FULL TEXT OF CVM INSTRUCTION NO. 461, OF OCTOBER 23, 2007, WITH THE AMENDMENTS INTRODUCED BY CVM INSTRUCTIONS NO. 468/08, 499/11, 508/11, 544/13, 554/14 AND 590/17.

CVM INSTRUCTION NO. 461, OF OCTOBER 23, 2007.

Regulates regulated securities markets and provides for the constitution, organization, operation and extinction of stock exchanges, commodity and futures exchanges and organized over-the-counter markets. Revokes CVM Instructions No. 42, of February 28, 1985; No. 179, of February 13, 1992, No. 184, of March 19, 1992; No. 203, of December 07, 1993; No. 263, of May 21, 1997; No. 344, of August 17, 2000; No. 362, of March 05, 2002; No. 379, of November 12, 2002; art. 6 of CVM Instruction No. 312, of August 13, 1999; arts. 1 to 14 and 17 of CVM Instruction No. 243, of March 1, 1996, CVM Instruction No. 250, of June 14, 1996; arts. 2 to 7, caput and §1 of art. 8, arts. 10, 13, 15 and 16 of CVM Instruction No. 297, of December 18, 1998; the sole paragraph of art. 1 and art. 3 of CVM Instruction No. 202, of December 06, 1993; and CVM Deliberation No. 20, of February 15, 1985.

THE PRESIDENT OF THE SECURITIES AND EXCHANGE COMMISSION - CVM makes public that the Collegiate Body, in meetings held on September 17 and 18, 2007, in view of the provisions of arts. 8, item I, and 18, item I, letter "f" of Law No. 6.385, of December 7, 1976, RESOLVED to issue the following Instruction:

SCOPE AND PURPOSE
Art. 1 This Instruction regulates the operation of regulated securities markets, as well as the constitution, organization, operation and extinction of stock exchanges, commodity and futures exchanges and organized over-the-counter markets.

Sole paragraph. This Instruction also covers, in the form of art. 92, the provision of services referred to in § 4 of art. 2 of Law No. 6.385, of December 7, 1976, and in art. 28 of Law No. 12.810, of May 15, 2013, with respect to the registration of securities, which shall be exclusive to entities administering organized over-the-counter markets.

CVM INSTRUCTION NO. 461, OF OCTOBER 23, 2007

• Sole paragraph included by CVM Instruction No. 544, of December 20, 2013.

CHAPTER I
REGULATED SECURITIES MARKETS
Section I
Scope
Art. 2 Regulated securities markets comprise organized exchange and over-the-counter markets and unorganized over-the-counter markets.

Art. 3 An organized securities market is considered the physical space or electronic system, intended for the negotiation or registration of operations with securities by a set group of people authorized to operate, who act on their own behalf or on behalf of third parties.

§1 Organized securities markets are stock exchanges, commodity and futures exchanges, and organized over-the-counter markets.

§2 Organized securities markets must be administered by entities authorized by the CVM.

Art. 4 Negotiation of securities in which an intermediary intervenes, as an intermediary, member of the distribution system referred to in items I, II and III of art. 15 of Law No. 6.385, of 1976, without the transaction being carried out or registered in an organized market that meets the definition of art. 3, is considered to be carried out in an unorganized over-the-counter market.

Sole paragraph. Negotiation of securities in which a member of the distribution system intervenes, as a party, when such negotiation results from the exercise of the activity of subscribing to securities on one's own account for resale in the market or of purchasing securities in circulation for resale on one's own account, shall also be considered as unorganized over-the-counter.

CHAPTER II
ORGANIZED SECURITIES MARKETS
Section I
Classification of Organized Securities Markets Art. 5 An organized securities market will be considered by the CVM as an exchange or an organized over-the-counter market depending, mainly, on the following:

I – existence of a system or environment for the registration of operations carried out previously;

CVM INSTRUCTION NO. 461, OF OCTOBER 23, 2007
II – rules adopted in their trading environments or systems for price formation, as described in arts. 65 and 73, in the case of an exchange, and arts. 95 and 96, in the case of an organized over-the-counter market; III – possibility of direct participation in the market, without the intervention of an intermediary; IV – possibility of deferring the disclosure of information about operations carried out; V – volume traded in their environments and systems; and VI – investor public targeted by the market.

Sole paragraph. The characteristics referred to in items I, III and IV are only admitted for organized over-the-counter markets, in the manner provided, respectively, in arts. 92, item III, 93 and 105 of this Instruction.

Art. 6 The CVM may determine the transformation of an organized over-the-counter market into an exchange, the alteration of procedures or operating rules of an organized over-the-counter market, or the alteration of special dispensations or authorizations that have been granted in accordance with this Instruction, due to the concrete characteristics of the market.

Sole paragraph. The determination referred to in the caput shall observe the procedure of art. 115 of this Instruction.

Section II
General Rules
Art. 7 The operation and extinction of organized securities markets depend on prior authorization by the CVM.

§1 Organized securities markets may be divided into trading segments, taking into account the characteristics of the transactions carried out, the securities traded, their issuers, listing requirements, the trading system used and the quantities traded.

§2 The operation and extinction of a trading segment depend on prior authorization by the CVM.

§3 All informational material or advertising relating to organized securities markets must prominently indicate its nature as an exchange or an organized over-the-counter market.

Art. 8 Non-institutional advertising material must be sent by the administrative entity to the CVM, in full version, within 5 (five) days prior to its dissemination.

§1 For the purposes of this article, non-institutional advertising is understood to be that which constitutes an offer of products or services related to organized securities markets.

CVM INSTRUCTION NO. 461, OF OCTOBER 23, 2007
§2 The material referred to in the caput shall:

a) use calm and moderate language; b) not underestimate the risk involved in operations with the product or service; and c) comply with the principles of clarity, completeness and truthfulness of information.

§3 The CVM may, at any time, request corrections, alterations or even the suspension of the dissemination of the advertising provided for in the caput of this article.

CHAPTER III
ADMINISTRATIVE ENTITIES OF ORGANIZED SECURITIES MARKETS
Section I
General Rules
Art. 9 Organized securities markets must be structured, maintained and supervised by administrative entities authorized by the CVM, constituted as an association or as a corporation, and which meet the requirements of this Instruction.

§1 The requirements established by this Instruction for the structure, organization and operation of the administrative entity of organized securities markets may be fulfilled, in whole or in part, through legal entities controlled by it, or by its holding company, or even through the hiring of third parties, provided that, at the discretion of the CVM, the purposes sought with the imposition of such requirements are achieved.

§2 The rules of this Instruction regarding the duties of conduct and responsibilities of partners, administrators, employees and agents of the administrative entities apply to the partners, administrators, employees and agents of the markets administered by them, when these are organized autonomously, either as a controlled society whose capital belongs entirely to the administrative entity, or as a society controlled by it.

§3 For the purpose of applying the provisions of §§ 1 and 2, the administrative entity shall submit to the CVM, when requesting authorization for the operation of an organized market, its legal, corporate, capital, asset and organizational structure.

§4 The CVM Collegiate Body may dispense with the observance of requirements imposed by this Instruction for the structure, organization and operation of the administrative entity, provided that such requirements are not compatible with the structure or nature of the market to be administered by the entity, or the purposes sought with the imposition of such requirements are achieved by alternative mechanisms adopted by the entity.

CVM INSTRUCTION NO. 461, OF OCTOBER 23, 2007
Art. 10 For the purposes of this Instruction, a partner of the administrative entity of organized securities markets is considered to be the associate or shareholder, depending on the legal form of organization.

Sole paragraph. The quality of partner may constitute a condition for authorization to operate, as provided in the bylaws of the administrative entity.

Art. 11 For the purposes of this Instruction, an authorized person to operate is considered to be the natural or legal person duly authorized by the administrative entity to act in the trading or registration environments or systems of the organized market.

Sole paragraph The activity referred to in the caput may occur, in the hypotheses and conditions defined by the administrative entity of the organized market:

I – by intermediaries, in their own name and on behalf of third parties; II – by special operators, in their own name or on behalf of an intermediary; III – in their own name, by other legal entities, or investment funds, directly and without the need for the intervention of an intermediary.

Art. 12 The same entity may establish and administer more than one organized securities market provided that:

I – it meets the requirements required for each category of organized market; II – it obtains specific authorizations from the CVM; III – it maintains segregated controls of the operational risks of each market; and IV – it provides the self-regulation department with appropriate financial resources and specialized human resources for the supervision of each of the markets, adopting the segregation mechanisms that are necessary for correct supervision.

Art. 13 In addition to the activities necessary for their operation as administrators of organized securities markets, entities may:

I – manage compensation, settlement and custody systems for securities, provided they have obtained specific authorizations from the CVM or the Central Bank of Brazil; II – provide technical, market, administrative and managerial support to persons authorized to operate, related to their corporate object; III – exercise, directly or indirectly, educational, promotional and editorial activities related to their corporate object and to the markets they administer;

CVM INSTRUCTION NO. 461, OF OCTOBER 23, 2007
IV – provide market development services; and
V – exercise other activities with prior authorization from the CVM.

