CVM Instruction No. 391 of July 16, 2003 (Revoked)

FULL TEXT OF CVM INSTRUCTION NO. 391, OF JULY 16, 2003, WITH CHANGES INTRODUCED BY CVM INSTRUCTIONS NO. 435/06, 450/07, 453/07, 496/11, 498/11, 535/13, 540/13, 545/14, 549/14 AND 554/14.

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

THE PRESIDENT OF THE SECURITIES AND EXCHANGE COMMISSION OF BRAZIL (CVM) MAKES PUBLIC THAT THE COLLEGIATE BODY, IN A MEETING HELD ON JULY 14, 2003, IN VIEW OF THE PROVISIONS OF ARTS. 2, ITEM IX; 8, ITEM I, AND 19 OF LAW NO. 6,385, OF DECEMBER 7, 1976, HAS RESOLVED TO ISSUE THE FOLLOWING INSTRUCTION:

CHAPTER I
SCOPE AND PURPOSE

Art. 1. This Instruction provides for the constitution, administration, and operation of Equity Investment Funds.

CHAPTER II
CONSTITUTION AND CHARACTERISTICS

Art. 2. The Equity Investment Fund (Fund), constituted in the form of a closed condominium, is a pooling of resources destined for the acquisition of shares, debentures, subscription warrants, or other securities convertible or exchangeable into shares issued by open or closed companies, participating in the decision-making process of the invested company, with effective influence on the definition of its strategic policy and its management, notably through the indication of members of the Board of Directors.

§1. Whenever the Fund decides to apply resources in companies that are, or may be, involved in a recovery and restructuring process, the subscription of quotas in goods or rights, including credits, shall be admitted, provided that such goods and rights are linked to the recovery process of the invested company and provided that their value is backed by an appraisal report prepared by a specialized company.

§2. The Fund's participation in the decision-making process of the invested company may occur:
I – by holding shares that constitute the respective control block, II – by entering into a shareholders' agreement, or, III – by entering into an agreement of a different nature or adopting a procedure that ensures the Fund effective influence on the definition of its strategic policy and its management.

§3. The Fund's bylaws shall establish the criteria to be observed for the definition of open companies that may be the object of investment by the Fund.

§4. The closed companies referred to in the caput shall follow the following governance practices:
I – prohibition of the issuance of beneficiary shares and the non-existence of such securities in circulation; II – establishment of a unified term of 1 (one) year for the entire Board of Directors; III – availability of contracts with related parties, shareholders' agreements, and stock option programs or other securities issued by the company; IV – adherence to an arbitration chamber for the resolution of corporate conflicts; V – in the case of its capital opening, bind itself, vis-à-vis the Fund, to adhere to a special segment of a stock exchange or of an entity maintaining an organized over-the-counter market that ensures, at minimum, differentiated levels of corporate governance practices provided for in the preceding items; and VI – annual audit of its financial statements by independent auditors registered with the CVM.

§5. The investment may be effected through a commitment, whereby the investor shall be obliged to subscribe the value of the committed capital as the Fund administrator makes calls, according to deadlines, decision-making processes, and other procedures established in the respective investment commitment.

§6. The Fund's denomination shall include the expression "Equity Investment Fund" (Fundo de Investimento em Participações), and it shall not be admitted that names or expressions be added to the Fund's denomination that may induce an incorrect interpretation regarding its objectives, its investment policy, or its target audience.

§ 7. The requirement of effective influence on the definition of the strategic policy and management of the invested companies referred to in the caput does not apply to invested companies listed in a special segment of securities trading, established by a stock exchange or by an entity of the organized over-the-counter market, aimed at the access market, which ensures, through a contractual link, stricter corporate governance standards than those required by law:
I – which correspond to up to 35% (thirty-five percent) of the Fund's net equity; or II – during the Fund's divestment period in each invested company.

§ 8. The limit referred to in item I of § 7 shall be 100% (one hundred percent) during the period for the application of resources, established at up to 6 (six) months counted from each of the quota subscription events provided for in the investment commitment.

§ 9. If the Fund exceeds the limit established in § 7, item I, for reasons beyond the manager's will, at the end of the respective month and such non-compliance persists at the end of the following month, the administrator must:
I – immediately notify the CVM of the passive non-compliance occurrence, with the appropriate justifications, as well as a forecast for re-compliance; and

II – notify the CVM of the portfolio's re-compliance, at the moment it occurs.

• §§ 7 to 9 introduced by CVM Instruction No. 540, of November 26, 2013.

Art. 3. The Fund's operation depends on prior registration with the CVM.

