CVM Instruction No. 175 of February 6, 1992

CVM INSTRUCTION NO. 175, OF FEBRUARY 6, 1992

Amends CVM Instruction No. 157, of August 21, 1991, which provides for the Constitution, Administration, and operation of Mutual Funds for Full Privatization, with credits and titles representing Brazilian external debt, admitted within the scope of the National Privatization Program (PND).

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. 6385, of December 7, 1976, and Resolution No. 1,810 of March 27, 1991, modified by Resolution No. 1,894, of January 9, 1992 of the National Monetary Council,

RESOLVES:

I - To amend Article 1 of CVM Instruction No. 157, of August 21, 1991, which shall enter into force with the following wording:

"Article 1. The Privatization Mutual Fund, constituted in the form of an open or closed condominium, in which only individuals or legal entities residing, domiciled, or headquartered abroad, foreign funds, or other collective investment entities participate, constitutes a communion of resources destined for the acquisition of securities and financial instruments issued by companies that are to be privatized in accordance with Law No. 8,031, of April 12, 1990."

II - To revoke paragraphs 1 and 2 of Article 2 of CVM Instruction No. 157;

III - To amend paragraph 3 of Article 3 of CVM Instruction No. 157, which shall enter into force with the following wording:

"Article 3.
I - ………………
II - ………………
III - ………………
IV - ………………

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V - ………………
VI- ………………
VII- ………………
VIII - ………………
IX - ………………
§1º ………………
§2º ………………
I - ………………
II- ………………
§3º The Fund's regulations shall provide for:
I - Investment policy to be adopted by the administering institution, assets that may compose the Fund's portfolio, and the diversification policy; II - management fees for obtaining conversion rights, or criteria for their determination, remuneration of the fiduciary agent, when applicable, and other expenses and charges of the Fund; III - remuneration of the administrators; IV - period of residence of resources in the Country, which shall not be less than 6 (six) years for each acquisition of securities and financial instruments within the scope of the FND; V - share value for purposes of subscription or redemption; VI - period for settlement of each investment, through the redemption of shares, which may be differentiated, depending on the percentage of the redemption value relative to the Fund's net assets."

IV - To amend Article 24 of CVM Instruction No. 157, which shall enter into force with the following wording:

"Article 24. Total or partial redemption of invested resources, in cash or in shares or securities composing the portfolio, shall be permitted."

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§1º In the redemption request, the shareholder shall indicate the amount in cruzeiros or number of shares to be redeemed and the destination of the proceeds. §2º In the event of redemption in cash, the Fund's administering institution shall immediately communicate the fact to the Securities and Exchange Commission and to the Central Bank of Brazil. §3º When the investment is transferred to another Fund, the originating administering institution shall transfer the shares and securities to the receiving administering institution or, if the redemption is in cash, the resources, through a payment order in favor of the new administrator, who shall proceed with the immediate subscription and full payment of shares, simultaneously communicating the fact to the Securities and Exchange Commission and to the Central Bank of Brazil."

V - To amend the sole paragraph of Article 25 of CVM Instruction No. 157, which, with the new wording given by Article 1 of CVM Instruction No. 162, shall enter into force with the following wording:

"Article 25. ...... ………………
I - .... ………………
II - .. ………………
III - .. ……...…
IV - . ………………
Sole Paragraph. The Fund may sell securities and financial instruments and/or federal public debt securities from its portfolio to acquire shares or other securities issued by open companies. It may apply up to 30% (thirty percent) of the values obtained from the sale of securities and financial instruments issued by privatized companies and/or federal public debt securities in equity participations in closed companies, always depending on prior authorization of the condominium owners or the entity that has received delegation of administrative powers of the Fund in accordance with item II of Article 32, observing the provisions contained in the Fund's regulations and observing the obligation of broad disclosure of the terms of this option in the Fund's prospectus."

VI - To amend Article 26 of CVM Instruction 157, which shall enter into force with the following wording:

"Article 26. The resources corresponding to each investment originating from the conversion of credits and titles of Brazilian external debt shall be subject to a minimum period of 6 (six) years of residence in the Country, counted from the date of their effective conversion, after which the value obtained from the liquidation of the investment may be returned."

VII - This Instruction shall enter into force on the date of its publication in the Official Gazette of the Union.

CVM INSTRUCTION NO. 175, OF FEBRUARY 6, 1992
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Original signed by
ARY OSWALDO MATTOS FILHO
President