CVM Instruction No. 251 of June 14, 1996 (Revoked)

FULL TEXT OF CVM INSTRUCTION NO. 251, OF JUNE 14, 1996, WITH THE CHANGES INTRODUCED BY CVM INSTRUCTION NO. 335/00.
CVM INSTRUCTION NO. 251, OF JUNE 14, 1996.
Provides for the hypotheses of application of the SUMMARY PROCEDURE in the administrative process.

The PRESIDENT OF THE SECURITIES AND EXCHANGE COMMISSION - CVM makes public that the Collegiate Body, in a meeting held on this date, and based on the provisions of art. 9, § 2, of Law No. 6,385, of December 7, 1976, and item II of Resolution No. 1,657, of October 26, 1989, of the National Monetary Council,

RESOLVED:

Art. 1. The following constitute hypotheses of objective nature infractions, in which a summary administrative proceeding may be adopted, in accordance with the Regulation annexed to CMN Resolution No. 1,657/89:

Art. 1
The following constitute hypotheses of objective nature infractions, in which a summary administrative proceeding may be adopted, in accordance with the Regulation annexed to CMN Resolution No. 1,657/89:

• Caput with wording given by CVM Instruction No. 335, of May 4, 2000.

OPEN COMPANY ADMINISTRATORS
I - Failure by the administrators of an open company and, where applicable, the intervenor, trustee, or liquidator:
a) to arrange for the suspension of trading of shares from the convening of the General Assembly that deliberates on the cancellation of the open company registration, until the effective publication of the notice of public offer for the acquisition of shares (article 3 of CVM Instruction No. 229/95); b) to adopt the procedures listed in items I to III of art. 13 of CVM Instruction No. 202/93, except for the hypothesis provided for in item VI of art. 17 of the same Instruction; c) to publish the announcements and annual financial statements within the deadlines provided for in art. 133 of Law No. 6,404, of December 15, 1976; d) to comply with the provisions of articles 1, 21, 32, and 35 (caput and sole paragraph) of CVM Instruction No. 247/96; e) to include controlled companies in consolidated financial statements without the proper authorization of the CVM (§ 1 of art. 23 of CVM Instruction No. 247/96); f) to present the explanatory notes that must accompany the consolidated financial statements, as provided for in art. 31 of CVM Instruction No. 247/96; g) to disclose, in an explanatory note, the market value of financial instruments, recognized or not in the financial statements (art. 1 and sole paragraph of CVM Instruction No. 235/95); h) to make the additional publications provided for in art. 1, items a and b, of CVM Instruction No. 207/94, as well as to violate articles 2 and 5 of the same Instruction; and i) to provide the certificates of entries recorded in the books referred to in items I to IV of art. 100 of Law No. 6,404/76;

ADMINISTRATORS OF INCENTIVIZED COMPANIES
II - Failure by the administrators of companies benefiting from resources originating from tax incentives:
a) to request registration with the CVM, in accordance with art. 26 and sole paragraph of CVM Instruction No. 92/88, with the changes contained in art. 1 of CVM Instructions Nos. 98/89 and 103/89; and b) to adopt the procedures provided for in items I and II of art. 7 of Instruction 92/88, except for the hypotheses provided for in items V and X of art. 13 of the same Instruction;

CONTROLLING SHAREHOLDER
III - Failure by the controlling shareholder to comply with the request of shareholders representing at least one-tenth of the shares with voting rights, regarding the installation of a Fiscal Council, as provided for in paragraphs 2 and 3 of art. 161 of Law No. 6,404/76 and the adoption of the multiple voting process, as provided for in art. 141, paragraph 1 of Law No. 6,404/76 and CVM Instruction No. 165/91;

PUBLIC DISTRIBUTION
IV - Use by the offeror or the institutions responsible for the distribution of securities, any advertising text before the registration is granted or without prior approval by the CVM (art. 23 of CVM Instruction No. 13/80, art. 15 of CVM Instruction No. 88/88, and art. 9 of CVM Instruction No. 223/94);

V - Failure by the distribution leader to send the placement maps of securities within the prescribed deadline (art. 17, item VI, of CVM Instruction No. 13/80, art. 23 of CVM Instruction No. 88/88, and art. 10, § 2 of CVM Instruction No. 223/94);

TREASURY SHARES
VI - Acquisition by the open company of its own issued shares without the corporate bylaws attributing powers to the Board of Directors to authorize such procedure (art. 1, CVM Instruction No. 10/80);

VII - Keeping in treasury, by the open company, its own issued shares in a quantity exceeding 5% of each class of shares in circulation in the market, included in this percentage are the shares existing, kept in treasury by controlled and affiliated companies (art. 3, CVM Instruction No. 10/80);

VIII - Acquisition by the open company of its own issued shares for retention in treasury or for cancellation, or alienation thereof, in private transactions (art. 9, CVM Instruction No. 10/80);

