CVM Instruction 148 (Revoked) - Establishment, Operation, and Administration of Stock Investment Mutual Funds

Provides for the constitution, operation, and administration of Stock Investment Mutual Funds.

The PRESIDENT OF THE SECURITIES AND EXCHANGE COMMISSION (Comissão de Valores Mobiliários) makes public that the Collegiate Body, in a session held on this date, and in view of the provisions of Resolution No. 1,787, of February 1, 1991, of the National Monetary Council,

HAS RESOLVED:

CHAPTER I
Of the Constitution and Characteristics

Art. 1. The Stock Investment Mutual Fund, constituted in the form of an open condominium - when it admits the redemption of quotas -, or closed - when it does not -, is a communion of resources destined for application in a diversified portfolio of securities and securities.

§1. The Fund may have a determined or undetermined duration, and its denomination must contain the expression "Stock Investment Mutual Fund".

§2. The closed Stock Investment Mutual Fund may be transformed into an open condominium, by decision of the General Meeting of quota holders, after 24 (twenty-four) months counted from the date of the start of its operations, which will also depend on prior authorization from the Securities and Exchange Commission.

§3. If the transformation of the Fund is approved, the administering institution will have a period of 180 (one hundred and eighty) days to adapt it to its new form, counted from the date of the General Meeting that deliberated on it.

Art. 2. Once constituted, the Stock Investment Mutual Funds must request authorization from the Securities and Exchange Commission for their operation.

Sole Paragraph. The request for authorization will be accompanied by a resolution of the administering institution regarding the constitution of the Fund, which will contain the full text of its bylaws, which, after authorization, will be registered at the Registry of Titles and Documents.

Art. 3. The bylaws of the Stock Investment Mutual Fund must necessarily provide for:

I - qualification of the administering institution; II - investment policy to be adopted by the administering institution, assets that may compose the Fund's portfolio, including considering the possibility of application in affiliated companies and the establishment of the diversification policy; III - entry fee or criterion for its fixation; IV - remuneration of the administrators; V - fixing of a waiting period based on the provisions of Article 26; VI - availability of monthly information for quota holders; VII - expenses and charges of the Fund; VIII - conditions for the redemption of quotas, which may be differentiated based on the number of quotas to be redeemed; IX - competence of the General Meeting of quota holders.

Sole Paragraph. The fees, expenses, and timeframes will be identical for all quota holders and will be contained in the information referred to in items III and IV of Article 40.

Art. 4. The following acts regarding the Fund must be sent to the CVM, which may, at its discretion, approve or not:

I - alteration of the bylaws;
II - indication and substitution of the director responsible for the administration of the Fund (Article 5, paragraph 2); III - substitution of the administering institution; IV - transformation; V - merger; VI - incorporation;

VII - spin-off;
VIII - liquidation.

Sole Paragraph. - The Central Bank of Brazil will be informed by the Securities and Exchange Commission upon authorization for the operation of the Fund, as well as in the cases provided for in items II to VIII of this article.

CHAPTER II
Of Administration

Art. 5. The administration of the Fund will be exercised exclusively by a multiple bank with an investment portfolio, investment bank, brokerage company, or securities distribution company or other equivalent entities, authorized by the Securities and Exchange Commission to exercise the activity provided for in Article 23 of Law No. 6,385, of December 7, 1976.

§1. The administering institution must maintain or contract the technical services necessary for the correct performance of the activity referred to in the "caput" of this article.

§2. The administration of the Fund will be under the direct supervision and responsibility of a director of the administering institution.

Art. 6. The administering institution will have the power to exercise all rights inherent to the securities and securities comprising the Fund's portfolio, including the right to sue and to attend and vote in general and special meetings.

§1. The administering institution may also open and operate bank accounts, freely acquire and alienate securities and securities, settle disputes, and ultimately practice all acts necessary for the administration of the portfolio, observing the limitations of this Instruction.

§2. The custodian institutions of the securities and securities of the Fund may only comply with orders signed by the legal representative(s) or agent of the administering institution, duly accredited with it for this purpose.

