Circular Letter CVM/SSE No. 02/2022

SECURITIES AND EXCHANGE COMMISSION OF BRAZIL
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 – Ed. Corporate Financial Center, S.404/4th Floor, Brasília/DF – CEP: 70712-900 – Brazil -Tel.: (61) 3327-2030/2031 www.cvm.gov.br Circular Letter No. 2/2022-CVM/SSE São Paulo, December 21, 2022. To Administrators of Real Estate Investment Funds (“FII”) Subject: Clarification on the completion of Item 14 of the Annual Report. Gentlemen,

1. This Circular Letter aims to guide FII administrators regarding the adequate completion of Item 14 of the Annual Report, as provided for in Annex 39-V of CVM Instruction No. 472/2008 (“ICVM 472”).

2. As is well known, said item requires the disclosure of transactions in situations of conflict of interest carried out within the scope of FIIs, in accordance with art. 34 and item IX of art. 35 of ICVM 472.

3. First, it is important to consider the provisions of Technical Pronouncement CPC 00(R2), applicable to FIIs by virtue of art. 2 of CVM Instruction No. 516/2011, with regard to the qualitative characteristics of useful financial information. According to items 2.4 and 2.5 of the aforementioned Accounting Pronouncement, “if financial information is to be useful, it must be relevant and faithfully represent what it purports to represent. The usefulness of financial information is enhanced if it is comparable, verifiable, timely and understandable”; and “relevant financial information is capable of making a difference in the decisions made by users.”

4. In this context, this technical area clarifies that the information in Item 14 of the Annual Report must be consistent and comparable to the information presented in the audited financial statements of the FII, reflecting its net asset position as of that base date. Such representation must also include the balances of conflicted operations contracted in previous periods, which are still registered in the FII’s assets (transactions in stock).

5. Objectively, Item 14 of the Annual Report must encompass the disclosure of conflicted transactions, whether they are flow (in the period) or stock, as of a certain base date, guaranteeing more useful financial information to the user, in light of items 2.12 and 2.13 of Technical Pronouncement CPC 00(R2).

6. Specifically, acquisitions in situations of conflict of interest that are still registered in the fund’s portfolio at the end of the fiscal year (operations in stock) must be reported in Item 14 of the Annual Report recurrently, until they are effectively alienated. This procedure, in addition to providing useful information to users, allows reconciling the Annual Report with the Balance Sheet (Assets) of the FII as of a certain base date.

7. Alienation operations in situations of potential conflict of interest must be reported in Item 14 of the Annual Report on the base date corresponding to the period to which they refer, no longer impacting the Annual Report of the subsequent period (flow operations). In this way, it is possible to reconcile the Annual Report with the effects of the alienation reflected in the FII’s income statement for the fiscal year, as of a certain base date.

8. An identical procedure to that of paragraph 7 should be used for potentially conflicted assets acquired and alienated throughout the same fiscal year (flow operations).

9. The application of the understanding above guarantees the comparability and completeness of the information, including its nature, date of approval by the assembly, values and involved counterparties, providing useful financial information for user decision-making.

Sincerely,

NATHALIE ARAUJO VIDUAL
Superintendent of Securitization Supervision - Acting

Document electronically signed by Nathalie de Andrade Araujo Matoso Vidual, Substitute Superintendent, on 12/21/2022, at 16:18, 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://super.cvm.gov.br /conferir_autenticidade, informing the verification code 1665530 and the CRC code 6938CBEB.
This document's authenticity can be verified by accessing https://super.cvm.gov.br/conferir_autenticidade, and typing the "Verification Code" 1665530 and the "CRC Code" 6938CBEB.
Reference: Process No. 19957.009383/2021‐43 SEI Document No. 1665530