CVM Instruction No. 398 of October 28, 2003 (Revoked) - National Film Industry Financing Fund - FUNCINE

FULL TEXT OF CVM INSTRUCTION NO. 398, OF OCTOBER 28, 2003, WITH AMENDMENTS INTRODUCED BY CVM INSTRUCTIONS NO. 435/06, 451/07, 498/11, 545/14, 609/19, AND 615/19 AND BY CVM RESOLUTION NO. 162/22.

Provides for the constitution, administration, operation, and disclosure of information of the National Film Industry Financing Fund - FUNCINE.

THE PRESIDENT OF THE SECURITIES AND EXCHANGE COMMISSION - CVM makes public that the Collegiate Body, in a meeting held on this date, having regard to the provisions of Art. 2, item IX, and Art. 8, item I, of Law No. 6,385, of December 7, 1976, with the wording given by Law No. 10,303, of October 31, 2001, and Art. 42 of Provisional Measure No. 2,228-1, of September 6, 2001, RESOLVED to issue the following Instruction:

CHAPTER I
SCOPE AND PURPOSE

Art. 1. This Instruction provides for general rules governing the constitution, administration, operation, and disclosure of information of the National Film Industry Financing Fund - FUNCINE.

Art. 2. For the purposes of this Instruction, the following are considered:

I - PROJECTS APPROVED BY ANCINE: those projects and/or programs approved by ANCINE – National Cinema Agency, which are intended for:
a) Brazilian independent feature films, including their production and distribution and/or; b) construction, renovation, and recovery of exhibition halls and/or; c) acquisition of shares of publicly-held companies with predominantly national capital, whose corporate purpose is the production, marketing, distribution, or exhibition of Brazilian independent feature films and/or; d) serial cinematographic or videographic work produced with a minimum of 3 (three) and a maximum of 26 (twenty-six) chapters and Brazilian independent feature telefilms. a) projects for the production of independent Brazilian audiovisual works carried out by Brazilian production companies; b) construction, renovation, and recovery of exhibition halls owned by Brazilian companies; c) acquisition of shares of Brazilian companies for the production, marketing, distribution, and exhibition of independent Brazilian audiovisual works, as well as for the provision of cinematographic and audiovisual infrastructure services; d) projects for the marketing and distribution of independent Brazilian cinematographic audiovisual works carried out by Brazilian companies; and

CVM INSTRUCTION NO. 398, OF OCTOBER 28, 2003 e) infrastructure projects carried out by Brazilian companies.

• Wording given by CVM Instruction No. 451, of April 3, 2007.

II – INDEPENDENT PRODUCTION: that whose production company, holder of the majority of the property rights over the work, has no association or link, direct or indirect, with radio broadcasting services or electronic mass communication operators by subscription;

III - COMPANY HOLDER OF PROJECT APPROVED BY ANCINE – a company with predominantly national capital, which may take any of the corporate forms provided by Law, except for projects included in item "c" of item I above, is responsible for the production and/or execution of PROJECT APPROVED BY ANCINE, as well as for the accounting regarding the use of resources originating from FUNCINE, in whose name the approval of the project is published in the Official Gazette of the Union, in accordance with ANCINE regulations.

III - COMPANY HOLDER OF PROJECT APPROVED BY ANCINE – a company with predominantly national capital, which may take any of the corporate forms provided by Law, except for projects included in item "c" of item I above, is responsible for the production and/or execution of PROJECT APPROVED BY ANCINE, as well as for the accounting regarding the use of resources originating from FUNCINE, in whose name the approval of the project is published in the Official Gazette of the Union, in accordance with ANCINE regulations; and

• Wording given by CVM Instruction No. 451, of April 3, 2007.

IV – BRAZILIAN COMPANY: a society constituted under Brazilian laws, with headquarters and administration in the Country, whose majority of total and voting capital is directly or indirectly owned by native or naturalized Brazilians for more than 10 (ten) years, who must exercise in fact and in law the decision-making power of the company.

• Item included by CVM Instruction No. 451, of April 3, 2007.

CHAPTER II
CHARACTERISTICS AND CONSTITUTION AND OPERATION
Section I
Characteristics

Art. 3. FUNCINE is a communion of resources, constituted in the form of a closed condominium, without legal personality, intended for investment in projects approved by the National Cinema Agency - ANCINE.

Art. 4. The name of FUNCINE must contain the expression "National Film Industry Financing Fund - FUNCINE" and its investment objective, not allowing that names or expressions be added to the name of FUNCINE that induce an improper interpretation regarding its objectives, its investment policy, or its target audience.

Art. 5. The Fund must have a determined duration, as established by its regulations.

Section II
Composition and Operation

Art. 6. The operation of FUNCINE depends on prior authorization from CVM.

Art. 7. The constitution of FUNCINE must be deliberated by the administering institution, which, in the same act, must also approve the full text of its regulations.

Art. 8. The request for authorization for operation, signed by the administering institution of FUNCINE, must be accompanied by the following documents:

I – act of constitution with full text of its regulations, in 2 (two) copies, duly initialled and signed, accompanied by a certificate proving its registration in the titles and documents registry; I – act of constitution with full text of its regulations, in 2 (two) copies, duly initialled and signed;

• Item I with wording given by CVM Instruction No. 615, of October 2, 2019.

II – 2 (two) copies of the fund prospectus;

III – dissemination material to be used in the distribution of FUNCINE quotas;

IV – name of the independent auditor, duly registered with this Commission;

V – the designation of a director or managing partner of the administering institution, in accordance with CMN Resolution No. 2,451, of November 27, 1997, with the modifications introduced by CMN Resolution No. 2,486, of April 30, 1998, to respond, civilly, criminally, and administratively, for the management, supervision, and monitoring of FUNCINE, as well as for the provision of information related to it;

VI – declaration signed by the administering institution of FUNCINE in accordance with Annex I of this Instruction;

VII – completed registration form, in accordance with Annex II of this Instruction.

