Circular No. 2.616

CIRCULAR N. 002616 ------------------ Amends and consolidates the provisions relating to the constitution and operation of financial investment funds and funds for investment in shares of investment funds. The Board of Directors of the Central Bank of Brazil, in a session held on 14.09.95, having regard to the provisions of art. 1, sole paragraph, of the Regulation annexed to Resolution No. 1.088, of 30.01.86, added by art. 1 of Resolution No. 1.728, of 10.07.90, in art. 13 of Resolution No. 1.962, of 27.08.92, and in art. 1 of Resolution No. 2.183, of 21.07.95, D E C I D E D: Art. 1 Approve, as a consequence of the repeal of art. 35 and the introduction of amendments to arts. 5, 13, 15, 19, 20, 27, 34, 36, 37, 40 and 43 of the Regulation annexed to Circular No. 2.594, of 21.07.95, the annexed Regulation, which consolidates the rules pertaining to the constitution and operation of financial investment funds and funds for investment in shares of investment funds. Art. 2 Establish: I - that, in the prohibition on carrying out repurchase transactions with individuals and non-financial legal entities, provided for in art. 1 of Circular No. 1.890, of 01.02.91, commitments assumed with financial investment funds are not included; II - in addition to the provision contained in art. 12, sole paragraph, of Resolution No. 1.962, of 27.08.92, the faculty for financial investment funds to negotiate with financial institutions, in accordance with the regulations in force, mercantile contracts for the purchase and sale of products, goods and/or services for future delivery or provision and securities or certificates representing such contracts, provided that they are issued or guaranteed by bodies or entities other than those referred to in art. 1 of Resolution No. 2.008, of 28.07.93. Art. 3 Authorize the transformation or merger of fixed-income mutual funds, investment funds in "commodities", financial investment funds, funds for investment in shares of financial investment funds, short-term fixed-income funds and funds for investment in shares of short-term fixed-income funds into funds for investment in shares of investment funds, subject to the same conditions and terms provided for in art. 3 of Resolution No. 2.183, of 21.07.95. Art. 4 Establish that shares originating from fixed-income mutual funds transformed or merged into a financial investment fund or fund for investment in shares of investment funds that are not redeemed on the date on which their first 28-day interval is completed, counting the period of permanence in the previous fund, shall observe, for the purpose of updating their respective value, the interval established for the fund into which they were transformed or merged, counted from that date. Art. 5 This Circular enters into force on the date of its publication. Art. 6 Circular No. 2.594, of 21.07.95, is revoked. Art. 7 Circulars Nos. 2.595, 2.596, both of 21.07.95, 2.601, of 09.08.95, and 2.611, of 31.08.95, Letter-Circular No.
2.564, of 28.07.95, and Communiqué No. 4.702, of 31.07.95, remain in force, whose regulatory basis becomes this Circular. Brasília, 18 September 1995 Cláudio Ness Mauch Director of Norms and Organization of the Financial System REGULATION ANNEXED TO CIRCULAR NO. 2.616, OF 18.09.95, WHICH GOVERNS THE CONSTITUTION AND OPERATION OF FINANCIAL INVESTMENT FUNDS AND FUNDS FOR INVESTMENT IN SHARES OF INVESTMENT FUNDS. CHAPTER I On the Constitution and Characteristics Art. 1 The financial investment fund, constituted as an open-ended condominium, is a community of resources destined for investment in a diversified portfolio of financial assets and other operational modalities available within the financial market, subject to the limitations provided for in this Regulation and in the regulations in force. Sole paragraph. The fund has an indefinite term of duration and its name, which may not contain terms incompatible with its objective, must include the expression "Financial Investment", and it is permitted to add word(s) that identify(ies) the profile of its investments in the event of directing a preponderant portion of its resources to specific segment(s). Art. 2 The constitution of the fund, within 5 (five) days counted from its occurrence, must be the subject of written communication to the Regional Office of the Central Bank of Brazil to which the administering institution is subject, in which must be stated: I - the date of constitution of the fund; II - the designation of a statutory member of the administration of the administering institution, technically qualified, to answer, civilly and criminally, for the management, supervision and monitoring of the fund, as well as for the provision of information relating thereto. Sole paragraph. The communication referred to in this article must be accompanied by a declaration signed by the administrator designated by the administering institution that: I - is aware of its obligations towards the fund; II - is responsible, primarily, under the legislation in force, including before third parties, for the occurrence of situations that indicate fraud, negligence, imprudence or incompetence in the administration of the fund, and is also subject to the application of penalties of suspension or disqualification for positions of direction in financial institutions and other institutions authorized to operate by the Central Bank of Brazil. Art. 3 The document of constitution must reproduce the entire text of the fund's regulation, contain the qualification of its founders, be registered in a registry of titles and documents and remain at the disposal of the Central Bank of Brazil at the headquarters of the administering institution. Sole paragraph. The Central Bank of Brazil may determine amendments to the fund's regulation. Art. 4 The regulation of the fund must contain, at a minimum, the following information: I - management fee or criterion for its establishment, observing the provisions of art. 12; II -
