CVM Instruction No. 205 of January 14, 1994, with Amendments Introduced by CVM Instructions Nos. 389/03, 418/05 and 455/07

FULL TEXT OF CVM INSTRUCTION NO. 205, OF JANUARY 14, 1994, WITH AMENDMENTS INTRODUCED BY CVM INSTRUCTIONS NOS. 389/03, 418/05 AND 455/07.

Provides for the constitution, operation, and administration of Real Estate Investment Funds.

THE PRESIDENT OF THE SECURITIES AND EXCHANGE COMMISSION (CVM) makes public that the Collegiate Board, in a session held on this date, having in view the provisions of LAW NO. 6,385, of December 7, 1976, and based on Article 4 of Law No. 8,668, of June 25, 1993,

HAS DECIDED:

CHAPTER I
OF THE CHARACTERISTICS OF THE FUND

Art. 1. The Real Estate Investment Fund, constituted in the form of a closed-end condominium, whose redemption of quotas is not permitted, is a communion of resources, captured through the securities distribution system and destined for application in real estate ventures.

Sole Paragraph. The Fund may have a determined or undetermined duration, and its denomination must contain the expression "Real Estate Investment Fund".

Art. 2. The Real Estate Investment Fund shall be destined for the development of real estate ventures, such as construction of properties, acquisition of ready-made properties, or investments in projects aiming to facilitate access to housing and urban services, including in rural areas, for subsequent alienation, leasing, or renting.

§1. It is prohibited for the real estate venture that is the object of the Fund to be commercially exploited by the Fund itself, except through leasing or renting.

§2. The properties, assets, and rights of use to be acquired by the Fund shall be subject to prior evaluation, which must observe the prevailing market conditions for transactions conducted in cash, in current currency.

CHAPTER II
OF THE CONSTITUTION OF THE FUND

Art. 3. The managing institution shall request from the Securities and Exchange Commission - CVM, simultaneously, the authorization for the constitution and operation of the Fund and the registration of quota distribution.

Art. 4. The constitution and operation of the Real Estate Investment Fund will depend on compliance with the following requirements:

I - registration, with the CVM, of the quota distribution, in accordance with Article 8;

II - proof before the CVM of the subscription by the public of the entirety of the quotas subject to the distribution registration, which subscription must be completed within a maximum period of 180 (one hundred and eighty) days, counted from the date of grant of the quota distribution registration by the CVM;

III - proof of the registration, at the Registry of Titles and Documents, of the minutes of the General Assembly of subscribers that deliberated on the constitution of the Fund;

IV - nominal list of subscribers, qualification, and number of quotas subscribed, when requested by the CVM.

Art. 5. The subscription of quotas must be made in national current currency, with immediate payment, admitting, provided it meets the objectives of the Fund, payment in land or other properties, as well as in real rights of use, enjoyment, fruition, and acquisition over real estate assets.

§1. Payment in assets and rights must be made based on an appraisal report prepared by 3 (three) experts or by an independent specialized company, duly justified with the indication of adopted evaluation criteria and comparison elements, and approved by the managing institution of the Fund.

§2. The amounts received in the payment of quotas must be deposited in a banking institution authorized to receive deposits, in the name of the Fund in organization, and their immediate application in quotas of financial application funds, in quotas of fixed-income funds and/or in fixed-income securities, public or private, is mandatory.

§3. If the requirement set forth in Item II of Article 4 is not met within the period fixed in the request for authorization and registration of distribution with the CVM (Article 8, Item I), the financial resources of the Fund will be immediately prorated among the subscribers, in proportion to the paid-up quotas, plus the net earnings obtained from the Fund's applications, according to paragraph 2 above.

Art. 6. Once constituted and authorized for operation, it is admitted that a portion of its assets that, temporarily, is not invested in real estate ventures may be invested in quotas of Financial Application Funds, in quotas of Fixed-Income Funds, and/or in Fixed-Income Securities of free choice by the administrator.

Sole Paragraph. The portion referred to in the "caput" of this article may not exceed the equivalent of 25% (twenty-five percent) of the total value of quotas issued by the Fund, unless expressly authorized by the CVM, upon justification by the Fund's administrator.

Art. 7. The following acts relating to the Fund depend on prior authorization from the CVM:

I - amendment of the bylaws;
II - issuance of new quotas;
III - designation and replacement of the director responsible for the administration of the Fund; IV - replacement of the managing institution; V - merger, incorporation, spin-off, or liquidation; VI - secondary distribution, as provided in CVM INSTRUCTION NO. 88, of 11/03/88.