CHAPTER III
PORTFOLIO COMPOSITION

Art. 9. At least 80% (eighty percent) of the resources invested in FUNCINE must be directed towards ventures of the types enumerated in item I of Art. 2 of this Instruction, observing, with respect to each type of destination, the minimum percentages to be established in its regulations.

Art. 9. At least 90% (ninety percent) of the resources invested in FUNCINE must be directed towards ventures of the types enumerated in item I of Art. 2 of this Instruction, observing, with respect to each type of destination, the minimum percentages to be established in its regulations.

• Wording given by CVM Instruction No. 451, of April 3, 2007.

§1. The portion of FUNCINE's assets not committed to the investments referred to in the caput of this article shall consist of securities issued by the National Treasury and/or by the Central Bank of Brazil - BACEN.

§2. Investments in the types of destination listed in items "a", "b", and "d" of item I of Art. 2 of this Instruction must be made through a contract to be entered into by the administering institution of FUNCINE, in its name and representation, and the COMPANY HOLDER OF PROJECT APPROVED BY ANCINE, which must contain the following specifications:

I – name of the Project;
II – registration number and date of project approval at ANCINE; III - qualification of the COMPANY HOLDER OF THE PROJECT APPROVED BY ANCINE with the registration numbers in the National Registry of Legal Entities – CNPJ - of the Ministry of Finance and the state or municipal registration; IV - specification of the rights assured in the venture in exchange for the investment through FUNCINE and the form of FUNCINE's participation in the results of the venture in question; V - guarantees, if any; VI - deadline for project completion; VII – sanctions and fines for non-compliance with contractual clauses; VIII – authorized signature of the person responsible for the company receiving the investments;

§3. In the case of investments in the types of destination listed in items "a" and "d" of item I of Art. 2 of this Instruction, it must be provided in the contract or in a declaration by the COMPANY HOLDER OF THE PROJECT APPROVED BY ANCINE that the audiovisual works subject to FUNCINE's investment have their broadcasting and dissemination guaranteed, within the time and manner specified in said contract or declaration, as applicable.

§ 3. In the case of investments in the type of destination provided for in item "a" of item I of Art. 2 of this Instruction, it must be provided in the contract or in a declaration by the COMPANY HOLDER OF THE PROJECT APPROVED BY ANCINE that the audiovisual works subject to FUNCINE's investment have their broadcasting and dissemination guaranteed, within the time and manner specified in said contract or declaration, as applicable.

• Wording given by CVM Instruction No. 451, of April 3, 2007.

§4. Investments in the types of destination contemplated in item "b" of item I of Art. 2 of this Instruction may be made through any legal form that guarantees FUNCINE participation in the results of the Project in question.

§5. Investments in the type of destination listed in item "c" of item I of Art. 2 of this Instruction must be made through the acquisition of shares of the aforementioned companies by FUNCINE on a stock exchange or organized over-the-counter market.

Art. 10. Radio broadcasting services and electronic mass communication companies may not hold controlling shareholdings in the companies referred to in item "c" of item I of Art. 2 of this Instruction.

Art. 10. For the purpose of applying FUNCINE resources, radio broadcasting services and telecommunications service providers may not hold controlling shareholdings in the companies referred to in item "c" of item I of Art. 2 of this Instruction.

• Wording given by CVM Instruction No. 451, of April 3, 2007.

Art. 11. It is prohibited to invest FUNCINE resources in projects that have majority participation by a quota holder of the fund itself.

Art. 12. Cinematographic or videographic works of an advertising or journalistic nature may not constitute the object of investment of FUNCINE.

Art. 12. Audiovisual works of an advertising, sports, or journalistic nature may not constitute the object of investment of FUNCINE.

• Wording given by CVM Instruction No. 451, of April 3, 2007.

Art. 13. The contracts referred to in § 2 of Art. 9 above must be kept, updated, in the premises of the administering institution, available to any quota holders.

Art. 14. Relevant events, as defined in Art. 62 of this Instruction, include any alterations to the contracts referred to in § 2 of Art. 9 of this Instruction.

CHAPTER IV
QUOTAS

Art. 15. FUNCINE quotas correspond to ideal fractions of its net equity and must be book-entry.

Art. 16. FUNCINE quota may be transferred privately, through a transfer and assignment term, signed by the assignor and the assignee, and registered in the titles and documents registry, or traded on a stock exchange or entity of the organized over-the-counter market where the fund is listed.

Art. 16. FUNCINE quotas may only be traded in regulated markets:

I - when distributed publicly through an offer registered with CVM; I – when distributed publicly through an offer registered with CVM; or

• Item I with wording given by CVM Resolution No. 162 of July 13, 2022.

II - when distributed with restricted efforts, observing the restrictions of the specific norm; or II - REVOKED

• Item II revoked by CVM Resolution No. 162 of July 13, 2022.

III - when the quotas are already admitted to trading in regulated markets.

Sole Paragraph. Quotas issued by FUNCINE that do not fall under the hypotheses of items I to III of the caput may also be traded in regulated markets, provided they are previously submitted to trading registration, by presenting a prospectus, in accordance with applicable regulations.

• Article with wording given by CVM Instruction No. 498, of June 13, 2011.

Sole Paragraph. The provisions of CVM DELIBERATION No. 20, of February 15, 1985, apply to the trading of FUNCINE quotas, namely, the participation of a society or professional member of the distribution system makes the trading public.

Art. 17. The value of the quota is the result of dividing the net asset value by the number of FUNCINE quotas, calculated at least semi-annually, based on the corresponding accounting statements.

Art. 18. In the initial issuance of FUNCINE quotas, the value of the quota will be established through the division of the total issuance value by the number of quotas issued.

Art. 19. The full payment of quotas may be made in national currency, goods, and rights, as stipulated in the FUNCINE regulations.

Sole Paragraph. The payment in goods and rights must be based on an appraisal report prepared by 3 (three) experts or by an independent specialized company, duly substantiated with the indication of the appraisal criteria and comparison elements adopted, and approved by the administering institution of FUNCINE.

Art. 20. The amortization of quotas must be effected always in national currency, in the manner and time set forth in the FUNCINE regulations.

Art. 21. The status of quota holder is characterized by registration in the quota holders' register.