Art. 7. The administering institution will fix the remuneration to be received for the provision of management and administration services of the Fund, including, if applicable, provision for participation in the Fund's results.

Art. 8. The administering institution may, by prior notice published in the periodical(s) referred to in item III, letter "d", of Article 40, or by means of a letter, telex, or telegram addressed to each quota holder, resign from the administration of the Fund, and must immediately communicate this fact to the Securities and Exchange Commission.

Sole Paragraph. In the case of Funds with quotas traded on stock exchanges or organized over-the-counter markets, the same disclosure required for material facts must be adopted by the respective entities and the administering institution.

CHAPTER III
Of the Discrediting of the Administering Institution

Art. 9. The Securities and Exchange Commission, in the exercise of its legal powers, may discredit the administering institution that fails to comply with current regulations.

§1. The discrediting process will begin with notification from the Securities and Exchange Commission to the administering institution, indicating the facts that supported it and the deadline for presenting a defense, which shall not be less than 15 (fifteen) days counted from the date of receipt of the notification issued by the Commission.

§2. The decision of the Securities and Exchange Commission that discredits the administering institution will be reasoned, with the right to appeal to the National Monetary Council, without suspensive effect, within 15 (fifteen) days counted from the date of receipt of the communication issued by the Commission.

Art. 10. In the cases of resignation and discrediting, the administering institution will be obliged to immediately convene the General Meeting to elect its successor or deliberate on the liquidation of the Fund.

Sole Paragraph. The administering institution must remain in the exercise of its functions until its effective substitution.

CHAPTER IV
Of the Obligations of the Administering Institution

Art. 11. The following are included among the obligations of the administering institution:

I - to maintain, at its own expense, updated and in perfect order:
a) the records of quota holders and transfers of quotas; b) the minutes book of general meetings; c) the attendance book of quota holders; d) the archive of auditors' reports; e) the accounting records relating to the operations and assets of the Fund; f) the documentation relating to the operations of the Fund, for a period of five years. II - to receive dividends, bonuses, and any other income or values from the Fund; III - to exercise or alienate the rights of subscription of shares and other securities; IV - to employ, in the defense of the rights of quota holders, the diligence required by the circumstances, practicing all acts necessary to ensure them, including lawsuits, appeals, and exceptions; V - to cover the advertising expenses of the Fund; VI - to keep custodied in a commercial bank, multiple bank with an investment portfolio, investment bank, stock exchange, or custody entity authorized by the Securities and Exchange Commission, the securities and securities comprising the Fund.

CHAPTER V
Of the General Meeting

Art. 12. It is exclusively the competence of the General Meeting of quota holders:

I - to take, annually, the accounts relating to the Fund and deliberate on the financial statements presented by the administering institution; II - to alter the bylaws of the Fund; III - to deliberate on the substitution of the administering institution; IV - to deliberate on the transformation, merger, incorporation, spin-off, or eventual liquidation of the Fund; V - to deliberate on changes in the remuneration rate of the administering institution, including regarding participation in the Fund's results.

Sole Paragraph. The bylaws of the Fund may be altered independently of a General Meeting or consultation with quota holders whenever such alteration results exclusively from the need to meet requirements of the Securities and Exchange Commission, as a consequence of legal or regulatory norms, and the necessary communication to quota holders must be provided, within 30 (thirty) days, when applicable, in the periodicals intended for the dissemination of Fund information.

Art. 13. The convocation of the General Meeting will be made by announcement published in the periodical(s) intended for the dissemination of information about the Fund.

§1. The convocation must necessarily include the day, time, and location where the meeting will be held, and, in a summary manner, the matters to be addressed.

§2. The first convocation of the General Meeting must be made at least 8 (eight) days in advance, counted from the date of publication of the first announcement.

§3. In the cases provided for in items III, IV, and V of Article 12, if a second convocation is necessary, it must be made 5 (five) days in advance.

§4. Regardless of the convocation provided for in this article, the General Meeting will be considered regular if all quota holders attend.

§5. The General Meeting may be convened by the administering institution or by quota holders who hold at least 5% (five percent) of the total quotas issued by the Fund.