§ 1 Except for participations resulting from their financial investment policy, the administrative entity of the organized market and its controlled entities may only participate in the capital of third parties that develop activities connected or similar to theirs.

§2 The participation of the administrative entity of an organized market in the capital of persons authorized to operate in the markets under its responsibility is prohibited.

Section II
Duties of Administrative Entities
Art. 14 The administrative entity of an organized market must maintain a balance between its own interests and the public interest it must attend to, as responsible for the preservation and self-regulation of the markets it administers.

Art. 15 It is incumbent upon the administrative entity to approve rules of organization and operation of the markets it administers, covering, at a minimum, the following:

I – conditions for admission and continued participation as a person authorized to operate in the markets it administers, including in the capacity of partner, when required, observing the provisions of art. 51, §2; II – procedure for admission, suspension and exclusion of persons authorized to operate in the markets it administers, including in the capacity of partner, when required; III – definition of the classes, rights and responsibilities of persons authorized to operate in the markets it administers; IV – definition of the operations permitted in the markets it administers, as well as the supervision structures of the transactions carried out; V – conditions for admission to trading and maintenance of authorization to trade securities in the markets it administers, as well as the hypotheses of suspension and cancellation of the authorization to trade; and VI – creation and operation of a self-regulation department, in the form of Section II of Chapter IV.

Sole paragraph. The CVM may refuse to approve the rules or require alterations, whenever it considers them insufficient for the adequate operation of the securities market, or contrary to a legal or regulatory provision, observing, with regard to the requirement of alterations, the procedure described in Chapter VIII.

Art. 16 The administrative entity of an organized securities market must:

I – keep records of operations carried out in the trading environments it administers for a period of 5 (five) years, or until the closure of investigations, when the CVM has communicated their existence to the administrative entity; II – except in cases where direct settlement between persons authorized to operate is expressly provided for in regulations, carry out the physical and financial settlement of operations carried out in the trading environments it administers, directly or by hiring for this purpose an entity for compensation and settlement authorized by the CVM and the Central Bank of Brazil; III – promote cooperation and coordination between entities responsible for supervision and inspection, and for compensation and settlement, as well as for processing information related to transactions carried out, whenever these services are not provided internally.

Sole paragraph. The provision of compensation and settlement services by the administrative entity itself or by an entity hired by it depends on specific authorizations from the CVM and the Central Bank of Brazil.

Art. 17 It is incumbent upon the administrative entity of organized securities markets to approve conduct rules necessary for their proper operation and the maintenance of high ethical standards of trading in the markets it administers, detailing the obligations of its administrators, employees, agents and controlling partners, as well as of persons authorized to operate, their administrators, employees and agents.

§1 The administrative entity will establish sanctions in case of non-compliance with the rules referred to in the caput, always respecting the right of defense.

§2 The rules referred to in the caput must regulate, at a minimum, the form of trading of securities admitted to trading in the organized securities markets administered by the entity by its administrators, employees and agents, and by the administrators, employees and agents of persons authorized to operate, in a manner to ensure the control of operations of such agents by the administrative entity and by the person authorized to operate, respectively, as well as to prevent improper trading by such agents.

Art. 18 Observing the provisions of Complementary Law No. 105, of January 10, 2001, administrative entities of organized securities markets must establish among themselves mechanisms and rules:

I – of exchange of information on facts that may affect the regularity and transparency of operations carried out in their markets, whenever the securities traded therein are admitted to trading in more than one organized market, or have as underlying asset securities and other assets admitted to trading in more than one organized market; and

CVM INSTRUCTION NO. 461, OF OCTOBER 23, 2007
II – that enable the compensation and settlement of transactions carried out outside their trading environments and systems.

Section III
Organization of Administrative Entities
Art. 19 The administrative entity of an organized market, regardless of its legal form of organization, must necessarily have the following bodies:

I – Board of Directors, with an Audit Committee; II – General Director; III – Self-Regulation Council; IV – Self-Regulation Department; and V – Director of the Self-Regulation Department.

§1 The bodies referred to in the caput have the duties and responsibilities established by the bylaws, observing the provisions of this Instruction.

§2 Self-regulation activities are the exclusive competence of the bodies mentioned in items III to V of the caput, prohibiting the attribution, outside the hypotheses provided for in this Instruction, of supervision and inspection functions to the Board of Directors and the General Director.

§3 The prohibition established in §2 does not prevent the participation of administrators of the administrative entity in the Self-Regulation Council, observing the provisions of art. 47.

§4 The provisions of §2 do not exempt the Board of Directors from its competence described in art. 24, VIII, nor the General Director from its competencies described in art. 28, items II to VII and in art. 64.

Section IV
Bylaws
Art. 20 The bylaws must establish rules regarding the administrative structure of the administrative entity that ensure the adequate operation of the market it administers and the fulfillment of its self-regulation functions, also providing for:

I – election, inauguration, substitution and dismissal of members of the Board of Directors and its Audit Committee, the Self-Regulation Council, the General Director and the Director of the Self-Regulation Department;

CVM INSTRUCTION NO. 461, OF OCTOBER 23, 2007
II – minimum requirements for appointment to the Board of Directors and its Audit Committee, the Self-Regulation Council and the positions of General Director and Director of the Self-Regulation Department; III – attributions of the Board of Directors, its President and its Audit Committee, the General Director, the Self-Regulation Council, the Self-Regulation Department and its Director, observing the provisions of this Instruction; IV – incorporation, merger, spin-off, transformation and dissolution of the administrative entity; V – convocation, competence and operation of the general assembly, provided for, at a minimum, one annual assembly, to be held in the first four months following the end of the fiscal year; VI – maximum period of precautionary suspension, by the General Director, of the activities of a person authorized to operate (art. 28, VII); and VII – the body responsible for the admission, suspension and exclusion of persons authorized to operate, except when it is a measure resulting from the imposition of penalties by the Self-Regulation Council (art. 49).

§1 When the quality of partner is a requirement for the granting of authorization to operate in a market administered by the entity, the bylaws must:

I – regulate the matters referred to in items I to III of art. 15; and II – provide for the free trading of equity titles or shares issued by the market administrative entity.

§2 Amendments to the bylaws require, to take effect, prior authorization from the CVM, which will be granted according to the procedure established in Chapter VIII.

Section V
General Assembly
Art. 21 The general assembly is competent to elect and dismiss members of the Board of Directors and to decide on all acts relating to the administrative entity, preserving, however, the autonomy of the self-regulation structure referred to in Chapter IV.

Sole paragraph The notice of convocation of the general assemblies of the administrative entities, together with the administration's proposal, if any, must be sent to the CVM concomitantly with their dissemination.

Section VI
Administration

CVM INSTRUCTION NO. 461, OF OCTOBER 23, 2007
Art. 22 The administration of the administrative entity of an organized market is the responsibility of the Board of Directors, the General Director and the other Directors, and the bylaws must establish the competencies of the Board of Directors and the directors, observing the provisions of this Instruction.

Sole paragraph. The administrators of the administrative entity must exercise the attributions conferred by law, regulatory norms and the bylaws to achieve the purposes and interest of the entity, always respecting the public interest in the adequate operation of the organized market it administers.

Art. 23 Administrators must be natural persons and have the qualification, knowledge and technical capacity necessary for the execution of the responsibilities attributed to them.

§1 When it is a proposal of the controlling shareholder or the administration of the administrative entity, the convocation of the general assembly in which the election of an administrator is intended to be carried out must be made with indication that all information described in Annex IV is available in a declaration signed, under the penalties of law, by the candidate.

§2 The following are impediments to the election of an administrator, or to hiring as an employee or relevant agent of the administrative entity:

I – the occurrence of any of the impediment hypotheses provided for in Law No. 6.404, of 1976, unless the Law admits dispensation by the general assembly; II – a final conviction for any of the crimes provided for in Chapter VII-B of Law No. 6.385, of 1976, in Law No. 7.492, of 1986 and in Law No. 9.613, of 1998, unless rehabilitation has already been determined; III – the provision of false, inaccurate, or omitted declarations, when, due to their extent or content, they prove relevant for assessing the provisions of the caput and §1 of this article.

§3 For the purposes of applying the provisions of §2, a relevant employee or agent is considered to be one to whom a management function is attributed, as indicated in the organizational chart presented by the administrative entity when requesting authorization, or when updating it.

§4 Administrators who cease to meet, due to a supervening fact or unknown at the time of approval of their name, the requirements required for the position, must be immediately dismissed, communicating the fact to the CVM.

