Circular Letter CVM/SMI 01/24

COMISSÃO DE VALORES MOBILIÁRIOS
Rua Sete de Setembro, 111/2-5º e 23-34º Andares, Centro, Rio de Janeiro/RJ – CEP: 20050-901 – Brasil - Tel.: (21) 3554-8686 Rua Cincinato Braga, 340/2º, 3º e 4º Andares, Bela Vista, São Paulo/ SP – CEP: 01333-010 – Brasil - Tel.: (11) 2146- 2000 SCN Q.02 – Bl. A – Ed. Corporate Financial Center, S.404/4º Andar, Brasília/DF – CEP: 70712-900 – Brasil -Tel.: (61) 3327-2030/2031 www.cvm.gov.br Circular Letter No. 1/2024/CVM/SMI Rio de Janeiro, March 28, 2024. To the Directors of Intermediaries referred to in Article 5, Item I, of CVM Resolution No. 35/21 Subject: Monitoring of operations and communication to the CVM as provided for in items IV and IX of Article 33 of CVM Resolution No. 35/2021 [1] Dear Directors,

1. This Circular Letter aims to express the understanding of the CVM’s Superintendence of Market and Intermediary Relations regarding the procedure to be observed by intermediaries in monitoring and communicating to the CVM indications of non-compliance with legislation that falls under this agency’s oversight, in accordance with items IV and IX of Article 33 of CVM Resolution No. 35, of May 26, 2021, and CVM Resolution No. 50, of August 31, 2021.

2. Initially, it is important to clarify that the intermediary has the duty to ensure the integrity and regular functioning of the market and the duty to continuously monitor the operations and offerings it intermediates, in order to identify situations of atypicalities, frauds, and potentially irregular operations conducted in the securities market, stock exchange market, and organized over-the-counter market, as per Article 33 of CVM Resolution No. 35/21.

3. This Superintendence understands that the knowledge obtained by the intermediary during the registration, suitability, and continuous relationship processes with its clients allows for close, assertive, and effective monitoring of the operations it intermediates.

4. Therefore, this SMI emphasizes the obligation to conduct this monitoring of operations and offerings through procedures, controls, and filters capable of detecting operations that represent potential violations of the provisions contained in CVM Resolution No. 62/22 – which prohibits the practice of creating artificial conditions of demand, supply, or price of securities, price manipulation, conducting fraudulent operations, and using inequitable practices – and in CVM Resolution No. 44/21, regarding the improper use of insider information and conducting operations during prohibited periods (Articles 13 and 14).

5. In this context, we alert to the need for observance of the following procedures when communications arise from this monitoring:

i. The detection of indications of irregularities, through methodologies and samples that are continuously evaluated based on their effectiveness, in operations in the securities market, stock exchange market, and organized over-the-counter market, must be communicated simultaneously to the regulator and the self-regulatory entity. The simultaneity of communication can be simplified by a single communication addressed to both, the regulator and the self-regulatory entity;

ii. In the communication to be made by the intermediary, the confidentiality of the communicator may be requested, since the confidentiality of those involved in the communication is already conferred by the existing and applicable confidentiality duties to the regulator and self-regulatory entity;

iii. The reports must (i) clearly identify potential irregularities, containing a detailed description of the facts and the grounds on which the intermediary’s understanding regarding the characterization of the indications is based, and (ii) be accompanied by the full documentation supporting the statements and indications provided, including the description of how the indication was detected and the subsequent documents obtained during the investigation carried out by the intermediary;

iv. The communication made to the regulator and self-regulatory entity does not exempt the intermediary from the obligation to continue investigating the case and to make supplementary communications if new facts are identified, in addition to immediate measures that may be taken by the intermediary; and

v. Communications regarding complaints must be sent to the regulator and self-regulatory entity using the means and channels already established for such communications.

6. Finally, we remind you that the Directors referred to in Article 5, Item I, of CVM Resolution No. 35/21 are responsible for complying with the rules provided in this Resolution, and that the monitoring process implemented by the intermediaries, as well as its effectiveness, will be subject to supervision by the self-regulation and by this superintendence.

[1] Art. 33. The intermediary must:
...
IV – inform the CVM whenever it verifies the occurrence or indications of violation of the legislation that the CVM is responsible for overseeing, within a maximum period of 5 (five) business days from the occurrence or identification, without prejudice to communication to the entities administering the organized markets in which it is authorized to operate or to the self-regulatory entity, maintaining records of the evidence found; ... IX – continuously monitor the operations it intermediates, in order to identify those that aim to provide undue advantage or profit to one of the parties, or cause damage to third parties, as regulated by specific regulation;

Sincerely,

André Francisco de Alencar Passaro
Superintendent of Market and Intermediary Relations

Document electronically signed by Andre Francisco Luiz de Alencar Passaro, Superintendent, on 03/28/2024, at 12:45, based on Article 6 of Decree No. 8.539, of October 8, 2015.
The authenticity of the document can be verified on the site https://super.cvm.gov.br/conferir_autenticidade, by informing the verification code 2007753 and the CRC code 33A5CBC7.
This document's authenticity can be verified by accessing https://super.cvm.gov.br/conferir_autenticidade, and typing the "Verification Code" 2007753 and the "CRC Code" 33A5CBC7.
Reference: Process No. 19957.002587/2024-04 SEI Document No. 2007753