CHAPTER III
OF THE REGISTRATION OF QUOTA DISTRIBUTION

Art. 8. The request for registration of quota distribution with the CVM shall be formulated by the managing institution, accompanied by the following documents:

I – deliberation of the managing institution regarding the project for the constitution of the Fund, in which the full text of its bylaws and the maximum period to complete its registration at the Registry of Titles and Documents located at the headquarters of the managing institution must appear; II – indication of the director of the managing institution responsible for the administration of the Fund; III – declaration from the Stock Exchange, if applicable, of approval for the request for admission to trading of the Fund's securities, conditioned only on obtaining registration with the CVM; IV – copy of the receipt for the Payment of the Inspection Tax related to the public distribution of quotas; V – copy of the quota distribution contract and, if applicable, the subscription guarantee contract, as well as a list of participants in the launch consortium and copies of subcontracts, if applicable; VI – model of the subscription list or form, according to Article 38, § 3; VII – model of the investment certificate (Article 36, § 4), or copy of the contract signed with the institution providing book-entry quota services, as applicable; VIII – study of technical, commercial, economic, and financial viability of the real estate venture to be developed, as well as the budget and work schedule, in cases where necessary; IX – copy of the development memorial or approved land subdivision project, and indication of its registration number at the Real Estate Registry, or copy of the Deed of Purchase and Sale or Promise of Purchase and Sale or title of acquisition of real rights over properties between the entrepreneur and the managing institution, as applicable; X – draft construction contract, if any, if the entrepreneur is a person distinct from the builder; XI – contract signed between the entrepreneur and the financial institution, if applicable; XII – draft prospectus, from which the following must appear:

a) at minimum, all information contained in the documents referred to in Items I to IX of this article; b) brief history of the managing institution and information regarding the venture that constitutes the object of the Fund, as well as the entrepreneur and/or land subdivider or developer of the venture that will constitute the object of the Fund, if applicable; c) technical opinion from the investment consultant, if any;

d) the prospectus must mention, in highlight, the following: "The authorization for the operation of the Fund and the registration of the issuance do not imply, on the part of the Securities and Exchange Commission, guarantee of the truthfulness of the information provided, or judgment on the quality of the Fund, its managing institution, its investment policy, the venture that constitutes its object, or, still, on the quotas to be distributed".

Art. 9. The registration of the issuance of quotas is subject to the payment of the Inspection Tax of the Securities Market, instituted by Law No. 7,940, of December 20, 1989, at the rate of 0.30% (thirty hundredths of a percent), as provided in Article 20, § 6, of Law No. 8,383, of December 30, 1991.

CHAPTER IV
OF THE BYLAWS

Art. 10. The bylaws of the Real Estate Investment Fund must provide for:

I – the object of the Fund, clearly defining the nature of the real estate investments or ventures that may be carried out; II – the investment policy to be adopted by the managing institution, which must contain, at minimum:

a) description of the fundamental objective of the real estate investments to be carried out, identifying the aspects that may only be altered with prior consent of the quota holders; b) specification of the degree of freedom that the managing institution reserves in fulfilling the investment policy, indicating the nature of operations it is authorized to carry out independently of prior authorization from the quota holders; c) the assets that may compose the Fund's assets, as well as the investment diversification requirements.

III – the duration period of the Fund;
IV – the entry fee or criteria for its fixing, if applicable; V – the number of quotas to be issued and their division into series, if applicable; VI – the possibility or not of new and future issuances of quotas, in which case it must regulate the respective hypotheses, the criteria for fixing the price, and the right of preference of the quota holders for subscription of new issuances; VII – the criteria for subscription of quotas by the same investor; VIII – the commercialization policy of the ventures; IX – the policy for distribution of earnings and results; X – the qualification of the managing institution;

XI – the obligations and responsibilities of the managing institution, especially regarding those provided in Article 14, as well as its duties in the capacity of fiduciary owner of the properties and rights comprising the Fund's assets; XII – the institution, duly accredited by the CVM, providing book-entry quota services, if applicable; XIII – the remuneration of the managing institution and the investment consultant, if any; XIV – the expenses and charges of the Fund, observing the provisions in Chapter X; XV – the criteria for calculating the net asset value of the quotas, which must also observe the accounting standards provided in Article 44, to be issued by the CVM; XVI – the mandatory and periodic information to be provided to quota holders, stock exchanges, or the CVM (Article 14, Items VIII to XVI); XVII – the manner of convening, legitimization, and representation, the "quorum" for installation and deliberations, and the competence of the general assembly. XVIII – the manner and conditions for dissolution and liquidation of the Fund, including regarding the form of asset distribution among quota holders and the programmed amortization of quotas, if applicable; XIX - the maximum percentage that the entrepreneur, developer, builder, or land subdivider may subscribe or acquire in the market.

CHAPTER V
OF THE ADMINISTRATION

Section I
Of Competence

Art. 11. The administration of the Real Estate Investment Fund belongs exclusively to a multiple bank with an investment portfolio or real estate credit portfolio, investment bank, brokerage company or securities distribution company, real estate credit society, savings banks, and savings and loan associations.