Section VII
Board of Directors
Subsection I
Competence
Art. 24 It is exclusively incumbent upon the Board of Directors:

I - approve the rules relating to the general operation of the administered market, its regulations, as well as the rules relating to the admission, suspension and exclusion of persons authorized to operate;

CVM INSTRUCTION NO. 461, OF OCTOBER 23, 2007

INSTRUCTION CVM NO. 461, OF OCTOBER 23, 2007

II - approve the rules regarding the admission to trading, suspension, and exclusion of securities and respective issuers, when applicable; III – without prejudice to the competence delegated to the General Director in art. 64, I, determine the total or partial recess of the market; IV – choose and dismiss independent auditors, in the manner proposed by the Audit Committee (art. 27); V – establish the hypotheses, deadlines, and effects of the filing of appeals to the Board of Directors, especially in the cases referred to in arts. 28 and 64; VI – judge appeals in the hypotheses provided for in the bylaws or regulations; VII - approve the budget of the Self-Regulation Department and the Self-Regulation Council, as well as the corresponding work program; VIII – examine the reports provided for in art. 45, prepared by the Director of the Self-Regulation Department, and deliberate on the necessary measures by virtue of their content; IX – approve the annual report of internal operational risk controls, as well as the business continuity plan referred to in art. 63; X – elect and dismiss the General Director and other Directors; XI – elect and dismiss the members of the Self-Regulation Council; and XII – elect and dismiss the Director of the Self-Regulation Department, among the independent members of the Self-Regulation Council (art. 38).

§1º The documents referred to in item VII must be sent to the CVM within 5 (five) business days after their approval, accompanied, if applicable, by the justification for the rejection of the proposal presented by the Self-Regulation Council. §2º Only the independent members of the Board of Directors must participate in the deliberation referred to in item XII.

Subsection II
Composition

Art. 25. The corporate bylaws of the administrator entity shall establish the rules regarding the composition and functioning of the Board of Directors, observing the following:
I – the majority of its members must be independent directors, as defined by art. 26; and

INSTRUCTION CVM NO. 461, OF OCTOBER 23, 2007

II – there may not be more than one director who maintains a link with the same authorized person to operate, or the same entity, conglomerate, or group to which the same authorized person to operate belongs.

Art. 26. An independent director is one who does not maintain a link with:
I – the administrator entity, its direct or indirect holding company, subsidiaries, or company subject to direct or indirect common control; II – the administrator of the administrator entity, its direct or indirect holding company, or subsidiary; III – person authorized to operate in their market; and IV – partner holding 10% or more of the voting capital of the administrator entity.

§1º A link with the persons mentioned in the caput is conceptualized as:
I – employment relationship or arising from a permanent professional services contract or participation in any administrative, advisory, supervisory, or deliberative body; II – direct or indirect participation, in a percentage equal to or greater than 10% (ten percent) of the total capital or voting capital; or III – being a spouse, partner, or relative up to the second degree.

§2º For the purposes of item I of §1º of this article, a relationship existing for up to one year prior to taking office as a member of the Council is equated to the current relationship.

§3º Participation in an administrative or supervisory body as an independent member is not considered a link, for the purposes of the caput.

Section VIII
Audit Committee

Art. 27. The Audit Committee is a body of the Board of Directors and shall have competence to examine the following matters:
I – propose to the Board of Directors the indication of independent auditors and ratify the choice made; II – monitor the results of internal audit, proposing to the Board of Directors the actions necessary to improve it; III – analyze the financial statements of the administrator entity, making the recommendations deemed necessary to the Board of Directors; and

INSTRUCTION CVM NO. 461, OF OCTOBER 23, 2007

IV – evaluate, regarding its effectiveness and sufficiency, the internal control structure referred to in art. 75, as well as the annual report referred to therein.

Section IX
General Director

Art. 28. It is incumbent upon the General Director:
I – when requested, forward to the CVM information regarding operations with securities, within the deadline, form, and detail specified, including the specification of final clients; II – admit, suspend, or exclude securities from trading; III – promote, without prejudice to the activities carried out by the Self-Regulation Department, real-time monitoring and inspection of operations carried out in the markets it administers; IV – take measures and adopt procedures to prevent the carrying out of operations that may constitute violations of legal and regulatory norms; V – cancel transactions carried out, provided they have not yet been settled, in the administered market or suspend or request that clearing and settlement entities suspend their settlement, when facing situations that may constitute violations of legal and regulatory norms; VI – immediately inform the Director of the Self-Regulation Department of facts that come to his knowledge that may constitute a violation of legal and regulatory norms; VII – determine precautionarily, without prejudice to the specific attributions of the Self-Regulation Department, the suspension of activities of a person authorized to operate, in the cases provided for in the norms referred to in item IV of art. 15, or in the hypothesis of apparent violation of the conduct norms referred to in art. 17, observing the maximum deadline provided for in the bylaws, immediately communicating the suspension to the Director of the Self-Regulation Department, the CVM, and the Central Bank of Brazil; VIII – fix, ensuring broad and prior disclosure to interested parties and the CVM:
a) the periodic contributions of persons authorized to operate and of issuers of securities admitted to trading; b) the emoluments, commissions, and any other costs to be charged for services resulting from the fulfillment of their functional, operational, regulatory, and supervisory duties; IX - implement the penalties determined by the Self-Regulation Council; X – immediately inform the CVM of the occurrence of events that affect the regular functioning of the markets it administers, even if temporarily; and

INSTRUCTION CVM NO. 461, OF OCTOBER 23, 2007

XI – send to the CVM and the Director of the Self-Regulation Department, daily, until the following day:
a) report of the operations that were submitted to auction and of the canceled operations, if it is a stock exchange market; b) report of individualized position balances in the future settlement and securities lending markets; and c) report with the daily movement of each trading or operation registration environment or system, with the identification of persons authorized to operate and final clients.

§1º The competence for the deliberations referred to in item VIII may be attributed by the bylaws to the Board of Directors, totally or partially.
§2º The General Director must take the necessary measures to preserve the confidentiality of the information obtained in the exercise of his duties.

Art. 29. The General Director is prohibited from providing any member of the Board of Directors with information not disclosed to the public regarding:
I – operations carried out in the trading environments of the market he administers; II – custody positions; and III – positions held in the future settlement and securities lending markets.

Art. 30. The General Director must meet the independence requirements referred to in items III and IV of art. 26, to him not applying, however, the norm of § 2º of art. 26.

Section X
Social Exercise and Financial Statements

Art. 31. The social exercise of the administrator entity must end on December 31 of each year, being mandatory the preparation of financial statements at the end of the social exercise, in the manner determined by Law 6.404, of 1976, and CVM regulation applicable to open companies.

§1º The entity's financial statements must be audited by an independent auditor registered with the CVM.

§2º The independent auditor must present a detailed report on:
I – the functioning of internal controls and accounting procedures, indicating any deficiencies or their ineffectiveness; and

INSTRUCTION CVM NO. 461, OF OCTOBER 23, 2007

II – the quality and safety of operational procedures and systems, including regarding the measures provided for in situations of rupture, contingency, or emergency, in the manner provided for in art. 63.

§ 3º The following also apply to administrator entities:
I - the duty to provide quarterly information applicable to open companies; and II – the duty to provide the annual information form – IAN, and its update, applicable to open companies.

§4º The financial statements, accompanied by the auditors' opinion, as well as the quarterly information and the IAN form, must be available on the administrator entity's page on the worldwide computer network.

§5º When granting authorization to the administrator entity, the CVM may dispense with the observance of §§ 3º and 4º, considering the size and the investor audience targeted by the market to be administered by the entity.

Section XI
Equity or Social Capital

Art. 32. The equity or social capital of the administrator entity shall be divided, as the case may be, into quotas, equity titles, or shares.

Sole paragraph. The economic and financial situation of the administrator entity must always be adequate to the proper functioning of the markets under its administration, and the CVM may determine the making of capital contributions or the adequacy of equity, whenever it considers that the economic or financial situation of the entity is not compatible with its functions, or with the conditions it must have to exercise them, observing the procedure of art. 115 of this Instruction.

Section XII
Participations in Equity or Social Capital

Art. 33. Prior authorization from the CVM is required for the acquisition, by natural or legal person, or group of persons acting in concert or representing the same interest, of direct or indirect participation equal to or greater than 15% (fifteen percent) of the equity or social capital with voting rights of an entity administering an organized market.

§1º For the purposes of applying the norm of the caput, the acquisition of participation equal to or greater than 15% (fifteen percent) is equated to the acquisition of participation that, added to that previously held by the persons mentioned in the caput, causes such persons to hold direct or indirect participation equal to or greater than 15% (fifteen percent) of the equity or social capital with voting rights of an entity administering an organized market.

INSTRUCTION CVM NO. 461, OF OCTOBER 23, 2007

§2º For the purposes of this Instruction, representing the same interest is considered the controller of the persons mentioned in the caput, the companies controlled by them, their affiliates, and the companies subject to direct or indirect common control with them.

§3º In its analysis regarding the granting of the authorization referred to in the caput, the CVM must consider, in addition to compliance with the requirements established in this Instruction regarding the controller of the administrator entity, mainly, the relevance of the organized market for the Brazilian capital market, the existence or not of a formal commitment that ensures the maintenance of the organized market in national territory, and the offering of satisfactory conditions for the participation of local investors and the access of persons authorized to operate of Brazilian nationality.