Art. 4. The registration shall be automatically granted upon protocol at the CVM of the following documents:
I - deed of constitution and the full text of its bylaws, in 3 (three) copies, duly initialed and signed, accompanied by a certificate proving its registration in a deeds and documents registry; II - declaration by the Fund administrator that it has signed the contracts mentioned in § 4 of Art. 9, if applicable; III – declaration indicating the name of the independent auditor. IV – information regarding the maximum and minimum number of quotas to be distributed, the issuance value, all costs incurred, and other relevant information about the distribution; V – dissemination material to be used in the distribution of the Fund's quotas, including prospectus, if any; VI – any additional information that may be made available to potential investors; VII - brief description of the qualification and professional experience of the administrator's technical staff and the manager, if any, in the function of portfolio management or administration.

Art. 5. Only qualified investors, as per the regulation issued by the CVM regarding investment funds in securities, with a minimum subscription value of R$ 100,000.00 (one hundred thousand reais), may invest in the Fund.

Art. 5. Only qualified investors, as defined in specific regulation, may invest in the Fund.

• Art. 5 with wording given by CVM Instruction No. 554, of December 17, 2014.

Art. 6. The Bylaws of the Equity Investment Fund shall provide for:
I – maximum deadline for the subscription of quotas constituting the minimum initial equity established for operation, counted from the respective registration date with the CVM; II – qualification of the administering institution and, if applicable, the managing institution; III – investment policy to be adopted by the administrator, with the indication of assets that may compose the Fund's portfolio and explanation of any risks of portfolio concentration and illiquidity of these assets; IV – rules and deadline for capital calls, observed the provision in the investment commitment signed by the subscriber;

V – rules and criteria for setting the deadline for the applications mentioned in Art. 2, from each capital subscription and, on the restitution of capital or extension of this deadline, in case the investment is not realized within the established deadline; VI – procedure for eventual signing of a new investment commitment, and detailed criteria on the valuation of quotas acquired after the initial subscription; VII – entry and/or exit fee to be paid by the quota holder, and criterion for its fixation; VIII – methodology for determining the accounting value of the Fund's assets, including regarding provisioning and write-off criteria for investments; IX – remuneration of the administrator or criterion for its fixation, which may include administration and performance fees; X – information to be made available to quota holders, its periodicity, and form of disclosure; XI – expenses and charges of the Fund; XII – possibilities of amortization, with the respective conditions, respecting the provisions of Chapter VI of this Instruction; XIII – competence of the general meeting of quota holders, criteria and requirements for its convocation and deliberation; XIV – duration of the Fund and conditions for possible extensions; XV – indication of possible conflicts of interest; XVI – decision-making process for the Fund to carry out investment and divestment; XVII - existence, composition, and operation of an advisory council, investment committee, technical committee, or other committee, if any; XVIII – rules for the replacement of the administrator; XIX – treatment to be given to rights arising from the Fund's portfolio assets, including but not limited to earnings, dividends, and interest on equity, and the form of distribution or reinvestment of these rights; XX – hypotheses for the liquidation of the Fund; XXI – possibility of using goods and rights, including securities, in the amortization of quotas, as well as in the liquidation of the Fund, with the establishment of detailed and specific criteria for the adoption of these procedures; and XXII – date of closing of the fiscal year. XXI – possibility of using goods and rights, including securities, in the amortization of quotas, as well as in the liquidation of the Fund, with the establishment of detailed and specific criteria for the adoption of these procedures; XXII – date of closing of the fiscal year; and

• Items XXI and XXII with wording given by CVM Instruction No. 535, of June 28, 2013.

XXIII – possibility for the general meeting of quota holders to deliberate on the provision of guarantee, aval, acceptance, or any other form of co-obligation, on behalf of the Fund.

• Item XXIII included by CVM Instruction No. 535, of June 28, 2013.

Sole Paragraph. The Fund is prohibited from carrying out derivative operations, except when such operations are carried out exclusively for the purpose of asset protection through operations with options that have as underlying asset a security that integrates the Fund's portfolio or in which there is a right of conversion.

Sole Paragraph. The Fund is prohibited from carrying out derivative operations, except when such operations are carried out exclusively for the purpose of asset protection.

• Wording given by CVM Instruction No. 453, of April 30, 2007.

§1. The Fund is prohibited from carrying out derivative operations, except when such operations are carried out exclusively for the purpose of asset protection.

§2. For capital calls made from May 12, 2011, the maximum deadline referred to in item V of the caput must not exceed the last business day of the 2nd month subsequent to the initial date for quota subscription.

• §§ 1 and 2 with wording given by CVM Instruction No. 496, of May 11, 2011.

