CVM Instruction 220 (Repealed)

Establishes norms and procedures to be observed in stock exchange operations and provides other measures.

The PRESIDENT OF THE SECURITIES AND EXCHANGE COMMISSION makes public that the Collegiate Body, in a session held on this date, in accordance with Article 18, item II, letters "a" and "c", of Law No. 6,385, of December 7, 1976,

RESOLVES:

Art. 1. Stock exchanges must establish conduct rules to be observed by brokerage firms in their relationship with their clients and the market, which must include, at a minimum, provisions that meet the following principles:

I - probity in the conduct of activities in the best interest of their clients and in the integrity of the market;

II - diligence in the execution of buy, sell, or swap orders for securities;

III - qualification to perform their activities;

IV - obligation to obtain and present to their clients information, including about risks characteristic of the market, as well as to supply their clients, in a timely manner, with documentation of the transactions carried out;

V - avoid conflicts of interest and, when not possible, ensure equitable treatment to their clients;

Sole Paragraph. The conduct rules referred to in this article must be submitted to the Securities and Exchange Commission at least 30 days prior to their respective application.

Art. 2. Observing the provisions of this Instruction, as well as the norms issued by the stock exchanges, brokerage firms and other participants who operate directly in the trading floors or systems of the exchange must establish rules and parameters regarding the receipt, registration, validity period, priority, execution, distribution, and cancellation of orders.

Sole Paragraph. Clients must be informed in writing regarding the rules of the brokerage firm referred to in this article.

Art. 3. Stock exchanges must require brokerage firms to maintain updated registries containing the information necessary for the perfect identification and qualification of their clients.

§1. It is permitted for brokerage firms to maintain their clients' registries through an informatized system, provided that the provisions contained in this Instruction and in the norms issued by the stock exchanges are observed.

§2. If the brokerage firm is part of a financial conglomerate, the maintenance of a single client registry will be admitted, observing the provisions contained in this Instruction and in the norms issued by the stock exchanges.

§3. Client registries must remain at the headquarters of the brokerage firm or in the financial conglomerate to which it belongs, available to the Securities and Exchange Commission and the stock exchanges.

§4. At the exclusive discretion of the Securities and Exchange Commission, in the case of special operations in the Stock Exchange, preceded by the gathering of dispersed orders through bank branches in the country, the client data will be archived at the brokerage or distributing firm that intermediates the operation, available to the supervision of the Securities and Exchange Commission, dispensing with registration in the Stock Exchanges' systems.

§5. The operation referred to in the previous paragraph will be registered, in the Stock Exchange where it takes place, in the name of the intermediary institution in a special account.

Art. 4. The registries must also observe the following requirements:

I - have attached, when it concerns an individual client, a copy of the identity card and CPF, and, in the case of a legal entity client, a copy of the respective contract, bylaws or social statute registered with the competent authority and the CGC card;

II - in the case of portfolios administered by third parties, the corresponding authorization must be attached, as well as the administrator's registration form and respective code;

III - in the case of institutional investors, national or foreign, the name(s) of the person(s) authorized to transmit orders must appear, and, as the case may be, the name(s) of the administrator(s) of the institution or responsible person(s) for the administration of the portfolio in the Country;

IV - when brokerage firms operate with their clients through collective accounts, not characterized as investment companies or funds, these must be identified by a code that allows knowledge of such condition, and each participant must also be registered.

Art. 5. Brokerage firms must maintain a document, dated and signed by the client or by their duly constituted legal representative, before the first ordered transaction is carried out, which must contain, at a minimum, the following declarations:

I - that the information provided for filling out the registry is true;

II - that they commit to informing, within ten days, any changes that may occur in their registry data;

III - that they operate on their own account or, otherwise, clearly indicate in whose name they intend to operate;

IV - that they are or are not a person affiliated with the brokerage firm;

V - that they are not barred from operating in the securities market;

VI - that, by express option, if applicable, they manifest themselves in favor of the transmission of orders exclusively in writing;

VII - that they are aware of the provisions of this Instruction, the norms issued by the stock exchanges and brokerage firms, copies of which they have received and keep in their possession.

§1. It is incumbent upon brokerage firms to request express authorization from their clients so that, regardless of judicial or extrajudicial notification, they may sell, in a stock exchange, the shares acquired on their behalf and order and not settled, or other securities, applying the proceeds of the sale to the payment of their respective debts.

§2. The lack of signature on the document referred to in this article is admitted for up to twenty days from the date of the first ordered transaction by the client.

Art. 6. Brokerage firms must institute adequate control procedures to prove compliance with the provisions of Article 2, maintaining the respective records, at their headquarters or financial conglomerate, available to the Securities and Exchange Commission, the stock exchanges, and clients, for a period of 5 (five) years.

Art. 7. Stock exchanges must regulate the types of orders accepted in their trading floors or systems, in a specific norm submitted to the Securities and Exchange Commission at least thirty days prior to its respective application.

§1. "Order", for the purposes of this Instruction, is the act by which the determines a brokerage firm to buy or sell securities or rights inherent thereto in their name and under the conditions they specify.

§2. Small orders, relating to spot market operations, may be grouped in a standard lot and its multiples for ease of execution, and the ordering clients must specify the validity period of their orders, not exceeding five days.

Art. 8. The other members of the securities and securities distribution system - item III of Article 15 of Law No. 6,385/76 - may only pass on client orders registered with them if:

I - they maintain a registry of their clients observing the provisions of this Instruction;

II - they provide, directly to the stock exchanges, the registry of their clients, except when it concerns operations provided for in paragraph 2 of Article 7.

III - they inform the intermediary brokerage firm, for each operation, the code of the final client, contained in the stock exchanges' registry.

Sole Paragraph. For the purposes of the provisions of this article, the members referred to in the "caput" of this article are obliged to:

I - inform the Securities and Exchange Commission, when requested, the name and operations of the client;

II - forward to their clients the rule adopted by the brokerage firm.

Art. 9. Stock exchanges must immediately send, when requested, the list of clients of the operations carried out by them to the Securities and Exchange Commission.

Sole Paragraph. The provisions of this article also apply to commodities and/or futures exchanges that operate with indices representative of securities, regarding these operations.

Art. 10. The members of the securities and securities distribution system, whenever they receive any values from their clients, as well as when making payments to them regarding operations in the securities market, must include the following information in the respective documents:

I - the client's checking account number with the intermediary;

II - when by check, the checking account and check numbers, their respective value, the name(s) of the beneficiary(ies), the drawer, and the drawee bank, with indication of the branch.

Art. 11. Stock exchanges must establish supervision procedures for operations carried out by persons affiliated with brokerage firms and other members of the securities distribution system, in order to preserve the conduct rules referred to in item V of Article 1.

Art. 12. Persons affiliated with a brokerage firm may only trade securities through the firm to which they are affiliated.

Art. 13. The director of the stock exchange operations area of the brokerage firm is responsible for compliance with the provisions contained in this Instruction.

Art. 14. Non-compliance with the provisions contained in this Instruction constitutes a hypothesis of objective nature infraction, in which case the summary administrative process procedure may be adopted, in accordance with the Regulation annexed to Resolution No. 1,657, of October 26, 1989, of the National Monetary Council, except for hypotheses that constitute an infraction of CVM Instruction No. 08 of October 8, 1979.

Art. 15. It is up to stock exchanges to issue the complementary norms necessary for the execution of the provisions of this Instruction.

Art. 16. The provisions contained in this Instruction apply, insofar as applicable, to entities or associations that regulate organized markets, as well as to other members of the securities and securities distribution system provided for in item III of Article 15 of Law No. 6,385/76.

Art. 17. This Instruction will enter into force ninety days after the date of its publication, however, stock exchanges and other members of the securities and securities distribution system must adapt to the principles of this Instruction, within the following deadlines:

I - thirty days from the date of publication for stock exchanges to establish the rules provided for in Article 1, as well as to issue complementary norms to this Instruction, which must be sent to the Securities and Exchange Commission, immediately after their respective approval;

II - sixty days from the end of the period established in item I for the preparation, by brokerage firms, of the rules provided for in Article 2;

§1. For the purposes of compliance with the provisions of Articles 3, 4, and 5 of this Instruction, brokerage firms must adapt their current registries within a period of one year from the publication of this Instruction.

§2. While the rules referred to in Articles 1 and 2 of this Instruction are not approved by the stock exchange and brokerage firms, the provisions contained in CVM Instruction No. 33, of March 26, 1984, must be observed.

§18. CVM Instructions No. 33, of March 26, 1984; 107, of October 26, 1989; 129, of July 26, 1990; 150 of July 10, 1991; 163, of October 31, 1991; 166, of December 11, 1991; item XV of CVM Instruction No. 135, of November 16, 1990, CVM Deliberation No. 141 of January 23, 1992, and other provisions to the contrary are repealed, from the effectiveness of this Instruction.

Original signed by
THOMÁS TOSTA DE SÁ
President