CVM Instruction No. 333 of April 6, 2000

CVM INSTRUCTION NO. 333, OF APRIL 6, 2000.

Provides for irregular operations in the securities market.

The PRESIDENT OF THE SECURITIES AND EXCHANGE COMMISSION - CVM makes public that the Collegiate Body, in a meeting held on this date, based on art. 18, item II, letters “a” and “c”, of Law No. 6.385, of December 7, 1976, and considering that:
a) it is incumbent upon the CVM to ensure the orderly development of the market, and for this purpose to remove distortions incompatible with the reliability that must prevail in the securities market; b) the CVM, in the course of its inspection activities, found the existence of negotiations involving forged documents and powers of attorney, as well as forged endorsements on checks issued by members of the securities distribution system to their clients; and, c) it is incumbent upon members of the securities distribution system to pay attention to the publications of the General Inspectorates of Justice disclosing inspections carried out in notary units and serial numbers of firm recognition seals stolen from them.

RESOLVED to issue the following Instruction:

Art. 1
This Instruction provides for norms to be observed by members of the securities distribution system, aiming to prevent the occurrence of fraud against investors in the securities market.

Art. 2
Brokerage and distribution companies, whenever they make payment by check referring to operations in the securities market, must include a strip with the wording “exclusively for credit in the account of the original beneficiary” and invalidate the clause “to its order”.

Art. 3
Members of the securities distribution system may only effect a change of client address, as well as transfer the ownership of securities in operations not traded on an exchange or organized over-the-counter market, upon express order from the owner, and must keep it on file available for inspection by the CVM and its auxiliary bodies, for a period of five years.

Sole Paragraph. The events referred to in the caput of this article are considered extraordinary, for the purposes of art. 2 of CVM Instruction No. 310, of July 9, 1999.

Art. 4
Intermediaries and providers of bookkeeping, custody of securities, and issuer agent services must contact the owner of the securities to confirm the existence of the order given by power of attorney that may constitute irregularity, especially when it concerns clients with the following characteristics:

CVM INSTRUCTION NO. 333, OF APRIL 6, 2000.
2
I - first operation;
II - minor or elderly;
III - estate;
IV - with domicile in another location;
V - large unusual order;
VI - company in bankruptcy or in bankruptcy proceedings; VII - contractual alteration with the entry of a new partner or shareholder; VIII - sub-delegation of powers to third parties by the grantee; and, IX - power of attorney drawn up outside the city where the client has domicile.

Sole Paragraph. Members of the securities distribution system must keep archived, for a minimum period of five years, authenticated copies of the Identity Card, the Taxpayer Identification Card, and the proof of residence of the attorney-in-fact.

Art. 5
Considered a serious offense, for the purposes of art. 11, § 3, of Law No. 6.385, of December 7, 1976, is the violation of the provisions of this Instruction.

Art. 6
This Instruction enters into force on the date of its publication in the Official Gazette of the Union.

Original signed by
JOSÉ LUIZ OSORIO DE ALMEIDA FILHO
President