§4º The acquisition or alienation of 5% (five percent) or more of equity titles or shares of the same species or class, issued by the administrator entity, is subject to the provisions of art. 12 of CVM Instruction 358, of 2002.

Art. 34. The person authorized to operate in an organized market, or group of persons acting in concert or representing the same interest, as well as their direct and indirect holding companies, subsidiaries, and persons subject to direct or indirect common control, may not hold more than 10% (ten percent) of the equity or social capital with voting rights of the entity that administers it.

Art. 35. Non-compliance with the provisions of this Section shall result, without prejudice to other measures that may be determined by the CVM, in the limitation of voting rights inherent to the participations in the equity or social capital, such limitation being established in the corporate bylaws of the administrator entity.

§1º Whenever the deliberation and administration bodies of the administrator entity become aware of any situation that determines the limitation of the exercise of voting rights referred to in the caput of this article, they must communicate this fact to the president of the assembly table or meeting of the administration body, who shall act in a manner to prevent the exercise of the limited voting rights.

§2º Without prejudice to judicial annulment and the applicable administrative sanctioning process, the bylaw amendments and other social deliberations taken based on votes that violate the limitations established in this Section do not produce effects before the CVM.

CHAPTER IV
SELF-REGULATION OF ORGANIZED SECURITIES MARKETS

Section I
Structure of Self-Regulation

Art. 36. The Self-Regulation Department, the Director of the Self-Regulation Department, and the Self-Regulation Council are the bodies of the administrator entity responsible for the inspection and supervision of operations carried out in organized securities markets under their responsibility, of persons authorized to operate in them, as well as of the organization and market monitoring activities developed by the administrator entity itself.

INSTRUCTION CVM NO. 461, OF OCTOBER 23, 2007

§1º The Self-Regulation Department, the Director of the Self-Regulation Department, and the Self-Regulation Council shall also be responsible for inspecting and supervising compliance, by the administrator entity, with the monitoring of the obligations of securities issuers, when applicable.

§2º It shall be incumbent upon the Self-Regulation Department, the Director of the Self-Regulation Department, and the Self-Regulation Council, as provided for in this Instruction, in the corporate bylaws, and in their regulations, to monitor, ex officio or by communication from the General Director or third parties, compliance with the market and administrator entity operating rules, as well as to impose penalties resulting from the violation of norms under their supervision.

§3º The administrator entity of the organized market may constitute an association, controlled company, or company subject to common control, of specific purpose, that performs the inspection and supervision functions referred to in this article, or, alternatively, hire an independent third party to perform such functions.

§4º In the hypothesis of §3º, the controlled company or hired third party must observe the restrictions resulting from the confidentiality to be preserved regarding operations carried out in the market, as well as the other norms established for the Self-Regulation Council, the Director of the Self-Regulation Department, and the Self-Regulation Department.

Art. 37. The Self-Regulation Department and the Self-Regulation Council must:
I – be functionally autonomous from the administration bodies of the entities administering the markets under their supervision; II – possess autonomy in the management of resources provided for in their own budget, which must be sufficient for the execution of activities under their responsibility; and III - possess broad access to records and other documents related to the operational activities of the markets under their supervision, the clearing and settlement entity that provides these services for the markets, if applicable, and persons authorized to operate, having, for this purpose, the duty of cooperation of the General Director and keeping available to the CVM and the Central Bank of Brazil, if applicable, the audit reports carried out.

§1º The Self-Regulation Department, the Director of the Self-Regulation Department, and the Self-Regulation Council must take the necessary measures to preserve the confidentiality of the information obtained by virtue of their competence, as well as those contained in the reports and processes under their responsibility.

§2º The measures referred to in §1º must include:
I – clear and precise definition of practices that ensure the proper use of facilities, equipment, and files common to more than one sector of the administrator entity;

INSTRUCTION CVM NO. 461, OF OCTOBER 23, 2007

II – the preservation of information by all its members, including regarding the planning of self-regulation activities, reports resulting from them, and processes initiated, prohibiting the transfer of such information to unauthorized persons or those who may come to use them improperly.

Art. 38. The Director of the Self-Regulation Department is responsible for conducting the work of the Self-Regulation Department.

§1º Except for the Director of the Department, members of the Board of Directors or Management, nor employees or agents of the administrator entity who perform any other function in the entity, may integrate the Self-Regulation Department.

§2º The Director of the Self-Regulation Department must be elected by the Board of Directors among the independent members of the Self-Regulation Council, as defined in art. 26, and may only be dismissed, by the Board of Directors, in the hypotheses of art. 39, observing the sole paragraph of art. 24.

§3º In the event of the dismissal of the Director of the Self-Regulation Department, the Board of Directors must, immediately:
I – decide on the continuation or not of the Director of the Self-Regulation Department as a member of the Self-Regulation Council; and II - choose, even provisionally, a substitute for the Director of the Self-Regulation Department, among the independent members of the Self-Regulation Council.

§ 2º The Director of the Self-Regulation Department must be elected by the Board of Directors among the independent members of the Self-Regulation Council, as defined in art. 26, and may only be dismissed, by the Board of Directors, in the hypotheses of art. 39, observing § 2º of art. 24.

§ 3º In the event of the dismissal of the Director of the Self-Regulation Department, the Board of Directors must, immediately, decide on the continuation or not of the Director of the Self-Regulation Department as a member of the Self-Regulation Council.

• §§ 2º and 3º with wording given by CVM Instruction No. 508, of October 19, 2011.

§4º Within 5 (five) days after the dismissal of the Self-Regulation Director, a detailed report containing the justifications considered by the Board of Directors for the said dismissal, including an analysis of the performance of the Self-Regulation Department during the management of the dismissed Self-Regulation Director, must be sent to the CVM.

§5º The CVM may determine the disclosure to the public of the report provided for in §4º of this article.

Art. 38-A The temporary substitution of the Director of the Self-Regulation Department, in cases of dismissal or vacancy, must comply with the provisions of the organization and functioning rules of the securities organized market administrator entity.

INSTRUCTION CVM NO. 461, OF OCTOBER 23, 2007

• Article included by CVM Instruction No. 508, of October 19, 2011.

Art. 39. The Director of the Self-Regulation Department and the other members of the Self-Regulation Council:
I – are elected and dismissed by the Board of Directors; II – must have a fixed term of three years, renewable; III – will lose their mandates only by force of resignation, judicial conviction, or in a sanctioning process initiated by the CVM, in both cases by an unappealable decision leading to impediment or disqualification, or if so deliberated by the Board of Directors, based on a reasoned and detailed proposal regarding the circumstances that justified it, presented by any member of the Board of Directors or the Self-Regulation Council; and IV – are subject to the impediments referred to in §2º of art. 23.

Sole paragraph. The dismissal of the Director of the Self-Regulation Department or members of the Self-Regulation Council, as well as the conditions under which such dismissal occurred, will be considered by the CVM when evaluating the self-regulation activities developed by the administrator entity, including regarding compliance with the principle of independence and autonomy established in art. 37.

Art. 40. The structure of the Self-Regulation Department, including the name and summary curriculum of the main executives, as well as other human and material resources available for the execution of the work program, must be reported to the CVM annually, as well as any changes throughout the year.

Art. 41. The administrator entity must have approved a Code of Conduct specific for the members of the Self-Regulation Department and Council, regulating, at minimum:
I – the rules regarding the exercise of their functions, including the hypotheses of impediment of those members; II – the conditions under which their members may hold and trade securities traded in the environments and systems of the organized market; and III – procedure and sanctions, including suspension, in case of disciplinary infractions.

Section II
Self-Regulation Department

Art. 42. The administrator entity must maintain a Self-Regulation Department with the function of exercising primarily, observing the competence of the Self-Regulation Council (art. 46), the inspection

INSTRUCTION CVM NO. 461, OF OCTOBER 23, 2007

CVM INSTRUCTION NO. 461, OF OCTOBER 23, 2007

and supervision of operations carried out in organized securities markets that are under their responsibility and of the persons authorized to operate there.

Sole Paragraph. The administering entity must establish effective mechanisms and procedures so that the Department monitors compliance with its rules and code of conduct, as well as with current regulations, in order to identify violations, abnormal trading conditions, or behaviors that may jeopardize the regular functioning, transparency, and credibility of the market.

Art. 43. It shall be the responsibility of the Self-Regulation Department, without prejudice to other duties assigned to it:
I - to monitor the operations carried out in the markets administered by the entity, with the aim of detecting possible non-compliance that may constitute violations of legal and regulatory norms; II - to monitor, directly and broadly, the persons authorized to operate; III - to point out deficiencies in compliance with legal and regulatory norms verified in the functioning of the markets administered by the entity, even if attributable to the administering entity itself, as well as in the activities of the persons authorized to operate, monitoring the programs and measures adopted to remedy them; IV - to initiate, instruct, and conduct disciplinary administrative proceedings to investigate violations of the norms under its supervision; V - to propose to the Self-Regulation Council the application of the penalties provided for in Art. 49, when applicable; and VI - to take note of complaints made regarding the functioning of the organized securities markets administered by the entity, monitoring their progress and the measures resulting from their receipt.