Sole Paragraph. In the case of quotas deposited in Clearing and Custody Chambers, it is admitted that the ownership register be maintained by that entity, in the manner applicable to shares issued by publicly-held companies.

Art. 22. The ownership of FUNCINE quotas confers equal rights to quota holders, including regarding deadlines, rates, and expenses, with each quota being assigned the right to one vote at Quota Holders' Assemblies.

Art. 23. Every quota holder, upon entering FUNCINE, must attest, through an adherence term, that they received the prospectus and regulations of FUNCINE and that they are aware of its investment policy.

Sole Paragraph. The administering institution must keep available for CVM inspection the adherence term referred to in this article, duly signed by the investor or electronic system recognized by system audit, which guarantees compliance with the caput.

CHAPTER V
DISTRIBUTION OF QUOTAS

Art. 24. The distribution of FUNCINE quotas may only be carried out by institutions members of the securities distribution system.

Art. 25. The distribution of FUNCINE quotas depends on prior registration with CVM.

Sole Paragraph. Registration will be automatically granted upon protocol at CVM of the following documents:

I – declaration, from the administering institution of FUNCINE, that the distribution contract with an institution member of the distribution system has been signed, when applicable;

II – fund prospectus;

III – information regarding the maximum and minimum number of quotas to be distributed, the issuance value, and other relevant information about the distribution;

IV – draft of the announcement of the start of distribution to be published prior to the distribution of quotas, in the periodical chosen by the administering institution;

V – draft of the announcement of the end of distribution, which must be published after the end of the distribution of quotas, in the same periodical mentioned in the previous item;

VI – any additional information that may be made available to potential investors; and

VII - proof of payment of the registration fee referred to in Law No. 7,940/89.

Art. 26. The announcement of the start of distribution of FUNCINE quotas must contain:

I – name of the fund;

II – name and address of the fund's administering institution;

III – name and address of the institutions responsible for distribution;

IV - minimum net asset value foreseen for the operation of FUNCINE;

V – investment policy and main characteristics of the fund;

VI – market where the fund's quotas are traded;

VII – subscription and full payment conditions of quotas;

VIII – date of the start of distribution;

CVM INSTRUCTION NO. 398, OF OCTOBER 28, 2003
IX – clarification that more information and copies of the prospectus and regulations can be obtained from the institutions responsible for the distribution of quotas or at CVM;

X – the reference of the protocol at CVM of the documents referred to in Art. 8 of this Instruction; and

XI – the statements, in a prominent manner: "CVM does not guarantee the truthfulness of the information provided, nor does it make a judgment on the quality of the fund, the administering institution, or the quotas to be distributed."

Art. 27. The total subscription of FUNCINE quotas must be closed within a maximum period of 360 (three hundred and sixty) days, from the date of the start of distribution, with its trading, alienation, assignment, or transfer to any title by subscribers to third parties prohibited until the distribution is closed.

§1. If the minimum number of quotas provided in the regulations is not fully subscribed within 360 (three hundred and sixty) days, from the date of the start of distribution, the values obtained during the distribution of quotas must be immediately allocated among the subscribers, in proportion to the values paid, plus the net earnings earned by FUNCINE's investments.

§2. In the case of the previous paragraph, the administrator may opt to reduce the total number of quotas to be issued, readjusting the percentage participations relative to the quotas already placed, provided that written formal consent of the subscribers regarding the new conditions is obtained and the return of the paid value, duly remunerated for the time elapsed, is made to subscribers who do not agree.

§3. In the event that, during the quota distribution process, the administering institution decides to alter any of the previously disclosed conditions, the distribution must be suspended, obtaining the consent of subscribers regarding the new conditions and the return of the paid value, duly remunerated for the time elapsed, to subscribers who do not agree with the new conditions.

§4. After completing the procedure of § 3 above, the prospectus and what else is due must be corrected, and a new announcement of the start of distribution must be published, in accordance with Art. 26 of this Instruction, prior to its restart.

Art. 28. The amounts received in the full payment of quotas, during the quota distribution process of FUNCINE, must be deposited in a commercial bank, or multiple bank with commercial portfolio, in the name of FUNCINE, with their immediate investment in securities issued by the National Treasury and/or by BACEN being mandatory until the portfolio is qualified, in accordance with Chapter XII of this Instruction.

§1. The fund's administering institution must send monthly to CVM, during the distribution period, within a maximum period of 15 (fifteen) days, counted from the end of the month, a statement of the portfolio's investments.

§2. In the case of a fund that is already in operation, the values related to the new distribution of quotas must be book-kept separately from the fund's other investments, until the end of the distribution.

Art. 29. The administering institution must send to CVM, within 10 (ten) days after the end of the subscription of FUNCINE quotas, the following information:

I – fund registration number in the CNPJ; and

CVM INSTRUCTION NO. 398, OF OCTOBER 28, 2003
II – list of the fund's quota subscribers.

Sole Paragraph. The administering institution must inform CVM of the date of the end of each quota distribution.

Art. 30. A new distribution of quotas may only be started after the previous distribution has been fully subscribed and paid, or readjusted in accordance with paragraphs 2nd or 3rd of Art. 27, unless otherwise provided in the fund's regulations.

Art. 31. CVM, due to a substantiated request and at its exclusive discretion, may extend the deadlines provided in this chapter.

Art. 32. The announcement of the end of distribution of FUNCINE quotas must contain:

I – name of the fund;

II – name and address of the fund's administering institution;

III – name and address of the institutions responsible for distribution;

IV – quantity and total value of distributed quotas and total asset value reached;

V – date of the end of distribution;

VI – the statements, in a prominent manner: "This announcement is of an exclusively informative nature, not constituting an offer to sell quotas."

Art. 33. CVM may, at its discretion and based on the characteristics of the distribution, dispense with the publication of distribution announcements.

CHAPTER VI
PROSPECTUS

Art. 34. The prospectus must contain all relevant information for the investor regarding FUNCINE's investment policy and the risks involved, as well as regarding the main rights and responsibilities of quota holders and administrators.

§1. The prospectus must be available, during the distribution period, in sufficient number of copies, at the distribution locations.