Art. 11. The administration of the Real Estate Investment Fund belongs exclusively to commercial banks, multiple banks with an investment portfolio or real estate credit portfolio, investment banks, brokerage companies or securities distribution companies, real estate credit societies, and savings banks.

• Caput with wording given by CVM Instruction No. 418, of April 19, 2005.

Art. 11. The administration of the Real Estate Investment Fund belongs exclusively to commercial banks, multiple banks with an investment portfolio or real estate credit portfolio, investment banks, brokerage companies or securities distribution companies, real estate credit societies, savings banks, and mortgage companies.

• Caput with wording given by CVM Instruction No. 455, of June 13, 2007.

Sole Paragraph. The institutions referred to in the "caput" of this article must maintain a technical department qualified to provide services for analysis and monitoring of real estate projects, or contract such services externally.

Art. 12. It is the responsibility of the managing institution to manage the Fund's assets, being able to carry out all operations, perform all acts related to its object, and exercise all rights inherent to the ownership of the assets and rights comprising the Fund's assets, including the right to sue, appeal, and raise defenses, being able to open and operate bank accounts, freely acquire and alienate titles belonging to the Fund, as well as to settle, provided the restrictions imposed by Law No. 8,668, of June 25, 1993, this Instruction, the Fund's bylaws, or a resolution of the general assembly are observed.

Sole Paragraph. The administration of the Fund will be under the direct supervision and responsibility of a director of the managing institution, especially designated for this purpose.

Art. 13. The managing institution will be, under the terms and conditions established in Law No. 8,668, of June 25, 1993, the fiduciary owner of the real estate assets and rights over real estate acquired with the Fund's resources.

§1. The managing institution, in the capacity of fiduciary owner, will administer and dispose of the assets, in the manner and for the purposes established in the legislation and the Fund's bylaws or in a general assembly.

§2. The negotiations of real estate assets or rights over real estate for the Fund's assets will be carried out directly by the managing institution, in the capacity of fiduciary owner, for the exclusive benefit of the Fund.

Section II
Of Obligations

Art. 14. The obligations of the managing institution of the Fund are:

I - to arrange for the annotation, at the Real Estate Registry, of the restrictions set forth in Article 7 of Law No. 8,668, of June 25, 1993, making it appear in the records of the real estate assets comprising the Fund's assets that such real estate assets:

a) do not compose the administrator's assets; b) do not answer directly or indirectly for any obligation of the managing institution; c) do not compose the list of assets and rights of the administrator, for the purpose of judicial or extrajudicial liquidation; d) cannot be given as guarantee for debt of an operation of the managing institution; e) are not subject to execution by any creditors of the administrator, however privileged they may be; f) cannot be the object of the constitution of real encumbrances.

II - to maintain, at its own expense, updated and in perfect order:

a) the records of quota holders and of transfer of quotas; b) the minutes and attendance books of the general assemblies; c) the documentation relating to the properties and operations of the Fund; d) the accounting records relating to the operations and assets of the Fund; e) the archive of the opinions and reports of the independent auditor and, when applicable, of the investment consultant.

III - to receive earnings or any amounts due to the Fund; IV - to always act in the sole and exclusive benefit of the quota holders, employing in the defense of their rights the diligence required by the circumstances and practicing all acts necessary to ensure them, judicially or extrajudicially; V - to administer the Fund's resources prudently, without burdening it with unnecessary or excessive expenses; VI - to cover the Fund's advertising expenses; VII - to keep deposited in an institution providing custody services, duly authorized by the CVM, the titles acquired with the Fund's resources; VIII - to provide the investor, mandatorily, at the time of subscription of quotas, against receipt:

a) - a copy of the Fund's bylaws; b) - the prospectus for the launch of the Fund's quotas; c) - a document detailing the expenses with commissions or subscription fees, distribution fees, and others that the investor must bear;

IX - to widely and immediately disclose any relevant act or fact relating to the Fund or its operations, in order to guarantee quota holders and other investors access to information that may, directly or indirectly, influence their decisions to acquire or alienate quotas of the Fund, being prohibited from using the information to obtain, for itself or for others, advantage through the purchase or sale of the Fund's quotas; X - to ensure that the violation of the provision in the previous Item cannot occur through subordinates or third parties trusted by it; XI - to disclose, monthly, the value of the Fund's assets, the net asset value of the quota, and the yield calculated for the period, which may be done through the Stock Exchanges, in the case of quotas that have registration for trading on an Exchange; XII - to keep available to quota holders, at its headquarters, information, updated monthly, relating to:

a) net asset value of the quotas and of the Fund's investments, including discrimination of the assets and rights comprising its assets;

b) information on the progress of the works and on the total value of investments already made, in the case of a Fund constituted with the objective of developing a real estate venture, until the completion and delivery of the construction; c) list of judicial or extrajudicial demands proposed in defense of the rights of quota holders or by them against the administration of the Fund, indicating the start date and the date of final solution, if any;

