FULL TEXT OF CVM INSTRUCTION NO. 243, OF MARCH 1, 1996, WITH CHANGES INTRODUCED BY CVM INSTRUCTIONS NO. 250/96, 343/00, 440/06 AND 461/07.

CVM INSTRUCTION NO. 243, OF MARCH 1, 1996.

Regulates the operation of the organized over-the-counter market.

THE PRESIDENT OF THE SECURITIES AND EXCHANGE COMMISSION – CVM makes public that the Collegiate Body, in a session held on this date, and in accordance with the provisions of item II of Article 1, items I and II of Article 8, and items "a" and "c" of item II of Article 18 of Law No. 6,385, of December 7, 1976, resolved to issue the following instruction:

OF THE ENTITIES RESPONSIBLE FOR THE ORGANIZED OVER-THE-COUNTER MARKET

Art. 1 Entities that intend to develop an organized system for trading fixed and variable-income securities in an over-the-counter market must be constituted as a civil or commercial company, with the following object:

I - maintain a system suitable for carrying out purchase and sale operations of variable-income securities and financial instruments provided for in Article 10 of this Instruction, in a free and open market, specially constituted and supervised by the entity itself, by intermediaries and participants, and by competent authorities;

II - permanently equip the aforementioned system with all means necessary for the prompt and efficient execution and visibility of operations;

III - establish trading systems that provide price continuity and liquidity to the market;

IV - create regulatory and operational mechanisms that enable intermediaries and participants to attend to investors' buy and sell orders;

V - record the operations;

VI - preserve high ethical standards of trading, establishing, for this purpose, codes of conduct for intermediaries, participants, and companies, supervising their observance, and applying penalties, within the limits of its competence, to violators;

VII - disclose the operations carried out with speed, breadth, and detail; and

VIII - exercise other activities expressly authorized by the CVM.

Sole Paragraph. The entities of the organized over-the-counter market shall be constituted as self-regulatory bodies, to which it is incumbent, as auxiliaries of the CVM, to supervise their respective participants and the operations carried out therein.

Art. 2 The entities of the organized over-the-counter market shall operate under the supervision and inspection of the CVM, depending, for the start of their operations, on prior authorization from the same, requested through the presentation of the following documents and information:

I - constituent acts and bylaws;

II - demonstration of economic, technical, and financial capacity;

III - description of the operation of the organized over-the-counter market, including rules, regulations, and procedures regarding the execution, recording, clearing, and settlement of operations; disclosure of these and of buy and sell offers; qualification of its participants; and, if applicable, regulation of a guarantee mechanism or insurance contract;

IV - conditions for the admission of securities and financial instruments to trading in the organized over-the-counter market, as well as the conditions for the suspension and cancellation of trading of these instruments;

V - name and qualification of the administrators of the entity responsible for the organized over-the-counter market and, if applicable, of the guarantee mechanism.

§1 The CVM shall express its opinion on the authorization request within a maximum period of 90 (ninety) days, which may be interrupted only once, if additional information is requested, in which case a new period of 90 (ninety) days will begin.

§2 Subsequent changes to the rules and regulations issued by the entities must be previously communicated to the CVM, accompanied by the appropriate justification, for its opinion, which must occur within a period of 30 (thirty) days, which may be interrupted only once, if additional information is requested, in which case a new period of 30 (thirty) days will begin.

Art. 3 The CVM may, at any time, determine, at the expense of the entities of the organized over-the-counter market, the carrying out of an audit it deems necessary.

Art. 4 The entities must keep, available to the CVM, information regarding the trading of securities and financial instruments carried out in their systems.

OF THE SOCIAL EQUITY AND FINANCIAL STATEMENTS

Art. 5 The social equity of the entities of the organized over-the-counter market shall be constituted by contributions and donations from members and other permanent or occasional revenues, as established in the bylaws.

Art. 6 At the end of each fiscal year, the value of the equity of the entities of the organized over-the-counter market must be updated based on the corresponding financial statements, adopting the procedures and accounting criteria provided for for corporations.

§1 The fiscal year shall coincide with the calendar year, and the preparation of financial statements audited by an independent auditor registered with the CVM shall be mandatory upon its closure.