§2. The delivery of the updated prospectus is mandatory when the quota holder enters FUNCINE, with the administering institution keeping proof of this delivery in its custody.

§3. The prospectus must be altered and sent to CVM when there are modifications to FUNCINE's regulations and/or distribution conditions.

Art. 35. The prospectus must contain information on the following topics, as well as any other information considered relevant:

I - management goals and objectives of FUNCINE, as well as its target audience;

INSTRUCTION CVM No. 398, OF OCTOBER 28, 2003

II - investment policy and asset allocation ranges by type of destination among those listed in item I of art. 2 of this Instruction, discriminating the process of analysis and selection of the same;

III - hiring of third parties to provide services to FUNCINE;

IV - specification of the fees and other expenses of FUNCINE;

V - policy of relations with market institutions, comprising:

a) policy for selecting financial intermediaries;

b) policy for acting in public distributions of securities.

VI - presentation of the managing institution and its respective experience;

VII - conditions for purchasing shares of FUNCINE, comprising minimum and maximum investment limits;

VIII - conditions for amortization of shares;

IX - profit distribution policy, comprising payment deadlines and conditions;

X - risks involved, identifying:

a) general risks;

b) risk management policy;

c) risks arising from portfolio concentration, informing, in addition, the limits for investment in securities issued by the National Treasury or by BACEN and in shares issued by the same issuer;

d) risks arising from the selection of destination types and investment modalities of the portfolio;

e) limit for investment in PROJECT(S) APPROVED BY ANCINE owned by a shareholder of FUNCINE itself;

f) risk arising from the failure to distribute the minimum number of shares and the need for pro-rata allocation, in accordance with § 1 of art. 27, for investors who have already obtained the tax benefit, in which case these investors must seek the SRF for the appropriate adjustment.

XI - duration of FUNCINE.

CHAPTER VII
OF THE BYLAWS OF FUNCINE

Art. 36. The bylaws of FUNCINE must, mandatorily, provide for:

I - qualification of the institution managing FUNCINE;

II - duration of the fund and conditions for its eventual alteration;

III - investment and reinvestment policy;

IV - conditions for the amortization of shares;

V - the possibility of new and future issuances of shares, in which case it must regulate the respective hypotheses, the criteria for fixing the price, and the right of preference of shareholders to subscribe to new issuances;

VI - distribution of results;

VII - target audience;

VIII - minimum number of shares to be subscribed, in accordance with art. 27.

Art. 37. The alteration of the bylaws of FUNCINE depends on the approval of the general meeting of shareholders, convened specifically for this purpose, by correspondence, from which the alterations to be proposed must expressly appear.

Art. 38. The approved modifications shall enter into force from the date of filing the following documents with the CVM:

I - declaration by the managing institution, attesting that correspondence was sent to all shareholders, specifying specifically the matter to be deliberated;

II - list of shareholders present at the general meeting;

III - copy of the minutes of the general meeting; and

IV - copy of the bylaws, consolidating the alterations made, duly registered at the deeds and documents registry office.

IV - copy of the bylaws, consolidating the alterations made.

• Item IV with wording given by CVM Instruction No. 615, of October 2, 2019.

Art. 39. The bylaws of FUNCINE may be altered, independently of the general meeting or consultation with shareholders, whenever such alteration results exclusively from the need to meet the express requirement of the CVM, to comply with legal or regulatory norms, or due to the update of the address of the managing institution of FUNCINE.

Sole Paragraph. These alterations must be communicated to shareholders, by correspondence, within a period of up to 30 (thirty) days.

Art. 40. The managing institution has a period of up to 30 (thirty) days to carry out the alterations determined by the CVM, counted from the receipt of the correspondence that formulates said requirements.

CHAPTER VIII
OF THE GENERAL MEETING

Section I
Of Competence

Art. 41. It is exclusively the competence of the general meeting of shareholders:

I - to deliberate on:

a) the financial statements presented by the managing institution;

b) the replacement of the managing institution;

c) the merger, incorporation, spin-off, or liquidation of FUNCINE;

d) the increase in the management fee;

e) the issuance of new shares; and

f) the alteration of the investment policy of FUNCINE.

II - the alteration of the bylaws of FUNCINE.

Section II
Of Convocation

Art. 42. The convocation of the general meeting must be made by correspondence sent to shareholders.

§1. The convocation must mandatorily include the day, time, and place where the general meeting will be held, and, in a summary manner, the matters to be addressed.

§2. The convocation of the general meeting must be made at least 10 (ten) days in advance of the date of its realization.

Art. 43. The general meeting must be convened by the managing institution of FUNCINE annually, until June 30, to deliberate on the matters provided for in item I, "a", of art. 41 of this Instruction.

Art. 44. In addition to the convocation provided for in the previous article, the general meeting may be convened at any time by the managing institution or by a shareholder or group of shareholders who hold, at least, 5% (five percent) of the total issued shares.

Sole Paragraph. When the holding of the general meeting is motivated by the initiative of shareholder(s), the managing institution must carry out the convocation within 30 (thirty) days, at the expense of the requester(s), unless the general meeting so convened deliberates otherwise.

Section III
Of the Deliberation Process

Art. 45. The deliberations of the general meeting, which must be installed with the presence of at least one shareholder, or legal representative, are taken by the criterion of the majority of shares held by shareholders present, with one vote assigned to each share.

Sole Paragraph. The matters provided for in letters "c", "d", "e", and "f" of item I and in item II of art. 41 of this Instruction may only be approved by the vote of shareholders who hold the absolute majority of the issued shares.

Art. 46. Only shareholders of FUNCINE, their legal representatives, or attorneys legally constituted for less than one year may vote at the general meeting.

Art. 47. The managing institution and its employees may not vote at the general meetings of FUNCINE, except when it concerns FUNCINE intended exclusively for them.

Art. 48. The summary of the decisions of the general meeting must be sent to each shareholder within a period of 30 (thirty) days, counted from its realization.

