Circular No. 2209 — Amends and Consolidates the Regulations Governing the Establishment and Operation of Financial Investment Funds and Funds of Funds

CIRCULAR NO. 2209

AMENDS AND CONSOLIDATES THE REGULATIONS GOVERNING THE ESTABLISHMENT AND OPERATION OF FINANCIAL INVESTMENT FUNDS AND FUNDS OF FUNDS.

WE COMMUNICATE THAT THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BRAZIL, IN A SESSION HELD ON 05.08.92, BASED ON ART. 1 OF RESOLUTION NO. 1,787, OF 01.02.91, WITH THE WORDING GIVEN TO IT BY ART. 3 OF RESOLUTION NO. 1,791, OF 26.02.91, DECIDED:

ART. 1. AMEND AND CONSOLIDATE, UNDER THE TERMS OF THE ATTACHED REGULATIONS, THE RELEVANT NORMS FOR FINANCIAL INVESTMENT FUNDS AND FUNDS OF INVESTMENT IN QUOTAS OF FINANCIAL INVESTMENT FUNDS.

ART. 2. THIS CIRCULAR ENTERS INTO FORCE ON THE DATE OF ITS PUBLICATION, PRODUCING EFFECTS FROM 31.08.92.

ART. 3. ARE REVOKED, FROM 31.08.92, CIRCULARS NOS. 1,903, OF 26.02.91, 1,909, OF 27.02.91, 1,912 AND 1,913, BOTH OF 06.03.91, 1,916, OF 20.03.91, 1,923 AND 1,925, BOTH OF 27.03.91, 1,929, OF 04.04.91, 1,935, OF 11.04.91, 1,938, OF 16.04.91, 1,941, OF 17.04.91, 1,945, OF 24.04.91, 1,959, OF 17.05.91, 1,990, OF 18.07.91, 2,062, OF 16.10.91, 2,079, OF 07.11.91, AND 2,107, OF 30.12.91, ART. 3 OF CIRCULAR NO. 2,063, OF 16.10.91, ARTS. 1 TO 3 OF CIRCULAR NO. 2,124, OF 24.01.92, CIRCULAR LETTERS NOS. 2,154, OF 05.03.91, 2,163, OF 06.05.91, 2,175, OF 05.06.91, AND 2,192, OF 02.08.91, AND COMMUNIQUÉS NOS. 2,331, OF 04.03.91, 2,337, OF 20.03.91, 2,359, OF 09.04.91, 2,360, OF 10.04.91, 2,370, OF 17.04.91, 2,377, OF 30.04.91, 2,461, OF 11.07.91, 2,722, OF 21.02.92, AND 2,802, OF 13.04.92.

ART. 4. CIRCULAR LETTERS NOS. 2,150, OF 28.02.91, AND 2,164, OF 13.05.91, ISSUED BASED ON CIRCULAR NO. 1,903, OF 26.02.91, REMAIN IN FORCE, WHOSE REGULATORY BASES AND CITATIONS NOW REFER TO THIS CIRCULAR.

BRASÍLIA (DF), AUGUST 5, 1992

GUSTAVO JORGE LABOISSIÈRE LOYOLA PEDRO LUIZ BODIN DE MORAES DIRECTOR DIRECTOR

ATTACHED REGULATIONS

CHAPTER I

ON THE ESTABLISHMENT AND CHARACTERISTICS

ART. 1. THE FINANCIAL INVESTMENT FUND, CONSTITUTED IN THE FORM OF AN OPEN CONDOMINIUM, IS A COMMUNITY OF RESOURCES DESTINED FOR APPLICATION IN A DIVERSIFIED PORTFOLIO OF FIXED INCOME SECURITIES.

SINGLE PARAGRAPH. THE FUND WILL HAVE AN INDEFINITE DURATION AND ITS NAME, WHICH CANNOT CONTAIN TERMS INCOMPATIBLE WITH ITS OBJECTIVE, WILL INCLUDE THE EXPRESSION "FINANCIAL INVESTMENT".

ART. 2. THE ESTABLISHMENT OF A FINANCIAL INVESTMENT FUND, WITHIN A MAXIMUM PERIOD OF FIVE DAYS COUNTED FROM ITS OCCURRENCE, WILL BE SUBJECT TO WRITTEN COMMUNICATION TO THE REGIONAL DELEGACY OF THE CENTRAL BANK TO WHICH THE ADMINISTRATING INSTITUTION IS JURISDICTIONALLY SUBJECT, THIS COMMUNICATION MUST CONTAIN THE NAME OF THE ADMINISTRATOR RESPONSIBLE FOR THE FUND'S OPERATIONS AND BE ACCOMPANIED BY A COPY OF THE CONSTITUTION DOCUMENT.

PARAGRAPH 1. THE CONSTITUTION DOCUMENT, WHICH WILL BE REGISTERED AT THE REGISTRY OF TITLES AND DOCUMENTS, MUST REPRODUCE THE FULL TEXT OF THE FUND'S REGULATIONS AND CONTAIN THE QUALIFICATION OF ITS FOUNDERS.

PARAGRAPH 2. THE CENTRAL BANK MAY, AT ANY TIME, DETERMINE THAT NECESSARY ALTERATIONS BE MADE TO THE FUND'S REGULATIONS.

ART. 3. THE REGULATIONS OF THE FINANCIAL INVESTMENT FUND, TO WHICH THE CONDOMINIUMS MUST ADHERE AT THE TIME OF THEIR ENTRY, WILL CONTAIN THE FOLLOWING INFORMATION:

I - MANAGEMENT FEE, OR CRITERIA FOR ITS FIXATION;

II - OTHER FEES AND/OR EXPENSES;

III - CONDITIONS FOR APPLICATION AND REDEMPTION OF QUOTAS;

IV - AVAILABILITY OF INFORMATION FOR THE CONDOMINIUMS, IN ACCORDANCE WITH ARTS. 41 TO 44.

SINGLE PARAGRAPH. THE FEES, EXPENSES, AND DEADLINES WILL BE IDENTICAL FOR ALL CONDOMINIUMS.

CHAPTER II

ON ADMINISTRATION

ART. 4. THE ADMINISTRATION OF A FINANCIAL INVESTMENT FUND MAY BE EXERCISED BY A MULTIPLE BANK, COMMERCIAL BANK, INVESTMENT BANK, SAVINGS BANK, CREDIT, FINANCING AND INVESTMENT COMPANY, SECURITIES BROKERAGE COMPANY OR SECURITIES DISTRIBUTION COMPANY, UNDER THE DIRECT SUPERVISION AND RESPONSIBILITY OF THE INSTITUTION'S ADMINISTRATOR.

PARAGRAPH 1. FOR THE PURPOSES OF EXERCISING FUND ADMINISTRATION, THE ADMINISTRATING INSTITUTION MUST BE CREDENTIALED IN THE CENTRAL BANK INFORMATION SYSTEM - SISBACEN.

PARAGRAPH 2. THE ADMINISTRATING INSTITUTION THAT DOES NOT POSSESS THE CREDENTIAL REFERRED TO IN PARAGRAPH 1 MUST OBTAIN IT FROM THE CENTRAL BANK/DEPARTMENT OF INFORMATION TECHNOLOGY (DEINF), IN BRASÍLIA (DF), OR TO THE RESPECTIVE REPRESENTATION AT THE REGIONAL DELEGACY TO WHICH IT IS JURISDICTIONALLY SUBJECT.

PARAGRAPH 3. EACH FINANCIAL CONGLOMERATE OR INDEPENDENT INSTITUTION MAY CONSTITUTE AND ADMINISTER ONLY ONE FUND.

