CMN Resolution No. 5,111 — Regulates the concepts of investment entity and credit rights for purposes of Article 19 and Article 23 of Law No. 14,754 of December 12, 2023, and Article 3, Section 7 of Law No. 11,312 of June 27, 2006

CMN RESOLUTION NO. 5,111, OF DECEMBER 21, 2023

Regulates the concepts of investment entity and credit rights for purposes of the provisions of Article 19 and Article 23 of Law No. 14,754 of December 12, 2023, and Section 7 of Article 3 of Law No. 11,312 of June 27, 2006, included by Article 15 of Law No. 14,711 of October 30, 2023.

The Central Bank of Brazil, in accordance with Article 9 of Law No. 4,595 of December 31, 1964, makes public that the National Monetary Council, in a session held on December 21, 2023, based on Articles 19 and 23 of Law No. 14,754 of December 12, 2023, and Section 7 of Article 3 of Law No. 11,312 of June 27, 2006, included by Article 15 of Law No. 14,711 of October 30, 2023,

RESOLVES:

Art. 1 This Resolution establishes the concepts of investment entity and credit rights for purposes of the provisions of Articles 19 and 23 of Law No. 14,754 of December 12, 2023, and Section 7 of Article 3 of Law No. 11,312 of June 27, 2006, included by Article 15 of Law No. 14,711 of October 30, 2023.

Art. 2 Investment funds in the country that have a professional management structure, represented by agents or service providers with powers to make investment and divestment decisions discretely, with the purpose of obtaining return through appreciation of the invested capital, income, or both, in accordance with this Resolution, are classified as investment entities.

Section 1 For purposes of the main text, investment funds in the country that cumulatively:

I - raise resources from one or more investors to invest in one or more assets;

II - are managed, discretely, by professional agents or service providers, duly qualified and authorized to exercise this activity, when required by legislation; and

III - define in their bylaws and in other constitutive documents, if any, strategies to be used to generate return for the investor, consisting of one or more of the following strategies:

a) investment and divestment of the assets that make up the fund's portfolio, observing the strategy, market conditions, and, when applicable, the term established therein, in order to maximize return for the unitholders;

b) investment and maintenance, in whole or in part, of the assets that make up the fund's portfolio according to its investment policy until the liquidation of such assets, through their payment or any form of negotiation of such assets or until the liquidation of the fund, aiming at return in the form of capital appreciation, income, or both;

c) investment and maintenance of the assets that make up the fund's portfolio, without a defined term for liquidation or divestment, seeking appreciation of the invested capital and realization of return through redemption or amortization of units or through mechanisms that ensure the negotiation of units in the secondary market.

Section 2 The following are not classified as investment entities, in an exemplary manner, investment funds in the country that:

I - have an investment committee or another deliberative governance body in which majority physical person unitholders or persons indicated by them make decisions and send orders to the manager regarding the composition of the fund's portfolio;

II - control legal entities that have been controlled, directly or indirectly, by their majority physical person unitholders in the 5 (five) years prior to the investment by the fund;

III - the majority physical person unitholders are administrators of companies invested by the fund; or

IV - the majority physical person unitholders can determine or veto investment or divestment decisions.

Section 3 For purposes of the provisions of items I to IV of Section 2:

I - majority unitholders shall be considered those who, directly or indirectly, hold the units representing the largest part of the fund's equity; and

II - physical persons and their spouses or partners, as well as relatives in the direct line, collateral line, or by affinity, up to the second degree, residing in the country or abroad, shall be considered together.

Section 4 The classification of the unitholder under the hypotheses provided for in items I to IV of Section 2 shall be the subject of a declaration to be provided by the unitholder to the fund administrator.

Section 5 The classification of the investment fund in the country as an investment entity is not discredited by:

I - the existence of consultative governance bodies with participation of unitholders or other means of advice and oversight by unitholders, as well as an investment committee or another deliberative governance body that does not fit within the provision of item I of Section 2, provided that the agent or service provider maintains discretion to make decisions related to the composition of the fund's portfolio;

II - the existence of a voting agreement among the fund's unitholders, provided that the agent or service provider maintains discretion to make decisions related to the composition of the fund's portfolio;

III - minority participation, direct or indirect, in the fund, by the agent, service provider, or physical person who is part of the professional management structure, for purposes of alignment of interests with the investor;

IV - participation, direct or indirect, as a unitholder of a Credit Rights Investment Fund (FIDC), by the assignor, originator, fund manager, its specialized consultant, or any other service provider of the fund; or

V - the fund's investment policy that provides for the acquisition of assets from a single issuer, assignor, debtor, or originator, regardless of concentration or diversification limits.

