CVM Instruction No. 186 of March 17, 1992 (Revoked)

FULL TEXT OF CVM INSTRUCTION NO. 186, OF MARCH 17, 1992, WITH CHANGES INTRODUCED BY CVM INSTRUCTIONS NOS. 200/93, 213/94 AND 615/19

Provides for the constitution, operation, and administration of Cultural and Artistic Investment Funds.

THE PRESIDENT OF THE SECURITIES AND EXCHANGE COMMISSION makes public that the Collegiate Body, in a session held on this date, and in view of the provisions of Law No. 8.313, of December 23, 1991, and Decree No. 455, of February 26, 1992,

HAS RESOLVED:

CHAPTER I
OF THE CONSTITUTION AND CHARACTERISTICS

Art. 1 The Cultural and Artistic Investment Fund, constituted in open form - when it allows for the redemption of quotas -, or closed form - when it does not allow for the redemption of quotas -, is a pooling of resources destined for application in cultural and artistic projects.

§1 The Fund may have a fixed or indefinite duration, and its denomination must include the expression "Cultural and Artistic Investment Fund".

§2 A closed Cultural and Artistic Investment Fund may be transformed into an open one, by decision of the General Meeting of unitholders, which will depend on prior authorization from the Securities and Exchange Commission.

• See CVM Instruction No. 200, of August 3, 1993.

§3 If the transformation of the Fund is approved, the managing 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, Cultural and Artistic Investment Funds must request authorization from the Securities and Exchange Commission for their operation.

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

• See CVM Instruction No. 200, of August 3, 1993.

Sole Paragraph. The authorization request must be accompanied by the deliberation of the managing institution regarding the constitution of the Fund, which must contain the full text of its bylaws.

• Sole Paragraph with wording given by CVM Instruction No. 615, of October 2, 2019.

Art. 3 The bylaws of the Cultural and Artistic Investment Fund must necessarily provide for:

I - qualification of the managing institution; II - investment policy to be adopted by the managing institution, determining the cultural and artistic projects, sectors or sub-sectors in which resources will be allocated, as well as the diversification strategy to be followed; III - entry fee or criteria for its fixing, in the case of open funds; IV - remuneration of administrators; V - fixing of a waiting period based on the provisions of article 26; VI - availability of information for unitholders; VII - expenses and charges of the Fund, especially the subscription fee in the case of closed funds; 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 unitholders; X - periodicity and criteria for asset valuation; XI - procedure for distribution of results.

Sole Paragraph. The fees, expenses, and timeframes will be identical for all unitholders and will be contained in the information referred to in item III of article 35.

Art. 4 The following acts related to the Fund must be sent to the Securities and Exchange Commission, which may, at its discretion, approve or not:

I - amendment of the bylaws;
II - indication and replacement of the director responsible for the administration of the Fund (article 5, paragraph 2); III - replacement of the managing institution; IV - transformation; V - merger; VI - incorporation; VII - spin-off; VIII - liquidation;

Sole Paragraph. The Central Bank of Brazil and the Culture Secretariat - PR, 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.

• See CVM Instruction No. 200, of August 3, 1993.

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 legally 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 managing 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 the managing institution.

Art. 6 The managing institution may open and operate bank accounts, acquire and transfer for consideration the assets and rights comprising the fund's patrimony, settle disputes, and in fact, practice all acts necessary for the management of the Fund, observing the limitations of this Instruction.

Art. 7 The managing 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 managing institution may, by prior notice published in the periodical(s) intended for the dissemination of the fund's information or by means of a letter, telex, or telegram addressed to each unitholder, 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 relevant events must be adopted by the respective entities and the managing institution.

CHAPTER III
OF THE DISCREDITING OF THE MANAGING INSTITUTION

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

§1 The discrediting process will begin with notification from the Securities and Exchange Commission to the managing institution, indicating the facts that underpinned 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 managing institution will be reasoned, with an appeal to the National Monetary Council, without suspensive effect, within a period of 15 (fifteen) days counted from the date of receipt of the communication issued by the Commission.

Art. 10. In cases of resignation and discrediting, the managing 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 managing institution must remain in the exercise of its functions until its effective replacement.