CHAPTER IX
OF ADMINISTRATION

Section I
Of General Provisions

Art. 49. FUNCINE shall be administered by a financial institution authorized by BACEN, which has registration with the CVM for the professional exercise of portfolio management, in accordance with art. 23 of Law No. 6.385, of December 7, 1976.

Sole Paragraph. The managing institution referred to above must indicate the director or managing partner responsible for the administration of FUNCINE before the CVM.

Art. 50. The managing institution of FUNCINE, observing legal limitations and those provided for in this Instruction, has powers to practice all acts necessary for the administration of the FUNCINE portfolio, as well as to exercise all rights inherent to the assets that integrate it.

Sole Paragraph. The managing institution may hire a third party, equally qualified for the professional exercise of portfolio management, to manage the FUNCINE portfolio, observing the provisions of § 1 of art. 51 of this Instruction.

Art. 51. When the administration of FUNCINE is not exercised by an institution integrated into the securities distribution system, or that is not duly authorized to perform the services set forth in items I to III of this article, the managing institution must hire a legally qualified institution for:

I - the execution of treasury services, such as:

a) opening and moving bank accounts, in the name of FUNCINE;

b) receipt of resources, upon issuance or full payment of shares, and payment, upon redemption of shares or liquidation of FUNCINE;

c) receipt of dividends and any other income; and

d) financial settlement of all operations of FUNCINE.

II - the bookkeeping of the issuance and redemption of shares; and

III - the distribution of shares of FUNCINE.

§1. The institutions and persons hired to execute services are jointly liable with the managing institution of FUNCINE, in the exercise of their duties, for damages caused to shareholders.

§2. Service provision contracts for FUNCINE signed by the managing institution with third parties must be kept available to the CVM.

§3. The expenses for hiring the services described in the caput of this article must be funded by the managing institution, and cannot be considered as expenses of the fund.

Art. 52. Orders to buy and sell securities, shares, and other assets must always be issued with precise identification of FUNCINE.

Art. 53. It is prohibited for the managing institution to practice the following acts in the name of FUNCINE:

I - receive deposits in a checking account other than that owned by FUNCINE;

II - provide guarantee, aval, acceptance, or co-obligate itself in any other form;

III - promise predetermined returns to shareholders;

IV - carry out operations with shares outside the stock exchange or organized over-the-counter market by an entity authorized by the CVM, except for the hypotheses of investment in projects approved by ANCINE, subscription in public distributions, and exercise of right of preference;

V - sell shares on installment;

VI - grant or contract loans, advance future income to shareholders, or open credits in any modality;

VII - invest resources abroad;

VIII - invest resources in the acquisition of shares of FUNCINE itself;

IX - carry out operations of FUNCINE when a situation of conflict of interest between FUNCINE and the managing institution is characterized;

X – encumber, in any form, the assets of the Fund;

XI - invest in futures or options markets;

XII – acquire real estate.

Section II
Of the Obligations of the Managing Institution of FUNCINE

Art. 54. Included among the obligations of the managing institution of FUNCINE are:

I - to ensure that, at its expense, the following are kept updated and in perfect order, for a minimum period of five years after the liquidation of FUNCINE:

a) the register of shareholders;

b) the minutes book of general meetings;

c) the attendance book of shareholders;

d) the opinions of the independent auditor;

e) the accounting records relating to the operations and assets of FUNCINE; and

f) the documentation relating to the operations of FUNCINE, for a period of 5 (five) years.

II - in the event of the initiation of an administrative proceeding by the CVM, keep the documentation referred to in the previous item until its conclusion;

III – exercise or ensure that all rights arising from the assets and activities of FUNCINE are exercised;

IV - employ, in the defense of the shareholder's rights, the diligence required by the circumstances, practicing all acts necessary to ensure them, taking even the appropriate judicial measures;

V - exercise its activities always seeking the best conditions for FUNCINE;

VI - fund the expenses with advertising of FUNCINE, including the elaboration of the prospectus;

VII - transfer to FUNCINE any benefit or advantage that it may achieve as a result of its condition as managing institution of FUNCINE;

VIII - keep the shares referred to in letter "c" of item I of art. 2 of this Instruction, which are part of the FUNCINE portfolio, custodied in an entity authorized by the CVM to exercise the activity;

IX – require, through a contractual clause, that the COMPANY HOLDING A PROJECT APPROVED BY ANCINE send all contracts signed with third parties, which imply the assignment of property rights or participation in project revenues;

X - pay the penalty fine, in accordance with current legislation, per day of delay in complying with the deadlines provided for in this Instruction;

XI - prepare and disclose the information provided for in Chapters X and XI of this Instruction;

XII - request the admission to trading of FUNCINE shares on a stock exchange or in an organized over-the-counter market;

XIII - maintain a shareholder service, responsible for clarifying doubts and receiving complaints;

XIV - observe the provisions contained in the bylaws of FUNCINE; and

XV - comply with the deliberations of the general meeting.

Section III
Of the Replacement of the Managing Institution

Art. 55. The managing institution of FUNCINE must be replaced in the following cases:

I - deregistration for the exercise of portfolio management activity, by decision of the CVM;

II - resignation;

III - dismissal, by deliberation of the general meeting; or

IV – extrajudicial liquidation of the managing institution.

Art. 56. The CVM may, at any time, deregister the managing institution that fails to comply with current legal or regulatory norms.

§1. The deregistration process will begin with notification by the CVM to the managing institution, indicating the facts that support it and the deadline for presenting a defense, not less than 15 (fifteen) days, counted from the date of receipt of the respective notification.

§2. The decision of the CVM that deregisters the managing institution must be reasoned, indicating with precision the facts considered irregular, with the right to appeal to the Council of Resources of the National Financial System, without suspensive effect, within a period of 15 (fifteen) days, counted from the date of receipt of the communication issued by the CVM.

Art. 57. In the event of deregistration of the managing institution, the CVM must appoint a temporary managing institution, which must immediately convene a general meeting to elect its successor or deliberate on the liquidation of FUNCINE.

Art. 58. In the event of resignation, the managing institution must communicate its decision, with 180 (one hundred and eighty) days' prior notice, by letter, or any other means of written communication, addressed to each shareholder, being obliged, in the same act, to communicate its decision to the CVM.

