CVM Instruction No. 193 of July 23, 1992

CVM INSTRUCTION NO. 193, OF JULY 23, 1992.
Authorizes the inclusion of convertible debentures as a reference asset for trading in the options market. Amends provisions of CVM INSTRUCTION NO. 120, of July 6, 1990, which provides for the futures, forward, and options markets referenced in securities.

THE PRESIDENT OF THE SECURITIES AND EXCHANGE COMMISSION - CVM, makes public that the Collegiate Board, in a session held on this date, in accordance with the provisions of Articles 8, 17, and 18, item II, letter "a", of LAW NO. 6,385, of December 7, 1976.

RESOLVES:

Art. 1st Authorize the inclusion of convertible debentures as a reference asset for trading in the options market.

Sole Paragraph. Only convertible debentures, issued by companies registered in Stock Exchanges and whose shares have a high degree of liquidity in the spot market, will be admitted as objects of trading in the market referred to herein.

Art. 2nd Amend Articles 1st and 2nd of CVM INSTRUCTION NO. 120, of July 6, 1990, which shall henceforth read as follows:

"Art. 1st Operations in the futures, forward, and options markets with securities shall be guaranteed by deposits in Stock Exchanges or in Clearing and Settlement Systems, in an amount equivalent to at least:

a) twice the value of the market premium, or 10% (ten percent) of the exercise price, whichever is greater, when dealing with put options.

b) twice the value of the market premium, or 10% (ten percent) of the spot price, whichever is greater, when dealing with call options.

c) 20% (twenty percent) of the position amount or contract value, when dealing with forward and futures stock transactions.

§1st In the cases referred to in letters "a" and "b", the guarantee may be provided in cash, public or private securities, duly registered in the Special Clearing and Custody System (SELIC), and in the Securities Registration and Financial Settlement System (CETIP), respectively, bank guarantee letters, certificates representing gold, or shares included among those acceptable by the Stock Exchange where the transaction takes place.

§2nd When dealing with shares or certificates representing gold, 80% (eighty percent) of their average quotes in the spot markets administered by Stock Exchanges, or of Commodities and Futures Exchanges, shall be considered for the purpose of providing guarantees.

§3rd In forward and futures stock transactions, the minimum guarantee referred to in letter "c" of this article must be provided in cash, and additional guarantees may be provided in the manner of the preceding paragraphs.

§4th In forward sales, futures, and option writing transactions with shares or convertible debentures, the presentation of the aforementioned guarantees is waived if the deposit of the securities, object of the transaction, is made.

§5th A short position shall be considered any transaction in which the deposit of the securities, object of the transaction, is at any time replaced by any other guarantees.

§6th The brokerage company may use up to 10% (ten percent) of the value of the bank guarantee letter for each client, per market type.

§7th The guarantees referred to in this article shall be due daily, with positions being compulsorily closed if the respective deposits are not made by the first business day following the transaction.

§8th The calculation methodology for the guarantees referred to herein shall be established by the Stock Exchanges, which must ensure the proper settlement of transactions carried out in their venues or in trading systems administered by them, prevent or correct situations that may constitute violations of legal or regulatory norms, or that embody modalities of fraud or manipulation.

§9th The calculation methodology for the guarantees, referred to above, as well as any amendments thereto, must be communicated to the CVM, prior to its implementation, along with a justified explanation of the criteria used."

"Art. 2nd ......

§1st The calculation methodology for the guarantees referred to herein shall be established by the Exchanges, which must observe, in addition to the criteria referred to in the previous article, the volatility of the reference indices and the interest rate practiced in the market.

§2nd The calculation methodology, as well as any amendments thereto, must be communicated to the CVM, prior to its implementation, along with a justified explanation of the criteria used."

Art. 3rd The Securities and Exchange Commission, in the exercise of its duties, may determine to the Exchanges the alteration of the guarantee calculation methods adopted by them, as well as the adoption of any other measure deemed adequate for the regular functioning of the market.

Art. 4th This Instruction shall enter into force on the date of its publication.

Original signed by
ROBERTO FALDINI
President