other fees and/or expenses; III - investment policy, in order to characterize the segment in which the fund must predominantly operate; IV - conditions for issuance and redemption of quotas; V - establishment of an interval for updating the quota value for the respective redemption with yield, due to the provisions of art. 20; VI - criteria for disclosure of information to the quotaholders, under the terms of Chapter IX; VII - reference, when applicable, to the delegation of powers of administration of the fund's portfolio, with identification and qualification of the legal entity to which such powers are delegated. Sole paragraph. In defining the investment policy, information must be provided regarding: I - the general characteristics of the fund's operations, including the criteria for composition and diversification of the portfolio and the operational risks involved; II - the possibility of making investments that put the fund's assets at risk. Art. 5 The fees, expenses and terms adopted by the fund must be identical for all quotaholders, except as provided in art. 20, paragraph 5. CHAPTER II Administration Art. 6 The administration of the fund may be exercised by a multiple bank, commercial bank, savings bank, investment bank, credit, financing and investment company, securities brokerage company or securities distribution company. Paragraph 1 It is a condition for the administration of the fund that the administering institution be accredited in the Banco Central Information System - SISBACEN. Paragraph 2 The administering institution that does not have the accreditation referred to in the previous paragraph must obtain it from the Banco Central do Brasil/Department of Information Technology (DEINF), in Brasília (DF), or from the Regional Office of the Banco Central do Brasil to which it is subject. Paragraph 3 The administration of the fund by a brokerage company or distribution company is permitted for those that meet the minimum limits of paid-in capital and net equity established in the regulations in force for the exercise of this activity. Art. 7 The administering institution, observing the limitations of this Regulation, has the powers to perform all acts necessary for the administration of the fund and to exercise the rights inherent to the financial assets and operational modalities that make up its portfolio, including the right to act and to attend and vote at general or special meetings. Art. 8 The obligations of the administering institution include: I - keeping updated and in perfect order: a) the documentation related to the fund's operations; b) the register of quotaholders; c) the book of minutes of general meetings; d) the attendance book of quotaholders; e) the opinions of the independent auditor; f) the record of all accounting facts related to the fund; II - receiving any income or amounts of the fund; III - making available to the quotaholder, free of charge, a copy of the fund's regulation, as well as informing them
of the name of the periodical used for providing information and the management fee charged; IV - disclosing, daily, in the periodical referred to in item III, in addition to keeping available at its headquarters and branches and at the institutions that place quotas of the fund, the value of the fund's net equity, the value of the quota and the accumulated returns in the month and calendar year to which they refer; V - bearing the expenses of advertising the fund; VI - providing annually to quotaholders a document containing information on the income earned in the calendar year and, based on data relating to the last day of December, on the number of quotas owned by them and their respective value. Paragraph 1 The disclosure of the information provided for in item IV may be arranged through class entities of institutions of the National Financial System, provided that it is carried out in widely circulated periodicals, observing the responsibility of the administrator designated under the terms of art. 2, item II, for the regularity in the provision of such information. Paragraph 2 In exceptional cases, duly justified before the Banco Central do Brasil, the disclosure of the information provided for in item IV may be arranged in a manner and at intervals different from those provided therein. Art. 9 The administering institution may, observing the provisions of art. 37, sole paragraph, by resolution of the general meeting of quotaholders: I - contract consulting services from specialized companies, aiming at the analysis and selection of financial assets and operational modalities to integrate the fund's portfolio; II - delegate powers to administer the fund's portfolio to duly identified third parties, without prejudice to its responsibility and that of the administrator designated under the terms of art. 2, item II. Sole paragraph. The administration powers referred to in item II may only be delegated to legal entities, whether or not members of the National Financial System. Art. 10. The managing institution is prohibited, in the specific exercise of its functions and/or using the fund's resources, from: I - granting loans, advances or credits under any other modality; II - providing surety, guarantee, acceptance or co-obligating itself in any other form, except when dealing with margin guarantees in operations carried out in derivatives markets; III - carrying out operations and trading with financial assets and/or operational modalities outside the scope of the financial market or expressly prohibited in the regulations in force; IV - investing resources directly abroad; V - acquiring quotas of the fund itself; VI - paying or reimbursing itself for fines imposed due to non-compliance with the rules set forth in this Regulation; VII - selling fund quotas in installments; VIII - promising predetermined returns to the quotaholders; IX - making, in its advertising or in other documents presented to investors, promises of withdrawals or returns,
based on its own performance, on the performance of others or on that of financial assets and/or operational modalities available within the financial market; X - delegating powers to manage the fund, except as provided in art. 9, item II. Art. 11. The managing institution, by means of a notice published in the periodical referred to in art. 8, item III, or by means of a letter with acknowledgment of receipt or telegram with delivery notification addressed to each quotaholder, may resign from the administration of the fund, provided that it convenes, in the same act, a general meeting to decide on its replacement or on the liquidation thereof, observing the provisions of art. 23. Sole paragraph. In the cases of replacement of the managing institution and liquidation of the fund, the rules in force on civil or criminal liability of administrators, directors and managers of financial institutions shall apply, as applicable, regardless of those governing the civil liability of the managing institution itself. Art. 12. The managing institution must stipulate remuneration to be received for the provision of the fund's administration service. Sole paragraph. The administration fee charged by the fund's managing institution may only be increased by decision of the general meeting of quotaholders. CHAPTER III Of the Portfolio Art. 13. The fund's investments must be represented by: I - deposit with the Central Bank of Brazil, in the form of specific regulations; II - financial assets and/or operational modalities available within the financial market, except shares, promissory notes issued by corporations, intended for public offering, Economic Development Securities (TDE), quotas of investment funds in the modalities regulated by the Securities Commission and quotas of the Social Development Fund - FDS. Paragraph 1. The financial assets comprising the fund's portfolio: I - must be duly registered, as the case may be, in the Special Settlement and Custody System (SELIC) or in a registration and financial settlement system administered by the Custody and Financial Settlement of Securities Center - CETIP; II - when physically issued, must be held in custody at a multiple bank with a commercial or investment portfolio, commercial bank, investment bank, stock exchange or entity authorized to provide such service by the Central Bank of Brazil or by the Securities Commission. Paragraph 2. Excepted from the provisions of paragraph 1, item I, are the fund's investments in quotas of investment funds, in variable income securities and in gold. Paragraph 3. The fund's investments in gold are only permitted when acquired on commodity and futures exchanges. Paragraph 4. The fund's investments in "warrants" and in mercantile contracts for the purchase and sale of products, merchandise and/or services for future delivery or provision, as well as in securities or certificates representing such contracts must: I - without prejudice to compliance with the provisions of
paragraph 1, have a guarantee from a financial institution or insurance company, observing, in the latter case, specific regulations of the Superintendence of Private Insurance - SUSEP; II - be restricted to those issued or guaranteed by bodies or entities other than those referred to in art. 1 of Resolution No. 2,008, of 28.07.93, except when dealing with Rural Product Notes - CPR. Paragraph 5. The fund's operations in derivatives markets may be carried out both in those administered by stock exchanges or commodity and futures exchanges, and in the over-the-counter market, in this case provided they are duly registered with CETIP. Paragraph 6. Regarding the financial assets and/or operational modalities comprising the fund's portfolio: I - the total issuance and/or co-obligation of a single legal entity, its controller, companies directly or indirectly controlled by it, and its affiliates under common control, as well as of a single State, Municipality, investment fund or individual may not exceed 10% (ten percent) of the fund's net equity; II - the total issuance and/or co-obligation of a single financial institution, its controller, companies directly or indirectly controlled by it, and its affiliates under common control may exceed the percentage referred to in item I, observing the maximum of 20% (twenty percent) of the fund's net equity. Paragraph 7. Exceptionally, up to 10% (ten percent) of the fund's net equity may be represented by shares received as a result of the conversion of debentures. Paragraph 8. The percentages referred to in this article must be complied with daily, based on the fund's net equity of the immediately preceding business day. CHAPTER IV Of the Net Equity Art. 