CHAPTER IV
OF THE OBLIGATIONS OF THE MANAGING INSTITUTION

Art. 11. Included among the obligations of the managing institution are:

I - to maintain, at its own expense, updated and in perfect order:
a) the records of unitholders and transfers of quotas; b) the minutes book of general meetings; c) the attendance book of unitholders; d) the archive of auditors' reports; e) the accounting records related to the operations and patrimony of the Fund; and f) the documentation related to the operations of the Fund, for a period of five years. II - to employ, in the defense of the rights of unitholders, the diligence required by the circumstances, practicing all acts necessary to ensure them, including actions, appeals, and exceptions; III - to bear the expenses of advertising the Fund;

CHAPTER V
OF THE GENERAL MEETING

Art. 12. It is exclusively the competence of the General Meeting of unitholders to:

I - take, annually, the accounts related to the Fund and deliberate on the financial statements presented by the managing institution; II - amend the bylaws of the Fund; III - deliberate on the replacement of the managing institution; IV - deliberate on the transformation, merger, incorporation, spin-off, or eventual liquidation of the Fund;

V - deliberate on changes in the remuneration rate of the managing institution, including regarding participation in the Fund's results.

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

Art. 13. The convening of the General Meeting will be made through an announcement published in the periodical(s) intended for the dissemination of the Fund's information.

§1 The convening must necessarily contain the day, time, and location where the meeting will be held, and also, in a brief manner, the subjects to be treated.

§2 The first convening 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 convening is necessary, it must be made 5 (five) days in advance.

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

§5 The General Meeting may be convened by the managing institution or by unitholders 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 convening, by the majority of issued quotas, and in the second convening, by the majority of quotas of those present.

Art. 15. Decisions of the General Meeting may be taken through a formalized consultation process by letter, telex, or telegram addressed by the managing institution to each unitholder 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 assent by the unitholders, 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 will be the absolute majority of issued quotas, regardless of the matter.

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

Art. 17. Legal representatives of unitholders or their legally 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 OF QUOTAS

Art. 18. The quotas of the Cultural and Artistic Investment Fund will correspond to ideal fractions of its patrimony and will assume the book-entry and/or registered form.

§1 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 unitholder is proven by the Investment Certificate or by the statement of deposit accounts.

§3 Open Cultural and Artistic Investment Funds are exempt from prior registration of quota issuance, as permitted by item I of the sole paragraph of article 19 of Law No. 6.385 of December 7, 1976.

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

I - the denomination "INVESTMENT CERTIFICATE"; II - the name of the Cultural and Artistic Investment Fund and the number of its registration in the General Register of Taxpayers of the Ministry of Economy, Finance and Planning; III - the following information about the managing institution:
a) denomination and location of headquarters;

b) reference to the authorization of the Securities and Exchange Commission (article 2); c) number of registration in the General Register of Taxpayers of the Ministry of Economy, Finance and Planning; IV - registered form; V - name of the unitholder or unitholders, jointly or severally, when 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 director responsible for the managing 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 unitholder, according to the records of the Cultural and Artistic Investment Fund.

Sole Paragraph. When the system of integer numbers of 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 unitholder in cash.

Art. 21. 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 managing institution.

CHAPTER VII
OF THE DISTRIBUTION OF RESULTS, NEGOTIABILITY AND REDEMPTION OF QUOTAS OF FUNDS IN CLOSED REGIME.

Art. 22. In closed funds, the General Meeting is responsible for deliberating on the distribution of results to unitholders.

§1 The values deliberated for distribution may be monetarily updated according to criteria provided in the Fund's bylaws, from the date of deliberation until the date of effective distribution, observing current legislation.

§2 The minutes of the meeting that deliberates on the distribution of results must be published in the periodicals intended for the dissemination of the fund's information.

Art. 23. The quotas of closed Funds may only be offered to the public through a multiple bank with an investment portfolio, investment bank, brokerage company, or distribution company.

Sole Paragraph. The quotas of closed Funds may only be traded on a stock exchange or organized over-the-counter market.

Art. 24. In closed Funds, there will be no redemption of quotas, except upon the expiration of their duration or by the liquidation of the Fund.

CHAPTER VIII
OF THE DISTRIBUTION OF RESULTS, NEGOTIABILITY AND REDEMPTION OF QUOTAS OF FUNDS IN OPEN REGIME

Art. 25. In open funds, the General Meeting is responsible for deliberating on the distribution of results to unitholders.

Sole Paragraph. Trading on stock exchanges or over-the-counter markets of the open fund's quotas is prohibited.

Art. 26. The bylaws of the open Fund may establish waiting periods for the request for redemption of its quotas, observing a maximum of 180 (one hundred and eighty) days.

Art. 27. The fulfillment of redemption requests made by unitholders may not exceed the value of resources applied in assets specified by the fund's bylaws for the purpose of meeting this requirement.