§1º The Self-Regulation Department may, in the exercise of its activities, require from the persons authorized to operate and from the administering entity of the market itself all information, even if confidential, necessary for the exercise of its competence.

§2º The statute of the administering entity may provide that some of the sanctions referred to in item V be applied by the Director of the Self-Regulation Department, with appeal to the Self-Regulation Council.

§3º The Self-Regulation Department reports directly to the Self-Regulation Council and to the Board of Directors, in the latter case only for accountability regarding its activities in the fulfillment of the annual work program.

CVM INSTRUCTION NO. 461, OF OCTOBER 23, 2007

Subsection I
Information Reporting

Art. 44. The Director of the Self-Regulation Department must send to the CVM:
I – immediately, information about the occurrence, or indications of occurrence, of a serious violation of CVM norms, such as, exemplarily, those typified in CVM Instructions No. 08, of October 8, 1979 and 358, of 2002; and II – monthly, by the fifteenth day of the following month and after approval by the Self-Regulation Council:
a) a descriptive report on the possible non-observance of current legal norms in the organized securities market in question and the deviations observed in the operations, mentioning the analyses started and concluded in the period, with the indication of the principals involved, as well as the measures adopted; b) a report on the audits concluded in the period, mentioning the persons authorized to operate who were inspected, the scope of the work performed, the period covered, the final result, the irregularities identified, and the measures adopted; and c) a report listing the administrative proceedings initiated, including those related to the use of the mechanism for compensation of damages, with identification of the interested parties and their respective conduct.

Art. 45. The Director of the Self-Regulation Department must annually prepare, for approval by the Self-Regulation Council, the following documents:
I - a report on the accountability of the activities carried out by the Self-Regulation Department, audited by an independent auditor registered with the CVM, indicating the main persons responsible for each of them, as well as the measures adopted or recommended as a result of its action; and II – a report containing the budget proposal for the following fiscal year.

Sole Paragraph. The reports provided for in this article must be sent to the Self-Regulation Council, which, after reviewing them, will send them to the Board of Directors and, on the same day, to the CVM.

Section III
Self-Regulation Council

Subsection I
Competence and Composition

Art. 46. It is the competence of the Self-Regulation Council to supervise the activities of the Self-Regulation Department and to judge the proceedings initiated, instructed, and conducted by it.

§1º It is incumbent upon the Self-Regulation Council, without prejudice to other duties assigned to it:
I - to approve the regulations of the procedures to be observed in the initiation and processing of proceedings and in the negotiation and execution of commitment terms, provided that such regulations, as well as their modifications, will only take effect after approval by the CVM, observing the procedure provided for in Chapter VIII; II - to determine to the General Director the application of the penalties provided for in Art. 49; III – to draft its own internal regulations; and IV – to approve the documents referred to in item II of Art. 44, as well as information on any measures, recommendations, and reservations that have been proposed as a result of the observed facts; and V – to approve the budget proposal and the annual work program of the Self-Regulation Department;

§2º In the event that the statute provides for the application of certain sanctions by the Director of the Self-Regulation Department, the competence of the Self-Regulation Council must necessarily include the power to judge appeals against these decisions.

§3º The result of the judgment of the proceedings, with the disciplinary sanctions applied, must be sent to the CVM within 5 (five) business days.

Art. 47. The Self-Regulation Council must be composed of at least 2/3 (two thirds) of independent members, in accordance with Art. 26, one of whom shall be elected Director of the Self-Regulation Department.

§1º The President of the Self-Regulation Council must be elected by the other members of this body, among the independent members, and may not hold the position of Director of the Self-Regulation Department.

§2º It is incumbent upon the President of the Self-Regulation Council, in addition to conducting the administrative work of the Council, to represent it before the CVM.

Subsection II
Subject to Penalties

Art. 48. Those subject to the penalties applied by the Director of Self-Regulation or by the Self-Regulation Council are the members of the administration bodies of the administering entity, the persons authorized to operate, as well as the administrators and agents of the aforementioned persons.

Sole Paragraph. Issuers and their administrators are also subject to the penalties referred to in the caput when the activity of monitoring the obligations assumed by them before the administering entity of the organized market is attributed to the Self-Regulation Department.

Subsection III
Penalties

Art. 49. Violation of the norms whose supervision is incumbent upon the Self-Regulation Department subjects its infringers to the penalties provided for in the regulations.

§1º Without prejudice to the publicity mechanisms adopted by the administering entity in accordance with the regulations referred to in the caput of this article, the suspension or cancellation of authorization of a person authorized to operate must be communicated, immediately, to the CVM and to the Central Bank of Brazil.

§2º The revenues collected from fines and commitment terms entered into within the scope of self-regulation must be reverted, in their entirety, to the activities provided for in this Chapter or to the indemnification of third parties harmed.

§3º No appeal to the CVM lies against the decisions of the Self-Regulation Council.

§4º The investigated party may request that the penalty imposed on him, or the payment that has been agreed upon in a commitment term entered into within the scope of self-regulation, be submitted to the CVM as a basis for the execution of a commitment term.

§5º In the judgment of violations of legal norms under its competence, the CVM may reduce, from the penalties it applies, those that have been imposed within the scope of self-regulation.

§6º In administrative proceedings before the CVM that have as their object the same facts already investigated within the scope of self-regulation, the maximum penalty provided for in Art. 11, §1º, of Law 6.385, of 1976, must be calculated by adding the penalty imposed by self-regulation and that applied by the CVM, when they are of the same nature.

CHAPTER V
OPERATIONS IN ORGANIZED SECURITIES MARKETS

Section I
General Norms

Art. 50. Trading environments or systems must ensure the transparency of offers and operations carried out and provide for adequate price formation.

§1º When it comes to organized securities markets that are intended only for the recording of previously occurred operations, the records must be carried out through systems or with the adoption of procedures that provide adequate information about the prices of the transactions carried out, including regarding their eventual discrepancy with respect to standards of similar business, with the refusal of registration of discrepant business being permitted.

§2º Finding that the organized market is not adopting the necessary measures to comply with the provisions of this article, the CVM may determine the adoption of supplementary measures and, if the pointed out deficiencies are not corrected, cancel the authorization for the functioning of the organized securities market.

Section II
Persons Authorized to Operate

Art. 51. Operations in an organized market can only be carried out by a person authorized to operate in such market.

§1º Admission as a person authorized to operate in an organized securities market depends on authorization by the administering entity, which must consider its organization, the human and material resources required, and the integrity and professional aptitude of the persons who act in its name.

§2º The admission requirements as a person authorized to operate must observe the principles of equal access and respect for competition.

§3º The minimum qualifications for admission and maintenance as a person authorized to operate will include, among others, the eventual needs of capital allocated to the protection of risks of each of the authorized activities, the segregation of activities intended to prevent conflicts of interest, and the existence of a department responsible for verifying compliance with the rules and code of conduct applicable to the operations carried out in the market.

§4º The administering entities may establish other requirements, including of unblemished reputation, or indicate other impediments for admission and permanence of a person authorized to operate, at the discretion of its Board of Directors.

§5º It is prohibited for the administering entity, without prior authorization from the CVM, to establish a maximum limit of persons authorized to operate, or to reduce the previously approved limit, even by classes or for the exercise of certain rights of access to the markets it maintains.

Art. 52. The persons authorized to operate, in their own name or on behalf of third parties, in an organized market:
I – must heed and comply with the decisions of the administration and supervision bodies of the administering entity; and II – must provide all information, as required by the administration and supervision bodies of the administering entity.

CVM INSTRUCTION NO. 461, OF OCTOBER 23, 2007

Section III
Responsibility for Operations

Art. 53. The persons authorized to operate are responsible for the business carried out in organized markets, whether towards their principals or towards their counterparties.

§1º The persons authorized to operate are responsible, including:
I – for business carried out without powers of representation or without due authorization; II – for the loss or undue alienation of securities; III – for eviction, jointly with the alienator; and IV – for the settlement of the business carried out.

§2º The responsibility provided for in this article may be excluded in business merely registered in an organized market.

Section IV
Operations in Organized Securities Markets

Art. 54. As provided for by the rules established by the administering entity of the organized market, operations may be carried out in their own name or on behalf of a third party.

Section V
Considerations

Art. 55. The considerations established by the administering entity of the organized market (art. 28, items VIII, “a” and “b”) must be reasonable and proportional to the services rendered, not constituting a mechanism of undue restriction to access to the markets it administers.

Sole Paragraph. The CVM will not previously approve the considerations established by the administering entity, but may request a detailed demonstration of their formation and determine their revision or establish maximum limits.