Art. 3 The professional management structure referred to in Article 2 may also be established at the level of the direct or indirect unitholder of the investment fund in the country, provided that this direct or indirect unitholder is organized as an investment fund in the country or as a fund or investment vehicle abroad, which will result in the classification of the investment fund in the country as an investment entity.

Section 1 The provisions of the main text and Sections 1 to 5 of Article 2 apply, insofar as applicable, for purposes of verifying professional management at the level of the direct or indirect unitholder referred to in the main text.

Section 2 For purposes of the main text, the following are considered funds or investment vehicles abroad:

I - societies or contractual arrangements, personified or not, constituted in the form of a partnership, between general partners and limited partners, or in a substantially similar form, provided they have a discretionary management structure as described in Article 2, evidenced through service provision contracts or other corporate or contractual arrangements;

II - investment funds abroad or investment vehicles abroad constituted in a substantially similar form, provided they have a discretionary management structure as described in Article 2, evidenced through service provision contracts or other corporate or contractual arrangements;

III - sovereign funds, thus considered the investment vehicles abroad whose equity is constituted by resources from the sovereign savings of the respective country;

IV - governmental bodies, multilateral organizations, and development agencies;

V - public or private pension and pension funds abroad, thus considered the investment vehicles whose equity is constituted by employers, unions, or governmental entities, with the objective of guaranteeing retirement or pension benefits to their respective participants; and

VI - funds constituted to carry out the professional management of a set of assets formed by philanthropic donations, the financial application of which generates resources exclusively to support causes of public interest, such as education, health, culture, and the environment (endowment).

Section 3 Indirect unitholders may use funds or vehicles abroad to hold their investments in investment funds in the country, without altering the classification of the fund as an investment entity.

Section 4 In the hypotheses provided for in items III to VI of Section 2, the professional management structure may be exercised in an integrated manner with the unitholder itself or in a separate manner.

Art. 4 For purposes of the provision of Article 19 of Law No. 14,754 of 2023, the following are considered credit rights, observing the other conditions of this article:

I - rights and titles representative of credit;

II - securities representative of credit;

III - certificates of receivables and other securities representative of securitization operations that are not backed by non-standardized credit rights; and

IV - by equivalence, units of FIDC that observe the provisions of this article.

Section 1 For purposes of the main text, the following are not considered credit rights:

I - federal, state, municipal, and Federal District public bonds;

II - bonds issued or co-obligated by financial institutions;

III - pledged operations backed by the assets referred to in items I and II;

IV - units of classes of investment funds that invest predominantly in the assets referred to in items I, II, and III;

V - non-convertible debentures or those without profit-sharing subject to public distribution; and

VI - commercial notes subject to public distribution.

Section 2 The assets provided for in items V and VI of Section 1 shall be considered as credit rights for purposes of the main text when, at the time of acquisition:

I - the issuer is in the phase of judicial or extrajudicial recovery; or

II - an assembly of debenture holders or commercial note holders has occurred, to request the flexibility of rights related to the clauses of early maturity of debts, or the default by the issuer of its monetary obligations, evidenced by the due communication to the market or so informed by the administrator of organized markets.

Section 3 For purposes of the main text, the following are considered credit rights, in an exemplary manner, federal, state, municipal, and Federal District precatórios.

Section 4 The assets received by the FIDC as a result of judicial or extrajudicial procedures involved in the recovery of its credit rights, by force of expropriation of assets, excision of guarantees, payment in kind, conversion, adjudication, or auction of seized property or transaction, in accordance with Article 840 and following of Law No. 10,406 of January 10, 2002 (Civil Code), shall be considered credit rights while they compose the FIDC's portfolio, provided that its manager presents a plan for the liquidation of the recovered assets.

Section 5 The titles referred to in item II of Section 1 refer to Bank Deposit Certificates (CDB), Financial Notes (LF), Agricultural Credit Notes (LCA), Real Estate Credit Notes (LCI), and Guaranteed Real Estate Notes (LIG).

Section 6 The FIDC shall have the terms provided for in Sections 2 and 3 of Article 19 of Law No. 14,754 of 2023 to adjust the composition of its portfolio observing the provisions of this article.

Art. 5 This Resolution enters into force on the date of its publication.

Roberto de Oliveira Campos Neto

President of the Central Bank of Brazil