ART. 5. THE ADMINISTRATING INSTITUTION OF A FINANCIAL INVESTMENT FUND, OBSERVING THE LIMITATIONS OF THIS REGULATIONS, WILL HAVE POWERS TO PERFORM ALL ACTS NECESSARY FOR THE ADMINISTRATION OF THE FUND'S PORTFOLIO, AS WELL AS TO EXERCISE ALL RIGHTS INHERENT TO THE SECURITIES THAT INTEGRATE IT, INCLUDING THE RIGHT TO SUE AND TO ATTEND AND VOTE IN GENERAL OR SPECIAL ASSEMBLIES.

ART. 6. THE FOLLOWING ARE INCLUDED AMONG THE OBLIGATIONS OF THE ADMINISTRATING INSTITUTION OF A FINANCIAL INVESTMENT FUND:

I - MAINTAIN, AT ITS OWN EXPENSE, UPDATED AND IN PERFECT ORDER, ACCORDING TO GOOD ADMINISTRATIVE PRACTICE:

A - DOCUMENTATION RELATING TO THE FUND'S OPERATIONS;

B - THE REGISTRY OF CONDOMINIUMS;

C - THE MINUTES BOOK OF GENERAL ASSEMBLIES;

D - THE ATTENDANCE BOOK OF CONDOMINIUMS;

E - THE ARCHIVE OF INDEPENDENT AUDITOR OPINIONS;

F - REGISTRY OF ALL ACCOUNTING FACTS RELATING TO THE FUND;

II - RECEIVE ANY YIELDS OR VALUES FROM THE FUND;

III - COVER THE FUND'S ADVERTISING EXPENSES;

IV - DISCLOSE, DAILY, IN THE PERIODICAL(S) REFERRED TO IN ART. 22, ITEM III, THE FUND'S NET ASSETS VALUE, THE QUOTA VALUE, AND THE ACCUMULATED YIELDS FOR THE MONTH AND YEAR TO WHICH THE INFORMATION REFERS;

V - PROVIDE ANNUALLY TO THE CONDOMINIUMS A RECEIPT FOR INCOME TAX DECLARATION PURPOSES.

ART. 7. IT IS PROHIBITED TO THE ADMINISTRATING INSTITUTION, IN THE SPECIFIC EXERCISE OF ITS FUNCTIONS AND USING THE RESOURCES OF THE FINANCIAL INVESTMENT FUND:

I - GRANT LOANS OR ADVANCES, OR OPEN CREDITS, UNDER ANY MODALITY;

II - PROVIDE GUARANTEES, ENDORSEMENTS, ACCEPTANCES, OR CO-OBLIGATE UNDER ANY OTHER FORM;

III - TRADE WITH OTHER SECURITIES OTHER THAN THOSE REFERRED TO IN THIS REGULATIONS OR THOSE THAT MAY BE AUTHORIZED BY THE CENTRAL BANK;

IV - APPLY IN FOREIGN COUNTRIES RESOURCES RAISED IN THE COUNTRY;

V - ACQUIRE QUOTAS OF ITS OWN FUND, OR OF ANY OTHER FUND IN CONDOMINIUM;

VI - PAY OR REIMBURSE FINES AND/OR MONETARY PENALTIES IMPOSED UPON IT DUE TO NON-COMPLIANCE WITH NORMS CONSOLIDATED IN THIS REGULATIONS;

VII - SELL FUND QUOTAS ON INSTALLMENTS;

VIII - PROMISE DETERMINED YIELDS TO CONDOMINIUMS;

IX - MAKE, IN ITS ADVERTISING OR OTHER DOCUMENTS PRESENTED TO INVESTORS, PROMISES OF WITHDRAWALS OR YIELDS, BASED ON ITS OWN PERFORMANCE, ON OTHERS' PERFORMANCE, OR ON SECURITIES;

X - DELEGATE POWERS TO MANAGE AND ADMINISTER THE FUND, EXCEPT WITH SPECIFIC AUTHORIZATION FROM THE CENTRAL BANK.

ART. 8. THE ADMINISTRATING INSTITUTION MAY, THROUGH NOTICE PUBLISHED IN THE PERIODICAL(S) REFERRED TO IN ART. 22, ITEM III, OR VIA LETTER OR TELEGRAM ADDRESSED TO EACH CONDOMINIUM, RENOUNCE THE ADMINISTRATION OF THE FINANCIAL INVESTMENT FUND, BECOMING OBLIGATED TO, AT THE SAME ACT, CONVENE A GENERAL ASSEMBLY THAT WILL DECIDE ON ITS SUBSTITUTION OR ON THE LIQUIDATION OF THE FUND, OBSERVING THE PROVISIONS OF ART. 29.

SINGLE PARAGRAPH. IN THE CASES OF SUBSTITUTION OF THE ADMINISTRATING INSTITUTION AND LIQUIDATION OF THE FUND, THE NORMS IN FORCE ON CIVIL OR CRIMINAL LIABILITY OF ADMINISTRATORS, DIRECTORS, AND MANAGERS OF FINANCIAL INSTITUTIONS WILL APPLY, AS APPLICABLE, INDEPENDENTLY OF THOSE GOVERNING THE CIVIL LIABILITY OF THE ADMINISTRATING INSTITUTION ITSELF.

ART. 9. THE ADMINISTRATING INSTITUTION WILL ESTIMATE, AT ITS DISCRETION, THE REMUNERATION TO BE RECEIVED FOR THE PROVISION OF MANAGEMENT AND ADMINISTRATION SERVICES OF THE FINANCIAL INVESTMENT FUND.

CHAPTER III

ON THE COMPOSITION AND DIVERSIFICATION OF THE PORTFOLIO

ART. 10. THE APPLICATIONS OF THE FINANCIAL INVESTMENT FUND MUST BE REPRESENTED BY:

I - 45%, MINIMUM, IN:

A - SECURITIES ISSUED BY THE NATIONAL TREASURY OR THE CENTRAL BANK, REMUNERATED AT MARKET RATES; AND

B - DEPOSITS WITH THE CENTRAL BANK REMUNERATED AT THE REFERENCE DAILY RATE - TRD, OBSERVING A MINIMUM OF 25%;

II - BANK DEPOSIT CERTIFICATES, DRAFTS, MORTGAGE BONDS, SECURITIES ISSUED BY THE NATIONAL TREASURY OR THE CENTRAL BANK, SECURITIES OF STATE AND MUNICIPAL PUBLIC DEBT, AND DEBENTURES, OBSERVING THAT UP TO 25% OF THE TOTAL OF THESE APPLICATIONS MAY BE REPRESENTED BY SECURITIES INTEGRATING THE PORTFOLIO OF INSTITUTIONS QUALIFIED TO CONDUCT REPURCHASE OPERATIONS, LINKED TO REPURCHASE COMMITMENTS ASSUMED BY THESE;

III - 10%, MINIMUM, IN ECONOMIC DEVELOPMENT TITLES (TDE), LINKED TO PROJECTS CREDENTIALED IN THE PROGRAM FOR PROMOTING INDUSTRIAL COMPETITIVENESS, ISSUED BY MULTIPLE BANKS WITH COMMERCIAL OR INVESTMENT PORTFOLIOS, COMMERCIAL BANKS, INVESTMENT BANKS, DEVELOPMENT BANKS, AND SAVINGS BANKS, REMUNERATED AT THE REFERENCE RATE - TR, WITH A MATURITY PERIOD COMPATIBLE WITH THE FINANCIAL SCHEDULES OF THE PROJECTS, ADMITTING THAT UP TO 50% OF THE TOTAL OF THESE APPLICATIONS MAY BE REPRESENTED BY:

A - SECURITIES OF IDENTICAL CHARACTERISTICS, LINKED TO INVESTMENT PROJECTS IN AGRICULTURE, ISSUED BY THE ADMINISTRATING INSTITUTION ITSELF, IF AUTHORIZED TO RAISE RURAL SAVINGS DEPOSITS, OR BY AN INSTITUTION AUTHORIZED TO RAISE SAID DEPOSITS INTEGRATING THE FINANCIAL CONGLOMERATE TO WHICH THE ADMINISTRATING INSTITUTION BELONGS;

B - MORTGAGE BONDS ISSUED BACKED BY HOUSING FINANCING GRANTED WITHIN THE HOUSING FINANCIAL SYSTEM, IN THE CASE OF FUNDS ADMINISTERED BY SAVINGS BANKS;

IV - 3%, MINIMUM, IN QUOTAS OF THE SOCIAL DEVELOPMENT FUND - FDS.