IX - Failure by the open company to immediately publish the minutes of the Board of Directors' deliberation authorizing the acquisition or alienation of treasury shares (art. 10, CVM Instruction No. 10/80);

X - Failure by the open company to immediately communicate to the CVM and to the Stock Exchange where its securities are traded, the Board of Directors' deliberation authorizing the acquisition or alienation of treasury shares (art. 11, CVM Instruction No. 10/80);

XI - Failure by the open company to alienate the treasury shares that exceed the balance of profits and available reserves, within a period of 3 months from the approval of the balance sheet in which the excess is determined (art. 14, CVM Instruction No. 10/80);

RELEVANT SHAREHOLDING PARTICIPATION
XII - Failure by any natural or legal person, or group of persons acting in concert or representing the same interest, to comply with the provisions of articles 1 and 2 of CVM Instruction No. 69/87, regarding the disclosure of relevant shareholding participation;

TRUSTEE AGENT
XIII - Failure by the trustee agent of debenture holders to fulfill the duties imposed by items II, XVI, and XXIV of art. 12 of CVM Instruction No. 28/83;

INDEPENDENT AUDITOR
XIV - Violation by the independent auditor of the provisions of articles 20, 21, 26, 29, items V to VII, and 30, §§ 1 and 5 of CVM Instruction No. 216/94;

PORTFOLIO ADMINISTRATION
XV - Failure by the portfolio administrator of securities:
a) to contract in writing with the client the basic characteristics of the service, in the form provided for in item III of art. 10 of CVM Instruction No. 82/88; b) to observe the provisions of art. 11, items I and II of CVM Instruction No. 82/88, regarding acting as counterparty in operations with portfolios it administers; c) to observe the provisions of art. 11, item III of CVM Instruction No. 82/88, regarding the characteristics of the services it provides; d) to observe the provisions of art. 11, item VI of CVM Instruction No. 82/88, regarding the use of the resources it administers; e) to immediately indicate, in case of vacancy, a director or managing partner responsible for the administration of securities portfolios as provided for in article 6, item II and paragraph 3, of CVM Instruction No. 82/88; f) to observe the provisions of §§ 1 and 2 of article 1 of CVM Instruction No. 231/95;

BOOK-ENTRY SECURITIES SERVICE, CUSTODY, AND CERTIFICATE ISSUANCE XVI - Failure by the institutions authorized to provide book-entry securities, custody, and certificate issuance services to present the report required in art. 8 of CVM Instruction No. 89/88;

MANAGED PORTFOLIOS, FUNDS, AND INVESTMENT COMPANIES XVII - Failure by the administrators of Funds, Investment Companies, and Portfolios of Foreign Institutional Investors and, where applicable, the intervenor, trustee, or liquidator:
a) to observe the portfolio composition and diversification limits established:

1) in articles 43 to 45 of the Regulation Annex I to CMN Resolution No. 1,289/87, for Investment Companies - Foreign Capital;
2) in articles 40 to 42 of the Regulation Annex II to CMN Resolution No. 1,289/87, for Investment Funds - Foreign Capital;
3) in articles 25 to 26 of the Regulation Annex III to CMN Resolution No. 1,289/87, for Securities and Financial Instruments Portfolios maintained in the Country by entities mentioned in article 2 of Decree-Law No. 2,285/86;
4) in article 27 of the Regulation Annex IV to CMN Resolution No. 1,289/87, for Securities Portfolios maintained in the Country by foreign institutional investors;
5) in article 26 of CVM Instruction No. 141/91, for Mutual Funds of Privatization fully paid up with Privatization Certificates;
6) in articles 14 to 17 of CVM Instruction No. 153/91, for Incentivized Equity Mutual Funds;
7) in article 25 of CVM Instruction No. 157/91, for Mutual Funds of Privatization fully paid up with Credits and Instruments representing Brazilian external debt, admitted within the scope of the National Privatization Program;
8) in article 3 of CVM Instruction No. 171/92, for Sectoral Investment Funds in Mining Sector Shares;
9) in articles 30 and 31 of CVM Instruction No. 186/92, for Cultural and Artistic Investment Funds;
10) in article 26 of CVM Instruction No. 209/94, for Mutual Funds of Investment in Emerging Companies;
11) in articles 43, 44, 45, 49, 50, and 57 of CVM Instruction No. 215/94, for Mutual Funds of Investment in Shares, Mutual Funds of Investment in Shares - Free Portfolio, and Mutual Funds of Investment in Quotas of Mutual Funds of Investment in Shares;
12) in articles 36 to 42 of CVM Instruction No. 227/94, for Conversion Funds - Foreign Capital and Conversion Funds - Foreign Capital (Incentivized Areas);
13) in article 4 of CVM Instruction No. 241/96, for Mutual Funds of Investment in Shares - Free Portfolio intended for participation in Privatization Auctions; and

