Circular Letter CVM/SIN/SNC 01/2017

SECURITIES COMMISSION OF BRAZIL
Rua Sete de Setembro, 111/2-5th and 23-34th Floors – Center – Rio de Janeiro - RJ – ZIP: 20050-901 – Brazil Tel.: (21) 3554-8686 - www.cvm.gov.br Circular Letter No. 1/2017/CVM/SIN/SNC Rio de Janeiro, July 20, 2017

To
Directors responsible for the administration of investment funds

Subject: Interpretation of the provisions of Article 56, I, “b”, of CVM Instruction No. 555/14 and Chapter 1, Section 2, item 1.1, of the Investment Funds Accounting Plan (“COFI”)

Dear Sirs,

1. As is known, Article 56, I, “b”, of CVM Instruction No. 555/14 provides that the share value of investment funds must be calculated and disclosed, “for funds that do not offer daily liquidity to their unitholders, on a periodicity compatible with the fund’s liquidity, provided it is expressly stipulated in its regulations.”

2. On the other hand, Chapter 1, Section 2, item 1.1, of COFI (CVM Instruction No. 577/16) states that “the assets comprising the portfolios of investment funds must be evaluated daily at fair value...”.

3. In this context, it is the understanding of the technical areas that the aforementioned provisions must be taken together and that the calculation of the fair value of the portfolio assets of the funds covered by Article 56, I, “b”, of CVM Instruction No. 555/14 may occur on a periodicity compatible with the aforementioned liquidity. This understanding refers exclusively to the non-necessity of the daily calculation of the fair value of the portfolio of these funds for the purpose of complying with the aforementioned provision, except for situations and events that require the adjustment to fair value of the portfolio of these funds, when the date of such situations and events is different from the liquidity date of the fund.

4. Thus, by way of example, for investment funds that provide for applications and redemptions only on the 20th day of each month, the fair value of the fund’s assets must be calculated on this day, as well as the calculation and disclosure of the share value and net asset value. Similarly, the fair value of the fund’s assets must be calculated on the base date for the presentation of information contained in documents nos. 2, 3, 4, and 5 of COFI. Another situation in which the calculation of the fair value of the fund’s assets on a date different from the liquidity event would be required, for example, is on the day immediately preceding the events of incorporation, merger, spin-off, or transformation.

Sincerely,

Digitally signed by
JOSÉ CARLOS BEZERRA DA SILVA
Superintendent of Auditing and Accounting Standards

Digitally signed by
DANIEL WALTER MAEDA BERNARDO
Superintendent of Institutional
Investor Relations