Circular Letter No. 8/2023/CVM/SIN

SECURITIES AND EXCHANGE COMMISSION OF BRAZIL
Rua Sete de Setembro, 111/2-5th and 23-34th Floors – Center – Rio de Janeiro - RJ – CEP: 20050-901 – Brazil Tel.: (21) 3554-8686 - www.cvm.gov.br Circular Letter No. 8/2023/CVM/SIN Rio de Janeiro, October 13, 2023

To administrators and managers of investment funds

Subject: Interpretation of provisions of CVM Resolution No. 175, as amended by CVM Resolution No. 187

Dear Sirs,

1. As is known, the Securities and Exchange Commission of Brazil (CVM) published CVM Resolution No. 187 on September 27, 2023, which rectifies certain provisions of CVM Resolution No. 175, of December 23, 2022.

2. Among the changes is that of Annex XI of the Resolution, with the inclusion of Article 7-A, which now provides for the possibility of establishing and charging, directly as a charge on the fund, a "fee for the structuring and maintenance of pension and life insurance plans."

3. However, as Annex XI regulates only "investment funds constituted by open complementary pension entities and insurance companies, exclusively linked to complementary pension plans or life insurance plans, as referred to in Articles 76 and following of Law No. 11.196, of November 21, 2005" (Article 1), this technical area has received numerous inquiries from market participants regarding the scope of this regulatory option, that is, whether it applies only to the pension funds provided for in Law No. 11.196 or to pension funds in general.

4. In this sense, it is worth recalling what is stated in the document "Justification - Dispensation of Regulatory Impact Analysis (AIR)" ("Justification") published by the CVM together with CVM Resolution No. 187, which states, regarding the subject, that:

5. The sponsor is the legal entity that structures and maintains the pension or insurance plan that constitutes the pension fund. In other words, it is an agent that operates in a regulated manner in another segment of the financial market – pensions and insurance – but that circumstantially has to deal with investment funds.

6. As can be seen, the premise for the change promoted by CVM Resolution No. 187 on this point was the fact that agents in the pension and insurance segment "circumstantially have to deal with investment funds," justifying the charging of a specific fee to them in their capacity as structurers of these products, which, of course, does not occur only with respect to funds regulated by Normative Annex XI.

7. In fact, it does not even seem reasonable to argue that such a fee should be limited only to funds from this Normative Annex, since the factual premise of the understanding exposed in the Justification is the existence of a market practice already existing and recognized by the CVM that deserves specific treatment, and moreover, there is not yet any fund registered with the Autarchy based on the aforementioned Law No. 11.196.

SECURITIES AND EXCHANGE COMMISSION OF BRAZIL
Rua Sete de Setembro, 111/2-5th and 23-34th Floors – Center – Rio de Janeiro - RJ – CEP: 20050-901 – Brazil Tel.: (21) 3554-8686 - www.cvm.gov.br

7. Thus, in the understanding of this technical area, such provision of "structuring fee" as a charge on the fund applies to any fund and pension nature (such as those provided for in Article 116 of the general rule of CVM Resolution No. 175), and not only to those governed by Normative Annex XI.

8. Finally and on this occasion, we alert that said fee, in light of the transparency principles defended by the new fund regulation, must be disclosed in the fund documents where they are pertinent (regulations, descriptive annex or appendix, as the case may be).

Sincerely,

Digitally signed by
DANIEL WALTER MAEDA BERNARDO
Superintendent of Institutional Investor Supervision