XIII - to send to quota holders, semi-annually, the statements of the deposit accounts referred to in Article 37; XIV - to send to quota holders, annually, information on the quantity of quotas in their ownership and respective net asset value, as well as the proof for the purposes of income tax declaration; XV - to disclose in the newspaper(s) referred to in Article 16, within 60 (sixty) days after the months of June and December:

a) the report of the managing institution, observing the provisions of Article 17; b) the financial statements, prepared in accordance with the regulation issued by the CVM; c) the opinion of the independent auditor;

XVI - to send, on the date of its disclosure, to the CVM, without prejudice to others that may be required, the documents relating to the Fund referred to in Items IX, XI, XII, and XIV; XVII - to provide the quota holder, upon request, a nominal list containing the name, address, and quantity of quotas held by the Fund's participants, being able to charge the cost of the service.

§1. The custodian institutions of the titles acquired with the Fund's resources may only comply with orders signed by the director responsible for the administration of the Fund or by a legally constituted attorney-in-fact, duly accredited with it.

§2. The documents or information referred to in Items XI, XII, XIII, and XIV of this article must be disclosed within a maximum period of 15 (fifteen) days, counted from the end of the period to which they refer.

Art. 15. The managing institution is liable:

I - for any damages caused to the Fund's assets, resulting from:

a) acts that constitute mismanagement or reckless management; b) operation of any nature concluded between the Fund and the managing institution, between the Fund and the entrepreneur, or between the Fund and a person holding more than 50% (fifty percent) of the quotas of the Fund, when a conflict of interest situation is characterized; c) acts that constitute a violation of the Law, this Instruction, the Fund's bylaws, or a determination of the general assembly;

II - for eviction of right, in the case of alienation of properties or rights comprising the Fund's assets.

§1. The following characterize a conflict of interest situation, among others:

I - the acquisition, leasing, or renting, by the Fund, of a property owned by the managing institution, or by persons linked to it, as defined in § 2 of this article; II - the alienation, leasing, or renting of a property comprising the Fund's assets to the managing institution, or to persons linked to it, as defined in § 2 of this article; III - the acquisition by the Fund of a property owned by debtors of the managing institution, once the debtor's default is characterized.

§2. The following are considered linked persons, for the purposes of the provision in this article:

I - the company under the control, direct or indirect, of the managing institution, or of the administrators of the institution responsible for the administration of the Fund; II - the natural or legal persons holding the control, direct or indirect, of the managing institution; III - the company whose control, direct or indirect, belongs to the same natural or legal persons holding the control of the managing institution; IV - the company whose administrators, in whole or in part, are the same as those of the managing institution, except for positions held in collegiate bodies provided for in the statutes or internal regulations of the managing institution, provided their holders do not exercise executive functions, after prior consultation with the CVM; V - relatives up to the second degree of the natural persons referred to in the Items above.

§3. It does not constitute a conflict situation, for the purposes of the law and the bylaws, acquisition, by the Fund, of a property owned by the entrepreneur, provided it is not a person linked to the administrator, at the time of the constitution of the Fund.

§4. Any other operation between the Fund and the entrepreneur, different from that provided in the previous paragraph, will be subject to evaluation, being possible to contract under reasonable or equitable conditions, identical to those prevailing in the market or in which the Fund would contract with third parties.

Section III
Of Information

Art. 16. The publication of information relating to the Fund will be made in the newspaper(s) chosen by the managing institution for this purpose, and previously communicated to the quota holders, any alteration being preceded by notice.

Art. 17. The report provided for in Item XV, letter "a", of Article 14 must contain, at minimum:

I – description of the business carried out in the semester, specifying, regarding each one, the objectives, the amounts of investments made, the earnings obtained, and origin of the invested resources, as well as the yield calculated for the period; II – investment program for the following semester;

III – information, based on premises and grounds duly explained, regarding:
a) the economic situation of the real estate market segment in which the Fund's operations are concentrated, relative to the semester ended; b) the administration's outlook for the following semester; c) the market value of the assets and rights comprising the Fund's assets, including the average percentage of appreciation or depreciation calculated during the period, based on a technical analysis specifically carried out for this purpose, in observance of the guidelines usually practiced for the valuation of the real estate assets comprising the Fund's assets, these criteria which must be duly indicated in the report; IV – list of obligations incurred during the period; V – the profitability over the last 4 (four) calendar semesters; VI – the net asset value per share, at the time of the balance sheets, over the last 4 (four) calendar semesters; VII – the list of charges debited to the Fund in each of the last 2 (two) fiscal years, specifying value and percentage relative to the average semi-annual net assets in each year.