Section VI
Registration of Principals

Art. 56. The administering entity of an organized market must maintain:
I – a list of principals eligible to trade in the markets it administers, permanently updated by the persons authorized to operate; and,

CVM INSTRUCTION NO. 461, OF OCTOBER 23, 2007

II – a record of the operations carried out in the markets that allow identifying the principal of each operation, in accordance with CVM regulations.

Sole Paragraph. The administering entity must transmit the registration and record information to the clearing and settlement entity that provides these services, if applicable, with the aim of maintaining a single and updated registry, including observations regarding defaulting principals.

Section VII
Admission to Trading of Securities

Art. 57. Securities registered by the CVM are tradable in organized markets.

§1º Admission to trading in an organized securities market specific to a certain security depends on a decision by the respective administering entity responsible.

§2° Admission to trading, in an organized securities market, of other assets that are not securities depends on prior approval by the CVM, without prejudice to authorizations eventually required by other public bodies.

§3º Simultaneous trading of shares in stock exchange and organized over-the-counter markets is prohibited, with trading in more than one stock exchange or in more than one organized over-the-counter market being permitted.

§4º Simultaneous trading of other securities, with the exception of shares, in an organized securities market distinct from that in which the issuer has its securities traded is permitted, provided that the authorization referred to in §1º of this article has been obtained.

Section VIII
Self-Listing

Art. 58. The organized securities market may admit to trading securities issued by the respective administering entity.

§1º In the event provided for in the caput, the Self-Regulation Department must attest that the admission to trading of the securities issued by the entity is in compliance with the requirements provided for in the general rules it establishes for other issuers, as well as continuously monitor this compliance and confirm it in the report referred to in Art. 44, II, “a”.

§2º The Self-Regulation Department must monitor the operations carried out with securities issued by the administering entity itself, paying attention to the observance of the restrictions and limits on their trading established in statutory, legal, and contractual norms, with monitoring by sampling being prohibited.

CVM INSTRUCTION NO. 461, OF OCTOBER 23, 2007

§3º If any irregularity is found in the admission of the securities issued by the entity, in the compliance with the conditions for maintaining the registration of these securities or in the operations carried out with them, the Self-Regulation Department must communicate the fact to the CVM immediately.

Section IX
Trading, Outside Organized Market, of Listed Securities

Art. 59. Trading, outside an organized market, of securities admitted therein is prohibited, except in the following cases:
I – private negotiations;
II – public distribution, during the period of the respective distribution; III – subscription of quotas of funds and investment clubs, in the cases admitted in specific regulation; IV – corporate event that determines or allows the substitution or exchange of the security for another; V – alienation in a public acquisition offer; and VI – in other cases expressly provided for in regulation issued by the CVM.

Section X
Suspension and Exclusion of Securities from Trading

Art. 60. The operating rules of the administering entity of an organized market must regulate the situations in which the trading of securities admitted to trading will be suspended or excluded, as well as the information to be provided regarding the securities affected by such measures.

§1º The suspension of trading may be justified when:
I – the admission requirements cease to be met, provided that it is a curable lack; and II – news or information becomes public that is vague, incomplete, or raises doubt regarding its content or origin, which may come to influence the quotation of the security in a relevant way or induce investors to error.

§2º The rules referred to in the caput must, obligatorily, regulate the procedures to be adopted when:

CVM INSTRUCTION NO. 461, OF OCTOBER 23, 2007

I – there is information about the existence of a bankruptcy petition, provided that it indicates the risk of insolvency of the issuer, or of judicial or extrajudicial reorganization; II – there is approval of a petition for reorganization, judicial or extrajudicial, or declaration of bankruptcy of the issuer; and II – there is approval of a petition for reorganization, judicial or extrajudicial, or declaration of bankruptcy of the issuer;

• Item II with wording given by CVM Instruction No. 590, of September 11, 2017.
  III – there is declaration, by the Central Bank of Brazil or by the Private Insurance Superintendence, of intervention, extrajudicial liquidation, or temporary special administration of the issuer, with the intervener, liquidator, or board of directors, as the case may be, communicating the measure to the entity responsible for the administration of the organized market in which its securities are most traded. III – there is declaration, by the Central Bank of Brazil or by the Private Insurance Superintendence, of intervention, extrajudicial liquidation, or temporary special administration of the issuer, with the intervener, liquidator, or board of directors, as the case may be, communicating the measure to the entity responsible for the administration of the organized market in which its securities are most traded; and
• Item III with wording given by CVM Instruction No. 590, of September 11, 2017.
  IV – there is a need to disclose a relevant act or fact during trading hours, establishing deadlines and measures of a prior nature that must be observed by issuers to enable the administering entity of the organized market to evaluate the need for the suspension of trading for the dissemination of relevant information.
• Item IV included by CVM Instruction No. 590, of September 11, 2017.

§3º The exclusion of trading is mandatory when:
I – the admission requirements cease to be met, provided that it is an incurable lack; and II – the lacks or situations that justified the suspension have not been remedied.

§4º The suspension of trading of securities in an organized market entails the suspension of trading of the same security, or of others for which it is an underlying asset, in other organized securities markets, provided that the reasons that caused the suspension also affect them.

§5º The exclusion of securities whose trading is a condition for the admission of others entails the exclusion of these from the organized securities markets in which they are traded.

CVM INSTRUCTION NO. 461, OF OCTOBER 23, 2007

§6º The exclusion must be immediately communicated to the CVM.

§ 7º The administering entities of organized markets must make best efforts to enter into agreements or conventions with administering entities located in other jurisdictions that ensure the simultaneous suspension of trading of securities admitted to trading in national and foreign organized markets.

• § 7º included by CVM Instruction No. 590, of September 11, 2017.

Art. 61. The CVM may determine that the administering entity of an organized market proceed with the suspension or exclusion of securities from trading, as well as extend the suspension or exclusion to other organized securities markets.

Section XI
Disclosure of Information

Art. 62. The administering entity of an organized market must disclose at least the following information regarding the markets under its administration:
I – characteristics, rules, and operating manuals; II – information about the characteristics of each security admitted to trading; III – information about the operations carried out and their respective prices; IV – occasional and periodic information received from the issuers of the securities admitted to trading; V – at the opening of each daily trading session, the minimum, maximum, weighted average, reference, or adjustment and closing price, as well as the quantities traded in the previous session; and VI – an updated list of the persons authorized to operate in each of its markets.

§1º The content, means, and periodicity of the information to be publicly provided must be adequate to the characteristics of each market, the level of knowledge of investors, and the composition of the various interests involved.

§2º The CVM may require changes to the rules regarding the disclosure of information when it verifies that they are not sufficient for the protection of investors.

Section XII
Computerized Systems and Continuity of Operations

INSTRUCTION CVM NO. 461, OF OCTOBER 23, 2007

Art. 63. The organized market administrator entity must maintain, for a period of 5 (five) years, or until the closure of investigations, when the CVM has communicated its existence to the administrator entity:

I – a data storage and retrieval system regarding offers and transactions carried out that allows for their consultation or reconstruction, with the exceptions regarding offers, of the specifics of voice-brokerage trading systems;

II – a structure for duplication and storage of the information contained in the computerized systems; and

III – a business continuity plan capable of ensuring the functioning of the organized market in situations of rupture or emergency.

§1º The administrator entity must submit annually to the CVM the audit report of its systems, proving their adequacy to the provisions of this article, including regarding the procedures capable of ensuring continuity according to the plan referred to in item III.

§2º The CVM may determine the carrying out of specific extraordinary audits, if there is indication that the mechanisms adopted are not meeting, or may not come to meet, their purposes.

Section XIII

Cautionary Measures

Art. 64. With the objective of ensuring the efficient and regular functioning of the market or preserving high ethical standards of trading, the organized market administrator entity, in a reasoned decision, without prejudice to the powers attributed to the Self-Regulation Department, has competence, by decision of the General Director, to:

I – decree its own recess, in case of grave emergency, communicating the fact immediately to the CVM;

II – provisionally suspend, a person authorized to operate, when the protection of investors so requires, communicating, immediately, the occurrence to the CVM, to the Central Bank of Brazil and to the Director of the Self-Regulation Department;

III – prevent the carrying out of certain operations in its trading environments, when there are indications that they may constitute infractions of legal and regulatory norms; and

IV – cancel transactions carried out, provided they are not yet settled, or suspend their settlement, or request the clearing and settlement entity to suspend, if there are indications that they may constitute infractions of legal and regulatory norms.

CHAPTER VI

STOCK MARKETS

INSTRUCTION CVM NO. 461, OF OCTOBER 23, 2007

Section I

Characteristics

Art. 65. Stock markets are considered those that:

I - function regularly as centralized and multilateral trading systems and that allow the meeting and interaction of buy and sell offers of securities; or

II - allow the execution of transactions, subject or not to the interference of other persons authorized to operate in the market, having as counterparty a market maker that assumes the obligation to place firm buy and sell offers, provided that:

a) the market maker's activity is regulated by the stock exchange, in accordance with the specific regulation of the CVM for market makers, and supervised by the Self-Regulation Department;

b) the stock exchange's regulation provides for maximum limits for the difference between the buy and sell prices offered by the market maker; and

c) the interference of other persons authorized to operate is admitted in the interval between buy and sell offers, provided for the total quantity of that transaction.