PARAGRAPH 1. THE PERCENTAGES ESTABLISHED IN THIS ARTICLE MUST BE COMPLIED WITH BASED ON THE FUND'S NET ASSETS VALUE, AS DEFINED IN ART. 17, OBSERVING THE PERIODICITY PROVIDED FOR, CASE BY CASE, IN THIS REGULATIONS.

PARAGRAPH 2. THE PERCENTAGES OF 45% IN SECURITIES ISSUED BY THE NATIONAL TREASURY OR THE CENTRAL BANK AND 25% IN SECURITIES INTEGRATING THE PORTFOLIO OF INSTITUTIONS QUALIFIED TO CONDUCT REPURCHASE OPERATIONS, ESTABLISHED, RESPECTIVELY, IN ITEMS I AND II, MUST BE COMPLIED WITH DAILY, BASED ON THE NET ASSETS VALUE OF THE IMMEDIATE PREVIOUS BUSINESS DAY.

PARAGRAPH 3. REGARDING THE SECURITIES REFERRED TO IN ITEM II:

A - THE TOTAL OF A SAME ISSUER WILL NOT EXCEED 10% OF THE TOTAL APPLICATIONS OF THE FUND, OR 30% OF THIS SAME TOTAL IN THE CASE OF SECURITIES ISSUED BY A FINANCIAL INSTITUTION;

B - THE TOTAL OF ISSUANCE OR CO-OBLIGATION OF A SAME ISSUER, ITS CONTROLLER, COMPANIES DIRECTLY OR INDIRECTLY CONTROLLED BY IT, AND ITS AFFILIATES UNDER COMMON CONTROL WILL NOT EXCEED 10% OF THE TOTAL APPLICATIONS OF THE FUND, OR 30% OF THIS SAME TOTAL IN THE CASE OF A CONGLOMERATE INTEGRATED BY A FINANCIAL INSTITUTION;

C - RESALE COMMITMENTS IN REPURCHASE OPERATIONS MAY ONLY BE AGREED UPON OBSERVING THE PROVISIONS OF THE REGULATIONS IN FORCE.

PARAGRAPH 4. EXEMPT FROM THE DIVERSIFICATION REQUIREMENTS ESTABLISHED IN PARAGRAPH 3, ALINÉAS "A" AND "B", ARE SECURITIES ISSUED BY THE NATIONAL TREASURY OR THE CENTRAL BANK INTEGRATING THE FUND'S PORTFOLIO.

PARAGRAPH 5. SECURITIES OF THE PUBLIC DEBT OF THE STATES OF BAHIA, CEARÁ, ESPÍRITO SANTO, MINAS GERAIS, PARANÁ, RIO DE JANEIRO, RIO GRANDE DO SUL, SANTA CATARINA, AND SÃO PAULO, AND OF THE MUNICIPALITY OF SÃO PAULO, AS WELL AS THOSE OF OTHER STATES AND MUNICIPALITIES THAT THE CENTRAL BANK MAY SPECIFY, INTEGRATING THE FUND'S PORTFOLIO, WILL HAVE THE FOLLOWING TREATMENT:

A - IN THE CASE OF FUNDS ADMINISTERED BY A FEDERAL OFFICIAL FINANCIAL INSTITUTION, THEY MAY INTEGRATE THE COMPUTATION OF APPLICATIONS IN SECURITIES ISSUED BY THE NATIONAL TREASURY OR THE CENTRAL BANK, REFERRED TO IN ITEM I, ALINÉA "A", UP TO A LIMIT OF 50% OF THE TOTAL OF THESE APPLICATIONS;

B - IN THE CASE OF FUNDS ADMINISTERED BY AN INSTITUTION CONTROLLED BY THE CORRESPONDING ISSUING STATES OR BY A BANK ADMINISTERING A STATE AND/OR MUNICIPAL SECURITY LIQUIDITY FUND WHOSE SECURITIES HAVE BEEN SPECIFIED BY THE CENTRAL BANK:

1 - THEY MAY INTEGRATE THE COMPUTATION OF APPLICATIONS IN SECURITIES ISSUED BY THE NATIONAL TREASURY OR THE CENTRAL BANK, REFERRED TO IN ITEM I, ALINÉA "A";

2 - THEY WILL NOT BE SUBJECT TO THE DIVERSIFICATION REQUIREMENTS ESTABLISHED IN PARAGRAPH 3, ALINÉAS "A" AND "B".

PARAGRAPH 6. THE APPLICATIONS OF THE FUND IN SECURITIES INTEGRATING THE PORTFOLIO OF INSTITUTIONS QUALIFIED TO CONDUCT REPURCHASE OPERATIONS THAT FALL UNDER THE CONDITIONS ESTABLISHED IN ART. 1 OF CIRCULAR NO. 2,063, OF 16.10.91, WILL HAVE THE FOLLOWING TREATMENT:

A - THEY MAY INTEGRATE THE COMPUTATION OF APPLICATIONS REFERRED TO IN ITEM I, ALINÉA "A", IN THE CASE OF THOSE OPERATIONS HAVING AS OBJECT SECURITIES ISSUED BY THE NATIONAL TREASURY OR THE CENTRAL BANK;

B - THEY WILL BE SUBJECT, AS APPLICABLE, TO THE TREATMENT PROVIDED FOR IN PARAGRAPH 5, IN THE CASE OF THOSE OPERATIONS HAVING AS OBJECT STATE AND MUNICIPAL PUBLIC SECURITIES SPECIFIED BY THE CENTRAL BANK;

C - THEY WILL NOT BE CONSIDERED FOR THE PURPOSE OF VERIFYING OBSERVANCE OF THE 25% PERCENTAGE ESTABLISHED IN ITEM II.

ART. 11. THE REQUIREMENT OF 10% OF THE NET ASSETS VALUE OF THE FINANCIAL INVESTMENT FUND IN TDE, REFERRED TO IN ART. 10, ITEM III, WILL BE CALCULATED BASED ON THE QUOTIENT BETWEEN THE AMOUNT OF THESE SECURITIES HELD BY THE FUND ON THE LAST BUSINESS DAY OF THE CALCULATION PERIOD AND THE ARITHMETIC AVERAGE OF ITS NET ASSETS VALUE IN THE SAME PERIOD.

PARAGRAPH 1. FOR THE PURPOSES OF THE PROVISIONS OF THIS ARTICLE, THE CALCULATION PERIOD IS DEFINED AS THE TIME SPAN REPRESENTED BY TWO CONSECUTIVE WEEKS, WHICH MOVE ONE BY ONE, STARTING ON A MONDAY AND ENDING ON THE FRIDAY OF THE FOLLOWING WEEK, CONSIDERING ONLY BUSINESS DAYS.

PARAGRAPH 2. COMPLIANCE WITH THE REQUIREMENT REFERRED TO IN THIS ARTICLE MUST BE VERIFIED ON THE LAST BUSINESS DAY OF THE CALCULATION PERIOD, RESERVING THE PROVISIONS OF PARAGRAPH 3.