Art. 18. Any advertising text for the offer of shares, advertisement or promotion of the Fund must be previously submitted to the CVM, and may not diverge from the content of its bylaws, the prospectus referred to in Article 8, Item XII, or any information provided, at any time, to the CVM.

Sole Paragraph. If the advertising text is published with inaccuracies or improprieties that may induce the investor to valuation errors, the CVM may require that corrections and clarifications be disseminated, with equal prominence, through the same media used to disseminate the original advertising text.

Section IV
Of the Prohibitions

Art. 19. It is prohibited to the administering institution, in the exercise of the functions of manager of the Fund's assets and using the Fund's resources:
I – to grant or contract loans, advance future income to unitholders or open credits under any modality; II – to provide guarantee, aval, acceptance or co-obligate under any form; III – to apply abroad resources raised in the country; IV – to apply resources in the acquisition of shares of its own Fund; V – to sell shares of the Fund on installment, admitting the division of the issuance into series; VI – to promise predetermined income to unitholders;

VII – to carry out Fund operations when characterized by a situation of conflict of interest between the Fund and the administering institution, or between the Fund and the developer or the entrepreneur, except as provided in § 3 of Article 14; VIII – to encumber under any form, the real or financial assets of the Fund; IX – to trade with duplicate bills, promissory notes or other titles not authorized by the CVM; X – to apply in futures or options markets.

§1º The administering institution is prohibited from acquiring, for its own assets, shares of the Fund.

§2º It is prohibited to the administering institution and affiliated companies to receive any advantage or benefit, direct or indirect, related to the activities of the real estate fund under its administration, that is not transferred for the benefit of the unitholders.

Section V
Of the Resignation, Discrediting and Liquidation.

Art. 20. The administering institution may, by prior notice of 6 (six) months, published in the newspaper(s) referred to in Article 16, or by means of a letter, telex, telegram or, still, any other means of written communication, addressed to each unitholder, resign from the administration of the Fund, being obliged, in the same act, to communicate its intention to the CVM.

Art. 21. The CVM may, at any time, discredit the administering institution that fails to comply with the prevailing legal or regulatory norms.

§1º The discrediting process will begin with notification by the Securities and Exchange Commission to the administering institution, indicating the facts that support it and the deadline for presenting a defense, not less than 15 (fifteen) days, counted from the date of receipt of the respective notification.

§2º The decision of the Securities and Exchange Commission that discredits the administering institution must be reasoned, indicating with precision the facts considered irregular, with appeal to the National Monetary Council, without suspensive effect, within 15 (fifteen) days, counted from the date of receipt of the communication issued by the CVM.

Art. 22. In the cases of resignation, discrediting by the CVM or dismissal by the general assembly, the institution will be obliged to immediately convene the general assembly, to elect its successor or deliberate on the liquidation of the Fund, being facultative for the representative of the unitholders, or unitholders who hold at least 5% (five percent) of the issued shares, in any case, or to the CVM, in the cases of discrediting, the convening of the general assembly, if the administering institution does not do so within 15 (fifteen) days counted from the event.

§1º In the cases provided for in the "caput" of this article, the administering institution must remain in the exercise of its functions until it is recorded, in the Real Estate Registry Office, in the deeds referring to the real estate assets and rights comprising the Fund's assets, the minutes of the general assembly that elect its successor and successor in the fiduciary ownership of these assets and rights, duly approved by the CVM and registered in the Titles and Documents Registry Office.

§2º In the case of extrajudicial liquidation of the administering institution, it will be incumbent upon the liquidator appointed by the Central Bank of Brazil, without prejudice to the provisions of Article 24 of this Instruction, to convene the general assembly, within 5 (five) business days, counted from the date of publication, in the Official Gazette of the Union, of the act that decrees the extrajudicial liquidation, in order to deliberate on the election of a new administering institution and the liquidation or not of the Fund.

§3º If the general assembly does not elect a new administering institution within 30 (thirty) business days, counted from the date of publication, in the Official Gazette of the Union, of the act that decrees the extrajudicial liquidation of the administering institution, the Central Bank of Brazil will appoint a new institution to process the liquidation of the Fund, the liquidated institution being obliged to bear the costs of remuneration of the administrator thus appointed.

§4º The provisions of § 1 of this article apply even when the general assembly deliberates on the liquidation of the Fund as a consequence of the resignation, discrediting, dismissal or extrajudicial liquidation of the administering institution, it being incumbent upon the general assembly, in these cases, to elect a new administering institution to process the liquidation of the Fund.

§5º It will be incumbent upon the liquidator to practice all acts necessary for the regular management of the Fund's assets, until the recording referred to in § 1 of this article is carried out.