Sole Paragraph. A centralized and multilateral system is considered one in which all offers relating to the same security are directed to the same trading channel, becoming exposed to acceptance and competition by all parties authorized to trade in the system.

Section II

Registration Request

Art. 66. The request to the CVM for authorization for the functioning of the stock exchange must be accompanied by the documents and information listed in Annex II, and in the manner provided in Chapter VIII.

Sole Paragraph. The CVM may request from the applicant for authorization additional elements and information, as well as carry out the investigations it deems necessary.

Section III

Screens for Access to Trading in Foreign Exchanges

Art. 67. The foreign stock exchange that wishes to install in Brazil, in institutions part of the distribution system, screens for access to its trading systems, must obtain prior authorization from the CVM, which will be granted provided that the applicant for authorization:

I – is recognized as a stock exchange and is duly authorized to operate as such in its country of origin;

II – is subject to the supervision of the capital market regulatory authority of its country of origin, with which the CVM maintains a convention or international cooperation agreement or that is a signatory of the

INSTRUCTION CVM NO. 461, OF OCTOBER 23, 2007

Multilateral Memorandum of Understanding of the International Organization of Securities Commissions – IOSCO; and

III – the requirements required for authorization and functioning of stock exchanges in the country of origin of the applicant are, at least, substantially equivalent to those provided in this Instruction.

§1º The trading of securities through the trading systems referred to in the caput of this article is restricted to qualified investors, thus considered:

I – financial institutions;

II – insurance companies and capitalization societies;

III – open and closed entities of complementary pension;

IV – natural or legal persons with financial investments superior to R$ 1,000,000.00 (one million reais);

V – portfolio administrators and securities consultants authorized by the CVM, regarding their own resources;

VI – own social pension regimes instituted by the Union, by the States, by the Federal District or by Municipalities;

VII – investment funds intended for investors who meet the requirements provided in this paragraph.

§ 1º The trading of securities through the trading systems referred to in the caput of this article is restricted to qualified investors, as defined in specific regulation.

• § 1º with wording given by CVM Instruction No. 554, of December 17, 2014.

§2º The procedure for granting, cancellation or alteration of the authorization provided in this article must observe the provisions in Chapter VIII.

Art. 68. The foreign stock exchange must send to the CVM:

I – when filing the authorization request:

a) documentation proving compliance with the requirements of art. 67 items I, II and III;

b) indication of the person resident in the country with powers to receive summonses and citations, on behalf of the foreign stock exchange;

c) list and description of the securities admitted to trading, with indication of the issuer, when applicable.

INSTRUCTION CVM NO. 461, OF OCTOBER 23, 2007

II – as soon as it is available, the list of Brazilian intermediaries authorized to operate in their markets, as well as their representatives;

III – weekly, the volume traded by Brazilian intermediaries authorized to operate in their markets;

IV – annually, within 45 (forty-five) days after the end of the fiscal year:

a) list of Brazilian intermediaries admitted, suspended or excluded in the period;

b) description of any changes in the stock exchange's governance standards, in the exercise of its self-regulation functions and relevant alterations in the composition of its administration and shareholding control;

c) descriptive report of inspections and other investigative procedures involving Brazilian intermediaries, carried out in the period;

d) relevant changes in the regulation that disciplines the authorization and functioning of the stock exchange in its country of origin;

IV – upon request of the CVM, within 10 (ten) days counted from the receipt of the request:

a) data on the operations carried out, including the identification of final beneficiaries, when such information is available to the foreign stock exchange;

b) description of criteria for calculating required margins, guarantees and other information linked to the risk of participants and to the clearing and settlement of operations carried out;

c) description of the characteristics of the securities admitted to trading;

d) information on processes, investigations and inspections underway, involving intermediaries or Brazilian investors;

V – within 30 (thirty) days, counted from the confirmation of the existence of indications, the description of irregularities involving Brazilian investors or intermediaries.

Art. 69. The authorization referred to in art. 67 also depends on the accessibility, sufficiency and quality of information regarding the assets traded in the foreign stock exchange, as well as their issuers, when applicable.

§1º In assessing the requirements provided in the caput, the CVM must consider, among other characteristics judged relevant:

I – if it is a derivative contract whose underlying asset has homogeneous characteristics, produced and quoted on an international scale; and

INSTRUCTION CVM NO. 461, OF OCTOBER 23, 2007

II – the accounting standard in which the financial statements of the issuers of the assets traded are prepared.

§2º The authorization for the installation of the trading screen will imply the dispensation of registration of the issuers and of the securities traded therein, and the authorization may be limited to specific assets and issuers or to trading segments.

Section IV

Authorization to Operate in Stock Exchange

Art. 70. Admission as a person authorized to operate in a stock market depends on authorization from the administrator entity.

Art. 71. The indication regarding the name and address of the person who intends to obtain authorization to operate, as well as the names of its administrators, if applicable, must be disclosed on the administrator entity's website and in its official bulletin, during the period established in the statute or regulation.

Art. 72. In the 15 (fifteen) days subsequent to the end of the period referred to in the previous article, the Board of Directors or the General Director, as provided in the administrator entity's statute, must decide on the request for authorization to operate, and a justification for the adopted decision must be presented.

§1º The candidate whose authorization request is denied may appeal the denial, in the manner provided in the statute.

§2º The final decision of the administrator entity of the stock market must be communicated immediately to the CVM.

§3º The statute must provide for the right to review the decision of the General Director that determines the suspension or exclusion of a person authorized to operate.

Section V

Trading Rules

Art. 73. The stock exchange's trading environment or system must possess characteristics, procedures and trading rules, previously established and disclosed, that allow, permanently:

I – the regular, adequate and efficient formation of prices;

II - the prompt realization, visibility and registration of operations carried out; and

III – the public dissemination of offers and transactions involving assets traded therein, with speed, breadth and details sufficient for the good information of the market and price formation.

INSTRUCTION CVM NO. 461, OF OCTOBER 23, 2007

Sole Paragraph. When it is a centralized and multilateral trading system, price formation must occur through the interaction of offers, in which precedence is always given to the offer that represents the best price, respecting the chronological order of entry of offers into the system or trading environment, except for cases of special trading procedures provided in regulation.

Art. 74. The stock exchange's trading rules must:

I – avoid or discourage modalities of fraud or manipulation intended to create artificial conditions of demand, supply or price of the securities traded in their environments;

II – ensure equal treatment to persons authorized to operate in their environments, observing the distinctions between categories that may be stipulated in its statute and regulation;

III – avoid or discourage inequitable practices in their environments; and

IV – fix the variations of prices and quantities offered, in its trading environment that is characterized as centralized and multilateral, that require the adoption of special trading procedures, as well as the operational procedures necessary for when such variations are reached, respecting the minimum conditions that are established by the CVM in specific regulation.

Section VI

Risk Control

Art. 75. The administrator entities of stock markets must maintain risk control systems appropriate for monitoring the risks inherent to their activities, as well as for compliance with the provisions of this Instruction.

§1º The risk control systems must define the adequate procedures to ensure:

I – compliance with prudential rules that have been established for the functioning of the market;

II - the regular functioning and security of their computerized systems;

III – compliance with their information duties; and

IV – the identification, management and mitigation of significant risks to the functioning of the administrator entity.

INSTRUCTION CVM NO. 461, OF OCTOBER 23, 2007

§2º Annually, a report on the risk control systems referred to in the caput must be prepared, which will be submitted for approval to the Board of Directors of the administrator entity of the stock market, heard the Audit Committee, and sent to the CVM within 5 (five) business days after its approval.

Section VII

Disclosure of Information

Art. 76. The administrator entity of the stock market must make public in a continuous manner, throughout the daily auctions, at least the information on each transaction carried out, including price, quantity and time, with a maximum delay of 15 (fifteen) minutes.

Sole Paragraph. The summary of the operations carried out in the stock exchange must be in its daily information bulletin, which must be made available on its website.

Section VIII

Compensation Mechanism for Losses

Art. 77 The administrator entity of the stock market must maintain a compensation mechanism for losses, with the exclusive purpose of ensuring investors the reimbursement of losses resulting from the action or omission of a person authorized to operate, or of its administrators, employees or agents, regarding the intermediation of transactions carried out in the stock exchange or to custody services, especially in the following hypotheses:

I - non-execution or unfaithful execution of orders;

II - inadequate use of cash and securities or other assets, including regarding financing or lending operations of securities;

III - delivery to the investor of illegitimate securities or other assets or of restricted circulation;

IV - inauthenticity of endorsement in securities or other assets, or illegitimacy of power of attorney or document necessary for its transfer;

V – intervention or declaration of extrajudicial liquidation by the Central Bank of Brazil; and

VI - closure of activities.