§2 The financial statements referred to in the preceding paragraph, accompanied by the respective audit report, shall be forwarded to the CVM within 10 (ten) days after their approval by the entity's partners, meeting for this purpose, within the same deadlines provided for corporations.

OF THE ADMISSION OF ASSOCIATES AND PARTICIPANTS

Art. 7 The procedures and requirements for the admission of associates, intermediaries, participants, and representatives in the trading of the organized over-the-counter market shall be subject to regulation, which must be presented to the CVM together with the authorization request referred to in Article 2.

OF THE MEETING OF PARTNERS

Art. 8 The meeting of partners of the entity of the organized over-the-counter market shall be convened, installed, and held, in accordance with the provisions of the bylaws.

OF CONTRIBUTIONS AND FEES

Art. 9 It is the responsibility of the entity responsible for the organized over-the-counter market to fix the contributions and fees to be paid by users of the services or systems.

OF THE SECURITIES AND FINANCIAL INSTRUMENTS TRADEABLE IN THE ORGANIZED OVER-THE-COUNTER MARKET

Art. 10. The following variable-income securities and financial instruments are tradeable through the organized over-the-counter systems subject to this Instruction:

I - securities registered with the CVM for trading in the over-the-counter market;

II - securities issued by companies benefiting from resources originating from tax incentives registered with the CVM;

III - certificates of investment in audiovisual works;

IV - quotas of closed-end investment funds, which have been the subject of public distribution, such as:
a) Mutual Investment Funds in Stocks; b) Mutual Investment Funds in Stocks – Free Portfolio; c) Mutual Investment Funds in Quotas of Mutual Investment Funds in Stocks; d) Mutual Investment Funds in Emerging Companies; e) Real Estate Investment Funds; f) Cultural and Artistic Investment Funds; g) Privatization Funds – Privatization Certificates; h) Privatization Funds – Secured Debt; i) Incentivized Mutual Stock Funds; and j) Sectoral Investment Funds in Mining Sector Stocks.

V - other securities and financial instruments authorized, by the CVM, for trading in this market; and

VI - rights and indices related to the aforementioned securities.

Sole Paragraph. Trading in any modality, other than the spot market, is subject to prior authorization by the CVM, applying the same deadlines established in §1 of Article 2 of this Instruction.

Art. 11. Trading outside the organized over-the-counter markets in accordance with this Instruction, of securities and financial instruments admitted therein, may only occur in the following cases:

I - when it concerns public distribution, during the period of the respective distribution; and

II - when it concerns private trading.

Sole Paragraph. The admission to trading in a particular organized over-the-counter entity does not prevent simultaneous admission in another entity of the same kind, whose operation is authorized by the CVM.

OF THE ADMISSION OF SECURITIES AND FINANCIAL INSTRUMENTS TO TRADING BY INITIATIVE OF INTERMEDIARY OR PARTICIPANT OF THE MARKET

Art. 12. Entities may admit trading in their systems of securities and financial instruments of companies with registration for trading in an over-the-counter market at the initiative of a participant or intermediary of the organized over-the-counter market.

Sole Paragraph. The organized over-the-counter entity must previously send, for CVM approval, the regulation of the requirements for admission to trading provided for in the caput of this article, among which the obligation of the existence of a market maker for these securities and financial instruments must be included.

OF MARKET MAKERS

Art. 13. The registration of legal entities interested in carrying out operations intended to form the market for securities and financial instruments admitted to trading in the organized over-the-counter market shall be permitted, whose responsibilities, rights, and duties shall be established in rules and regulations by the organized over-the-counter market entity.

§1 Entities must submit the rules and regulations referred to in the caput of this article, as well as their amendments, to the prior approval of the CVM.

§2 The absence of CVM opinion within 60 (sixty) calendar days implies its approval.

OF LIABILITY FOR OPERATIONS

Art. 14. Intermediaries and market makers authorized to operate in the organized over-the-counter market are liable to their own clients, to other intermediaries with whom they have operated, and to their counterparty in the operations, for the proper settlement of the same, for the formal and material legitimacy of the securities and financial instruments delivered, and for the authenticity of endorsements and any documents presented to instruct their operation.

• Articles revoked by CVM Instruction No. 461, of October 23, 2007.

OF SANCTIONS

Art. 15. Non-compliance with the provisions of this Instruction constitutes a serious offense, for the purposes of § 3 of Article 11 of Law No. 6,385/76.

OF GENERAL PROVISIONS

Art 16. The transfer of registration of companies from stock exchanges to the over-the-counter market, organized or not, shall only be permitted if:

I - previously approved by a resolution to that effect by shareholders representing at least 51% of the company's capital, with or without voting rights, meeting without an Extraordinary General Assembly specially convened for this purpose; and

II - minority shareholders, numbering more than 100, on the date of the General Assembly, and holding more than 5% of the shares in circulation in the market on the same date, do not expressly oppose the change of registration. For the purpose of calculating the number of shareholders provided for herein, shares owned by Investment Funds shall be considered as belonging to a number of shareholders proportional to the number of participants in the Fund, at the rate of 1 shareholder for every 1,000 participants in the Fund, up to a maximum limit of 50 shareholders per Fund.

Art. 16. The change of registration of an open company from trading on a stock exchange to the organized over-the-counter market is only permitted if:

I - previously approved by its Board of Directors in a meeting specially convened for this purpose;

II - immediately after the Board of Directors' resolution, the company publishes a Notice of Act or Relevant Fact, informing its proposal and giving a period of up to forty-five days, counted from the publication of the Notice, for minority shareholders, registered in the shareholder book until the date of the resolution, to express their disagreement with the alteration of the trading market of the company's shares; and

III - there is no disagreement from minority shareholders, holders of at least fifty-one percent of the shares in circulation in the market.

Sole Paragraph. The disagreement of minority shareholders must be embodied in a document signed in triplicate, containing the complete qualification, the number, and the type of shares owned by them.

• Article with wording given by CVM Instruction No. 343, of August 11, 2000.

Art. 16-A. The change of registration of an open company from trading on a stock exchange or organized over-the-counter market to the unorganized over-the-counter market is only permitted if:

I - previously approved by a resolution to that effect by shareholders representing at least fifty-one percent of the company's capital, with or without voting rights, meeting in an Extraordinary General Assembly specially convened for this purpose; and

II - minority shareholders not linked to an interest group, on the date of the General Assembly, holding more than ten percent of the shares in circulation in the market on the same date, do not expressly oppose the change of registration.

• Article added by CVM Instruction No. 343, of August 11, 2000.

Art. 16-B. The change of registration of an open company from the organized over-the-counter market to a stock exchange is only permitted if:

I - previously approved by its Board of Directors in a meeting specially convened for this purpose; and

II - immediately after the Board of Directors' resolution, the company publishes a Notice in accordance with CVM Instruction No. 31, of February 8, 1984, informing that the change will take place forty-five days after the date of publication.

• Article added by CVM Instruction No. 343, of August 11, 2000.

Art. 16-B. The change of registration of an open company from the organized over-the-counter market to a stock exchange must be previously approved by its Board of Directors, in a meeting specially convened for this purpose.

§ 1 The company must publish a relevant fact notice, in accordance with CVM Instruction No. 358, of January 3, 2002, informing the approval of the change of its registration, in accordance with the caput of this article.

§ 2 The change referred to in this article must occur in such a way that there is no interruption in the trading of the securities issued by the company.

• Wording given by CVM Instruction No. 440, of October 18, 2006.

Art 17. The following provisions issued by the CVM apply to the organized over-the-counter market, insofar as applicable:

I - Instruction No. 8, of October 8, 1979;

II - Instruction No. 14, of October 17, 1980;

III - Instruction No. 36, of August 8, 1984;

IV - Instruction No. 77, of May 11, 1988;

V - Instruction No. 120, of June 6, 1990;

VI - Instruction No. 168, of December 23, 1991;

• Item revoked by CVM Instruction No. 250, of June 14, 1996.

VII - Instruction No. 179, of February 13, 1992;

VIII - Instruction No. 180, of February 13, 1992; and

IX - Instruction No. 220, of September 15, 1994.

• Article revoked by CVM Instruction No. 461, of October 23, 2007.

Art. 18. This Instruction shall enter into force on the date of its publication, with CVM Instructions No. 93, of December 26, 1988, and No. 196, of August 26, 1992, being revoked.

Signed original by

FRANCISCO AUGUSTO DA COSTA E SILVA
President