CHAPTER VI
OF THE GENERAL ASSEMBLY

Art. 23. It is exclusively the competence of the general assembly:
I – to examine, annually, the accounts relating to the Fund, and to deliberate on the financial statements presented by the administering institution; II – to amend the Fund's bylaws; III – to dismiss the administering institution; IV – to deliberate on:
a) the replacement of the administering institution, in cases of resignation, discrediting, dismissal or decree of its extrajudicial liquidation; b) the issuance of new shares as well as approval of the asset valuation report, used in their subscription; c) merger, incorporation and spin-off; d) dissolution and liquidation of the Fund, when not provided for and regulated in the bylaws. V – to determine to the administering institution the adoption of specific measures of investment policy that do not imply alteration of the Fund's bylaws, previously hearing the investment consultant, if any; VI – to elect and dismiss the representative(s) of the unitholders (Article 30).

§1º The general assembly that examines and deliberates on the matters provided for in Item I of this article must be held, annually, within 4 (four) months after the end of the fiscal year.

§2º The Fund's bylaws may be amended, independently of a general assembly or consultation with unitholders, whenever such amendment results exclusively from the need to meet the requirement of the Securities and Exchange Commission, as a consequence of legal or regulatory norms, and the necessary communication to unitholders must be provided, within 30 (thirty) days, in the newspaper(s) intended for the dissemination of Fund information.

Art. 24. It is incumbent upon the administering institution to convene the general assembly.

Sole Paragraph. The general assembly may also be convened directly by unitholders who hold, at least, 5% (five percent) of the issued shares, and by the representative(s) of the unitholders, observing the requirements established in the Fund's bylaws.

Art. 25. The deliberations of the general assembly may be taken through a formalized consultation process by letter, telex or telegram directed by the administering institution to each unitholder for response within a maximum of 30 (thirty) days.

§1º The consultation must contain all the informative elements necessary for the exercise of the right to vote.

§2º The deliberation quorum will be the absolute majority of the issued shares, regardless of the matter.

Art. 26. The convening will be made by advertisement published in the newspaper(s) chosen by the administering institution for the dissemination of Fund information, or by written communication, sent by mail, with receipt confirmation, to all unitholders registered in the "Register of Unitholders".

§1º The convening must necessarily contain, day, time and place where the assembly will be held, as well as the agenda.

§2º The first convening of the general assembly must be made with a minimum advance of:
I – 8 (eight) days counted from the date of publication of the first advertisement; or II – 15 (fifteen) days counted from the issuance of the communication.

§3º In the counting of the deadlines fixed in the previous paragraph, the day of publication of the advertisement or the day of issuance of the communication will be excluded.

§4º If, for any reason, the general assembly does not take place, or in the absence of the quorum necessary for the deliberation of a matter included in the agenda, the second convening must be made with an advance of, at least, 05 (five) business days.

§5º Regardless of the formalities provided for in this article, the general assembly will be considered regular if all unitholders attend.

Art. 27. The general assembly will be installed, in second convening, obeying the provisions of the Fund's bylaws.

§1º Except as provided in § 2 of this article, and in § 2 of Article 25, the deliberations will be taken by the criterion of the majority of shares of those present, corresponding to each share one vote, not counting blank votes.

§2º They depend on the approval of unitholders representing at least half of the issued shares, if a higher quorum is not fixed in the Fund's bylaws, the deliberations relating to the matters provided for in items II and IV, letters "a", "b", "c" and "d" of Article 23.

§3º When the Fund's bylaws contain a provision indicating the market in which the shares will be traded, the General Assembly may deliberate, by simple majority, its alteration, in first convening, for the specific purpose of allowing trading in a different market.

• §3º added by CVM Instruction No. 389, of June 3, 2003.

Art. 28. Only unitholders registered in the "Register of Unitholders" or in the deposit account, as the case may be, 3 (three) business days before the date fixed for its realization, may vote in the general assembly.

Art. 29. Legal representatives of unitholders or their legally constituted attorneys-in-fact for less than one year, observing the provisions of the Fund's bylaws, have the quality to attend the general assembly.

§1º It will be facultative for any unitholder to directly send a request for proxy or request to the administering institution to attach it to the convening made by letter.

§2º The proxy request must satisfy the following requirements:
a) contain all the informative elements necessary for the exercise of the requested vote; b) allow the unitholder to exercise a contrary vote, with indication of another attorney-in-fact for the exercise of this vote; c) directed to all unitholders.

CHAPTER VII
OF THE REPRESENTATIVE OF THE UNITHOLDERS

Art. 30. The general assembly of unitholders may, at any time, appoint one or more representatives to exercise the functions of managerial supervision and control of the Fund's developments or investments, in defense of the rights and interests of the unitholders.

Art. 31. It will be the attributes and duties of the representative(s) of the unitholders, in addition to others provided for in the Fund's bylaws:
I - to supervise the compliance with the Fund's financial and investment program; II - to supervise the observance of the investment policy explicit in the Fund's bylaws.