Sole Paragraph. The managing institution to be replaced, in the case provided for in the caput, remains responsible for the administration of FUNCINE until the General Assembly decides on its replacement or the liquidation of FUNCINE.

Art. 59. In the event of dismissal by the general meeting, the managing institution must immediately communicate such fact to the CVM.

Art. 60. In the events of resignation, deregistration by the CVM, or dismissal by the general meeting, the managing institution will be obliged to immediately convene the general meeting, to elect its successor or deliberate on the liquidation of FUNCINE.

Sole Paragraph. It is optional for the representative of shareholders, or shareholders who hold at least 5% (five percent) of the issued shares, in any case, or to the CVM, in cases of deregistration, to convene the general meeting, if the managing institution does not do so within a period of 15 (fifteen) days, counted from the event.

Art. 61. In the event of extrajudicial liquidation of the managing institution, it will be the responsibility of the liquidator appointed by BACEN to convene the general meeting, within a period of 5 (five) business days, counted from the date of publication, in the Official Gazette of the Union, of the act that decrees the extrajudicial liquidation, in order to deliberate on the election of a new managing institution or on the liquidation of FUNCINE.

§1. If the general meeting does not elect a new managing institution within a period of 30 (thirty) business days, counted from the date of publication, in the Official Gazette of the Union, of the act that decrees the extrajudicial liquidation of the managing institution, BACEN will appoint a new institution to process the liquidation of FUNCINE, with the liquidated institution obliged to bear the costs of remuneration of the administrator thus appointed.

§2. It will be the responsibility of the liquidator to practice all acts necessary for the regular management of the assets of FUNCINE.

CHAPTER X
OF THE DISCLOSURE OF INFORMATION AND RESULTS

Section I
Of Information

Art. 62. The managing institution of FUNCINE is obliged to disclose, widely and immediately, any act or relevant fact, in order to guarantee all shareholders access to information that may, directly or indirectly, influence their decisions regarding staying in FUNCINE or, in the case of other investors, regarding the acquisition of shares.

Art. 63. The managing institution of FUNCINE is obliged to send semi-annually to shareholders, within a period of up to 60 (sixty) days, counted from the end of the period to which they refer, an account statement containing:

I - name of FUNCINE and its CNPJ registration number;

II - name, address, and CNPJ registration number of the managing institution;

III - name of the shareholder;

IV - balance and value of shares at the beginning and end of the period and the movement occurred during the same;

V - place and date of issuance;

VI - financial statements of the fund.

Sole Paragraph. The managing institution must, additionally, send to shareholders within the period and periodicity specified in the caput, the semi-annual report.

Art. 64. If the shareholder has not communicated to the managing institution of FUNCINE the update of their address, the sending of information provided for in this Instruction is not mandatory if the last correspondence sent was returned due to incorrect declared address.

Art. 65. The managing institution must send to the CVM, semi-annually, within a period of up to 60 (sixty) days, counted from the end of the semester to which they refer, without prejudice to others that may be required, the following information:

a) semi-annual report;

b) opinion of the independent auditor, relating to the financial statements; and

c) list of judicial or extrajudicial demands, whether in defense of the rights of shareholders, or by these against the administration of FUNCINE, indicating the date of their start, the stage in which they are, and the final solution, if any.

Art. 65. The fund 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, the following information:

I – quarterly, within a period of 15 (fifteen) days after the end of the civil quarter to which they refer, the following information:

a) net asset value of the fund; and

b) number of issued shares.

II – semi-annually, within a period of up to 60 (sixty) days, counted from the end of the semester to which they refer:

a) semi-annual report;

b) opinion of the independent auditor, relating to the financial statements; and

c) list of judicial or extrajudicial demands, whether in defense of the rights of shareholders, or by these against the administration of FUNCINE, indicating the date of their start, the stage in which they are, and the final solution, if any.

• Article with wording given by CVM Instruction No. 435, of July 5, 2006.

Section II
Of the Semi-Annual Report

Art. 66. In addition to others that the managing institution deems relevant, the semi-annual report must address the following aspects:

I - basic information, comprising:

a) return earned;

b) financial statements, accompanied by the opinion of the independent auditor.

II - analysis of the FUNCINE portfolio in view of the adopted strategy and the objectives of the investment policy;

III - presentation of performance, comprising the evolution of the share value on the last day of each semester of the last 24 (twenty-four) months;

IV - management fee in current currency and as a percentage of the net assets of FUNCINE;

V – expenses incurred in the name of FUNCINE, informing:

a) total value debited, discriminating the main types of expenses; and

b) percentage of the debited value as expenses in relation to the average net assets of FUNCINE.

VI - the change of the managing institution, the portfolio manager, or its responsible directors;

VII - description of the business carried out in the semester, specifying, in relation to each, the objectives, the amounts of investments made, the income earned, the source of invested resources, as well as the return calculated in the period;

VIII - investment program for the following semester;

IX - information, based on premises and grounds duly explained, on:

a) - the economic situation of the segment of the film industry in which the operations of FUNCINE related to the ended semester are concentrated;

b) - the administration's prospects for the following semester;

X - list of obligations contracted in the period.

Section III
Of Disclosure

Art. 67. The information provided or any disclosure material of FUNCINE cannot be in disagreement with the prospectus, the bylaws of FUNCINE, or with the semi-annual report filed with the CVM.

Sole Paragraph. If the disclosure material presents inaccuracies or improprieties that may induce the investor to evaluation errors, the CVM may require that corrections and clarifications be disseminated, with equal prominence, through the medium used to disclose the text

CVM INSTRUCTION NO. 398, OF OCTOBER 28, 2003

original advertising material, it must explicitly state that the information is being republished by order of the CVM.

Art. 68. No dissemination material may assure or suggest guarantee of future results or exemption from risk for the investor.

Art. 69. In all dissemination material regarding the results of the FUNCE, information regarding the net equity of the FUNCE at the deadline dates, initial and final, of the periods used to present profitability must be included.