Art. 14. At the General Meeting, which may be installed with any number, decisions will be taken by the criterion of the majority of quotas of those present, with each quota corresponding to one vote, except as provided in the sole paragraph of this article and in paragraph 3 of Article 15.

Sole Paragraph. Decisions regarding the matters provided for in items III, IV, and V of Article 12 will be taken, in the first convocation, by the majority of issued quotas, and in the second convocation, by the majority of quotas of those present.

Art. 15. The decisions of the General Meeting may be taken through a formalized consultation process by letter, telex, or telegram addressed by the administering institution to each quota holder for a response within a maximum period of 30 (thirty) days.

§1. The consultation must contain all necessary informational elements for the exercise of the right to vote.

§2. The absence of response will be considered as consent by the quota holders, provided that such interpretation is expressly authorized by the bylaws of the Fund and is contained in the consultation itself.

§3. The "quorum" for decision-making will be the absolute majority of issued quotas, regardless of the matter.

Art. 16. Only quota holders registered in the "Register of Quota Holders" or in the deposit account, as applicable, 3 (three) days before the date fixed for its holding, may vote at the General Meeting.

Art. 17. Legal representatives of quota holders or their duly constituted proxies will have the quality to attend the General Meeting or to vote in the deliberation process by consultation.

CHAPTER VI
Of the Issuance, Placement, Negotiability, and Redemption of Quotas

Art. 18. The quotas of the Stock Investment Mutual Fund will correspond to ideal fractions of its assets and will assume the book-entry, registered, or black-endorsable form.

§1. The quotas may be represented by Investment Certificates or kept in deposit accounts in the name of their holders, as established by the bylaws of the Fund.

§2. The quality of quota holder is proven by the Investment Certificate or by the statement of deposit accounts.

Art. 19. The Investment Certificate, when adopted, will contain:

I - the denomination "INVESTMENT CERTIFICATE"; II - the name of the Stock Investment Mutual Fund and its registration number in the General Registry of Taxpayers of the Ministry of Economy, Finance and Planning; III - the following information about the administering institution:
a) denomination and location of the headquarters; b) reference to the authorization of the Securities and Exchange Commission (Article 2); c) registration number in the General Registry of Taxpayers of the Ministry of Economy, Finance and Planning.

IV - registered or black-endorsable form, as applicable; V - name of the quota holder(s), jointly or severally, if applicable; VI - serial number of the certificate; VII - quantity of quotas represented by it; VIII - place and date of issuance; IX - authorized signature of the responsible director of the administering institution, mechanical stamp admitted.

Art. 20. The Investment Certificate or the deposit account statement will represent an integer and/or fractional number of quotas belonging to the quota holder, according to the records of the Stock Investment Mutual Fund.

Sole Paragraph. When the system of integer quotas is adopted, the residual value of investments or reinvestments will be kept in a current account for future investments or, if requested, will be paid to the quota holder in cash.

Art. 21. In the case of an open Stock Investment Mutual Fund, upon the issuance of quotas, the value calculated at the close of the first business day subsequent to the effective availability of resources entrusted by investors to the administering institution, at its headquarters or premises, will be used, determining the value of the quota based on an asset evaluation carried out in accordance with the norms of the Chart of Accounts referred to in paragraph 2 of Article 37.

Sole Paragraph. For the calculation of the number of quotas, the commission or entry fee in effect at the time of the investment, as well as other agreed expenses, will be deducted from the value delivered to the administering institution.

Art. 22. The value of the quota of open Stock Investment Mutual Funds will be calculated daily.

Art. 23. The quotas of closed Stock Investment Mutual Funds may only be placed with the public through a multiple bank with an investment portfolio, investment bank, brokerage company, or securities distribution company.

Sole Paragraph. The quotas of closed Stock Investment Mutual Funds may only be traded on stock exchanges or organized over-the-counter markets.

Art. 24. In the investment proposal, or in the receipt provided to the investor at the time of sale, the value of the resources delivered to the administering institution or its agent must be expressly stated, specifying if represented by a registered check, payment order, bank check, deposit receipt in favor of the administering institution, debit in current account, or cash.

