Circular Letter CVM/SIN/SNC 01/96

CIRCULAR LETTER CVM/SIN/SNC No.
001/96
Rio de Janeiro, June 17, 1996
Subject: Securities Portfolio – Annex IV
Independent Audit Opinions

Dear Sir,

Through the monitoring work on foreign institutional investors (Annex IV) developed by this Securities and Exchange Commission (CVM), we have found that the audit opinions issued, in their vast majority, have not been prepared in accordance with the requirements resulting from CVM Instruction No. 169/92.

2. Therefore, to fully comply with current regulations, independent auditors and portfolio administrators must pay attention, from this date, to the following points, respectively, regarding the preparation and submission of audit opinions (models attached):

I – Audit opinions must include:

a. Attestation confirming the perfect and complete classification of the foreign institutional investor into one of the categories provided for in Article 1 of CVM Instruction No. 169/92, reflecting all characteristics set forth therein and, primarily, the absence of individuals or legal entities resident and domiciled in Brazil, when applicable (Annex 1);

b. Attestation confirming the adequate composition of the securities portfolio maintained by the foreign institutional investor in the country, in accordance with current regulations (Annex 2); and

c. The indication of the single professional category, and the registration number with the Regional Council of Accounting, when an individual, or with the indication of the professional category, the registration number with the Regional Council of Accounting of the technical responsible person, and the registration number of the firm, when a legal entity, in accordance with Article 26 of CVM Instruction No. 216/94.

II – Audit opinions must not include inappropriate expressions or evasive conclusions, such as those exemplified below, which have been rejected by this regulatory body:

a. "... the investor has unaudited assets in the amount of ...";

b. "... we obtained from XXXXXX (discretionary administrator or local administrator) confirmation that ...";

c. "... as audit procedures were not performed, we cannot provide further information and ...".

3. It is worth noting that independent auditors and portfolio administrators who do not act in accordance with regulatory standards will be subject to penalties imposed by this regulatory body, based on the provisions of Article 11 of Law No. 6.385/76.

At this opportunity, we renew our expressions of esteem and consideration.

Ana Maria da França Martins Brito
SUPERINTENDENT OF INVESTOR AND INTERMEDIARY RELATIONS

Antônio Carlos de Santana
SUPERINTENDENT OF ACCOUNTING AND AUDIT STANDARDS

Contact CVM