14. The net equity of the fund is understood as the algebraic sum of the available funds with the value of the portfolio, plus the amounts receivable, minus the liabilities. Sole paragraph. For the purpose of determining the value of the portfolio, the rules and procedures provided for in the Accounting Plan for Institutions of the National Financial System - COSIF must be observed. CHAPTER V Of the Issuance, Placement and Redemption of Quotas Art. 15. The quotas of the fund must be registered, non-transferable and kept in a deposit account in the name of their holders. Paragraph 1 The status of co-owner is characterized by the opening of a deposit account in their name. Paragraph 2 It is indispensable, upon the co-owner's entry into the fund, their adherence to the terms of the respective regulation, and the administering institution is responsible for defining the form and ensuring that such adherence is effected. Paragraph 3 The transfer of quotas of the fund is permitted only in the event of execution of a guarantee eventually provided through their use. Art. 16. The quotas of the fund may be placed by a multiple bank, commercial bank, savings bank, investment bank, credit, financing and investment company, securities brokerage company and securities
distribution company. Art. 17. The quotas of the fund must have their value calculated daily, based on a patrimonial valuation that considers the market value of the financial assets comprising the portfolio, in accordance with the provisions of art. 14 and the rules and procedures provided for in COSIF. Art. 18. The application and redemption of quotas of the fund may be made in cash, check, payment order, debit and credit in current account or credit order document. Sole paragraph. In exceptional cases, after prior consultation with the Central Bank of Brazil, the redemption may be made in financial assets comprising the fund's portfolio. Art. 19. In the issuance of quotas of the fund, as provided in the respective regulation, the value of the quota in force on the same day or on the first business day following the effective availability of the resources entrusted by the investor to the administering institution, at its headquarters or branches, must be used. Sole paragraph. For the calculation of the number of quotas to which the investor is entitled, the fees and/or expenses agreed upon must be deducted from the amount delivered to the administering institution. Art. 20. For purposes of redemption, the quotas of the fund must have their value updated at minimum intervals of 30 (thirty) days counted from the respective issuance date, as provided in its regulation. Paragraph 1 The occurrence of redemption on a date prior to the first update of the quota value is permitted, provided it is at the value in force on the respective issuance date or on the day of the redemption, whichever is lower. Paragraph 2 From the first update of the quota value, upon redemption on a day that does not correspond to the date of update of its value, the value of the quota in force on the date of the last update or on the day of the redemption must be used, whichever is lower. Paragraph 3 When the date of update of the quota value occurs on a non-business day, the redemption must be effected at the value in force on the first subsequent business day. Paragraph 4 The regulation of the fund must provide for the redemption of quotas on state or municipal holidays in the locality where the administering institution is headquartered. Paragraph 5 The provisions of this article do not apply to quotas held by a fund for investment in quotas of investment funds, which may be redeemed at any time with earnings. Art. 21. The redemption of quotas must be effected, without charging any fee and/or unforeseen expense, by the 5th (fifth) business day following the respective request, as provided in the fund's regulation. CHAPTER VI Of the General Assembly Art. 22. It is the exclusive competence of the general assembly of co-owners: I - to annually, within a maximum period of 4 (four) months after the end of the fiscal year, approve the accounts of the fund and deliberate on its financial statements; II - to amend the fund's regulation; III - to deliberate on the replacement of
the administering institution; IV - to deliberate on the increase of the administration fee practiced by the administering institution; V - to deliberate on transformation, incorporation, merger, spin-off or liquidation of the fund. Sole paragraph. The fund's regulation, as a consequence of legal or regulatory rules, may be amended independently of holding a general assembly, in which case the disclosure of the fact to the co-owners must be arranged within a maximum period of 30 (thirty) days. Art. 23. The convocation of the general assembly must be made by means of an announcement published in the periodical referred to in art. 8, item III, or by means of a letter with acknowledgment of receipt or telegram with delivery notification addressed to each co-owner, which must contain the day, time and place of the assembly and the matters to be dealt with. Paragraph 1 The convocation of the general assembly must be made with at least 8 (eight) days' notice, counting from the date of publication of the first announcement or of sending the letter or telegram to the co-owners. Paragraph 2 In the cases of art. 22, items III to V, if the general assembly is not held, a new announcement of second convocation must be published or the sending to the co-owners of a letter with acknowledgment of