Sole Paragraph. The bylaws must provide for the pro-rata system for meeting partial redemption requests of unitholders whenever the situation mentioned in the "caput" occurs.

Art. 28. The partial or total fulfillment of requested redemptions will occur within 60 (sixty) days after the date of the first asset valuation that follows the redemption requests.

Sole Paragraph. The redemption value of the quotas will be equal to the patrimonial value of the quotas obtained in the last asset valuation and may be monetarily updated according to criteria established in the bylaws of the open Fund, observing current legislation.

Art. 29. The redemption will be made in cash, check, credit in current account, or payment order, without charging any fee or expense.

CHAPTER IX
OF THE COMPOSITION AND DIVERSIFICATION OF THE PORTFOLIO

Art. 30. The application of the Fund's resources in cultural and artistic projects will be made exclusively through:

I - contracting legal entities of a cultural nature with headquarters in the country whose object is the execution of the mentioned cultural projects; II - participation in projects carried out by legal entities of a cultural nature with headquarters in the country; and III - acquisition of property rights for the commercial exploitation of literary, audiovisual, fonovideographic, performing arts, and plastic and visual arts works.

Sole Paragraph. Cultural and artistic projects, in accordance with the provisions of Law No. 8.313 of December 23, 1991, are:

I - the commercial production of musical instruments as well as discs, tapes, videos, films, and other forms of fonovideographic reproduction; II - the commercial production of theatrical, dance, music, singing, circus, and other similar shows; III - the commercial edition of works related to sciences, letters, and arts, as well as reference works and other of a cultural nature; IV - the construction, restoration, repair, or equipment of rooms and other environments intended for activities with cultural objectives, owned by for-profit entities; and V - other commercial or industrial activities of cultural interest as considered by the SEC / PR, heard the CNIC.

Art. 31. The Fund's resources not applied in cultural and artistic projects may be kept available or applied, exclusively, in securities issued by the National Treasury and the Central Bank of Brazil, state and municipal debt securities, securities issued or accepted by financial institutions, and quotas of financial application funds and funds investing in quotas of financial application funds.

Art. 31. The resources of funds not applied in cultural and artistic projects may be kept available or applied, exclusively, in securities issued by the National Treasury and the Central Bank of Brazil, state and municipal debt securities, securities issued or accepted by financial institutions, and quotas of fixed-income funds.

• Article with wording given by CVM Instruction No. 213, of May 23, 1994.

CHAPTER X
OF THE CHARGES OF THE FUND

Art. 32. In addition to the remuneration referred to in article 7 of this Instruction, the following expenses, which may be charged to the Fund by the managing institution, will constitute charges of the Fund:

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 - expenses with correspondence of interest to the Fund, including communications to unitholders; IV - fees and expenses of auditors responsible for reviewing the Fund's financial statements and analyzing its situation and the performance of the managing institution, including regarding the investment policy fixed in the bylaws and prospectuses; V - emoluments and commissions paid by Fund operations; VI - lawyers' fees, court costs, and related expenses incurred in 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 managing institution in the exercise of its functions; VIII - insurance premiums, as well as any expenses related to the transfer of resources of 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 unitholders; X - custody fee for the Fund's securities; and XI - subscription fee of quotas in the primary market; XII - registration fees and other expenses resulting from the registration of Funds in stock exchanges or organized over-the-counter markets.

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

CHAPTER XI
OF THE FINANCIAL STATEMENTS

Art. 33. The Cultural and Artistic Investment Fund will have accounting bookkeeping distinct from that of the managing institution.

Art. 34. The Fund's financial statements will be subject to the valuation criteria mentioned in item X of article 3 of this Instruction and will be audited semi-annually by an independent auditor registered with the Securities and Exchange Commission.

§1 The balance sheet and other financial statements will be calculated semi-annually, and the fund must carry out intermediate revaluations as provided in its bylaws.

§2 The Securities and Exchange Commission may issue accounting standards that it deems necessary.

CHAPTER XII
OF THE INFORMATION

Art. 35. The investor must be provided, obligatorily and free of charge, at the time of his entry as a unitholder of the Cultural and Artistic Investment Fund:

I - a copy of the Fund's bylaws, referred to in article 3; II - a brief history of the managing institution;

III - a document clearly stating the expenses with commissions or subscription fee, entry, and other expenses that the investor or the Fund must bear.

