Circular Letter CVM/SMI/SOI No. 01/2021

19/03/2021 SEI/CVM - 1217743 - Circular Letter https://sei.cvm.gov.br/sei/controlador.php?acao=documento_imprimir_web&acao_origem=arvore_visualizar&id_documento=1282769&infra_sistema=… 1/3 SECURITIES AND EXCHANGE COMMISSION OF BRAZIL (CVM) Rua Sete de Setembro, 111/2-5th and 23-34th Floors, Centro, Rio de Janeiro/RJ – CEP: 20050-901 – Brazil - Tel.: (21) 3554-8686 Rua Cincinato Braga, 340/2nd, 3rd and 4th Floors, Bela Vista, São Paulo/ SP – CEP: 01333-010 – Brazil - Tel.: (11) 2146-2000 SCN Q.02 – Bl. A – Corporate Financial Center Building, S.404/4th Floor, Brasília/DF – CEP: 70712-900 – Brazil - Tel.: (61) 3327-2030/2031 www.cvm.gov.br Circular Letter No. 1/2021-CVM/SMI-SOI Rio de Janeiro, March 17, 2021.

To
Directors responsible for Instruction CVM No. 505/11 at Intermediaries

Subject: Communication to clients about structural and ordinary changes.

Dear Directors,
This Circular Letter aims to provide guidance to Intermediaries on timely providing their clients with information regarding structural and ordinary changes, avoiding difficulties in client access to service channels and the execution of operations.

I – INTRODUCTION

1. The securities market has been experiencing a rapid sequence of transformations, with investor access to their advisors predominating via instant messaging and order commands through electronic trading platforms.
2. To keep pace with technological evolution, Intermediaries, brokers, and securities distributors have been reorganizing to have a structure closer to investors' needs. In some cases, mergers and acquisitions have been implemented with the aim of maximizing synergies between institutions.
3. It is evident that information about a new corporate structure under negotiation may be kept confidential, observing the provisions of applicable legislation and regulation, for the best conduct by the parties involved. However, once the new organizational structure is finalized, adequate publicity to clients is one of the components guaranteeing business continuity, mitigating possible difficulties for users in their routine accesses, whether for service or for commanding operations.
4. Information of interest is not limited to communication of the corporate operation itself (merger, incorporation, acquisition, etc.), but also other information relevant to the institution's clients, such as changes in email addresses, commercial addresses, Internet pages, links to mobile applications, among others. The full and timely dissemination of complete information contributes to ensuring business continuity, preventing controversies, and avoiding complaints.

19/03/2021 SEI/CVM - 1217743 - Circular Letter https://sei.cvm.gov.br/sei/controlador.php?acao=documento_imprimir_web&acao_origem=arvore_visualizar&id_documento=1282769&infra_sistema=… 2/3 II – REGISTRATION UPDATE
5. Within the scope of CVM regulation, registration update is the duty of the Intermediary, in accordance with Art. 1, item I, of Instruction CVM No. 510/11 (ICVM 510):
Art. 1. The participants indicated in Annex 1 must, through a system available on the CVM website on the World Wide Web:
I – update their registration forms whenever any of the data contained therein is altered, within 7 (seven) business days counted from the event that caused the alteration; (...) (emphasis added)
6. As observed in ICVM 510, the deadline is up to 7 (seven) business days for the Intermediary's registration update, which does not negate the fact that, given clients' needs when using applications, 'home broker', trading platforms, even a few moments without access can mean potential loss of opportunity.
7. And loss of opportunity can lead to investor demand against the Intermediary, before the self-regulatory body, via petition within the framework of the damage compensation mechanism (MRP), and even before the regulator, CVM, in which the SMI will instruct the due process for evaluating the Intermediary's conduct regarding what applicable regulation determines, including with regard to Art. 30, sole paragraph, of Instruction CVM No. 505/11 (ICVM 505):
Art. 30. The intermediary must exercise its activities with good faith, diligence, and loyalty towards its clients.
Sole paragraph. It is prohibited for the intermediary to favor its own interests or those of persons linked to it to the detriment of clients' interests. (emphasis added)
8. In this context, what is expected is diligent action in the best interest of the client by the Intermediary to effectuate timely communication of changes:
a) structural: mergers, incorporations, acquisitions, etc.; and b) other relevant ones: changes in email addresses, physical address, World Wide Web page, links to mobile applications, etc.
9. And in doing so, it is also expected, for this type of change, timely registration update with the CVM, aligning the Intermediary's new registration information, both with respect to clients and to the regulator.
III – CONCLUSION
10. Giving publicity to information relevant to clients in a timely manner creates a relationship of trust with them, strengthened by the perception that adequate communication of the registration update prevented their service or ability to command operations of interest from being negatively affected.

19/03/2021 SEI/CVM - 1217743 - Circular Letter https://sei.cvm.gov.br/sei/controlador.php?acao=documento_imprimir_web&acao_origem=arvore_visualizar&id_documento=1282769&infra_sistema=… 3/3
11. In the same sense, it is recommended that communications to the CVM be made as quickly as possible, even if there is a longer deadline as a limit for doing so, ensuring informational symmetry between the Intermediary, clients, and regulator. The Intermediary must use the CVMWeb system for this purpose. Changes in the Intermediary's Ombudsman channels may be communicated by electronic correspondence to the Superintendent of Investor Protection and Guidance (SOI), using the CVM Digital Protocol.
12. And the timely manner, not only to meet the maximum deadline provided by ICVM 510: up to 7 (seven) business days, but, primarily, in a timeframe that seeks to preserve business continuity, avoiding the occurrence of misinformation and difficulties in client access to service and operation channels.
13. It should be highlighted once again that transparency in the intermediation market is one of the guiding pillars of ICVM 505/11, reflected in its Art. 30, already transcribed above, with emphasis on diligence towards its clients and the search for the best interest of these same clients.

Respectfully,

Document electronically signed by Francisco José Bastos Santos, Superintendent, on 17/03/2021, at 13:22, based on Art. 6 of Decree No. 8.539, of October 8, 2015.
Document electronically signed by Jose Alexandre Vasco, Superintendent, on 18/03/2021, at 21:17, based on Art. 6 of Decree No. 8.539, of October 8, 2015.
The authenticity of the document can be verified on the site https://sei.cvm.gov.br/conferir_autenticidade, informing the verification code 1217743 and the CRC Code C9D7C069.
This document's authenticity can be verified by accessing https://sei.cvm.gov.br/conferir_autenticidade, and typing the "Verification Code" 1217743 and the "CRC Code" C9D7C069.
Reference: Process No. 19957.002726/2020-68 SEI Document No. 1217743