Art. 70. All profitability dissemination must inform, when applicable, the incidence of performance fees that reduce the value of the share or the number of shares upon amortization, clarifying its value and method of calculation.

Art. 71. Whenever the dissemination material presents information regarding profitability occurring in previous periods, a warning, highlighted, must be included, stating that:

I - the profitability obtained in the past does not guarantee future results; and

II - investments in FUNCEs are not guaranteed by the administering institution or by any insurance mechanism.

Art. 71-A. The administrator must send simultaneously to the CVM copies of any communications regarding the fund disseminated to shareholders or third parties.

• Article included by CVM Instruction No. 435, of July 5, 2006.

CHAPTER XI

OF THE ACCOUNTING STATEMENTS AND AUDIT REPORTS

Section I

Of the Accounting Statements

Art. 72. The FUNCE must have its own accounting records, and the accounts and accounting statements of the FUNCE must be segregated from those of the administering institution.

Art. 73. The accounting statements of the FUNCE regarding periods ending on March 31 and September 30 are subject to the accounting standards issued by the CVM.

Art. 74. The accounting statements must be made available to any interested party who requests them from the administering institution, within 60 (sixty) days after the closing of the period to which they refer.

Section II

Of the Audit of the Accounting Statements

CVM INSTRUCTION NO. 398, OF OCTOBER 28, 2003

Art. 75. The accounting statements of the FUNCE must be audited, semi-annually, by an independent auditor registered with the CVM, observing the standards that regulate the exercise of the activity.

Art. 76. In cases of liquidation of the FUNCE, the independent auditor must issue an opinion on the statement of the movement of net equity, covering the period between the date of the last audited accounting statements and the date of the actual liquidation of the FUNCE, expressing an opinion on the movements occurring during the period.

Sole paragraph. In its opinion, the auditor must also attest whether the amortization values were or were not carried out under equitable conditions and in accordance with the relevant regulations, as well as the non-existence of unrecorded debts, credits, assets, or liabilities.

Art. 77. The auditor must express an opinion on the parameter used for the conversion of the values of the FUNCE shares in cases of incorporation, merger, or spin-off, as well as on the value of the FUNCE shares resulting from such operations.

CHAPTER XII

OF THE PORTFOLIO

Art. 78. The FUNCE will have a period of 360 (three hundred and sixty days), counted from the date of the closing of the first distribution of shares, to fit its portfolio within the composition standards contained in its bylaws and legislation, as specified in Art. 9 of this Instruction, and must, until the start of its liquidation process, maintain the portfolio composition within these parameters.

§1st The CVM may, at its discretion, extend the period referred to in the caput of this article.

§2nd Whenever it is in the interest of the FUNCE, the administering institution must alienate, exchange, substitute, or otherwise transfer assets of the FUNCE, respecting the rules of its portfolio composition, making it clear that, in the event of temporary mobilization of assets necessary to meet such changes in position and portfolio composition, the available resources must be deposited in a commercial bank, or multiple with commercial portfolio, in the name of the FUNCE, being mandatory their application in securities issued by the National Treasury and/or the Central Bank until the determination of their final destination.

Art. 79. Only securities issued by the National Treasury and/or the Central Bank registered in trading, clearing, and settlement systems administered by entities authorized by the CVM or the Central Bank may integrate the portfolio of the FUNCE.

Art. 80. Non-compliance with the portfolio composition and diversification limits defined in this Instruction, after the period of 360 (three hundred and sixty) days, counted from the date of the closing of the first distribution of shares, or the extension authorized by the CVM, must be immediately justified before the CVM, which, without prejudice to applicable penalties, may determine that the administering institution convene a general shareholders' meeting to decide on one of the following alternatives:

I - transfer of the administration of the FUNCE;

II - incorporation into another FUNCE; or

III - liquidation of the FUNCE.

CVM INSTRUCTION NO. 398, OF OCTOBER 28, 2003

CHAPTER XIII

OF THE FUNCE CHARGES

Art. 81. The charges of the FUNCE, in addition to the remuneration of the administering institution, are the following expenses:

I - taxes, federal, state, or municipal fees or contributions, that fall or may fall on the assets, rights, and obligations of the FUNCE;

II - expenses with the registration of documents in notary offices, printing, dispatch, and publication of reports, forms, and publications, provided for in this Instruction or in relevant regulation, with the exception of the prospectus;

III - expenses with correspondence of interest to the FUNCE, including communications to shareholders;

IV - fees and expenses of the independent auditor;

V - emoluments and commissions paid by operations of the FUNCE;

VI - attorney fees, court costs, and related procedural expenses, incurred due to the defense of the interests of the FUNCE, in court or out of court, including the value of the judgment, attributed to the FUNCE, if applicable;

VII - portion of losses not covered by insurance policies and not resulting directly from fault or intent of the administering institution in the exercise of its functions;

VIII - the annual contribution due to the stock exchanges or to the over-the-counter market entity in which the FUNCE has its shares admitted to trading; and

IX - expenses with custody and settlement of operations with securities and shares.

Art. 82. Any expenses not provided for as charges of the FUNCE are borne by the administering institution.

CHAPTER XIV

OF INCORPORATION, MERGER, AND SPIN-OFF

Art. 83. Only operations of incorporation and merger between FUNCEs are permitted, and the transformation of their nature is prohibited.

Art. 84. The accounting statements of the FUNCE subject to spin-off, incorporation, or merger, drawn up on the date of the operation, must be audited by an independent auditor registered with the CVM, who must include in its opinion a mention regarding the adequacy of the criteria used for the equalization of shares among the FUNCEs.

Art. 85. In cases of spin-off, merger, and incorporation, the following must be sent to the CVM, within a period of up to 10 (ten) days, counted from the date of the respective general meetings:

I – declaration of the administering institution attesting that correspondence was sent to all shareholders, specifying the matter to be deliberated;

II - minutes of the general meeting;

III - balance sheets and calculation memorandum of share conversion;

IV - new bylaws of the FUNCE;

V - prospectus, duly updated; and

VI - any dissemination material to the market and to shareholders.