Art. 32. Only a natural or legal person who meets the following requirements may exercise the functions of representative of unitholders:

I - be a unitholder;
II - not hold office or function in the administering institution or in a society affiliated with it, or provide it with advisory services of any nature; III - not hold office or function in the entrepreneur, developer or construction company of the real estate development that constitutes the object of the Fund, or provide it with advisory services of any nature.

CHAPTER VIII
OF THE INVESTMENT CONSULTANT

Art. 33. The administering institution may hire an investment consultant.

Sole Paragraph. The general assembly may deliberate on the need to hire or not the investment consultant, as well as on whether to keep or not the hired consultant.

Art. 34. The contract signed with the investment consultant must specify, clearly and precisely, the attributes conferred upon it, its obligations and responsibilities.

Sole Paragraph. The contract must expressly provide for the possibility of rescission, at any time, either by decision of the administering institution, or by determination of the general assembly of unitholders, regardless of fine, indemnity or any other kind of penalty, provided that the prior notice is respected within the period stipulated, not exceeding 60 (sixty) days.

Art. 35. The technical opinions prepared by the investment consultant will be available to unitholders at the headquarters of the administering institution.

CHAPTER IX
OF THE ISSUANCE, PLACEMENT AND TRADING OF SHARES.

Art. 36. Real Estate Investment Fund shares will correspond to ideal fractions of its assets.

§1º The shares may be represented, as established by the Fund's bylaws, by Investment Certificates or kept in deposit accounts in the name of their holders, in an institution authorized by the CVM.

§2º The investment certificates may only be issued after the constitution of the Fund and must be delivered to unitholders within 60 (sixty) days of its constitution, respecting an equal period in the case of subsequent issuances, counted from the closing of the subscription.

§3º The quality of unitholder is proven by the unitholder register or by the deposit account statement, applying, where applicable, the rules provided for the transfer of titles in corporate law.

§4º The investment certificate, when adopted, must contain:
I - the denomination "INVESTMENT CERTIFICATE";

II - name of the Fund and number of its registration in the General Register of Taxpayers of the Ministry of Finance; III - duration of the Fund; IV - reference to the authorization for the constitution of the Fund and to the distribution registration of the shares in the Securities and Exchange Commission (article 3); V - denomination of the administering institution, location of its headquarters and its number of registration in the General Register of Taxpayers of the Ministry of Finance; VI - name of the unitholder; VII - serial number of the certificate; VIII - quantity and series of shares that it represents; IX - the unitholder's debit and the date of full payment, if applicable; X - place and date of issuance of the certificate; XI - authorized signature of the director of the administering institution responsible for the administration of the Fund, admitting mechanical stamp.

Art. 37. The investment certificate or the deposit account statement will represent an integer number of shares belonging to the unitholder, according to the Fund's records.

Art. 38. The issuance, subscription and full payment of shares will be carried out in accordance with the terms, conditions and value stipulated by the administering institution and informed in the distribution registration process at the CVM.

§1º The issuance of shares may be divided into series, with the specific purpose of establishing, for each series, different dates of full payment, without prejudice to the equality of the other rights conferred to unitholders.

§2º At the time of subscription of the shares, the subscriber will sign the list or individual subscription form, which will be authenticated by the administering institution, or by the institution authorized to process the subscription and full payment of the shares.

§3º The list or subscription form must contain:
I - name and qualification of the subscriber;
II - number and series of shares subscribed;
III - issuance price and total value paid, discriminated by series of shares subscribed, if applicable.

§4º The subscription may be made by means of a letter addressed to the administering institution, observing the provisions of this article, as well as the due full payment.

Art. 39. The Fund's shares may only be placed with the public and traded on the stock market or over-the-counter market after the registration of the distribution in the Securities and Exchange Commission (article 8), and through a multiple bank with investment portfolio, investment bank, brokerage or securities distribution company.

Art. 40. The Fund's shares will be registered at the CVM, for trading on stock exchanges or in the over-the-counter market.

§1º The shares may only be traded, in the stock market or over-the-counter market, after the full payment of the issuance price.

§2º Trading outside of stock exchanges or over-the-counter market is permitted for the shares of the Funds admitted therein, in the following cases:
I – when intended for public distribution, during the period of its respective distribution; II – when relating to private trading;

§3º The provisions of CVM RESOLUTION No. 20, of 02/15/85, apply to the Fund's shares, namely, the participation of societies or professionals integrated into the distribution system, buying or selling, makes the trading public.

