CVM INSTRUCTION NO. 169, OF JANUARY 2, 1992.

Provides for the registration, with the Securities and Exchange Commission (Comissão de Valores Mobiliários), of foreign institutional investors who may form portfolios of securities and financial instruments in the country, as provided for in Annex IV Regulation to CMN Resolution No. 1,289, of March 20, 1987, approved by CMN Resolution No. 1,832, of May 31, 1991, and gives other provisions.

THE PRESIDENT OF THE SECURITIES AND EXCHANGE COMMISSION makes public that the Collegiate Body, in a session held on this date, and based on the provisions of item I of Article 8 of LAW NO. 6,385, of December 7, 1976, and RESOLUTION NO. 1,832, of May 31, 1991, of the National Monetary Council,

HAS DECIDED:

Art. 1. For the purposes of the provisions of the Annex IV Regulation to CMN Resolution No. 1,289, of March 20, 1987, approved by CMN Resolution No. 1,832, of May 31, 1991, the following institutions are eligible for registration with the Securities and Exchange Commission as foreign institutional investors, acting, according to their objectives, on their own behalf or on behalf of other foreign institutional investors:

I - commercial banks, investment banks, savings and loan associations, global custodians, and similar institutions, regulated and supervised by a competent governmental authority;

II - insurance companies, regulated and supervised by a competent governmental authority, whose assets are equivalent to at least US$ 5,000,000 (five million dollars);

III - companies and/or entities whose purpose is to distribute the issuance of securities or to act as intermediaries in the negotiation of securities, acting on their own behalf or on behalf of third parties, registered and regulated by an body equivalent to the Securities and Exchange Commission or recognized by it;

IV - pension funds regulated by a competent governmental authority, whose assets are equivalent to at least US$ 5,000,000 (five million dollars);

V - non-profit institutions, provided they are regulated by a competent tax authority, recognized by the CVM, whose assets are equivalent to at least US$ 5,000,000 (five million dollars).

VI - any entity whose purpose is the application of resources in the financial and capital markets, in which resident and domiciled individuals and legal entities participate abroad, and which has not been constituted or operates exclusively for the benefit of a single individual, provided that:

a) it is registered and regulated by a body equivalent to the Securities and Exchange Commission or recognized by it; or

b) it has at least 30 (thirty) partners, shareholders, quota holders, or beneficiaries and assets equivalent to at least US$ 5,000,000 (five million dollars); or

c) it has at least 5 (five) partners, shareholders, quota holders, or beneficiaries and assets equivalent to at least US$ 15,000,000 (fifteen million dollars); or

d) it has assets equivalent to at least US$ 5,000,000 (five million dollars) and the portfolio administration is carried out, in a discretionary manner, by a professional administrator, registered and regulated by a competent governmental authority recognized by the CVM;

e) it has assets equivalent to at least US$ 5,000,000 (five million dollars), provided that all its partners, shareholders, quota holders, or beneficiaries are investors described in this article or, if individuals, hold individually, assets superior to the equivalent of US$ 1,000,000 (one million dollars); or

f) all its partners, shareholders, quota holders, or beneficiaries are institutions described in this article.

Art. 2. It is prohibited for foreign institutional investors:

I - to use portfolio resources to directly or indirectly acquire control or increase their participation in a controlled or affiliated company, or to acquire securities of closed companies;

II - to lend, loan, pledge, or guarantee the securities components of the portfolio or rights related thereto, except in cases expressly authorized by the Securities and Exchange Commission;

III - to acquire or sell, in Brazil, outside the stock exchange trading floor, shares of an open company registered for exchange trading, except for the cases of subscription, bonus, and conversion of debentures into shares regarding acquisition;

IV - to acquire or sell shares traded in an unorganized or organized over-the-counter market segment by an entity not authorized by the Securities and Exchange Commission.

Art. 3. To obtain and maintain registration in accordance with this Instruction, investors must commit to:

I) not effect, abroad, the transfer of ownership of the securities components of the portfolio;

II) only alienate, abroad, any rights related to these securities, for any reason, such as sale, assignment, grant of participation, or transfer to another investor mentioned in Article 1, who expressly commits to comply and ensure compliance with the provisions of this article, informing the CVM of any operation of this nature.

Art. 4. Investors who intend to operate on their own behalf must request the registration designated as "own account" and present the following documents:

I - a declaration signed by the foreign investor, indicating the category described in Article 1 in which they fall, and committing to comply and ensure compliance with the provisions of Articles 2 and 3, as well as, at the CVM's discretion, proof that they fit into the indicated category;

II - a request from the Brazilian administering institution, requesting registration in accordance with the Annex IV Regulation to CMN Resolution No. 1,289, of March 20, 1987, approved by CMN Resolution No. 1,832, of May 31, 1991, assuming total and unrestricted responsibility, including fiscal and exchange-related, for acts practiced directly or indirectly in the name of the foreign institutional investor, mainly with regard to the provisions of Articles 14, 16, 17, 21, and 24 of the aforementioned Regulation, in which it must be specified in which of the categories described in Article 1 the interested investor falls;

III - a copy of the administration contract signed between the foreign investor and the administering institution in Brazil, with clear indication of the directors responsible for the parties;

IV - a custody contract or, in its absence, indication of the future custodian and commitment to present the contract upon the first acquisition of securities;

V - a declaration by the administering institution that it maintains a specialized technical department or a copy of the contract for the provision of this service by third parties;

VI - a declaration by the foreign investor identifying their representative in Brazil, for the specific purpose of receiving notifications and citations in the name of the investor;

VII - a declaration by the administering institution that it will provide, when requested by the CVM, an opinion from an independent auditor, for the specific purpose of attesting to the correct compliance with legal obligations related to accounting, tax, and exchange norms, provided for in CMN Resolution No. 1832 and this Instruction.

Art. 5. Investors who intend to operate on behalf of third parties must request the registration designated as "collective account" and present the following documents:

I - all described in Article 4;

II - for each investor participating in the collective account, the declaration provided for in item I of Article 4 of this Instruction, which must be delivered to the Securities and Exchange Commission within 15 (fifteen) days from the first acquisition of securities.

Sole Paragraph. The investor may participate in one or more collective accounts and, if they opt to keep their securities in a separate custody account or in another custodian institution, the custody contract must contain a clause providing for the operational procedures for movement in the custody account, including regarding the information to be provided to the holder of the collective account and the Brazilian administering institution.

Art. 6. The holder of the collective account must provide the CVM, when requested, documentation specifying, by participant, the transactions carried out and the assets comprising the portfolio, as well as custody movements.

Art. 7. Official documents in a foreign language must be accompanied by a version in the vernacular, signed by a sworn translator and authenticated via consular channel.¹

Sole Paragraph. The other documents required by this Instruction, if not written in Portuguese, must be accompanied by a version in the vernacular, signed by a sworn translator, and registered in the registry of titles and documents.

Art. 8. The investor who fails to comply with the provisions of Articles 2, 3, and 6 will be responsible, together with the Brazilian administering institution, for the full payment of due taxes, and the CVM may suspend their authorization, based on item II of paragraph 1 of Article 9 of LAW NO. 6,385, of 07.12.76, without prejudice to applicable penalties.

Art. 9. This Instruction enters into force on the date of its publication in the Official Gazette of the Union, revoking INSTRUCTION CVM NO. 160, of August 21, 1991.

Signed original by
ARY OSWALDO MATTOS FILHO
President