Art. 36. The managing institution of the Fund is obliged to widely and immediately disclose any act or relevant fact related to it, in order to guarantee all unitholders 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. 37. The managing institution of the Fund must:

I - provide to the Stock Exchange of the location of its headquarters, for dissemination to the market, periodically, up to 30 (thirty) days after the date of each asset valuation, the value of the quota, net asset value, and the yield earned in the period. II - send to unitholders, periodically, up to 30 (thirty) days after the date of each asset valuation:
a) number of quotas and value of applications and redemptions; b) unitholder balance, in number of quotas and patrimonial value.
III - send semi-annually to unitholders, or publish in the periodical(s) referred to in item "d" of this item, within a period of 30 (thirty) days after the end of the semester, the following information:
a) yield earned in the semester; b) value and composition of the portfolio, discriminating quantity, type, and quotation of the securities that make it up, the total value of the portfolio; c) balance sheets and other financial statements, accompanied by the opinion of the independent auditor; d) indication of the periodical(s) used for information dissemination; e) list of institutions responsible for providing custody services for the securities components of the portfolio; f) detailed report on the economic-financial situation of the cultural and artistic projects, belonging to the fund's patrimony.

IV - send annually to the unitholders the following information, together with that contained in the preceding item:
a) the unitholder's balance, in number of quotas and value; b) the profitability over the last 6 (six) semesters, taken as complete fiscal years; c) the net asset value of the quota, at the time of the balance sheets, over the last 6 (six) semesters, as well as 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 32, specifying their value and percentage relative to the Fund's average monthly net assets, in each year; and e) proof for income tax declaration purposes.

§1º The financial institution administering the Closed Cultural and Artistic Investment Fund shall keep the information mentioned in the "caput" of this article available to the unitholders at its headquarters.

§2º The communications provided for in item IV of this article shall be sent within 60 (sixty) days after the end of the civil year to which they refer.

§3º The information referred to in item III must be available to the unitholder within 30 (thirty) days after the end of the semester, with the exception of item "c", which shall have a period of 60 (sixty) days for its disclosure.

§4º The disclosure of the information referred to in this article shall be made through publication in the periodical(s) intended for the disclosure of the Fund's information.

§5º The administering institution shall 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 the unitholders.

Art. 38. Any advertising text for the offer of quotas, advertisement, or promotion of the Fund may not diverge from the content of its bylaws.

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 disseminated, with equal prominence, through the same vehicle(s) used to disseminate the original advertising text.

Art. 39 The administering institution shall send to the Securities and Exchange Commission, within 30 (thirty) days after the end of the period to which they refer, without prejudice to others that may be required, the following documents relating to the Fund:

I - on the dates of asset valuation, whose periodicity must be less than a semester:
a) trial balance; b) contracts entered into by the Fund for the purpose of investing resources in cultural and artistic projects; and c) statement of sources and applications of resources.

II - semi-annually:
a) balance sheets; b) copies of the information provided to the unitholders; c) information regarding the general conditions of insurance coverage, in the case of transit of securities; and d) list of institutions responsible for providing custody services for the securities; and e) list of judicial and extrajudicial demands, whether in defense of the unitholders' rights or by them against the Fund's administration, indicating the date of their initiation and final resolution.

Sole Paragraph. The opinion of the independent auditor relating to the financial statements shall be sent to the Securities and Exchange Commission, within 60 (sixty) days from the date of the end of the semester.

CHAPTER XIII
OF THE PROHIBITIONS

Art. 40. It is prohibited for the administering institution, in the name of the Fund:

I - to receive deposits in a current account;
II - to contract or carry out financial loans under any modality;

III - to provide surety, guarantee, acceptance, or co-obligate itself under any other form; IV - to trade in duplicate bills, promissory notes, or other securities not authorized by the Securities and Exchange Commission; V - to promise predetermined returns to unitholders; VI - to organize efforts, hiring factors and services with the objective of carrying out cultural and artistic undertakings. VII - to invest resources:
a) abroad; b) in the acquisition of real estate; VIII - to sell the Fund's quotas on installment.

CHAPTER XIV
OF TRANSITORY AND FINAL PROVISIONS

Art. 41. The provisions of Article 11 of Law No. 6.385, of December 7, 1976, shall apply to the administering institution and to its administrators directly responsible for the administration of the Fund, regardless of other legal sanctions applicable.

Art. 42. The Securities and Exchange Commission may cancel the authorization for the operation of the Fund that, within 120 (one hundred and twenty) days from the date of authorization, has not obtained the resources necessary for the formation of its initial net assets.

Art. 43. This Instruction shall enter into force on the date of its publication in the Official Gazette of the Union.

Original signed by
ROBERTO FALDINI
President