Circular Letter No. 1/2023/CVM/SMI

SECURITIES AND EXCHANGE COMMISSION OF BRAZIL
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Dear Directors,

1. CVM Resolution No. 31/2021 and CVM Resolution No. 135/2022 establish, respectively in Article 9, § 3rd, and in Article 158, § 3rd, that applicants for authorization to perform the activities of central securities depository and organized securities market administering entity must present, as a requirement for the granting of authorization, a document that proves compliance with the Principles for Financial Market Infrastructures (“PFMI”) formulated by the Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO)1.

2. Within the scope of markets under CVM supervision, the PFMI apply to financial market infrastructures that perform clearing and settlement activities, as well as registration and centralized deposit of securities, whose role is of recognized relevance for the soundness and stability of the market.

3. Considering the function of financial market infrastructures and, above all, the provisions of Principle 23 of the PFMI, according to which infrastructures must publicly disclose clear and comprehensive rules and procedures and must provide sufficient information to allow their participants to understand the risks, fees, and other costs arising from their participation in the infrastructure, CPMI/IOSCO prepared the document titled “Disclosure framework and Assessment methodology”2.

4. Thus, in view of the provisions in the Explanatory Notes following the aforementioned Principle 23 of the PFMI and aiming to comply with the provisions of CVM Resolution No. 31/2021 and CVM Resolution No. 135/2022, interested parties seeking CVM authorization to perform the aforementioned activities must present a document signed by their General Director or Director Responsible for RCVM 31/21 in which they demonstrate that the structuring of their activities was carried out with the aim of complying with each of the PFMI applicable to them.

5. Furthermore, the SMI considers that a market infrastructure must use the CPMI/IOSCO assessment methodology to conduct formal periodic self-assessments regarding compliance with the PFMI, and that such assessments should be useful for identifying procedures that require structural improvements and for prioritizing resources for areas where the need for improvement has been identified.

6. In this sense, institutions operating financial market infrastructures active in the securities market must publish, following the standard established by CPMI/IOSCO, their self-assessment on PFMI observance at least every two years, or at a higher frequency in case of material changes in their systems or in the environment in which they operate.

7. The self-assessments must be available on the institution operating the financial market infrastructure's worldwide computer network, in a publicly accessible area.

1 CPMI/IOSCO. Principles for Market Infrastructures. April, 2012. Available at:
https://www.bis.org/cpmi/publ/d101a.pdf
2 CPMI/IOSCO. Principles for financial market infrastructures: Disclosure framework and Assessment methodology. December, 2012. Available at:
https://www.iosco.org/library/pubdocs/pdf/IOSCOPD396.pdf

Sincerely,

André Francisco Luís de Alencar Passaro
Superintendent of Market Relations and Intermediaries

Circular Letter 1 PFMI (1899711) SEI 19957.012660/2023-67 / pg. 1

Document electronically signed by Andre Francisco Luiz de Alencar Passaro, Superintendent, on 10/16/2023, at 12:05, based on art. 6 of Decree No. 8.539, of October 8, 2015.
The authenticity of the document can be checked on the site https://super.cvm.gov.br/conferir_autenticidade, providing the verification code 1899711 and the CRC Code E963B2E2.
This document's authenticity can be verified by accessing https://super.cvm.gov.br/conferir_autenticidade, and typing the "Verification Code" 1899711 and the "CRC Code" E963B2E2.
Reference: Process No. 19957.012660/2023-67 SEI Document No. 1899711 Circular Letter 1 PFMI (1899711) SEI 19957.012660/2023-67 / pg. 2

Circular Letter 1 PFMI (1899711) SEI 19957.012660/2023-67 / pg. 3