14) in article 26 of Joint BACEN/CVM Communication No. 034/91, for Mutual Funds of Privatization fully paid up with credits issued in national currency originating from the process of renegotiation of overdue debts of the Union or guaranteed by it;
b) to observe the prohibitions imposed in Articles 48 and 49 of Regulation Annex I, articles 44 to 46 of Regulation Annex II, articles 29 and 30 of Regulation Annex III, and articles 22 and 23 of Regulation Annex IV, all of CMN Resolution No. 1,289/87; in article 3 of CMN Resolution No. 2,034/93; in articles 30 to 32 of CVM Instruction No. 141/91; in articles 45 and 46 of CVM Instruction No. 153/91; in articles 31 to 34 of CVM Instruction No. 157/91; in article 40 of CVM Instruction No. 186/92; in articles 38 and 39 of CVM Instruction No. 209/94; in articles 37 and 38 of CVM Instruction No. 215/94; in articles 45 to 47 of CVM Instruction No. 227/94; and in articles 29 to 31 of Joint BACEN/CVM Communication No. 034/91; c) to observe the provisions of articles 50 and 51 of Regulation Annex I, articles 49 and 50 of Regulation Annex II, both of CMN Resolution No. 1,289/87; in article 13 of CVM Instruction No. 153/91; in articles 35 and 36 of CVM Instruction No. 157/91; in article 32 of CVM Instruction No. 186/92; in article 29 of CVM Instruction No. 209/94; in article 29 of CVM Instruction No. 215/94; in articles 49 and 50 of CVM Instruction No. 227/94; and in article 32 of Joint BACEN/CVM Communication No. 034/91, regarding expenses and charges imputable to the Funds or Companies; d) to observe the provisions of articles 31 and 32 of Regulation Annex I, article 33 of Regulation Annex II, both of CMN Resolution No. 1,289/87; in articles 29 to 32 of CVM Instruction No. 153/91; in article 24 of CVM Instruction No. 157/91; in articles 22 to 29 of CVM Instruction No. 186/92; in article 25 of CVM Instruction No. 209/94; in articles 25 to 28 of CVM Instruction No. 215/94; and in articles 29 to 32 of CVM Instruction No. 227/94, regarding the redemption of quotas and liquidation of the investment; e) to observe the regulatory provisions regarding financial statements provided for in articles 36 and 37 of Regulation Annex I, articles 34 to 36 of Regulation Annex II; article 22 of Regulation Annex III, article 20 of Regulation Annex IV, all of CMN Resolution No. 1,289/87; in articles 27 and 28 of CVM Instruction No. 141/91; in articles 40 and 41 of CVM Instruction No. 153/91; in articles 28 and 29 of CVM Instruction No. 157/91; in articles 33 and 34 of CVM Instruction No. 186/92; in articles 30 and 31 of CVM Instruction No. 209/94; in articles 30 and 31 of CVM Instruction No. 215/94; in articles 33 and 34 of CVM Instruction No. 227/94; and in articles 27 and 28 of Joint BACEN/CVM Communication No. 034/91; f) to observe the provisions of articles 33 to 35 of Regulation Annex I, articles 52 and 53 of Regulation Annex II, articles 33 and 34 of Regulation Annex III, article 24 of Regulation Annex IV, all of CMN Resolution No. 1,289/87; in articles 34 to 36 of CVM Instruction No. 141/91; in articles 27, 42, 43, and 44 of CVM Instruction No. 153/91; in articles 37 to 40 of CVM Instruction No. 157/91; in articles 35 to 39 of CVM Instruction No. 186/92; in articles 32
to 37 of CVM Instruction No. 209/94; in articles 32 to 36 of CVM Instruction No. 215/94; in articles 51 and 52 of CVM Instruction No. 227/94; in article 1 of CVM Instruction No. 239/95; in article 1 of CVM Instruction No. 242/96; and in articles 33 to 35 of Joint BACEN/CVM Communication No. 034/91, regarding information due to quota holders, the market, and the CVM; g) to observe the provision of article 52 of CVM Instruction No. 215/94, regarding the quota holder's awareness of the degree of risk of the investment and responsibility for any eventual occurrence of negative equity; h) to observe the provision of § 5 of article 1 of CVM Instruction No. 215/94, regarding the maximum percentage of quotas issued in the possession of a single quota holder; i) to observe the provision of the sole paragraph of art. 4 of CVM Instruction No. 215/94, regarding the forwarding for CVM approval of the documentation regarding the General Assembly of quota holders;

PAIT FUND
XVIII - Failure by the institution administering the Savings and Investment Plans - PAIT:
a) to observe the operational limits established in art. 4 of CVM Instruction No. 61/87, as well as in art. 1 of Instruction 87/88; and b) to comply with the deadline established for the redemption of assets, established in art. 5 of CVM Instruction No. 87/88;