Art. 6-A The Fund must maintain, at least, 90% (ninety percent) of its equity invested in the assets provided for in Art. 2.

§1. The limit established in the caput is not applicable:
I – during the period for the application of resources, established according to Art. 6, item V and §2, of each of the quota subscription events provided for in the investment commitment; and II – for Funds in operation before May 12, 2011 and that, from this date:
a) do not make new capital calls; or b) make new capital calls with the exclusive purpose of paying the Fund's expenses.

§2. The administrator must immediately notify the CVM, after the deadline referred to in item I of §1 has passed, of the occurrence of non-compliance, with the appropriate justifications, also informing the portfolio's re-compliance, at the moment it occurs.

§3. For the purpose of verifying the compliance provided for in the caput, the following values shall be added to the assets provided for in Art. 2:
I – destined for the payment of the Fund's expenses, provided it is limited to 5% (five percent) of the subscribed capital; II – resulting from divestment operations:

a) in the period between the date of actual receipt of resources and the last business day of the 2nd month subsequent to such receipt, in cases where the resources are reinvested in assets provided for in Art. 2; b) in the period between the date of actual receipt of resources and the last business day of the month subsequent to such receipt, in cases where the resources are not reinvested in assets provided for in Art. 2; or c) while linked to guarantees given to the buyer of the divested asset; and III – applied in public bonds with the objective of constituting a guarantee for project financing contracts with official financial institutions for infrastructure projects.

§4. If the non-compliance with the limit established in the caput persists for a period longer than the period for the application of resources, established according to Art. 6, item V and §2, the administrator must, within 10 (ten) business days counted from the end of the application deadline:
I – re-comply the portfolio; or
II – return the values that exceed the established limit to the quota holders who have subscribed the last capital call, without any earnings, in proportion to their subscription.

• Article included by CVM Instruction No. 496, of May 11, 2011.

Art. 7. The following acts relating to the Fund shall be communicated to the CVM, within a period of up to 8 (eight) days counted from their deliberation in the general meeting:
I – amendment of the bylaws;
II – replacement of the administrator;
III – merger;
IV – incorporation;
V – spin-off;
VI – liquidation; and
VII – distribution of new quotas.

§1. The deliberation on any of the matters indicated in items I to VI of this article shall only produce effects from the date of protocol at the CVM of the copy of the minutes of the general meeting, with the full text of the deliberations, and of the consolidated bylaws of the Fund, if applicable.

§2. The distribution of new quotas of the Fund depends on prior registration with the CVM.

§3. The registration shall be automatically granted upon protocol at the CVM of the documents referred to in Art. 4, items IV to VI, of this Instruction.

Art. 8. Equity Investment Funds shall highlight in their dissemination material the risks inherent to the concentration and possible illiquidity of the assets that integrate the portfolio resulting from their applications.

CHAPTER III
ADMINISTRATION

Art. 9. The administration of the Fund shall be the responsibility of a legal entity authorized by the CVM to exercise the activity of securities portfolio administration.

§1. The legal entity referred to in the caput shall indicate the director or managing partner responsible for the representation of the Fund before the CVM.

§2. The functions of administrator and manager may be exercised by the same legally qualified legal entity, and the administrator may hire a third party, equally qualified for the professional exercise of portfolio administration, to manage the Fund's portfolio.

§3. The Fund's manager and administrator shall be liable for damages caused to quota holders when acting with fault or intent, in violation of the law, the norms issued by the CVM, and the bylaws.

§4. When the Fund's administration is not exercised by a financial institution that is part of the distribution system, the administrator shall hire a legally qualified institution to execute the services of quota distribution and treasury, such as:
I – opening and movement of bank accounts, in the name of the Fund; II – receipt of resources upon issuance or subscription of quotas, and payment upon amortization or redemption, by the Fund, of quotas or upon the liquidation of the Fund; III – receipt of dividends and any other earnings; IV – financial settlement of all operations of the Fund.

§5. The institutions hired for the services provided for in the preceding paragraph shall be liable for the damages they cause to quota holders when acting with fault or intent, in violation of the law, the norms issued by the CVM, and the bylaws.

Art. 10. The administrator shall have the power to exercise all rights inherent to the securities and financial instruments that integrate the Fund's portfolio, including the right of action and the right to attend and vote in general and special meetings, and may delegate these powers to the manager, in whole or in part.

§1. In cases where the administrator or manager shares with the council or committee decisions inherent to the composition of the investment portfolio, including but not limited to the acquisition and sale of the Fund's portfolio assets, the procedures regarding the sharing of such decisions shall be clearly stated in the bylaws.

§2. The members of the council or committee shall inform the administrator, and the administrator shall inform the quota holders, of any situation that places them, potentially or effectively, in a situation of conflict of interest with the Fund.

Art. 11. The administrator may resign from the administration of the Fund, with prior notice of at least 60 (sixty) days, addressed to each quota holder and to the CVM.

Art. 12. The CVM, in the exercise of its legal powers, may decertify the administrator, in accordance with the norms regulating the exercise of the portfolio administrator activity.

Art. 13. In the cases of resignation or decertification, the administrator shall be obliged to immediately convene the general meeting to elect its successor, to be held within a period of up to 10 (ten) days, and it shall also be facultative for the quota holders who hold at least 5% (five percent) of the issued quotas, in any case, or for the CVM, in cases of decertification, to convene the general meeting.

§1. In the case of resignation, the administrator shall remain in the exercise of its functions until its effective replacement.

§2. In the case of decertification, the CVM may indicate a temporary administrator until the election of a new administration.

CHAPTER IV
ADMINISTRATOR'S OBLIGATIONS

Art. 14. The following are included among the administrator's obligations:
I – maintain, at its own expense, updated and in perfect order, for 5 (five) years after the Fund's closure:
a) the records of quota holders and transfers of quotas; b) the minutes book of the general meetings; c) the attendance book of quota holders; d) the archive of the auditors' reports; e) the records and financial statements relating to the operations carried out by the Fund and its equity; f) the documentation relating to the Fund's operations. II – receive dividends, bonuses, and any other earnings or values attributed to the Fund; III – bear, at its own expense, the Fund's advertising expenses; IV – pay, at its own expense, any punitive fines imposed by the CVM, in accordance with the current legislation, due to delays in complying with the deadlines provided for in this Instruction; V – prepare, together with the semi-annual and annual financial statements, a report on the operations and results of the Fund, including the declaration that the provisions of this Instruction and the Fund's bylaws have been observed; VI – provide to quota holders who, individually or jointly, being holders of at least 10% (ten percent) of the issued quotas, so request, investment studies and analyses, prepared by the manager or by the administrator, that support the decisions taken in the general meeting, including the appropriate records with the justifications of the recommendations and respective decisions; VII – if any, provide to quota holders who, individually or jointly, being holders of at least 10% (ten percent) of the issued quotas, so request, periodic updates of the studies and analyses prepared by the manager or by the administrator, allowing monitoring of the investments made, objectives achieved, return perspectives, and identification of possible actions that maximize the investment result; VIII – in the case of the instigation of an administrative procedure by the CVM, maintain the documentation referred to in item I of this article until its conclusion; IX – exercise, or diligence for them to be exercised, all rights inherent to the Fund's equity and activities; X – transfer to the Fund any benefit or advantage that it may achieve as a result of its condition as Fund administrator; XI – keep the fungible securities and financial instruments that integrate the Fund's portfolio custodied in a custodial entity authorized to exercise the activity by the CVM; XII – prepare and disclose the information provided for in Chapter VIII of this Instruction; XIII – sign, on behalf of the Fund, shareholders' agreements of the companies in which the Fund participates; XIV – comply with the deliberations of the general meeting; XV – comply and enforce all provisions of the Fund's bylaws.

Sole Paragraph. Whenever information is requested in the manner provided for in items VI and VII of this article, the administrator may submit the issue to the prior appreciation of the general meeting of quota holders, taking into account the interests of the Fund and the other quota holders, and any conflicts of interest regarding technical knowledge and the companies in which the Fund has invested, with the quota holders who requested the information being barred from voting in this case.

CHAPTER V
GENERAL MEETING

Art. 15. It shall be exclusively the competence of the general meeting of quota holders:
I – annually, take the accounts relating to the Fund and deliberate, by June 30 of each year, on the financial statements presented by the administrator; I – annually, take the accounts relating to the Fund and deliberate, within 150 (one hundred and fifty) days after the end of the fiscal year, on the financial statements presented by the administrator;

• Item I with wording given by CVM Instruction No. 535, of June 28, 2013.

II – amend the Fund's bylaws;

III – deliberate on the dismissal or replacement of the administrator and the choice of their successor; IV – deliberate on the merger, incorporation, spin-off, or eventual liquidation of the fund; V – deliberate on the issuance and distribution of new units; VI – deliberate on the increase in the administrator's remuneration rate, including regarding participation in the fund's results; VII – deliberate on the extension of the fund's duration term; VIII – deliberate on the alteration of the quorum for installation and deliberation of the general assembly; IX – deliberate on the installation, composition, organization, and functioning of the fund's committees and councils; and X – deliberate, when applicable, on requests for information from unitholders, observing the provisions of the sole paragraph of Article 14 of this Instruction. IX – deliberate on the installation, composition, organization, and functioning of the fund's committees and councils; X – deliberate, when applicable, on requests for information from unitholders, observing the provisions of the sole paragraph of Article 14 of this Instruction; and

• Items IX and X with wording given by CVM Instruction No. 535, of June 28, 2013.
  XI – deliberate on the provision of surety, guarantee, acceptance, or any other form of joint obligation, in the name of the fund.

• Item XI included by CVM Instruction No. 535, of June 28, 2013.
  §1º The fund's regulations may be altered independently of a general assembly or consultation with unitholders whenever such alteration results exclusively from the need to meet an express requirement of the CVM, as a consequence of legal or regulatory norms, and the necessary communication to unitholders must be provided within 30 (thirty) days. §2º General assembly deliberations of unitholders must be adopted by votes representing the majority of those present, except for those referred to in items II, III, IV, VI, VII, VIII, and IX of this article, and in item V of the same article, if there is no provision for the issuance of new units, which may only be adopted by a qualified majority previously established in the fund's regulations. §2º General assembly deliberations of unitholders must be adopted by votes representing the majority of those present, except for those referred to in items II, III, IV, VI, VII, VIII, IX, and XI of this article, and in item V of the same article, if there is no provision for the issuance of new units, which may only be adopted by a qualified majority previously established in the fund's regulations.

• §2º with wording given by CVM Instruction No. 535, of June 28, 2013.
  §3º The qualified majority established in the fund's regulations for the deliberation referred to in item XI of this article must represent unit holders corresponding to at least two-thirds of the units issued by the fund.

• §3º included by CVM Instruction No. 535, of June 28, 2013.
  Art. 16. The convening of the general assembly shall be in the manner stipulated in the fund's regulations, with a minimum advance notice of 15 (fifteen) days, and must contain a description of the matters to be discussed and voted on. §1º Regardless of the convening provided for in this article, the general assembly shall be considered regular if all unitholders attend. §2º The general assembly may be convened by the administering institution or by unitholders who hold at least 5% (five percent) of the total units issued by the fund. §3º The fund's regulations may provide for the possibility of general assembly deliberations being adopted through a formal consultation process. Art. 17. Only unitholders who, up to 3 (three) days before the date fixed for its holding, are registered in the "Register of Unitholders" or in the deposit account, as applicable, may vote in the general assembly. Art. 18. Unitholders, their legal representatives, or their legally constituted proxies shall have standing to attend the general assembly or to vote in the deliberation process by consultation. Sole paragraph. Unitholders may also vote through written or electronic communication, provided it is received before the assembly, observing the provisions of the regulations. Art. 19. Each unit shall be entitled to one vote in the general assembly of unitholders. §1º The regulations may admit the existence of one or more classes of units, attributing to them special political rights for the matters specified. §2º The regulations may attribute to one or more classes of units distinct economic-financial rights, exclusively regarding the setting of administration and performance fees, and their respective calculation bases.
  CHAPTER VI
  OF THE ISSUANCE, PLACEMENT, NEGOTIABILITY, AND AMORTIZATION Art. 20. The units of the Participation Investment Fund shall correspond to ideal fractions of its net asset value and shall assume a registered form. §1º The ownership of registered units shall be presumed by the registration of the unitholder's name in the "Register of Registered Units" or in the deposit account for the units, opened in the name of the unitholder. §2º The administrator shall require proof of the qualification set forth in Art. 5º to proceed with the transfer of ownership of units traded in the secondary market. §2º The administrator shall require, at the time of subscription of the units, proof of the qualification required in Art. 5º.

• Wording given by CVM Instruction No. 450, of March 30, 2007.
  Art. 21. The deposit account statement shall represent an integer or fractional number of units belonging to the unitholder, according to the records of the Participation Investment Fund.
  Art. 22. The investment commitment, subscription, issuance, and full payment of units shall comply with the terms, conditions, and values stipulated in the fund's regulations.
  §1º Upon joining the fund, the investor shall sign the Particular Instrument of Investment Commitment together with the administrator and two witnesses.
  §2º The investment commitment instrument must state that, during the validity of the fund, there will be capital calls to which the investor shall be obligated, according to rules contained in said instrument and under the penalties expressly provided therein. §3º At the time of the full payment of the units, the subscriber shall receive a payment receipt regarding the respective full payment, as provided in the fund's regulations and the commitment term, which shall be authenticated by the administrator or by the institution authorized to process the subscription and full payment of the units. §4º The subscription list or bulletin must contain:
  I – name and qualification of the subscriber;
  II – number of units subscribed; and
  III – subscription price, total amount to be paid by the subscriber, and respective deadline.
  §5º Subscription may be made by means of a letter addressed to the administrator, observing the provisions of this article.
  Art. 23. The amounts received in the full payment of units shall be deposited in a commercial bank, in the name of the fund, and shall be invested as established in its regulations, observing the provisions of Art. 9º. Art. 24. There shall be no redemption of units. Art. 25. The fund's regulations must specify the criterion for the amortization of its units. Art. 26. The fund's units that have been the subject of public distribution, except for private negotiations between qualified investors, may only be traded on the stock exchange or organized over-the-counter market, with the intermediary responsible for ensuring the qualified investor status of the acquirer of units. Art. 26 FIP units may only be traded in regulated markets:
  I - when distributed publicly through an offer registered with the CVM; II - when distributed with restricted efforts, observing the restrictions of the specific norm; or III - when the units are already admitted to trading in regulated markets.

§ 1º Units issued by FIPs that do not fall under the hypotheses of items I to III of the main text may also be traded in regulated markets, provided they are previously submitted to trading registration, by presenting a prospectus, in accordance with applicable regulations. § 2º For the purposes of applying item III of the main text, only units whose classes are already admitted to trading may be traded, in the case of the Fund:
I - that obtains financial support from development organizations; II - whose regulations attribute distinct special political rights; or III - whose regulations attribute distinct economic-financial rights, exclusively regarding the setting of administration and performance fees, and their respective calculation bases. § 3º It is incumbent upon intermediaries to ensure that the acquisition of units is only made by qualified investors.

• Article with wording given by CVM Instruction No. 498, of June 13, 2011.
  CHAPTER VII
  OF THE FUND'S CHARGES
  Art. 27. In addition to the remuneration referred to in item IX of Art. 6º, the following expenses shall constitute charges of the fund:
  I – emoluments and commissions paid for operations of purchase and sale of securities and financial assets comprising the fund's portfolio; II – taxes, federal, state, and municipal contributions that fall or may fall upon the assets, rights, and obligations of the fund; III – expenses with printing, mailing, and publication of reports, forms, and periodicals, provided for in this Instruction or in relevant regulation; IV – correspondence expenses of interest to the fund, including communications to unitholders; V – fees and expenses of the auditors responsible for the annual audit of the fund's financial statements; VI – attorneys' fees, costs, and related expenses incurred in defense of the fund's interests, in court or out of court, including the value of the condemnation, imputed to the fund, if applicable; VII – portion of eventual losses not covered by insurance policies and not resulting from fault or negligence of the administrator in the exercise of their functions; VIII – insurance premiums, as well as any expenses related to the transfer of resources from the fund between banks;

IX – any expenses inherent to the constitution, merger, incorporation, spin-off, or liquidation of the fund and to the holding of a general assembly of unitholders, within limits established in the regulations, which may be altered by assembly; X – custody fee for securities and financial assets comprising the fund's portfolio; and XI – expenses with the hiring of third parties to provide legal, tax, accounting, and specialized consulting services, within limits established in the regulations, which may be altered by assembly. §1º Any expenses not provided for as charges of the fund shall be borne by the administrator, except by contrary decision of the general assembly. §2º The administrator may establish that portions of the administration or performance fee are paid directly by the fund to service providers who have been subcontracted by the administrator, provided that the sum of these portions does not exceed the total amount of the administration or performance fee fixed in the fund's regulations.
CHAPTER VIII
OF THE FINANCIAL STATEMENTS AND OTHER INFORMATION OF THE FUND Art. 28. The Participation Investment Fund shall have its own accounting records, and the fund's investments, accounts, and financial statements must be segregated from those of the administrator and manager, as well as from the custodian and depositary. Art. 29. The norms applicable to the preparation of the fund's financial statements must be provided for in the fund's regulations, applying subsidiarily, and insofar as they do not provide otherwise, CVM Instruction No. 305, of May 5, 1999. Sole paragraph. The fund's financial statements, prepared at the end of each fiscal year, must be audited by an independent auditor registered with the CVM. Art. 30. The investor must be provided, obligatorily and free of charge, at the time of their entry as a unitholder of the Participation Investment Fund, against receipt:
I - a copy of the fund's regulations;
II - a brief description of the qualification and professional experience of the technical staff of the administrator, in the function of portfolio management or administration; III - a document clearly stating the expenses with commissions or subscription, distribution, and other fees that the investor must bear. Art. 31. The fund's administrator must disclose to all unitholders and to the CVM, any act or relevant fact concerning the fund. Sole paragraph. Among the information referred to above, confidential information regarding the issuing companies of securities and financial assets comprising the fund's portfolio, obtained by the administrator under a commitment of confidentiality or by reason of their regular functions as member or participant of the administrative or advisory bodies of the company, shall not be included.

Art. 32. The fund's administrator must send to unitholders and to the CVM:
I – semi-annually, within 45 (forty-five) days after the end of this period, the following information:
a) the composition of the portfolio, discriminating quantity and type of securities and financial assets that comprise it; b) the fund's financial statements accompanied by the declaration referred to in item V of Art. 14; c) the charges debited to the fund, in accordance with the provisions of Art. 27, specifying their value; and d) the list of institutions responsible for providing custody services for securities and financial assets comprising the portfolio. II – annually, within 60 (sixty) days after the end of the fiscal year, the following information:
a) the financial statements of the fiscal year accompanied by the opinion of the independent auditor; b) the net asset value of the unit on the date of the balance sheet closing and its profitability during the period; and c) the charges debited to the fund, in accordance with the provisions of Art. 27, specifying their value and percentage relative to the fund's average annual net asset value. Art. 32. The fund's administrator must send to the CVM, through the Document Submission System available on the Commission's website on the World Wide Web, according to the model available on said page, and also to the unitholder, the following information:
I – quarterly, within 15 (fifteen) days after the end of the civil quarter to which they refer, the following information:
a) the fund's net asset value; and b) the number of units issued.
II – semi-annually, within 60 (sixty) days after the end of this period, the following information:
a) the composition of the portfolio, discriminating quantity and type of securities and financial assets that comprise it; b) the fund's financial statements accompanied by the declaration referred to in item V of Art. 14; c) the charges debited to the fund, in accordance with the provisions of Art. 27, specifying their value; and d) the list of institutions responsible for providing custody services for securities and financial assets comprising the portfolio.

III – annually, within 90 (ninety) days after the end of the fiscal year, the following information:
III – annually, within 120 (one hundred and twenty) days after the end of the fiscal year, the following information:
a) the financial statements of the fiscal year, accompanied by the opinion of the independent auditor; b) the net asset value of the unit on the date of the balance sheet closing and its profitability during the period; and c) the charges debited to the fund, in accordance with the provisions of Art. 27, specifying their value and the percentage relative to the fund's average annual net asset value.

• Article with wording given by CVM Instruction No. 435, of July 5, 2006.
• Item III with wording given by CVM Instruction No. 535, of June 28, 2013.
  Sole paragraph. The information referred to in item “a” of item II of the main text must be sent to the CVM based on the civil calendar, and the information referred to in items “b”, “c”, “d”, and “e” of item II of the main text must be sent to the CVM based on the fund's fiscal year.
• Sole paragraph included by CVM Instruction No. 535, of June 28, 2013.
  Art. 33. The CVM may determine that the mandatory information provided for in this Instruction, as well as other information required by the CVM, periodic or occasional, be presented in electronic media or through its website on the World Wide Web - Internet, according to models and forms to be defined by the CVM.
• Article revoked by CVM Instruction No. 435, of July 5, 2006.
  Art. 34. The information provided or any disclosure material of the fund must not be in disagreement with its regulations or with reports filed with the CVM.
  Sole paragraph. If the advertising text presents inaccuracies or improprieties that may induce the investor to evaluation errors, the CVM may require that the necessary corrections and clarifications be disseminated, with equal prominence, through the medium(s) used to disseminate the original advertising text, and it must expressly state that the information is being republished by determination of the CVM. Art. 34-A. The administrator must send simultaneously to the CVM copies of any communications regarding the fund disseminated to unitholders or third parties.
• Article included by CVM Instruction No. 435, of July 5, 2006.
  CHAPTER IX
  OF THE PROHIBITIONS
  Art. 35. It is prohibited for the administrator, directly or indirectly, in the name of the fund:
  I – receive deposits in a checking account;

II – contract or make loans, except in the modalities established by the CVM; III – provide surety, guarantee, acceptance, or bind oneself under any other form; III – provide surety, guarantee, acceptance, or bind oneself under any other form, except with the approval of the qualified majority of unitholders gathered in a general assembly, provided that the fund's regulations foresee this possibility;