CHAPTER X
OF THE CHARGES AND EXPENSES OF THE FUND

Art. 41. The following expenses will constitute charges of the Fund to be debited by the administering institution:
I – remuneration of the administering institution, and of the investment consultant, if any; II – taxes, federal, state, municipal or autonomous contributions that fall or will fall on the assets, rights and obligations that compose the Fund's assets; III – expenses with correspondence of interest to the Fund, including communications to unitholders, and with printing, dispatch and publication of reports, forms and periodic information, provided for in this Instruction or in the Fund's bylaws; IV – expenses with the primary distribution of shares; V – expenses with admission of shares to trading on stock exchanges or in the organized over-the-counter market; VI – fees and expenses of the independent auditor in charge of the audit of the Fund's financial statements; VII – commissions, emoluments and any other expenses related to operations with real or financial assets carried out in the name or for the benefit of the Fund; VIII – attorneys' fees, costs and related expenses incurred due to the defense of the Fund's interests, judicially or extrajudicially, including the value of condemnation eventually imputed to the Fund;

IX – portion of eventual losses not covered by insurance policies, provided that it does not result directly from fault or intent of the administering institution in the exercise of its functions; X – insurance premiums, as well as any expenses related to the assets or rights comprising the Fund's assets; XI – any expenses inherent to the constitution, merger, incorporation, spin-off or liquidation of the Fund and holding of general assembly; XII – custody fee for titles or securities of the Fund; XIII – other necessary and exclusively in the interest of the Fund expenses, expressly provided for in its bylaws or authorized by the general assembly, especially those of maintenance, conservation and repairs of assets comprising the Fund's assets.

§1º It will be at the expense of the administering institution that resigns from its functions, is discredited by the CVM, or enters into a process of judicial or extrajudicial liquidation, the emoluments and other expenses related to the transfer, to its successor, of the fiduciary ownership of the real estate assets and rights comprising the Fund's assets.

§2º Any expenses not expressly provided for as charges of the Fund will be at the expense of the administering institution.

CHAPTER XI
OF THE FINANCIAL STATEMENTS

Art. 42. The Real Estate Investment Fund will have accounting records distinct from those of the administering institution.

Art. 43. The Fund's financial statements will be prepared observing the nature of the real estate developments in which the Fund's resources will be invested.

Art. 44. The Fund's financial statements will also obey the specific accounting standards to be issued by the CVM.

Art. 45. The Fund's financial statements will be audited semi-annually by an independent auditor registered at the CVM.

CHAPTER XII
OF THE FINAL PROVISIONS

Art. 46. The request for distribution registration of the shares will be considered automatically granted, if it has not been denied by the CVM within 30 (thirty) days, counted from the date of its presentation, through protocol, duly accompanied by the documents and information required.

§1º The deadline provided for in the "caput" of this article may be suspended only once, if the CVM requests additional documents or information necessary for the registration request or conditions it to modifications in the relevant documentation.

§2 A period not exceeding 60 (sixty) days, counted from the receipt by the administering institution of the respective correspondence, shall be granted to meet any eventual requirements, under penalty of the request being denied.

§3 The CVM is assured, for final manifestation, a period corresponding to 5 (five) business days, if the remainder of the period provided for in the "caput" is less.

§4 The non-compliance with the requirements will imply the denial of the registration, with the return of all documents that had accompanied the request.

Art. 47. The authorization for constitution shall be granted within 15 (fifteen) days from the presentation of the documents related in article 4, Items II and III.

Sole Paragraph. The period provided for in this article may be suspended only once, if the CVM requests the document provided for in Item IV of article 4, or any other additional information, with the procedures provided for in paragraphs 2 to 4 of article 46 applied, where applicable.

Art. 48. The non-compliance with the express period provided for in item XV of article 14 will subject the administrator to the payment of a daily coercive fine in the amount of 69.20 daily UFIR, incident from the 1st business day subsequent to the end of the referred periods.

Art. 49. The provisions contained in INSTRUCTION CVM NO. 31, of February 8, 1984, apply to the dissemination and use of information regarding relevant facts related to the Fund, where applicable.

Art. 50. The norms established in INSTRUCTION CVM NO. 13, of 08/30/80, apply to the intermediaries of the public distribution, where applicable.

Art. 51. The provisions of article 11 of LAW NO. 6.385, of 12/07/76, apply to the administering institution, as well as to its administrators and managers directly responsible for the administration of the Fund, regardless of other legal sanctions eventually applicable.

§1 It constitutes a serious offense for the purposes of the provision of § 3, of article 11 of LAW NO. 6.385, of 12/07/76, the dissemination to the market or to the Securities and Exchange Commission of untrue information related to the Fund, as well as the non-compliance with the following provisions: articles 4, 5, §§ 1 and 3; 7; 11; 13, § 2; 14, IV, IX and X; 19; 22; 27, § 2; 38 to 40; 43 to 45.

§2 The non-compliance with the following provisions constitutes hypotheses of offense of an objective nature, in which a summary administrative process procedure may be adopted: articles 14, I, II, VI to XV; 16 and 18.

Art. 52. This Instruction shall enter into force on the date of its publication in the Official Gazette of the Union.

Signed original by
THOMAS TOSTA DE SÁ
President