CVM Instruction No. 340 of June 29, 2000

CVM INSTRUCTION NO. 340, OF JUNE 29, 2000.

Amends CVM Instructions Nos. 303 and 305, of May 5, 1999, and provides for the administration and performance fees in closed-end investment funds in securities and financial assets.

The PRESIDENT OF THE SECURITIES AND EXCHANGE COMMISSION - CVM makes public that the Collegiate Board, in a meeting held on this date, having in view the provisions of Resolution of the National Monetary Council No. 1,787, of February 1, 1991, and of Art. 19 of Law No. 6,385, of December 7, 1976, HAS RESOLVED to issue the following Instruction:

Art. 1

Art. 2 of CVM Instruction No. 303, of May 5, 1999, shall be effective with the following wording:

“Art. 2

......

§1

Only funds intended for qualified investors may acquire shares of mutual investment funds in emerging companies or maintain positions in derivative markets, involving contracts referenced in commodities or foreign exchange.

§2

Funds intended exclusively for qualified investors may invest up to twenty percent of their assets in shares of funds constituted in the form of closed-end condominiums with a duration equal to or greater than five years and whose shares are traded on a stock exchange or organized over-the-counter market.”(NR)

Art. 2

Arts. 3 and 6 of CVM Instruction No. 305, of May 5, 1999, shall be effective with the following wording:

“Art. 3

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§1

In the case of assets without quotation, except as provided in § 9 of this article, their book value must be maintained and a provision must be established whenever this book value is higher than the net asset value.

......

§9

Investment funds constituted in the form of closed-end condominiums with a duration equal to or greater than five years may adopt, for the purpose of the valuation provided for in the caput of this article, the economic value determined by an independent specialized company, for the valuation of variable income securities of companies without an active market on a stock exchange or in an organized over-the-counter market.

CVM INSTRUCTION NO. 340, OF JUNE 29, 2000.
2

§10. The use of the option provided for in § 9 is conditioned to the provision in the fund's regulations that:
a) The administrator assumes responsibility before the CVM and the shareholders for the criteria, values, and premises used in the economic valuation adopted by the fund; b) The administration fee is charged based on the historical cost of the investments and the performance fee, if any, is only paid upon the full realization of the fund's applications; and c) Once a certain valuation criterion is adopted, it must be regularly used throughout the subsequent accounting years, and currently operating funds may review the valuation criterion used.”(NR)

“Art. 6 In the absence of an active market for a given security, its accounting, observing the provisions of § 1 of Art. 4,

......”(NR)

Art. 3

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