• Item III with wording given by CVM Instruction No. 535, of June 28, 2013.
  IV – trade with bills of exchange, promissory notes, except those referred to in CVM Instruction No. 134, of November 1, 1990, or other securities not authorized by the CVM; V – promise predetermined returns to unitholders; VI – invest resources:
  a) abroad; b) in the acquisition of real estate; and c) in the subscription or acquisition of shares of its own issuance.
  Sole paragraph. If there are guarantees provided by the fund, as provided in item III, the fund's administrator must ensure the wide dissemination of information about all existing guarantees, by means of, at minimum, the disclosure of a relevant fact and permanent availability, with prominence, of the information on the administrator's website on the World Wide Web.
• Sole paragraph included by CVM Instruction No. 535, of June 28, 2013.
  Art. 36. Except with the approval of the majority of unitholders gathered in a general assembly, it is prohibited to invest fund resources in securities and financial assets of companies in which participate:
  I – the administrator, the manager, the members of committees or councils created by the fund, and unitholders holding units representing 5% (five percent) of the fund's net asset value, their partners and respective spouses, individually or jointly, with a percentage greater than 10% (ten percent) of the voting or total share capital; II – any of the persons mentioned in the previous item who:
  a) are involved, directly or indirectly, in the financial structuring of the issuance operation of securities to be subscribed by the fund, including as placement agent, coordinator, or guarantor of the issuance; or b) are part of the boards of directors, advisory, or fiscal councils of the issuing company of the securities to be subscribed by the fund, before the first investment by the fund. Sole paragraph. Except with the approval of the majority of unitholders, it is equally prohibited for the fund to carry out operations in which it figures as counterparty to the persons mentioned in item I of this article, as well as other investment funds or securities portfolios managed by the administrator or manager, if applicable.
  CHAPTER X
  OF THE FINAL AND TRANSITORY PROVISIONS
  Art. 37. The constitution of funds to invest in Participation Investment Funds and in Emerging Companies Investment Funds, named Funds of Investment in Units of Participation Investment Funds, shall be permitted. Sole paragraph. Funds of Investment in Units of Participation Investment Funds must invest, at least, 90% (ninety percent) of their net asset value in units of Participation Investment Funds, as well as in units of Emerging Companies Investment Funds. Art. 37. The constitution of funds to invest in Participation Investment Funds, in Emerging Companies Investment Funds, and Equity Funds – Access Market, named Funds of Investment in Units of Participation Investment Funds, shall be permitted. Sole paragraph. Funds of Investment in Units of Participation Investment Funds must invest, at least, 90% (ninety percent) of their net asset value in units of Participation Investment Funds, of Emerging Companies Investment Funds, or of Equity Funds – Access Market.
• Art. 37 with wording given by CVM Instruction No. 549, of June 24, 2014.
  Art. 38. The administrator who fails to send to the CVM the information provided for in this Instruction shall be subject to a daily fine of R$ 200.00 (two hundred Reais), which shall apply from the first business day following the end of the deadlines determined for the fulfillment of the obligation, without prejudice to the eventual application of the penalties provided for in Art. 11 of Law No. 6.385, of 1976. Art. 39. Administrators of investment funds in securities and financial assets, closed condominiums, and mutual investment funds in emerging companies, may convene general assemblies of the funds under their administration for the purpose of promoting their transformation into Participation Investment Funds or Funds of Investment in Units of Participation Investment Funds. Sole paragraph. The approval of the transformation referred to in the main text shall be by the qualified quorum established by the regulations, and must be immediately communicated to the CVM. Art. 40. Non-compliance with the provisions of Arts. 6º; 7º; 8º; 10, §§ 1º and 2º; 11; 14, items II, III, IV, V, XI, XII, XIV; 15, §1º; 16; 19, 22, main text and § 4º; 24, 25; 26; 28; 29; 30; 32; 34, 35, and 39, sole paragraph, constitutes a hypothesis of an objective nature, subject to a summary administrative process.
• Art. 40 revoked by CVM Instruction No. 545, of January 29, 2014.
  Art. 41. A serious infraction, for the purposes of the provisions of Art. 11, § 3º, of Law No. 6.385, of 1976, is the infraction of the norms contained in Arts. 2º, §§ 2º, 3º, and 4º; 3º; 5º; 7º, § 2º; 15, items I and VIII, 31, and 36. Art. 41. A serious infraction, for the purposes of the provisions of Art. 11, § 3º, of Law No. 6.385, of 1976, is the infraction of the norms contained in Arts. 2º, §§ 2º, 3º, and 4º; 3º; 5º; 6º-A, §§ 2º and 3º; 7º, § 2º; 15, items I and VIII, 31, and 36.
• Article with wording given by CVM Instruction No. 496, of May 11, 2011.

Art. 42. This Instruction shall enter into force 30 (thirty) days after the date of its publication in the Official Gazette of the Union.

Signed original
LUIZ LEONARDO CANTIDIANO
President