PARAGRAPH 3. IN THE EVENT THAT THE ADMINISTRATING INSTITUTION FAILS TO FULLY COMPLY WITH THE REQUIREMENT REFERRED TO IN THIS ARTICLE, THE VALUE CORRESPONDING TO THE VERIFIED DIFFERENCE MUST BE DESTINED TO THE CONSTITUTION OF DEPOSITS WITH THE CENTRAL BANK FOR INSUFFICIENCY IN THE ACQUISITION OF TDE, OBSERVING THE PROVISIONS OF ARTS. 14 TO 16.

ART. 12. THE REQUIREMENT OF 3% OF THE NET ASSETS VALUE OF THE FINANCIAL INVESTMENT FUND IN FDS QUOTAS, REFERRED TO IN ART. 10, ITEM IV, WILL BE CALCULATED BASED ON THE QUOTIENT BETWEEN THE AVERAGE AMOUNT OF THESE QUOTAS HELD BY THE FUND IN THE PREVIOUS MONTH AND THE ARITHMETIC AVERAGE OF ITS NET ASSETS VALUE IN THE SAME MONTH.

PARAGRAPH 1. COMPLIANCE WITH THE REQUIREMENT REFERRED TO IN THIS ARTICLE MUST BE VERIFIED ON THE SECOND BUSINESS DAY OF EACH MONTH.

PARAGRAPH 2. THE FIRST ACQUISITION OF FDS QUOTAS WILL BE MADE AT THE RATE OF 3% OF THE AVERAGE NET ASSETS VALUE OF THE FUND VERIFIED IN THE MONTH OF THE START OF ITS ACTIVITIES.

PARAGRAPH 3. FDS QUOTAS HELD BY THE FUND ARE NOT REDEEMABLE, EXCEPT IN THE CASE REFERRED TO IN PARAGRAPH 4, ADMITTING THE ALIENATION OF ANY EXCESS TO ANOTHER FINANCIAL INVESTMENT FUND, PROVIDED THAT ON THE SAME DAY OF COMPLIANCE WITH THE REQUIREMENT REFERRED TO IN THIS ARTICLE.

PARAGRAPH 4. IN THE CASE OF EXTINCTION OF A FINANCIAL INVESTMENT FUND, THE ADMINISTRATOR OF THE FDS WILL PROVIDE LIQUIDITY FOR THE QUOTAS OF ITS ISSUANCE HELD BY THE FUND IN EXTINCTION.

CHAPTER IV

ON DEPOSITS WITH THE CENTRAL BANK

ART. 13. THE REQUIREMENT OF 25% OF THE NET ASSETS VALUE OF THE FINANCIAL INVESTMENT FUND IN DEPOSITS WITH THE CENTRAL BANK, REFERRED TO IN ART. 10, ITEM I, ALINÉA "B", WILL BE CALCULATED BASED ON THE ARITHMETIC AVERAGE OF THE FUND'S NET ASSETS VALUE DURING THE CALCULATION PERIOD.

SINGLE PARAGRAPH. FOR THE PURPOSES OF THE PROVISIONS OF THIS ARTICLE, THE CALCULATION PERIOD IS DEFINED AS THE TIME SPAN REPRESENTED BY TWO CONSECUTIVE WEEKS, WHICH MOVE ONE BY ONE, STARTING ON A MONDAY AND ENDING ON THE FRIDAY OF THE FOLLOWING WEEK, CONSIDERING ONLY BUSINESS DAYS.

ART. 14. DEPOSITS WITH THE CENTRAL BANK FOR INSUFFICIENCY IN THE ACQUISITION OF TDE, REFERRED TO IN ART. 11, PARAGRAPH 3, WILL BE CLASSIFIED ACCORDING TO THE FOLLOWING:

I - IN SUBSTITUTION FOR SECURITIES TO BE ISSUED AS A RESULT OF PROJECTS ALREADY CREDENTIALED, BUT WHOSE DISBURSEMENT OF RESOURCES HAS NOT YET OCCURRED, IN WHICH CASE THE DOCUMENTATION RELATING TO THE CREDENTIALING OF THE PROJECT AND THE COMMITMENT TO ACQUIRE BY THE FUND, FROM THE ISSUER, THE CORRESPONDING SECURITIES MUST BE MAINTAINED AT THE DISPOSAL OF THE CENTRAL BANK AT THE ADMINISTRATING INSTITUTION;

II - DUE TO THE UNAVAILABILITY OF SECURITIES.

ART. 15. THE DEPOSITS REFERRED TO IN ARTS. 13 AND 14:

I - WILL HAVE THEIR CONSTITUTION AND MOVEMENTS CARRIED OUT EXCLUSIVELY VIA THE "BANKING RESERVES" ACCOUNT;

II - WILL BE REMUNERATED AT THE REFERENCE DAILY RATE - TRD;

III - WILL BE UPDATED DAILY, ADDING TO THE CORRESPONDING BALANCES THEIR RESPECTIVE REMUNERATION.

PARAGRAPH 1. WITH A VIEW TO IMPLEMENTING THE PROVISIONS OF ITEM I, THE ADMINISTRATING INSTITUTION NOT HOLDING A "BANKING RESERVES" ACCOUNT MUST ENTER INTO AN AGREEMENT WITH A MULTIPLE BANK WITH COMMERCIAL PORTFOLIO, COMMERCIAL BANK, OR SAVINGS BANK.

PARAGRAPH 2. THE AGREEMENT PROVIDED FOR IN PARAGRAPH 1 DOES NOT IMPLY ANY LIABILITY ON THE PART OF THE FINANCIAL INSTITUTION HOLDING THE "BANKING RESERVES" ACCOUNT TOWARDS THE CENTRAL BANK, RESERVING THE CASE WHERE THE POSTINGS TRANSITED BY IT ARE NOT CHALLENGED UNTIL THE FIRST BUSINESS DAY FOLLOWING THE EVENT.

ART. 16. THE DEPOSITS REFERRED TO IN ARTS. 13 AND 14 WILL BE CONSTITUTED, AUTOMATICALLY, ON THE WEDNESDAY OF THE WEEK FOLLOWING THE END OF THE CALCULATION PERIOD OR, IF NOT A BUSINESS DAY, ON THE FIRST SUBSEQUENT BUSINESS DAY, REMAINING UNAVAILABLE UNTIL THE TUESDAY OF THE FOLLOWING WEEK.

PARAGRAPH 1. EXCLUSIVELY FOR THE PURPOSES OF ACQUIRING TDE, THE DEPOSITS REFERRED TO IN ART. 14 MAY BE PARTIALLY OR FULLY RELEASED DURING THE PERIOD OF UNAVAILABILITY.

PARAGRAPH 2. FOR THE PURPOSES OF THE EARLY RELEASE REFERRED TO IN PARAGRAPH 1, THE ADMINISTRATING INSTITUTION MUST FORMALIZE A REQUEST TO THE REGIONAL DELEGACY OF THE CENTRAL BANK TO WHICH IT IS JURISDICTIONALLY SUBJECT, CLARIFYING THAT THE CORRESPONDING CREDIT WILL BE POSTED IN ITS "BANKING RESERVES" ACCOUNT OR IN THE ACCOUNT OF THE CONVENIENT FINANCIAL INSTITUTION, AS THE CASE MAY BE, ON THE VERY DAY OF THE REQUEST.

CHAPTER V

ON NET ASSETS

ART. 17. THE NET ASSETS VALUE OF THE FINANCIAL INVESTMENT FUND WILL BE UNDERSTOOD AS THE SUM OF AVAILABLE FUNDS PLUS THE VALUE OF THE PORTFOLIO, PLUS VALUES RECEIVABLE, MINUS LIABILITIES.