receipt or telegram with delivery notification must again be arranged, with a minimum notice of 5 (five) days. Paragraph 3. Except in cases of force majeure, the general meeting must be held at the place where the managing institution has its head office; when held elsewhere, the notices or letters or telegrams addressed to the unit owners must clearly indicate the place of the meeting, which in no case may be held outside the locality of the head office. Paragraph 4. Regardless of the formalities provided for in this article, the general meeting attended by all unit owners must be considered regular. Art. 24. In addition to the annual account-rendering meeting, the general meeting may convene upon call by the managing institution or by unit owners holding quotas representing at least 30% (thirty percent) of the total. Art. 25. At the general meeting, which shall be installed with the presence of at least one unit owner, resolutions must be taken by the criterion of absolute majority of quotas of unit owners present, with each quota corresponding to one vote. Paragraph 1. Resolutions must be taken by majority of quotas of unit owners present at the general meeting, even in the cases of art. 22, items III to V, when the "quorum" of absolute majority of quotas issued is not reached at a conclave held on first call. Paragraph 2. In resolutions taken at a general meeting regarding the cases of art. 22, items III to V, the absolute majority must be computed in relation to the total quotas issued. Paragraph 3. The legal representatives of the unit owners are qualified to attend the general meeting. CHAPTER VII Of the Financial Statements Art. 26. The fund must have
accounting bookkeeping separate from that of the managing institution. Art. 27. The fund's fiscal year has a duration of 1 (one) year and the closing date must be set in the respective regulation. Art. 28. The fund is subject to the procedures for bookkeeping, preparation, submission and publication of financial statements provided for in COSIF. Paragraph 1. In the event of a null balance in all accounting accounts, the preparation, submission and publication of the fund's financial statements are waived, and the managing institution must arrange, in writing, to notify the Regional Office of the Central Bank of Brazil to which it is subject. Paragraph 2. Failure to comply with the deadlines set for submission of financial statements to the Central Bank of Brazil subjects the managing institution and the administrator designated under art. 2, item II, to the sanctions provided for in the legislation and regulations in force. Paragraph 3. The fund's annual financial statements must be audited by an independent auditor registered with the Securities Commission. CHAPTER VIII Of the Provision of Information to the Central Bank Art. 29. The managing institution must provide to the Central Bank of Brazil/Department of Registration and Information (DECAD), via SISBACEN transaction PMSG750, by the first business day following the start of the fund's activities, the following information: I - name and registration number in the General Taxpayers Registry (CGC), of its own and of the fund; II - date of the start of the fund's activities; III - name of the administrator designated under art. 2, item II; IV - name, address and registration number in the CGC of the legal entity to which powers of administration of the fund's portfolio have been delegated, when applicable; V - name, registration number in the Individual Taxpayers Registry (CPF) and telephone number of the persons responsible for providing information about the fund; VI - name and registration number in the CGC of the financial institution holding the "Bank Reserves" account, for the purposes of the transactions provided for in this Regulation. Sole paragraph. Any changes to the information provided for in this article must also be communicated to the Central Bank of Brazil/DECAD, via SISBACEN transaction PMSG750, by the first business day following the date of the respective occurrence. Art. 30. The managing institution must provide to the Central Bank of Brazil/Department of Special Studies and Monitoring of the Financial System (DEASF), via SISBACEN transaction to be disclosed in due course, with a delay of up to 3 (three) business days from the date to which they refer, the following daily information relating to the fund: I - balances of investments; II - value of net equity; III - value of the quota; IV - total amounts of subscriptions and redemptions on the day, considering the amounts effectively received and withdrawn; V - positions held in derivative markets. Paragraph 1. The
information provided for in this article: I - is due per business day, including, for this purpose, any state or municipal holidays; II - must be provided even in the event that all amounts are null. Paragraph 2. The Central Bank of Brazil/DEASF must specify the form and periodicity of providing the information provided for in items I and V. Art. 31. The provision of the information provided for in this Chapter, or its alteration, outside the established deadlines implies for the managing institution: I - the need to formally request the Central Bank of Brazil/DECAD or DEASF, as the case may be, via SISBACEN transaction PMSG750, the regularization of the information; II - payment of a fine per business day elapsed without the respective regularization, which fine: a) corresponds to R$150.00 (one hundred and fifty reais); b) is to be debited automatically from the "Bank Reserves" account of