COMPANIES PART OF THE DISTRIBUTION SYSTEM
XIX - Violation by the members of the distribution system of the provisions of CVM Instruction No. 220/94, except for the hypotheses where such practices are an instrument of infractions to CVM Instruction No. 08/79;

XX - Failure by the members of the distribution system to observe the provisions of arts. 2 and 3 of CVM Instruction No. 42/85;

XXI - Commission by the company part of the distribution system of the acts prohibited in art. 12, items II and V, of the Regulation annexed to CMN Resolution No. 1,655/89 and in art. 12, items II and V of the Regulation annexed to CMN Resolution No. 1,120/86, with the wording given by CMN Resolution No. 1,653/89 and CVM Instruction No. 122/90;

XXII - Violation by the brokerage company or distribution company of the provisions of articles 1, sole paragraph, 28, 35, and 36 of CVM Instruction No. 051/86;

XXIII - Failure by the organized over-the-counter market entity to keep at the disposal of the CVM information on the negotiations with securities and financial instruments carried out in its systems (art. 4 of CVM Instruction No. 243/96);

XXIV - Failure by the entity providing the service of settlement, registration, and custody of shares to daily disclose the accumulated balance of borrowed shares (art. 6 of CVM Instruction No. 249/96);

XXV - Failure by the Stock Exchanges and Futures Exchanges to observe, respectively, the provisions of articles 5, 10, § 2, 11, § 4, 63, and 71 of the Regulation annexed to CMN Resolution No. 1,656/89 and item "c" of item VI of CMN Resolution No. 1,645/89;

XXVI - Failure by the Stock Exchange to communicate to the CVM the admission for trading of securities of an open company (CVM Instruction No. 05/78);

XXVII - Failure by the Stock Exchange to adopt special trading procedures, in accordance with CVM Instruction No. 168/91, except for the hypotheses referred to in §§ 1 and 2 of article 2 of that Instruction, whose non-compliance constitutes a serious infraction;

XXVIII - Violation by the Stock Exchange of the determination contained in CVM Instruction No. 203/93;

XXIX - Failure by the Stock Exchanges, Futures Exchanges, organized over-the-counter market entities, and other self-regulatory entities to provide the CVM with the requested information, in the form and deadlines fixed;

PROPRIETARY PORTFOLIO OF BROKERAGE AND DISTRIBUTION COMPANIES XXX - Failure by the brokerage or distribution companies:
a) to observe the rules established in art. 4 of CVM Instructions Nos. 116 and 117/90, regarding operational limits for proprietary portfolio; b) to observe the provisions regarding financial statements established in art. 6 of CVM Instructions Nos. 116 and 117/90; c) to observe the provision of art. 7 of CVM Instructions Nos. 116 and 117/90, regarding acting as counterparty in operations of portfolios administered by them; d) to observe the provision of art. 9 of CVM Instructions Nos. 116 and 117/90, regarding daily registration control;

AUTONOMOUS INVESTMENT AGENT
XXXI - Commission by the autonomous investment agent of the acts prohibited to him in item XIII of CMN Resolution No. 238/72;

XXXII - Commission by the societies accrediting autonomous investment agents of the acts prohibited to them by item XV of CMN Resolution No. 238/72.

REAL ESTATE INVESTMENT FUND
XXXIII - Failure by the administering institution to comply with the provisions of articles 14, items I, II, VI to XV, 16, and 18 of CVM Instruction No. 205/94;

AUDIOVISUAL INVESTMENT CERTIFICATE
XXXIV - Failure by the issuing company of investment certificates - Decree No. 974/93, to fulfill the obligations provided for in articles 26 to 30 of CVM Instruction No. 208/94.

MONEY LAUNDERING
XXXV - Failure by the persons mentioned in art. 2 of CVM Instruction No. 301, of April 16, 1999, to identify their clients and keep updated the registry referred to in art. 3 of the same Instruction.

• Item added by CVM Instruction No. 335, of May 4, 2000.

XXXVI - Failure by the persons mentioned in art. 2 of CVM Instruction No. 301, of April 16, 1999, to keep the transaction registry referred to in art. 4 of the same Instruction.

• Item added by CVM Instruction No. 335, of May 4, 2000.

Art. 2. The summary procedure will not be adopted in case of specific recidivism.

Art. 3. In the event of concurrence between an objective nature infraction and a serious infraction, the procedure adopted will be that provided in CMN Resolution No. 454, of November 16, 1977.

Art. 4. This Instruction enters into force on the date of its publication in the Official Gazette of the Union, revoking CVM Instruction No. 135, of November 16, 1990, and other provisions to the contrary.

Original signed by
FRANCISCO AUGUSTO DA COSTA E SILVA
President