998, which provides for crimes of "money laundering" or concealment of assets, rights, and values, established, in its Article 9, the economic segments that must integrate the Brazilian system for the prevention of money laundering and the financing of terrorism (PLDFT).

2. Law No. 9,613 also included leasing companies, commercial factoring companies, and Simple Credit Companies (ESC) in the list of persons integrated into the Brazilian PLDFT system. This is provided for in item V of the sole paragraph of Article 9 of that legislation.

3. In the manner in which the Brazilian PLDFT system is organized, COAF is responsible for the supervision of all economic segments for which there is no own regulatory or supervisory body. Currently, in line with various normative improvements that have been reviewed by the Plenary of COAF, Resolution COAF No. 33 was issued on March 6, 2020, as deliberated by that collegiate body, based on § 1 of Article 14 of Law No. 9,613, of 1998, which, in turn, altered the wording of Article 1 of Resolution No. 21, of 2012, in the following manner:

Original wording of COAF Resolution No. 21/12
Article 1. This Resolution aims to establish general norms for the prevention of money laundering and the financing of terrorism, subjecting to its compliance commercial or mercantile factoring companies, in any of their modalities, including the securitization of assets, titles, or market receivables and related managers [our emphasis].

Wording altered by COAF Resolution No. 33/20
Article 1. This Resolution aims to establish general norms for the prevention of money laundering and the financing of terrorism to be observed by

commercial or mercantile factoring companies, in any of their modalities.

4. In this sense, this technical area clarifies that the alteration by COAF of the scope of the aforementioned provision, by excluding "the securitization of assets, titles, or market receivables and related managers," did not attract to the competence of the CVM the securitization companies of financial credits regulated by Resolution No. 2,686, of January 26, 2000, of the National Monetary Council (CMN), provided they do not constitute themselves as public companies, nor do they publicly distribute their issuances, or practice any other act exclusive to issuers regulated and supervised by the CVM.

5. Thus, their activity should not be confused with that of the securitizers provided for in Laws No. 9,514, of November 20, 1997, and No. 11,076, of December 30, 2004, whose issued receivable certificates are also considered, by virtue of these laws, as securities, and which, for this reason, are subject to the competence of the CVM.

6. Likewise, for such financial credit securitizers referred to in item 4 above, no registration of any kind with the CVM became due as a result of the issuance of COAF Resolution No. 33, nor could such registration be justified solely for the purpose of forwarding any reports of communications or unusual situations, by these companies, to the COAF.

Sincerely,

DANIEL WALTER MAEDA BERNARDO
Superintendent of Institutional Investor Relations