the infringing institution or of the convening financial institution, subject to the following: 1. in the case of provision of information outside the established deadline, it must be debited daily, from the business day following the occurrence of the irregularity, until its regularization; 2. in the case of the provision of information with inaccuracy, it must be applied on the business day following the rectification of the information provided with inaccuracy, its amount calculated based on the period in which the irregularity occurred. Paragraph 1. In order to make the provisions of this article feasible, the administering institution not holding a "Bank Reserves" account must enter into an agreement under the terms set forth in Circular No. 2,425, of 15.06.94. Paragraph 2. The convening financial institution must notify the Central Bank of Brazil/DECAD of the agreement, via SISBACEN transaction PMSG750, observing the deadline referred to in art. 29. Art. 32. The Central Bank of Brazil/DEASF may request the administering institution to provide other information about the fund. CHAPTER IX On Publicity and the Remittance of Documents Art. 33. The administering institution is obliged to disclose, widely and immediately, any relevant act or fact relating to the fund, in order to guarantee all co-owners access to information that may, directly or indirectly, influence their decisions regarding their permanence in it. Paragraph 1. The disclosure of the information provided for in this article must be made by means of publication in the periodical referred to in art. 8, item III, and kept available to the co-owners at the headquarters and branches of the administering institution and at the institutions that place quotas of the fund. Paragraph 2. The administering institution must make the publications provided for in this Regulation always in the same periodical and any change must be preceded by notice to the co-owners. Art. 34. The administering institution must, within a maximum period of 10 (ten) days after the end of each month, make available to the
co-owners, at its headquarters and branches and at the institutions that place quotas of the fund, information on the number of quotas owned by each one and their respective value, in addition to the profitability of the fund, based on data relating to the last day of the month to which they refer. Art. 35. The administering institution must publish, annually, based on data relating to the last day of the month of closing of the fiscal year, a document containing the financial statements of the fund, provided for in COSIF, and the profitability of the fund in the last 3 (three) fiscal years, always taking complete fiscal years as the basis. Sole paragraph. The publication provided for in this article must be arranged within a maximum period of 60 (sixty) days after the end of the fiscal year to which it refers. CHAPTER X General Rules Art. 36. The financial assets and operational modalities comprising the fund's portfolio may not be subject to lease, loan, pledge or guarantee, except when they are used as margin of guarantee in operations carried out in derivative markets. Art. 37. The following expenses constitute charges of the fund, in addition to the remuneration for services provided for in art. 12, which may be debited to it by the administering institution: I - federal, state, municipal or autarchic fees, taxes or contributions, which fall or may fall on the assets, rights and obligations of the fund; II - expenses with printing, dispatch and publication of reports, forms and periodic information, provided for in the fund's regulation or in the pertinent regulation; III - expenses with correspondence of interest to the fund, including communications to the co-owners; IV - fees and expenses of the auditor in charge of reviewing the financial statements and accounts of the fund and analyzing its situation and the performance of the administering institution; V - fees and commissions paid on the fund's operations; VI - attorneys' fees, costs and related expenses incurred in defending the interests of the fund, in or out of court, including the amount of the judgment, if the fund is unsuccessful; VII - any expenses inherent to the constitution or liquidation of the fund or to the holding of a general meeting of co-owners; VIII - custody fees for the fund's securities. Sole paragraph. Expenses arising from consultancy services regarding the analysis and selection of assets and modalities to integrate the fund's portfolio, those arising from the delegation of powers to administer said portfolio, as well as any others not provided for as charges of the fund must be borne by the administering institution. Art. 38. Within a maximum period of 5 (five) days counted from their occurrence, the following acts relating to the fund must be communicated in writing to the Regional Delegation of the Central Bank of Brazil to which the administering institution is subject, accompanied by the corresponding documents: I - amendment of regulation; II -