Sole paragraph. The fund's administering institution must present to the CVM, within 60 (sixty) days, counted from the date of delivery of the documents referred to in items I to VI of this article, the audit opinion regarding the statement of spin-off, incorporation, or merger.

CHAPTER XV

OF LIQUIDATION AND CLOSURE OF THE FUNCE

Art. 86. In the event of liquidation of the FUNCE, by decision of the general meeting, the administering institution of the FUNCE must promote the division of its assets among the shareholders, in proportion to their shares, within a maximum period of 180 (one hundred and eighty) days, counted from the date of the holding of the meeting.

§1st During the liquidation period of the FUNCE, amounts related to the alienation of assets comprising its assets must be applied in securities issued by the National Treasury or the Central Bank.

§2nd If difficulty is encountered in alienating, at a fair price, low-liquidity assets, the administering institution must convene the general meeting to deliberate on the destination of such assets, however, proceeding in accordance with the provisions of the caput, within the period provided therein, regarding the assets already alienated.

§3rd After the complete alienation of the FUNCE's assets, the administering institution must make available the value corresponding to each shareholder on the same date, within 5 (five) days after the closing of the period provided in the caput.

§4th In the event that, in the process of liquidating the FUNCE's assets, it is not possible for the administering institution to convert certain assets into national currency, such remaining and unliquidated assets will become held in condominium by the shareholders, in proportion to their respective quotas, applying the civil legislation that regulates the matter.

Art. 87. After the amortization of all shares of the fund and the division of the FUNCE's assets among the shareholders, the administering institution must promote its closure, sending to the CVM, within 10 (ten) days, counted from the date on which the resources from the liquidation were made available to the shareholders, the following documentation:

I - minutes of the general meeting that deliberated the liquidation of the FUNCE;

II - declaration of the administering institution, attesting that correspondence was sent to all shareholders, specifying the matter to be deliberated; and

CVM INSTRUCTION NO. 398, OF OCTOBER 28, 2003

III - proof of the entry of the request for deregistration in the CNPJ.

Sole Paragraph. The administering institution must present to the CVM, within 90 (ninety) days, counted from the date of delivery of the documents referred to in items I, II, and III of this article, the audit opinion regarding the statement of liquidation of the FUNCE referred to in Art. 76.

CHAPTER XVI

OF PENALTIES

Art. 88. It is considered a serious offense, for the purposes of Art. 11, § 3rd, of Law No. 6.385/76, the violation of the norms contained in Arts. 6th; 8th; 24; 26; 28; sole paragraph of Art. 49; Art. 51; items III, IV, VII, XIV, and XV of Art. 54; Arts. 62; 72; 73; and 75.

Art. 89. Non-compliance with the provisions of the sole paragraph of Art. 23; § 4th of Art. 27; §§ 1st and 2nd of Art. 28; §§ 1st to 3rd of Art. 34; sole paragraph of Art. 39; § 3rd of Art. 51; 52; 53; items I, VI, XI, and XIII of Art. 54; 62; 63; 65 to 71; 74; 76; 79, and 82 constitutes a hypothesis of objective nature offense, subject to a summary administrative process procedure.

• Art. 40 revoked by CVM Instruction No. 545, of January 29, 2014.

Art. 90. Without prejudice to the provisions of Art. 11 of Law No. 6.385/76, the administering institution will pay a daily fine, in the amount of R$ 200.00 (two hundred reais), incident from the first business day following the end of the period, due to non-compliance with the deadlines provided for in this Instruction.

Art. 90. The administering institution is subject to the daily fine provided for in the specific norm dealing with penalty fines due to non-compliance with the deadlines provided for in this Instruction, without prejudice to the provisions of Art. 11 of Law No. 6.385, of 1976.

• Art. 90 with wording given by CVM Instruction No. 609, of June 25, 2019.

Art. 91. The CVM may hold other directors, employees, and agents of the administering institution or the fund manager responsible, if their responsibility for the non-compliance with the provisions of this Instruction is established.

CHAPTER XVII

OF FINAL AND TRANSITORY PROVISIONS

Art. 92. In the event of a decree of intervention, temporary special administration, or extrajudicial liquidation of the fund's administering institution, the liquidator, the temporary administering institution, or the interventor are obliged to comply with the provisions of this Instruction.

Sole paragraph. It is permitted to the liquidator, the temporary administering institution, or the interventor, as applicable, to request that the CVM appoint a temporary administering institution or convene a general shareholders' meeting to deliberate on the transfer of the fund's administration to another institution accredited by the CVM or on its liquidation.

CVM INSTRUCTION NO. 398, OF OCTOBER 28, 2003

Art. 93. The CVM may determine that the information provided for in this Instruction, regarding the distribution of shares, as well as other information required by the CVM, periodic or occasional, must be presented through electronic means or the CVM's Internet page, according to the database structure and programs provided by the CVM.

§1st The CVM may create, alter, include, or suppress the programs referred to in the caput.

§2nd For the purposes of this Instruction, electronic mail is considered a valid form of correspondence between the administering institution and the shareholders.

Art. 94. This Instruction enters into force 15 (fifteen) days after the date of its publication in the Official Gazette of the Union.

Signed originally by

LUIZ LEONARDO CANTIDIANO

President

CVM INSTRUCTION NO. 398, OF OCTOBER 28, 2003

ANNEX I

DECLARATION

We declare, under penalty of the crime of false ideology, for the purpose of obtaining authorization for the operation of (include the name of the fund), that the bylaws of the aforementioned fund are in conformity with the current legislation.

---

Administering Institution

CVM INSTRUCTION NO. 398, OF OCTOBER 28, 2003

ANNEX II

Registration Form for
Securities Portfolio Administration Service Provider

1. Corporate Name:______

2. Trade Name:______

3. CNPJ:______

4. Headquarters Address: ______

5. City/State/ZIP Code ______ ______ ______

6. (DDD) TELEPHONE and FAX:_______ ______ ______

7. Mailing Address: ______

8. City/State/ZIP Code: ______ ______ ______

9. Electronic Address (e-mail): ______

10. Director or Managing Partner responsible for Securities Portfolio Administration Services:

Name:CPF: