CVM Instruction 382 (Revoked)

Establishes norms and procedures to be observed in transactions involving securities, on the trading floor, and in electronic trading and registration systems of stock exchanges and commodity and futures exchanges, and provides other measures.

The PRESIDENT OF THE SECURITIES AND EXCHANGE COMMISSION - CVM, makes public that the Collegiate Body, in a session held on this date, based on art. 18, item II, letters "a" and "c", of Law No. 6.385, of December 7, 1976, RESOLVED to issue the following Instruction:

SCOPE AND PURPOSE

Art. 1 This Instruction establishes norms and procedures to be observed in transactions involving securities, on the trading floor, and in electronic trading and registration systems of stock exchanges or commodity and futures exchanges.

DEFINITIONS

Art. 2 For the purposes of this Instruction, the following are considered:

I – Exchange(s): stock exchanges and commodity and futures exchanges, indistinctly;

II - Securities Broker: the company authorized to negotiate or register transactions involving securities on its own account or on behalf of third parties on exchanges and organized over-the-counter entities;

III - Commodities Broker: the company constituted for the negotiation and registration of transactions involving securities traded on commodity and futures exchanges;

IV – Broker(s): indistinctly, covers both securities brokers and commodities brokers;

V – Special Operator: an individual or sole proprietorship holding an exchange title, authorized to act in its trading floors and in electronic trading and registration systems, executing transactions on its own account and on behalf of brokers, provided authorized by the exchange;

VI - Organized Over-the-Counter Entity: a legal entity that administers an electronic system for the negotiation and registration of transactions involving securities;

VII - Principal or Client: the natural or legal person, and other entities authorized to negotiate securities, on whose behalf securities transactions are effected;

VIII - Clearing House: a clearing house or service provider of registration, clearing, and settlement of securities transactions, part of the Brazilian Payments System – SPB;

IX - Clearing Member or Clearing Agent: the legal entity, financial institution, or entity equivalent to it, responsible to those to whom it provides services and to the clearing house for the clearing and settlement of securities transactions under its responsibility;

X – Order: the act by which the client instructs a broker to buy or sell securities, or register a transaction, in their name and under the conditions specified;

XI - Offer: the act by which the broker or special operator announces or registers the intention to buy or sell securities;

XII - Related Person: the natural or legal person referred to in art. 14 of this Instruction; and

XIII – Company part of a Financial Conglomerate: Financial institution authorized to operate by the Central Bank of Brazil, part of a de facto or de jure group constituted by a set of financial institutions.

CONDUCT RULES

Art. 3 Exchanges must establish conduct rules to be observed by brokers in their relationship with their clients and other market participants, adhering to the following principles:

I - probity in the conduct of activities;

II - care for market integrity, including regarding client selection and the requirement of depositing guarantees;

III - diligence in fulfilling orders and specifying principals;

IV - diligence in controlling client positions in custody, with periodic reconciliation between: (i) executed orders; (ii) positions stated in statements and movement reports provided by the custody service provider entity; and (iii) positions provided by clearing houses;

V - qualification to perform activities;

VI - obligation to obtain and present to their clients information necessary for the fulfillment of orders, including regarding risks involved in market operations;

VII - adoption of measures to avoid the execution of transactions in situations of conflict of interest and to ensure equitable treatment of their clients; and

VIII - to provide their clients, in a timely manner, with documentation of transactions carried out.

§1 The information referred to in this article must be provided to the client before the start of their operations.

§2 The conduct rules referred to in this article must be sent to the CVM at least 30 (thirty) days before their implementation for approval.

§3 Failure to observe the principles described in this article by brokers constitutes a serious offense for the purposes of art. 11, § 3, of Law No. 6.385/76.

§4 Exchanges will be responsible for monitoring brokers regarding the observance of the principles referred to in items I to VIII of this article.

RESPONSIBLE DIRECTOR

Art. 4 Brokers must indicate to the exchange they are associated with and to the CVM a statutory director, who will be responsible for complying with the provisions contained in this Instruction and in operational and registration regulations.

Sole Paragraph. The director referred to in the caput must, in the exercise of their inspection activities regarding the procedures established in this Instruction, exercise the care and diligence that every active and honest person usually employs in the administration of their own business.

CURRENT ACCOUNTS

Art. 5 Brokers must maintain a record of all financial movements of their clients in current accounts that are not negotiable by check.

Sole Paragraph. The financial values corresponding to the movements referred to in this article will be segregated from the broker's own resources in a specific bank account maintained by the broker exclusively for this purpose.

RECEIPT, FULFILLMENT, AND DISTRIBUTION OF ORDERS AND TRANSACTIONS

Art. 6 Subject to the provisions of this Instruction, as well as the norms issued by the exchanges, brokers and other market participants who act directly in their trading floors or trading and registration systems must establish and submit to the prior approval of the exchanges, the rules and parameters of operation relating, at a minimum:

I - to the type of orders, time for their receipt, method of issuance, validity period, refusal procedures, registration, fulfillment, distribution, and cancellation; and

II - to the method and criteria for attending to received orders and distributing completed transactions.

§1 The rules regarding the receipt, fulfillment, and distribution of orders and transactions must be delivered to clients before the start of their operations.

§2 In any case, the registration of orders at the broker must always contain the time of receipt of the orders and the identification of the client who issued them with their sequential numbering in chronological order.

Art. 7 Brokers may fulfill orders for their own portfolio or for their clients' portfolios, being entitled, through a specific contract, to hire other brokers or special operators for their fulfillment, observing the provisions of arts. 9 and 12.

§1 In case of competing orders, priority for fulfillment must be determined by a chronological criterion, and orders from clients who are not related persons to the broker must always have priority over those issued by related persons.

§2 Only orders that are capable of being fulfilled at the time a transaction is effected, i.e., those whose price specified by the client is compatible with the market price, will compete in their distribution.

REGISTRATION AND IDENTIFICATION DOCUMENTATION OF CLIENTS AND SPECIAL OPERATORS

Art. 8 Brokers must register their clients and keep the registrations updated with the exchanges, clearing and settlement chambers, and entities providing bookkeeping and custody services, allowing for perfect identification and qualification of the same.

Art. 9 The registration data referred to in the previous article must contain, at a minimum, the information provided in §1, art. 3, of CVM Instruction No. 301, of April 16, 1999.

§1 In the case of institutional investors, whether resident or non-resident, the registration must additionally contain the names of persons authorized to issue orders, and, as applicable, the administrators of the institution or those responsible for portfolio administration in the country, as well as the legal representative or person responsible for the custody of their securities in the country.

§2 Brokers may only alter the address recorded in the registration upon express and written order from the client, accompanied by the corresponding proof of address.

§3 It is permitted for brokers to maintain client registration through an informatized system, provided that the provisions contained in this Instruction are observed.

§4 In case the institution is part of a financial conglomerate, provided that the provisions contained in this Instruction are observed and remote access to registration data is ensured through electronic means or an instant access system, the maintenance of a single client registration existing within the conglomerate will be admitted, with additional information to be completed by the clients and maintained at the broker or in the premises of the financial conglomerate, and obtained by the broker company when requested by the CVM.

§5 Single client registration is understood as the storage of all and any registration information or documentation for shared use among the members of the financial conglomerate.

§6 With prior CVM approval, in the case of special exchange operations, considered those preceded by the collection of dispersed small-value orders through bank agencies or their premises in the country, the registration data of principals will be archived at the broker or distributor company, dispensing with registration in the exchanges' systems in this case.

§7 A condition for the CVM's examination of the request regarding the special operations referred to in the previous paragraph is the provision regarding liability and the method of reimbursement to clients in the event of damage resulting from the operations.

§8 The operations referred to in §§ 6 and 7 will be registered, at the exchange where they take place, in the name of the intermediary institution, in a special account.

Art. 10. From the registration referred to in art. 8, or from the document attached to it, there must be a declaration, dated and signed by the client or by a duly constituted proxy, if applicable, stating that:

I – the information provided for filling out the registration is true;

II – they commit to informing, within 10 (ten) days, any changes that may occur in their registration data;

III – they operate on their own account, and whether they authorize or not the execution of orders by a proxy, duly identified;

IV - they operate on behalf of third parties, in the case of investment fund administrators and managed portfolios;

V - they are, or are not, a related person to the broker under the terms of art. 14 of this Instruction;

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

VII – by express option, if applicable, their orders will be transmitted exclusively in writing;

VIII - they are aware of the provisions of this Instruction, the broker's operating rules, the norms regarding the guarantee fund, and the operational norms issued by the exchanges and the clearing house, copies of which they have received and keep in their possession; and

IX - they authorize the brokers, if there are pending debts in their name, to settle, on the exchange or in a clearing and settlement chamber, the contracts, rights, and assets acquired on their behalf and order, as well as to execute assets and rights given as guarantee for their operations, or that are in the possession of the broker, applying the proceeds of the sale to the payment of pending debts, regardless of judicial or extrajudicial notification.

Art. 11. Brokers must institute adequate control procedures to prove compliance with the provisions of arts. 8 and 9, keeping all documents related to securities transactions, including dispersed orders, at their headquarters or at the headquarters of the financial conglomerate they are part of, and available to the CVM, the exchanges, and clients, for a period of 5 (five) years, from the date of the transaction.

PROHIBITIONS

Art. 12. It is prohibited:

I – to brokers:

a) to use collective current accounts, except for cases of joint accounts with up to 2 (two) holders;

b) to accept or fulfill orders from clients who are not previously registered; and

c) to use, in the activities of members of the securities distribution system, persons not part of this system, or to allow the exercise of mediation or brokerage activities by persons not authorized by the CVM for this purpose;

II - to special operators, to fulfill orders emanating directly from clients of brokers.

Art. 13. Brokers and other members of the securities distribution system may only open accounts, accept buy and sell orders, or effect transfers of securities transmitted by proxy, if the proxies are identified in the registration documentation as constituted proxies.

Sole Paragraph. It is up to clients to inform of any revocation of the mandate.

TRANSACTIONS BY RELATED PERSONS AND SPECIAL OPERATORS

Art. 14. Related persons to a specific broker may only negotiate securities on their own account, directly or indirectly, through the company to which they are linked.

§1. The following will be considered related persons, among others:

a) employees, operators, and agents of the broker;

b) autonomous agents accredited by it;

c) partners or shareholders of the broker, natural or legal persons, who hold direct or indirect control and those holding management or administrative positions;

d) spouse or partner and minor children of any of the persons mentioned in the preceding letters;

e) controlling and controlled companies; and

f) in the case of a broker part of a financial conglomerate, partners, directors, administrators, and employees of companies part of the conglomerate will also be considered related persons, as well as the own portfolios of these companies.

§2. Transactions and orders carried out for the broker's own portfolio are equated to transactions and orders carried out by related persons to the broker, for the purposes of this Instruction.

§3. Indirect negotiations are not considered those carried out by investment funds of which the persons mentioned in this article are unitholders, provided that such funds are not exclusive, nor can the administrator's negotiation decisions be influenced by the unitholders.

§4. In the case of a broker that does not operate directly in the trading floors or negotiation systems of exchanges, persons linked to it may issue their orders to other brokers, highlighting such condition in the respective contract.

Art. 15. Special operators may negotiate directly on the trading floor and in electronic trading and registration systems, and may only register their transactions through the member or clearing agent to which they are linked by contract.

TRANSFER OF TRANSACTIONS

Art. 16. It is up to exchanges to establish rules and procedures for the transfer of transactions carried out in any of their systems.

§1. The rules referred to in the caput of this article must provide, among others, the procedures for constituting the transfer link, and the method of identification and registration of transactions resulting from them.

§2. The rules referred to in the caput of this article must be submitted to the CVM for approval, at least 30 (thirty) days prior to their implementation.

§3. In any case, transfer is only permitted when there is a specific contract between the brokers and, if applicable, special operators involved.

§4. Transactions subject to transfer must be identified in a specific current account maintained between the brokers and, if applicable, special operators involved, always through the use of client identifier codes.

TYPES OF ORDERS

Art. 17. Exchanges must regulate the types of orders and offers accepted in their trading floors or negotiation systems, in a specific norm submitted to prior CVM approval, observing the provisions of arts. 6 and 7.

Sole Paragraph. In case the CVM does not manifest within 30 (thirty) days of receiving the rules referred to in the caput of this article, they will be presumed approved.

PAYMENTS AND RECEIPT OF VALUES BY THE BROKER

Art. 18. Brokers, whenever making payments to their clients regarding transactions carried out, must include the following information in the respective documents:

I - the client's current account number with the broker or intermediary; and

II - when by check, the bank current account number and check number, its value, the name(s) of the beneficiary(ies), the drawer, and the drawee bank, with indication of the branch and strips stating: "exclusively for credit to the original payee's account", nullifying the clause "to your order".

Sole Paragraph. The provisions of the caput of this article apply, insofar as applicable, to cases of receipt, by the broker, of any values from their clients.

SELF-REGULATION PROCEDURES

Art. 19. It is up to exchanges, as auxiliary bodies of the CVM, to monitor the activities of their members and issue complementary norms necessary for the execution of the provisions of this Instruction.

§1. Exchanges will keep available to the CVM the data and information obtained with the monitoring activities developed by them.

§2. Whenever, in the exercise of their monitoring activity, the entities mentioned in the caput of this article verify indications of the occurrence of offenses, they must immediately communicate this to the CVM.

APPLICATION TO OTHER ENTITIES

Art. 20. The provisions of this Instruction apply, insofar as applicable, to organized over-the-counter entities, associates of commodity and futures exchanges, as well as other members of the securities distribution system, including institutions authorized to provide registration, clearing, settlement, or custody services for securities.

ADAPTATION TO THIS INSTRUCTION

Art. 21. Exchanges, organized over-the-counter entities, company members of commodity and futures exchanges, as well as other members of the securities distribution system, must adapt to the principles of this Instruction, within the following deadlines:

I – exchanges will have 60 (sixty) days, counted from the entry into force of this Instruction, to send to the CVM rules provided for in arts. 3, 16, 17, and 19, §1, as well as to issue complementary norms to this Instruction;

II - organized over-the-counter entities will have 120 (one hundred and twenty) days, counted from the entry into force of this Instruction, to send to the CVM rules provided for in arts. 3, 16, 17, and 19, §1, as well as to issue complementary norms to this Instruction; and

III - brokers, special operators, and other participants who act directly in the trading floors or negotiation and registration systems of exchanges will have 30 (thirty) days counted from the date of CVM approval of operating rules to elaborate the rules provided for in arts. 6, 7, 8, and 9, of this Instruction.

Sole Paragraph. While the rules referred to in Items I, II, and III are not approved by the exchanges, brokers, and the CVM, the provisions contained in CVM Instruction No. 220, of September 15, 1994, must be observed.

Art. 22. It is considered a serious offense, for the purposes of art. 11, § 3, of Law No. 6.385/76, the violation of the norms contained in arts. 3; 4; 5; 6; 12; 13; 14; 15; 18 and 21;

Art. 23. Non-compliance with the provisions of arts. 8, 9, 10, and 11 constitutes a hypothesis of objective offense, subject to a summary administrative process.

Art. 24. CVM Instruction No. 220, of 1994, is revoked, from the entry into force of this Instruction.

Art. 25. This Instruction will enter into force on the date of its publication in the Official Gazette of the Union.

Original signed by

LUIZ LEONARDO CANTIDIANO

President