SINGLE PARAGRAPH. FOR THE PURPOSES OF DETERMINING THE VALUE OF THE PORTFOLIO, THE CRITERIA ESTABLISHED IN THE CHART OF ACCOUNTS REFERRED TO IN ART. 33, SINGLE PARAGRAPH, WILL BE OBSERVED.

CHAPTER VI

ON THE ISSUANCE, PLACEMENT, AND REDEMPTION OF QUOTAS

ART. 18. FINANCIAL INVESTMENT FUND QUOTAS, WHICH WILL BE NON-TRANSFERABLE, WILL CORRESPOND TO IDEAL FRACTIONS THEREOF, ASSUME THE FORM OF REGISTERED SHARES, AND WILL BE MAINTAINED IN DEPOSIT ACCOUNTS IN THE NAME OF THEIR HOLDERS.

SINGLE PARAGRAPH. THE QUALITY OF CONDOMINIUM IS PRESUMED BY THE REGISTRY OF QUOTAS IN THE DEPOSIT ACCOUNT OPENED IN THEIR NAME IN THE LEDGERS OF THE DEPOSITORY INSTITUTION.

ART. 19. STATEMENTS OF DEPOSIT ACCOUNTS WILL PROVE THE OBLIGATION OF THE ADMINISTRATING INSTITUTION TO COMPLY WITH THE CONTRACTUAL PRESCRIPTIONS CONTAINED IN THE REGULATIONS OF THE FINANCIAL INVESTMENT FUND AND THE NORMS OF THESE REGULATIONS.

SINGLE PARAGRAPH. ANY RESTRICTIVE OR MODIFICATORY CLAUSE OF THE OBLIGATION REFERRED TO IN THIS ARTICLE WILL BE REPUTED AS UNWRITTEN.

ART. 20. The extracts of the deposit accounts shall refer to an integer and/or fractional number of quotas, as provided for in the regulations of the financial application fund.

SINGLE PARAGRAPH. When the system of whole quotas is adopted, the residual value of the investments shall be maintained in a checking account for future investments or, if requested, paid to the condominium owner in cash.

ART. 21. Quotas of financial application funds may only be placed by:

I - MULTIPLE BANK;

II - COMMERCIAL BANK;

III - INVESTMENT BANK;

IV - SAVINGS BANK;

V - CREDIT, FINANCING AND INVESTMENT COMPANY;

VI - SECURITIES BROKERAGE COMPANY;

VII - SECURITIES DISTRIBUTION COMPANY.

ART. 22. The following shall be provided to the investor, free of charge, at the time of their entry into the financial application fund:

I - A COPY OF THE FUND'S REGULATIONS;

II - DOCUMENT CONTAINING CLEARLY THE FEES AND/OR EXPENSES WITH WHICH THE INVESTOR HAS BEAR;

III - INDICATION OF THE PERIODICAL(S) USED FOR THE DISCLOSURE OF INFORMATION ABOUT THE FUND.

SINGLE PARAGRAPH. The sending of the documents referred to in this article at the time of confirmation of the first investment shall be admitted.

ART. 23. The quotas of financial application funds shall have their value calculated daily, based on a patrimonial evaluation carried out in accordance with the content of Art. 17 and the norms of the Chart of Accounts referred to in Art. 33, single paragraph.

ART. 24. The investment and redemption of quotas of financial application funds shall be carried out in cash, check, payment order, debit and credit in checking account or document of order of credit.

SINGLE PARAGRAPH. In special cases, after preliminary hearing of the Central Bank, the redemption may be carried out in securities.

ART. 25. In the issuance of quotas of financial application funds, the value of the quota in force on the day of the effective availability of the resources entrusted by the investor to the administering institution, at its headquarters or branches, shall be used.

SINGLE PARAGRAPH. For the calculation of the number of quotas to which the investor is entitled, the fees and/or expenses agreed upon shall be deducted from the value delivered to the administering institution.

ART. 26. The redemption of quotas of financial application funds shall be carried out, without charging any fee or expense, on the same day or on the first subsequent business day of the respective request.

SINGLE PARAGRAPH. In the redemption, the value of the quota in force on the same day or on the first preceding business day before the respective payment shall be used, as provided for in the fund's regulations.

ART. 27. The regulations of the financial application fund may provide for the reinvestment of values corresponding to redemptions of quotas requested and not sought by condominium owners within a period of thirty days.

CHAPTER VII

OF THE GENERAL ASSEMBLY

ART. 28. It shall be the exclusive competence of the General Assembly of Condominiums of Financial Application Funds:

I - TO APPROVE, BY APRIL 30 OF EACH YEAR, THE ACCOUNTS OF THE FUND, PREPARED BY THE ADMINISTERING INSTITUTION, AND TO DELIBERATE ON THE FINANCIAL STATEMENTS THEREOF;

II - TO AMEND THE REGULATIONS OF THE FUND;

III - TO DELIBERATE ON THE SUBSTITUTION OF THE ADMINISTERING INSTITUTION;

IV - TO DELIBERATE ON THE TRANSFORMATION, MERGER, INCORPORATION, SPIN-OFF OR LIQUIDATION OF THE FUND.

SINGLE PARAGRAPH. The regulations of the fund may be amended independently of a General Assembly, whenever such amendment results exclusively from the need to meet requirements of the Central Bank, as a consequence of legal or regulatory norms, and the necessary communication to the condominium owners shall be provided within a period of thirty days.

ART. 29. The convening of the General Assembly of Condominiums of Financial Application Funds shall be made by announcement published in the periodical(s) referred to in Art. 22, item III, of which shall appear, mandatorily, the day, hour and place where the Assembly will be held and, even if in a summary manner, the matters to be addressed.

PARAGRAPH 1. The first convening of the General Assembly shall be made with eight days of antecedence, at the minimum, counting the period of publication of the first announcement.

PARAGRAPH 2. In the cases of Art. 28, items III and IV, if the General Assembly is not held, a new announcement of second convening shall be published, with a minimum antecedence of five days.

PARAGRAPH 3. Unless for force majeure reasons, the General Assembly shall be held in the place where the administering institution has its headquarters; when it must be held elsewhere, the announcements shall indicate, clearly, the place of the meeting, which in no case may be held outside the locality of the headquarters.

PARAGRAPH 4. Regardless of the formalities provided for in this article, the General Assembly shall be considered regular at which all condominium owners attend.

ART. 30. In addition to the annual meeting for the rendering of accounts, the General Assembly of Condominiums of Financial Application Funds may, furthermore, meet to deal with the matters referred to in Art. 28, items II to IV, by convening of the administering institution or of condominium owners holding quotas that represent 30%, at the minimum, of the total.

ART. 31. In the General Assembly of Condominiums of Financial Application Funds, which may be installed with any number, the deliberations shall be taken by the criterion of the absolute majority of quotas of condominium owners present, each quota corresponding to one vote.

PARAGRAPH 1. In the deliberations taken in General Assembly referring to the cases of Art. 28, items III and IV, the absolute majority shall be computed in relation to the total of quotas issued.

PARAGRAPH 2. The deliberations shall be taken by majority of quotas of condominium owners present at the General Assembly, even in the cases of Art. 28, items III and IV, when the "quorum" of the absolute majority of quotas issued is not reached in a convening held in first call.

PARAGRAPH 3. Only the condominium owners registered up to three days before the date fixed for its holding may vote in the General Assembly.

PARAGRAPH 4. The legal representatives of the condominium owners or their duly constituted proxies have the quality to attend the General Assembly.