Art. 25. The quotas of open Stock Investment Mutual Funds may be subject to assignment and transfer, observing the formalities provided for in the bylaws of the Fund.

Art. 26. The quotas of the open Fund may have a waiting period, counted from the date of their issuance, for the exercise of the right of redemption by the quota holder, which must be highlighted in its bylaws.

Art. 27. In the redemption of quotas, the value calculated at the close of the first business day subsequent to the entry of the redemption request at the headquarters or premises of the administering institution will be used.

Art. 28. The redemption will be made in cash, check, credit in current account, or payment order, without charging any fee or expense.

Sole Paragraph. In special cases, after preliminary consultation with the Securities and Exchange Commission, the redemption may be made in securities or securities.

Art. 29. In closed Stock Investment Mutual Funds, there will be no redemption of quotas, except by the end of the duration period or liquidation of the Fund.

CHAPTER VII
Of the Composition and Diversification of the Portfolio

Art. 30. The Stock Investment Mutual Fund must maintain, daily, at least 51% (fifty-one percent) of its assets applied in shares issued by open companies, acquired on stock exchanges, organized over-the-counter markets by an entity authorized by the CVM, or by subscription.

§1. The statute and prospectus of the Fund must define the maximum percentage that may be applied in options and futures markets, of shares and indices, with short sales prohibited.

§2. The balance of resources may be applied in quotas of Financial Application Funds and fixed-income securities of the administrator's free choice.

Art. 31. The applications of the Stock Investment Mutual Fund must observe that:

I - the total applications in shares of the same company will not exceed 10% (ten percent) of the voting capital or 20% (twenty percent) of its capital; II - in any case, the total applications in securities issued or co-obligated by a company, its holding company, companies directly or indirectly controlled by it, and its affiliates under common control will not exceed 1/3 (one third) of the total applications of the Fund.

Sole Paragraph. For the determination of the diversification limits established herein, shares received as bonuses or resulting from the conversion of debentures and shares or convertible debentures resulting from the exercise of preemptive rights will not be considered, provided that the excess is eliminated within 6 (six) months, which may be extended when justified and approved by the Securities and Exchange Commission.

Art. 32. The applications of open Stock Investment Mutual Funds must observe that:

I - Open Funds must maintain, at least, 5% (five percent) of the total value of their applications in ordinary or preferred shares with voting rights; II - the diversification of the portfolios of open Funds will be conditioned to the percentage of ordinary and preferred shares with permanent voting rights existing in the portfolio, according to the rules established by the following Table:

Percentage of ordinary or preferred shares with permanent voting rights in the Fund's stock portfolio.
Maximum percentage in shares of the same company
33.33 33.33
27 25
25 20
22 17
18 14
15 12
9 11
5 10

§1. The provisions contained in items I and II of Article 32 of this Instruction do not apply to closed Stock Investment Mutual Funds.

§2. Closed Stock Investment Mutual Funds must, necessarily, highlight in their prospectuses the risks inherent to portfolio concentration resulting from their applications.

Art. 33. Orders to buy and sell securities and securities will always be issued with precise identification of the Stock Investment Mutual Fund.

Art. 34. The Funds must adapt to the portfolio composition and diversification requirements within a maximum period of 8 (eight) months counted from the date when authorization for operation is granted.

Sole Paragraph. Non-compliance with the composition and diversification limits referred to in this Instruction, after the period provided for in this article, must be justified before the Securities and Exchange Commission, which, without prejudice to applicable penalties, may determine that the administering institution convene the general meeting of quota holders to decide on one of the following alternatives:

I - transfer of the Fund's administration to another institution; II - liquidation of the Fund.

CHAPTER VIII
Of the Charges of the Fund

Art. 35. The following expenses, which may be charged to the Fund by the administering institution, will constitute charges of the Fund, in addition to the remuneration referred to in Article 7:

I - taxes, federal, state, municipal, or autonomous contributions, that 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 this Instruction or in relevant regulation; III - correspondence expenses of interest to the Fund, including communications to quota holders; IV - fees and expenses of the auditors responsible for reviewing the financial statements of the Fund and analyzing its situation and the performance of the administering institution, including regarding the investment policy fixed in the statutes and prospectuses. V - emoluments and commissions paid for purchase and sale operations of securities and securities of the Fund; VI - lawyers' fees, court costs, and related expenses incurred in the defense of the Fund's interests in court or out of court, including the value of the condemnation, imputed to the Fund, if applicable; VII - portion of eventual losses not covered by insurance policies and not resulting directly from fault or negligence of the administering institution in the exercise of its functions; VIII - insurance premiums, as well as any expenses relating to the transfer of resources from the Fund between banks; IX - any expenses inherent to the constitution, transformation, merger, incorporation, spin-off, or liquidation of the Fund and to the holding of the General Meeting of quota holders; X - custody fee for securities and securities of the Fund.

Sole Paragraph. Any expenses not provided for as charges of the Fund will be borne by the administering institution.

CHAPTER IX
Of the Financial Statements

Art. 36. The Stock Investment Mutual Fund will have accounting records distinct from those of the administering institution.

Art. 37. The financial statements of the Fund will be subject to the accounting standards issued by the Securities and Exchange Commission, and will be audited semi-annually by an independent auditor registered with the Commission.

§1. The financial statements will be published within 60 (sixty) days after the closing of the semester or civil year to which they refer, in the periodicals intended for the dissemination of information relating to the Fund.

§2
The Account Plan issued by the Securities and Exchange Commission (CVM) will encompass all norms for the evaluation of assets comprising the Fund, as well as for the recognition of revenues and expenses inherent to securities, observing, with respect to securities, the guidance of the Central Bank of Brazil.

CHAPTER X
Information

Art. 38. The investor must be provided, obligatorily and free of charge, at the time of their entry as a quota holder of the Mutual Investment Fund:
I - a copy of the fund regulation, referred to in Article 3; II - a brief history of the administering institution; III - a document clearly stating the expenses with commissions or subscription, distribution, and other fees that the investor must bear.

Art. 39. The administering institution of the Fund is obliged to disclose, widely and immediately, any act or relevant fact pertaining to it, in order to ensure that all quota holders have access to information that may, directly or indirectly, influence their decisions regarding staying in the Fund and other investors regarding the acquisition of quotas.

Art. 40. The administering institution of the Fund must:
I - provide the Stock Exchange of the location of its headquarters, for disclosure to the market, the following information:
a) daily, the quota value and the net asset value of the Fund; b) monthly, the yield earned in the period.
II - send monthly to quota holders, when there has been movement:
a) number of quotas and value of applications and redemptions; b) quota holder balance, in number of quotas and value.

III - send semi-annually to quota holders, or disclose in the periodical(s) referred to in item "d" of this subsection, within 15 (fifteen) days after the end of the semester, the following information:
a) yield earned in the semester; b) value and composition of the portfolio, specifying quantity, type, and quotation of the securities comprising it, the value of each application and its percentage of the total portfolio value, highlighting, when applicable, applications in affiliated companies. c) balance sheets and other financial statements, accompanied by the opinion of the independent auditor; d) indication of the periodical(s) used for disclosure of information; e) list of institutions responsible for providing custody services for securities comprising the portfolio; IV - send annually to quota holders the following information together with that contained in the previous subsection:
a) quota holder balance, in number of quotas and value; b) the yield in the last 6 (six) semesters, taken as complete fiscal years; c) the nominal value of the quota, at the time of the balance sheets, in the last 6 (six) semesters, in addition to the adjusted value for reinvestments occurring each year; d) the charges debited to the Fund in each of the last 3 (three) years, as provided in Article 35, specifying their value and percentage relative to the Fund's average monthly net asset value, in each year; e) brokerage expenses in each of the last 3 (three) years, as a percentage of the average monthly value of the stock portfolio, in each year; f) proof for income tax declaration purposes;

§1. The administering institution of a closed-end Equity Mutual Fund must keep updated information available to quota holders at its headquarters, at least every 15 days, regarding the composition of the Fund's portfolio.

§2. The administering institution must, within a maximum of 10 (ten) days after the end of each month, make available to quota holders at its headquarters or branches, the information referred to in items "a" and "b" of subsection III of this article.

§3. The sendings referred to in subsections III and IV of this article are not mandatory to quota holders:
I - holders of quotas whose value is less than three minimum wages; or II - whose last information sending was returned due to incorrect declared address and who have not proceeded to update it.

§4. The communications provided for in subsection IV of this article must be sent within 60 (sixty) days after the end of the civil year to which they refer.

§5. The information referred to in subsection III must be available to the quota holder within 15 (fifteen) days after the end of the semester, except for that contained in item "c", which will have a period of 60 (sixty) days for its disclosure.

§6. The disclosure of the information referred to in this article must be made through publication in the periodical(s) intended for the disclosure of the Fund's information.

§7. The administering institution must make the publications provided for in this Instruction always in the same periodical(s), and any change in this regard must be preceded by notice to quota holders.

Art. 41. Any advertising text for the offer of quotas, advertisement, or promotion of the Fund must not diverge from the content of its regulation.
Sole Paragraph. If the advertising text presents inaccuracies or improprieties that may induce the investor to evaluation errors, the Securities and Exchange Commission may require that corrections and clarifications be broadcast, with equal prominence, through the same medium(s) used to broadcast the original advertising text.

Art. 42. The administering institution must send to the Securities and Exchange Commission, within 15 (fifteen) days after the end of the period to which they refer, without prejudice to others that may be required, the following documents regarding the Fund:
I - monthly:
a) trial balance; b) statements of the composition and diversification of applications, highlighting, when applicable, applications in affiliated companies; c) statement of sources and applications of resources. II - semi-annually:
a) balance sheets; b) copies of the information provided to quota holders; c) information regarding the general conditions of coverage by insurance, in the case of transit of securities; d) list of institutions responsible for providing custody services for securities comprising the portfolio; e) list of judicial or extrajudicial demands, whether in defense of the rights of quota holders, or by them against the administration of the Fund, indicating the date of its start and the final solution. Sole Paragraph. The opinion of the independent auditor regarding the financial statements must be sent to the Securities and Exchange Commission, within 60 (sixty) days from the date of the end of the semester.

CHAPTER XI
Prohibitions

Art. 43. It is prohibited for the administering institution, in the name of the Fund:
I - receive deposits in a current account;
II - contract or make loans under any modality; III - provide surety, guarantee, acceptance, or bind itself under any other form; IV - trade with bills of exchange, promissory notes, except those referred to in CVM Instruction No. 134, of November 1, 1990, or other securities not authorized by the Securities and Exchange Commission; V - promise predetermined yield to quota holders; VI - acquire or sell off the stock exchange of stock exchanges shares of open companies registered for trading on the exchange, except, regarding acquisition, the cases of subscription, bonus, and conversion of debentures into shares; VII - apply resources:
a) abroad; b) in the acquisition of real estate; c) in the subscription or acquisition of shares of its own issuance; d) in the acquisition of shares traded in an unorganized or unorganized by an entity not authorized by the Securities and Exchange Commission market segment.

Art. 44. It is prohibited for the administering institution to sell the provision of Fund quotas.

CHAPTER XII
Transitional and Final Provisions

Art. 45. The provisions of Article 11 of Law No. 6.385, of December 7, 1976, apply to the administering institution and its administrators directly responsible for the administration of the Fund, regardless of other legal sanctions applicable.

Art. 46. Equity Mutual Funds currently in operation will have a period of 180 (one hundred and eighty) days, from the date of publication of this Instruction, to adapt to its norms.

Art. 47. The Securities and Exchange Commission will cancel the authorization for the operation of the Fund that, within 90 (ninety) days from the date of authorization, has not obtained the resources necessary to form its initial capital.

Art. 48. This Instruction enters into force on the date of its publication in the Official Gazette of the Union.

Signed by
ARY OSWALDO MATTOS FILHO
President