Circular Letter CVM/SMI No. 07/2015

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 1 CIRCULAR LETTER/CVM/SMI/No. 07/2015 São Paulo, December 29, 2015.
To
Institutions part of the securities distribution system, registrars, central securities depositories and custodians of securities.
Subject: Regulatory framework for the creation of encumbrances and liens on securities subject to central deposit.
Dear Sir/Madam,

1. As provided in Article 63-A of Law No. 10,931, of August 2, 2004 (as amended by Law No. 12,543, of December 8, 2011), the creation of encumbrances and liens on financial assets and securities in transactions carried out within the scope of the securities market or the Brazilian payment system, individually or on a universal basis, shall be carried out, including for purposes of publicity and effectiveness against third parties, exclusively through the registration of the respective instrument in entities expressly authorized for this purpose by the Central Bank of Brazil and the Securities and Exchange Commission (CVM), within their respective areas of competence.
2. The provisions of the aforementioned article were regulated by Decree No. 7,897, of February 1, 2013, which determined that the Central Bank of Brazil and the Securities and Exchange Commission (CVM), within their respective spheres of competence, issue the necessary rules and instructions for its compliance.
3. Within the scope of the Securities and Exchange Commission (CVM), CVM Instruction No. 541/2013 was published in the Official Gazette of the Union on December 26, 2013, which provides for the provision of central deposit services for securities. Said Instruction, in force since July 1, 2014, established a period of one year and six months after its entry into force for central depositories to adapt to its provisions, including those regarding the creation of encumbrances and liens on securities.

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 2
4. Given the conclusion of the adaptation process of both securities central deposit service providers authorized by the Securities and Exchange Commission (CVM), we inform you that from January 4, 2016, all provisions of CVM Instruction No. 541/2013 will apply, including those regarding the creation of encumbrances and liens on securities, in accordance with Article 35 of the aforementioned Instruction.
Sincerely,
(Signed original)
MARGARETH NODA
Superintendent of Market and Intermediary Relations (in office)