CHAPTER VIII

OF THE FINANCIAL STATEMENTS

ART. 32. The financial application fund shall have accounting records distinct from those relative to the administering institution.

ART. 33. The financial statements of financial application funds shall be subject to the norms of bookkeeping issued by the National Monetary Council and by the Central Bank.

SINGLE PARAGRAPH. For the purpose of the evaluation of the assets comprising the fund's portfolio, as well as for the appropriation of revenues and expenses inherent thereto, the norms contained in the Chart of Accounts edited by the Central Bank shall be observed.

ART. 34. The financial application fund shall be audited semi-annually by an independent auditor registered with the Securities and Exchange Commission.

CHAPTER IX

OF THE RENDERING OF INFORMATION TO THE CENTRAL BANK

ART. 35. The administering institution of financial application funds shall provide to the Central Bank/Banking Operations Department (DEBAN), with at least two business days before the start of the fund's activities, via SISBACEN Correio transaction, the following information:

I - DENOMINATION AND NUMBER OF REGISTRATION IN THE GENERAL REGISTER OF CONTRIBUTORS (CGC), OF ITS OWN AND OF THE FUND;

II - DENOMINATION OF THE FINANCIAL INSTITUTION IN WHOSE "BANKING RESERVES" ACCOUNT THE MOVEMENT OF THE DEPOSITS REFERRED TO IN ARTS. 13 AND 14 WILL BE PROCESSED;

III - DATE ON WHICH THE ACTIVITIES OF THE FUND WILL BEGIN.

PARAGRAPH 1. The information referred to in this article is intended for the registration of the fund and constitutes a prerequisite for the access of the administering institution to the PFAF500 transaction of SISBACEN.

PARAGRAPH 2. In the event that the administering institution of the fund does not have a "BANKING RESERVES" account, the convening financial institution shall manifest its conformity, under the same conditions and deadline provided for in this article.

ART. 36. The administering institution of financial application funds shall inform the Central Bank/Department of Special Studies and Monitoring of the Financial System (DEASF), via SISBACEN Correio transaction, the annual rate to be charged for the provision of management and administration services of the fund.

SINGLE PARAGRAPH. The information referred to in this article shall be provided at the start of the fund's activities or when the referred rate is altered, in both cases up to the first subsequent business day of the date of the respective occurrence.

ART. 37. The administering institution of financial application funds that comes to administer, concomitantly, fund(s) of liquidity of state or municipal debt securities shall inform this condition to the Central Bank/Department of Special Studies and Monitoring of the Financial System (DEASF), via SISBACEN Correio transaction.

PARAGRAPH 1. The information referred to in this article shall be provided up to the first subsequent business day of the date of the respective occurrence, as well as be accompanied by information on the denomination and the number of registration in the General Register of Contributors (CGC) of the administering institution itself, of the financial application fund and of the state or municipal debt liquidity fund(s) administered.

PARAGRAPH 2. The loss of the condition of administering institution of state or municipal debt liquidity fund shall also be informed to the Central Bank, under the same conditions and deadline provided for in this article.

ART. 38. The administering institution of financial application funds shall provide daily to the Central Bank, via PFAF500 transaction of SISBACEN, the following information relative to the fund:

I - BALANCES OF INVESTMENTS IN:

A - SECURITIES ISSUED BY THE NATIONAL TREASURY;

B - SECURITIES ISSUED BY THE CENTRAL BANK;

C - PRIVATE SECURITIES AND SECURITIES (CERTIFICATES OF BANK DEPOSIT, MORTGAGE LETTERS, LETTERS OF EXCHANGE AND DEBENTURES);

D - SECURITIES OF THE STATE AND MUNICIPAL PUBLIC DEBTS:

1 - RELATED IN ART. 10, PARAGRAPH 5, AND OTHERS THAT THE CENTRAL BANK COMES TO SPECIFY;

2 - NOT SPECIFIED BY THE CENTRAL BANK;

E - COMMITTED OPERATIONS:

1 - NOT CLASSIFIED UNDER THE CONDITIONS ESTABLISHED IN ART. 1 OF CIRCULAR NO. 2,063, OF 16.10.91, HAVING AS OBJECT:

. SECURITIES ISSUED BY THE NATIONAL TREASURY OR THE CENTRAL BANK;

. SECURITIES OF THE STATE AND MUNICIPAL PUBLIC DEBTS;

. PRIVATE SECURITIES AND SECURITIES;

2 - CLASSIFIED UNDER THE CONDITIONS ESTABLISHED IN ART. 1 OF CIRCULAR NO. 2,063, OF 16.10.91, HAVING AS OBJECT:

. SECURITIES ISSUED BY THE NATIONAL TREASURY OR THE CENTRAL BANK;

. SECURITIES OF THE STATE AND MUNICIPAL PUBLIC DEBTS:

• RELATED IN ART. 10, PARAGRAPH 5, AND OTHERS THAT THE CENTRAL BANK COMES TO SPECIFY;

• NOT SPECIFIED BY THE CENTRAL BANK;

F - TDE AND, IF THE CASE:

1 - SECURITIES LINKED TO INVESTMENT PROJECTS IN AGRICULTURE, ISSUED BY THE ADMINISTERING INSTITUTION ITSELF, IF AUTHORIZED TO COLLECT RURAL SAVINGS DEPOSITS, OR BY THE INSTITUTION AUTHORIZED INTEGRATING THE FINANCIAL CONGLOMERATE TO WHICH THE ADMINISTERING INSTITUTION BELONGS;

2 - MORTGAGE LETTERS ISSUED WITH COLLATERAL IN HOUSING FINANCING GRANTED WITHIN THE SCOPE OF THE HOUSING FINANCIAL SYSTEM, IN THE CASE OF A FUND ADMINISTERED BY A SAVINGS BANK;

G - QUOTAS OF THE FDS;

II - NET ASSET VALUE;

III - RETURNS ON THE DAY AND ACCUMULATED IN THE MONTH AND IN THE YEAR, WITH TWO DECIMAL PLACES;

IV - AMOUNT, IN CRUZEIROS, OF THE QUOTAS ISSUED ON THE DAY;

V - AMOUNT, IN CRUZEIROS, OF THE QUOTAS REDEEMED ON THE DAY.

PARAGRAPH 1. The information referred to in this article may be provided with a lag of up to three business days, except those relative to the last day of the period of calculation of the deposits with the Central Bank referred to in ARTS. 13 and 14, which shall be provided up to the business day immediately preceding the date of constitution of these deposits.

PARAGRAPH 2. The administering institution that comes to provide or alter the information referred to in this article after the deadline referred to in PARAGRAPH 1 shall formalize a request in this sense to the Regional Agency of the Central Bank to which it is subject.

PARAGRAPH 3. The provision or alteration of the information referred to in this article after the deadline provided for in PARAGRAPH 1, as well as the modification of the value of the deposits with the Central Bank, subject the administering institution to the payment of:

A - FINE, PER BUSINESS DAY OF DELAY IN THE PROVISION OF THE INFORMATION OR REASON OF ITS ALTERATION, IN THE VALUE OF CR$ 500,000.00 (FIVE HUNDRED THOUSAND CRUZEIROS), CORRECTED MONTHLY BY THE VARIATION OF THE INDEX OF UPDATE OF THE FISCAL REFERENCE UNIT - UFIR MONTHLY; AND

B - PECUNIARY PENALTY, TO BE CALCULATED ON THE VALUE OF THE EVENTUAL DEFICIENCY IN THE CONSTITUTION OF THE REFERRED DEPOSITS.

PARAGRAPH 4. The pecuniary penalty referred to in PARAGRAPH 3, ALINÉA "B", shall be calculated taking as base the average adjusted rate of all financing operations registered in the SPECIAL SYSTEM OF SETTLEMENT AND CUSTODY (SELIC), INDEPENDENTLY OF THE CHARACTERISTICS OF THE SECURITIES, INCREASED BY INTEREST OF 30% PER YEAR, CONSIDERING THE NUMBER OF BUSINESS DAYS ELAPSED BETWEEN THE DATE OF THE CONSTITUTION OF THE DEPOSITS WITH THE CENTRAL BANK AND THE DAY OF REGULARIZATION OF THE INFORMATION PERTAINING TO THEM, DEDUCTING THE VARIATION OF THE DAILY REFERENCE RATE - TRD IN THE PERIOD.

PARAGRAPH 5. The daily factors and the DAILY REFERENCE RATE - TRD, used for the purpose of calculating the pecuniary penalty, referred to in PARAGRAPH 4, may be obtained by consultation, respectively, to the PTAX880 - OPTION 14 AND PTAX860 - OPTION 17 TRANSACTIONS OF SISBACEN.

PARAGRAPH 6. The fine and the pecuniary penalty referred to in PARAGRAPH 3 shall be due on the first subsequent business day of the regularization of the information referred to in this article.

PARAGRAPH 7. The modifications in the value of the deposits with the Central Bank, when resulting from the request of the administering institution, including in the sense of the provision or alteration of the information referred to in this article after the deadline provided for in PARAGRAPH 1, shall not entail valued entries.

PARAGRAPH 8. For the purpose of consultation to the information referred to in this article, the administering institution shall have the PFAF600 transaction of SISBACEN.

ART. 39. The Central Bank/Department of Special Studies and Monitoring of the Financial System (DEASF) may request from the administering institution the provision of other information about the financial application fund.

CHAPTER X

OF ADVERTISING AND THE REMITTAL OF DOCUMENTS

ART. 40. The administering institution of financial application funds shall be obliged to disclose, broadly and immediately, any act or fact relevant to it, in a manner to guarantee to all condominium owners access to the information that may, directly or indirectly, influence their decision regarding the permanence in the fund.

PARAGRAPH 1. The disclosure of the information referred to in this article shall be made through publication in the periodical(s) referred to in Art. 22, item III.

PARAGRAPH 2. The administering institution shall make the publications provided for in these regulations always in the same periodical(s), any change being preceded by notice to the condominium owners.

ART. 41. The administering institution of financial application funds shall, within a maximum period of ten days after the closing of each month, make available to the condominium owners, at its headquarters and branches, the information referred to in Art. 42, based on the data relative to the last day of the month to which they refer.

ART. 42. The administering institution of financial application funds shall remit to each condominium owner, annually, based on the data of the fund relative to the last day of the month of December, a document containing information on the number of quotas of their ownership and the respective value, as well as the return of the fund in the year.

SINGLE PARAGRAPH. The remittance of the information referred to in this article shall not be mandatory to the condominium owners:

A - HOLDERS OF QUOTAS WHOSE TOTAL VALUE IS LESS THAN CR$ 500,000.00 (FIVE HUNDRED THOUSAND CRUZEIROS), CORRECTED MONTHLY BY THE VARIATION OF THE INDEX OF UPDATE OF THE FISCAL REFERENCE UNIT - UFIR MONTHLY;

B - WHOSE LAST REMITTAL OF INFORMATION HAS BEEN RETURNED FOR INCORRECT ADDRESS DECLARED AND WHO HAVE NOT UNDERGONE THE RESPECTIVE UPDATE.

ART. 43. The administering institution of financial application funds shall publish, annually, based on the data relative to the last day of the month of December, a document containing the following information regarding the fund:

I - RETURN AND NOMINAL VALUE OF THE QUOTA IN THE LAST THREE YEARS, ALWAYS TAKEN AS BASE COMPLETE EXERCISES;

II - VALUE AND COMPOSITION OF THE PORTFOLIO, DISCRIMINATING QUANTITY, SPECIES AND QUOTATION OF THE SECURITIES AND SECURITIES THAT INTEGRATE IT, VALUE OF EACH INVESTMENT AND ITS PERCENTAGE ON THE TOTAL VALUE OF THE PORTFOLIO;

III - BALANCE SHEETS AND OTHER FINANCIAL STATEMENTS, ACCOMPANIED BY THE OPINION OF THE INDEPENDENT AUDITOR;

IV - LIST OF ENTITIES RESPONSIBLE FOR THE CUSTODY SERVICE OF THE SECURITIES AND SECURITIES INTEGRATING THE PORTFOLIO;

V - THE CHARGES DEBITED TO THE FUND IN EACH OF THE LAST THREE YEARS, AS PROVIDED IN ART. 47, SPECIFYING ITS VALUE AND PERCENTUAL RELATIVE TO THE AVERAGE MONTHLY NET ASSETS OF THE FUND IN EACH YEAR.

ART. 44. The measures provided for in ARTS. 42 and 43 shall be adopted within a maximum period of sixty days after the closing of the year to which they refer.

CHAPTER XI

OF THE GENERAL NORMS

ART. 45. The securities and securities integrating the portfolio of financial application funds shall be mandatorily custodied in a multiple bank with commercial or investment portfolio, commercial bank, investment bank, stock exchange or entity authorized for the provision of this service by the Central Bank or by the Securities and Exchange Commission.

ART. 46. The values constituting the portfolio of financial application funds may not be subject to lease, loan, pledge or guarantee, except in the cases expressly authorized by the Central Bank.

ART. 47. The following shall constitute charges of the financial application fund, in addition to the remuneration of the services referred to in ART. 9, the following expenses, which may be debited to the administering institution:

I - FEES, TAXES OR FEDERAL, STATE, MUNICIPAL OR AUTARCHIC CONTRIBUTIONS, THAT BEAR OR COME TO BEAR ON THE GOODS, RIGHTS AND OBLIGATIONS OF THE FUND;

II - EXPENSES WITH PRINTING, SHIPPING AND PUBLICATION OF REPORTS, FORMS AND PERIODIC INFORMATION, PROVIDED FOR IN THE REGULATIONS OF THE FUND OR IN THE PERTINENT REGULATION;

III - EXPENSES WITH CORRESPONDENCE OF INTEREST OF THE FUND, INCLUDING COMMUNICATIONS TO THE CONDOMINIUM OWNERS;

IV - FEES AND EXPENSES OF THE AUDITORS RESPONSIBLE FOR THE REVIEW OF THE BALANCE SHEET AND ACCOUNTS OF THE FUND AND THE ANALYSIS OF ITS SITUATION AND THE ACTION OF THE ADMINISTERING INSTITUTION;

V - EMOLUMENTS AND COMMISSIONS PAID ON THE OPERATIONS OF THE FUND;

VI - FEES OF LAWYERS, COSTS AND RELATED EXPENSES MADE IN DEFENSE OF THE INTERESTS OF THE FUND, IN COURT OR OUTSIDE IT, INCLUDING THE VALUE OF THE CONDEMNATION, IF THE FUND COMES TO BE LOST;

VII - ANY EXPENSES INHERENT TO THE CONSTITUTION OR LIQUIDATION OF THE FUND OR TO THE HOLDING OF A GENERAL ASSEMBLY OF CONDOMINIUM OWNERS;

VIII - CUSTODY FEES OF THE VALUES OF THE FUND.

SINGLE PARAGRAPH. Any expenses not provided for as charges of the fund shall be at the expense of the administering institution.

ART. 48. Within a maximum period of five days counted from the occurrence, the following acts relative to financial application funds shall be the object of written communication to the Regional Agency of the Central Bank to which the administering institution is subject, accompanied by the corresponding documents:

I - AMENDMENT OF REGULATIONS;

II - SUBSTITUTION OF THE ADMINISTERING INSTITUTION;

III - TRANSFORMATION;

IV - MERGER;

V - INCORPORATION;

VI - SPIN-OFF;

VII - LIQUIDATION.

ART. 49. NON-COMPLIANCE WITH THE NORMS CONSOLIDATED IN THIS REGULATION SHALL BE CONSIDERED A SERIOUS OFFENSE, WITHOUT PREJUDICE TO THE APPLICATION, TO THE INSTITUTION ADMINISTERING THE FINANCIAL APPLICATION FUND AND TO THE ADMINISTRATOR RESPONSIBLE FOR THE OPERATIONS THEREOF, OF THE OTHER SANCTIONS PROVIDED FOR IN THE LEGISLATION AND REGULATION IN FORCE, AND THE CENTRAL BANK MAY ALSO DETERMINE THE CONVENING OF A GENERAL MEETING OF CONDOMINIUMS TO DECIDE ON ONE OF THE FOLLOWING ALTERNATIVES:

I - TRANSFER OF THE ADMINISTRATION OF THE FUND TO ANOTHER INSTITUTION;

II - LIQUIDATION OF THE FUND.

SINGLE PARAGRAPH. NON-COMPLIANCE WITH THE NORMS GOVERNING CHAPTERS III, IV, AND IX MAY RESULT, WITHOUT PREJUDICE TO THE APPLICATION OF OTHER SANCTIONS, IN THE SUMMARY DISCREDITING OF THE ADMINISTERING INSTITUTION BY THE CENTRAL BANK.

CHAPTER XII

OF THE FUND INVESTING IN QUOTAS OF FINANCIAL APPLICATION FUNDS

ART. 50. THE INSTITUTIONS REFERRED TO IN ART. 4, ALTERNATIVELY TO THE ESTABLISHMENT AND ADMINISTRATION OF A FINANCIAL APPLICATION FUND, MAY ESTABLISH AND ADMINISTER A FUND INVESTMENT WHOSE RESOURCES SHALL BE DESTINED, EXCLUSIVELY, TO THE ACQUISITION OF QUOTAS OF FINANCIAL APPLICATION FUNDS.

PARAGRAPH 1. THE ESTABLISHMENT AND OPERATION OF THE INVESTMENT FUND REFERRED TO IN THIS ARTICLE, DESIGNATED FUND INVESTING IN QUOTAS OF FINANCIAL APPLICATION FUNDS, ARE SUBJECT, INsofar AS APPLICABLE, TO THE NORMS ESTABLISHED IN THIS REGULATION, OBSERVED THE FOLLOWING:

A - ITS NAME MUST CONTAIN THE EXPRESSION "INVESTMENT IN QUOTAS OF FINANCIAL APPLICATION FUNDS";

B - FOR THE PURPOSE OF EXERCISING ITS ADMINISTRATION, THE CREDENCING OF THE ADMINISTERING INSTITUTION IN SISBACEN IS OPTIONAL;

C - ITS PORTFOLIO SHALL BE COMPOSED, IN ITS ENTIRETY, OF QUOTAS OF FINANCIAL APPLICATION FUNDS, WITH THE RESPECTIVE APPLICATIONS SUBJECT TO A DIVERSIFICATION REQUIREMENT OF A MAXIMUM OF 25% IN QUOTAS OF A SINGLE FUND;

D - THE INFORMATION REFERRED TO IN ART. 38, ITEMS II TO V, RELATING TO THIS, SHALL, BASED ON THE LAST BUSINESS DAY OF THE MONTH TO WHICH THEY REFER, BE FORWARDED TO THE CENTRAL BANK/SPECIAL STUDIES AND FINANCIAL SYSTEM MONITORING DEPARTMENT (DEASF), BY THE THIRD BUSINESS DAY AFTER THE CLOSING OF EACH MONTH.

PARAGRAPH 2. IN THE EVENT OF DELAY OR INACCURACY IN THE PROVISION OF INFORMATION REFERRED TO IN ALINÉA "D", THE FINE PROVIDED FOR IN ART. 38, PARAGRAPH 3, ALINÉA "A", SHALL BE APPLIED TO THE INSTITUTION ADMINISTERING THE FUND INVESTING IN QUOTAS OF FINANCIAL APPLICATION FUNDS.

PARAGRAPH 3. FOR THE PURPOSES OF REGISTERING A FUND INVESTING IN QUOTAS OF FINANCIAL APPLICATION FUNDS CONSTITUTED AFTER THE EFFECTIVE DATE OF THIS REGULATION, THE ADMINISTERING INSTITUTION MUST PROVIDE THE CENTRAL BANK/SPECIAL STUDIES AND FINANCIAL SYSTEM MONITORING DEPARTMENT (DEASF) WITH THE FOLLOWING INFORMATION, AT LEAST TWO BUSINESS DAYS BEFORE THE START OF THE FUND'S ACTIVITIES:

A - NAME AND GENERAL TAXPAYER REGISTER NUMBER (CGC), OF BOTH THE INSTITUTION AND THE FUND;

B - DATE OF START OF THE FUND'S ACTIVITIES.

CHAPTER XIII

OF FINANCIAL APPLICATION FUNDS FOR STATE AND/OR MUNICIPAL DEBT

ART. 51. THE ADMINISTERING INSTITUTIONS OF FUNDS FOR THE LIQUIDITY OF STATE AND/OR MUNICIPAL PUBLIC DEBT, INDEPENDENTLY OF THE PROVISION IN ART. 4, PARAGRAPH 3, MAY ESTABLISH AND ADMINISTER A FINANCIAL APPLICATION FUND - STATE AND/OR MUNICIPAL PUBLIC DEBT, GOVERNED, INsofar AS APPLICABLE, BY THE NORMS ESTABLISHED IN THIS REGULATION, WHOSE RESOURCES SHALL BE DESTINED, EXCLUSIVELY, TO THE ACQUISITION OF ISSUANCES OF THE CORRESPONDING STATE AND/OR MUNICIPALITY, AS THE CASE MAY BE.

PARAGRAPH 1. IT SHALL BE ADMITTED THAT UP TO 30% OF THE RESOURCES OF THE FUND BE REPRESENTED BY ISSUANCES OF THE CORRESPONDING STATE AND/OR MUNICIPALITY, AS THE CASE MAY BE, INTEGRATING THE PORTFOLIO OF THE ADMINISTERING INSTITUTION ITSELF, LINKED TO REPURCHASE COMMITMENTS ASSUMED BY IT IN COMMITTED OPERATIONS.

PARAGRAPH 2. EACH OFFICIAL STATE FINANCIAL CONGLOMERATE MAY ONLY ESTABLISH AND ADMINISTER A SINGLE FINANCIAL APPLICATION FUND - STATE AND/OR MUNICIPAL PUBLIC DEBT.

ART. 52. ONLY THE RESPECTIVE TREASURY(IES) AND THE AUTHORITIES, PUBLIC COMPANIES, MIXED-ECONOMY COMPANIES, AND FOUNDATIONS LINKED, CONTROLLED, OR MAINTAINED BY THE CORRESPONDING STATE AND/OR MUNICIPALITY MAY APPLY RESOURCES IN A FINANCIAL APPLICATION FUND - STATE AND/OR MUNICIPAL PUBLIC DEBT.

SINGLE PARAGRAPH. IT SHALL BE THE RESPONSIBILITY OF THE ADMINISTERING INSTITUTION OF THE FUND TO VERIFY COMPLIANCE WITH THE CONDITION PROVIDED FOR IN THIS ARTICLE, AND THE RESPECTIVE DOCUMENTATION MUST BE KEPT AVAILABLE TO THE CENTRAL BANK.