replacement of the administering institution; III - transformation; IV - incorporation; V - merger; VI - spin-off; VII - liquidation. Sole paragraph. In the case of an amendment of regulation, the corresponding document must be made available to the Central Bank of Brazil at the headquarters of the administering institution. Art. 39. Non-compliance with the rules established in this Regulation subjects the administering institution and the administrator designated under the terms of art. 2, item II, to the sanctions provided for in the legislation and regulations in force, and the Central Bank of Brazil may also determine the convening of a general meeting of co-owners to decide on one of the following alternatives: I - transfer of the administration of the fund to another institution; II - liquidation of the fund. Sole paragraph. Non-compliance with the rules established in Chapters III, V and VIII may result, without prejudice to the application of other sanctions, in the summary disqualification of the institution as administrator of the fund. CHAPTER XI Of the Financial Investment Fund - Short Term Art. 40. The institutions referred to in art. 6 are permitted to establish and administer a fund that allows redemption of shares at any time with income, regardless of the provisions of art. 20. Sole paragraph. The establishment and operation of the fund referred to in this article, designated short-term financial investment fund, are subject, as applicable, to the rules established in this Regulation, observing the following: I - its name must include the expression "Financial Investment - Short Term", with the option to add word(s) that identify(ies) the profile of its investments in the event of directing a predominant portion of its resources to specific segment(s); II - its investments must be represented by: a) deposit with the Central Bank of Brazil, in the form of specific regulations; b) financial assets and operational modalities permitted for financial investment funds; III - the redemption of its shares must be effected, as provided in the fund's regulation, on the same day or on the first business day following the request, using the value of the share in effect on the respective payment date. CHAPTER XII Of the Fund for Investment in Shares of Investment Funds Art. 41. The institutions referred to in art. 6 may establish and administer an investment fund whose resources must be allocated exclusively to the acquisition of shares of financial investment funds and of investment funds abroad. Paragraph 1 The establishment and operation of the fund referred to in this article, designated fund for investment in shares of investment funds, are subject, as applicable, to the rules established in this Regulation, observing the following: I - its name must include the expression "Investment in Shares of Investment Funds", with the option to add word(s) that identify(ies), when applicable, its short-term characteristic and/or the profile of its
investments, in the event of directing a predominant portion of its resources to specific fund(s); II - its portfolio must be composed entirely of shares of investment funds, with the acquisition of shares prohibited: a) of a financial investment fund that is not short-term by a short-term fund for investment in shares of investment funds; b) of a financial investment fund with a share value update interval greater than that adopted by the fund for investment in shares of investment funds; III - its investments in shares of the same fund cannot exceed 25% (twenty-five percent) of its net equity; IV - the information provided for in art. 30, relating to it, is restricted to the values of net equity and of the share, based on the last day of the month to which they refer, in addition to the total values of subscriptions and redemptions accumulated in the month, and must be provided to the Central Bank of Brazil, via SISBACEN transaction to be disclosed in due course, by the third business day after the end of each month. Paragraph 2 It is permitted that the fund's investments exceed the percentage referred to in item III, provided that: I - they are shares of a fund administered by an institution that is part of the same financial conglomerate; II - the possibility of concentration is provided for in the respective regulation, in the part pertaining to the investment policy. Paragraph 3 In the event of delay or inaccuracy in providing the information provided for in item IV, the fine referred to in art. 31, item II, applies to the administering institution. CHAPTER XIII Of the Financial Investment Fund - State and/or Municipal Debt Art. 42. The institutions administering liquidity funds of state and/or municipal public debt may establish and administer a financial investment fund - state and/or municipal debt, governed, as applicable, by the rules established in this Regulation, observing the following: I - its investments must be represented by: a) securities issued by the corresponding State(s) and/or Municipality(ies); b) repurchase operations carried out with the administering institution, provided they have as their object the same securities referred to in subitem "a"; II - only the treasuries of the State itself and its Municipalities and the autarchies, public companies, mixed-capital companies and foundations linked to or controlled or maintained by them may invest resources in the fund; III - the redemption of its shares must be effected regardless of the provisions of art. 20, as provided in the fund's regulation, on the same day or on the first business day following the request, using the value of the share in effect on the respective payment date. Paragraph 1 The administering institution is responsible for verifying compliance with the condition provided for in item II, and the respective documentation must be kept available to the Central Bank of Brazil. Paragraph 2 Each official state financial conglomerate may establish and
administer only one financial investment fund - state and/or municipal debt.