§1º The compensation mechanism for losses provided in this chapter applies only to operations with securities.

§2º The compensation mechanism for losses may be maintained by the stock exchange's administrator entity itself, or by an entity constituted exclusively or contracted for this purpose.

INSTRUCTION CVM NO. 461, OF OCTOBER 23, 2007

Art. 78. The administrator entity of the stock market must issue specific regulation disciplining the functioning of the compensation mechanism for losses, containing at least the following:

I – description of the form of organization and designation of its administrators, when applicable;

II – detailed description of the form of indemnification to claimants, of the payment deadlines and of the form of correction of the values;

III – procedures and deadlines for analysis of indemnification requests, which cannot exceed 120 (one hundred and twenty) days between the indemnification request and the stock exchange's decision regarding it;

IV - the instances responsible for conducting the process and for the final decision;

V– origin of the resources;

VI – minimum and maximum values of the patrimony or minimum and maximum amounts allocated for the compensation mechanism for losses, which must be based on the analysis of the risks inherent to its activity, as well as the criteria for apportionment in case of insufficiency of the patrimony;

VII – policy for the application of the resources of the compensation mechanism for losses; and

VIII – form and deadline for replenishment to the mechanism, by the person authorized to operate that caused the complaint, of the value paid to the claimant, as well as the penalty provided for non-compliance with this obligation.

Art. 79. The regulation, as well as its subsequent alterations, must be previously approved by the CVM, observing the procedure provided in art. 117.

Subsection I

Complaint to the Mechanism

Art. 80. The investor may request reimbursement of his loss by the mechanism instituted for this purpose, independently of any judicial or extrajudicial measure, within 18 (eighteen) months, counted from the date of occurrence of the action or omission that gave rise to the request.

Sole Paragraph. The maximum value provided by the resources originating from the compensation mechanism for losses will be R$ 60,000.00 (sixty thousand reais) per claimant investor in each occurrence referred to in the caput, without prejudice to the voluntary fixing, by the stock exchange, of higher amounts.

Sole Paragraph. The maximum value provided by the resources originating from the compensation mechanism for losses will be R$ 70,000.00 (seventy thousand reais) per claimant investor in each occurrence referred to in the caput, without prejudice to the voluntary fixing, by the stock exchange, of higher amounts.

INSTRUCTION CVM NO. 461, OF OCTOBER 23, 2007

• Sole Paragraph with wording given by CVM Instruction No. 499, of July 13, 2011.

Art. 81. The reimbursement request will be formulated, duly justified, to the administrator entity of the stock market in which the intermediary to whom the order was given or cash, securities or other assets were delivered is a person authorized to operate.

§1º When the intermediary is a person authorized to operate in more than one stock exchange, the reimbursement request must be directed to the one in which the operation that gave rise to the complaint occurred.

§2º In the case of order forwarding, if there is no responsibility of the society that forwarded it, it is incumbent upon it, together with the investor, to request reimbursement of the loss.

Art. 82. The decision on the reimbursement request must be immediately communicated to the parties, containing, at least:

I – its foundations;

II – value and payment conditions of the indemnity due to the claimant; and

III – the indication of the person responsible for the loss that entails reimbursement.

Sole Paragraph. The claimant may present an appeal to the CVM against the decision that denied the reimbursement.

Art. 83. In the judgment of the appeal referred to in the sole paragraph of art. 82, the CVM may determine the carrying out of new diligences and, even, the taking of testimonies.

§1º The CVM's decision must be recorded within 90 (ninety) days, counted from the receipt of the appeal, observing the requirements established in art. 82 and its items.

§2º The carrying out of new diligences determined by the CVM suspends the deadline referred to in §1º.

Art. 84. The discussion regarding the right of recourse against the person authorized to operate, that caused the losses object of the reimbursement due to the claimant, cannot obstruct the payment to the claimant, within the deadline provided in the regulation.

§1º In the case of the person authorized to operate referred to in the caput filing a judicial lawsuit with the purpose of eluding its responsibility, aiming or not to obstruct the payment to the claimant, the administrator entity of the stock market must communicate, immediately, the occurrence to the CVM, informing if there is an injunction or preliminary relief granted, as well as providing all pertinent documentation.

§2º Without prejudice to the provisions of the previous paragraph, the administrator entity of the stock market shall use all means and resources available to ensure the effectiveness of the decisions rendered during the procedure now regulated.

INSTRUCTION CVM NO. 461, OF OCTOBER 23, 2007

Art. 85. The CVM must, when there is conflict between administrator entities of stock markets regarding the responsibility of their respective compensation mechanisms, determine which one will be responsible.

Art. 86. The discontinuation or termination of the compensation mechanism for losses, with or without distribution of resources to its contributors, depends on prior approval of the CVM.

Sole Paragraph. The approval must be given through the demonstration that the purpose of the constitution of the compensation mechanism for losses no longer subsists, as well as that it is no longer possible to formulate complaints to it, and it must be proven, moreover, that all pending debts have been settled and that the specific administrative procedures are closed.

Subsection II

Bookkeeping

Art. 87. The patrimony or resources linked to the compensation mechanism for losses must have their own and special bookkeeping, to ensure their exclusive destination.

Art. 88. Up to three months after the end of each fiscal year, the administrator entity of the stock market, based on the accounting records and documents relating to the compensation mechanism for losses, must prepare the financial statements, which will be audited by an independent auditor registered with the CVM, and made available on the stock exchange's website.

Art. 89. The unaudited financial statements of the mechanism must be sent monthly to the CVM, until the 15th (fifteenth) day of the subsequent month.

Subsection III

Administrative Expenses

Art. 90. With the purpose of reimbursing itself for the essential expenses for the functioning of the compensation mechanism for losses, the administrator entity of the stock market may charge, for its administration, a fee previously approved by the CVM.

Subsection IV

Disclosure

Art. 91. The administrator entity of the stock market must widely disclose to investors the existence, objectives and mode of functioning of the compensation mechanism for losses.

CHAPTER VII

CVM INSTRUCTION NO. 461, OF OCTOBER 23, 2007

ORGANIZED OTC MARKETS

Section I

Characteristics

Art. 92. The organized over-the-counter market may operate through one or more of the following forms:

I – as a centralized and multilateral trading system, defined in the terms of the sole paragraph of Art. 65, which allows for the matching and interaction of buy and sell offers for securities;

II – through the execution of transactions, subject or not to the interference of other persons authorized to operate in the market, having as counterparty a market maker who assumes the obligation to place firm buy and sell offers;

III – through the registration of previously executed transactions.

Sole Paragraph. The authorization for the organized over-the-counter market to operate through the registration of previously executed transactions, in the form of item III of the caput, or to provide other securities registration services, in the form of item V of Art. 13, is equivalent, subject to the limits established therein, to the authorization for the provision of the services referred to in § 4º of Art. 2 of Law No. 6,385, of 1976, and in Art. 28 of Law No. 12,810, of 2013.

• Sole Paragraph included by CVM Instruction No. 544, of December 20, 2013.

Art. 93. In an organized over-the-counter market, the trading or registration of previously executed transactions may occur without the direct participation of an intermediary integrated into the securities distribution system, provided that in this case, in accordance with the provisions of the regulations, the settlement of the transaction is contractually guaranteed by the entity administering the organized over-the-counter market, or alternatively, is carried out directly between the parties to the transaction.

Section II

Trading and Registration Rules

Subsection I

Trading Systems

Art. 94. The trading environments or systems of the organized over-the-counter market must possess characteristics, procedures, and trading rules, previously established and disclosed, which allow, permanently, for the regular, adequate, and efficient formation of prices, as well as the prompt execution and registration of transactions carried out.

Art. 95. When it concerns a centralized and multilateral trading system, price formation must occur through the interaction of offers, giving precedence always to the offer that represents the best price, respecting the chronological order of entry of the offers into the system or trading environment, except for cases of special trading procedures provided for in the regulations.

Art. 96. When it concerns a market where market makers are counterparties, as described in item II of Art. 92, their activity must be regulated and supervised by the entity administering the organized over-the-counter market, in accordance with the specific CVM regulations for market makers.

Art. 97. The trading rules of the trading system of the organized over-the-counter market must:

I – avoid or discourage fraud or manipulation modalities intended to create artificial conditions of demand, supply, or price of the securities traded in its environments;

II – ensure equal treatment to persons authorized to operate in its environments, observing the distinctions between categories that may be stipulated in its statutes and regulations; and

III – avoid or discourage inequitable practices in its environments.

Subsection II

Registration Systems

Art. 98. The rules and procedures of the organized over-the-counter market functioning as a registration system must allow the administering entity to identify and discourage fraud or manipulation modalities intended to create artificial conditions of demand, supply, or price of the securities.

Art. 99. The records of previously executed transactions must be made through systems or by adopting procedures that provide adequate information about the prices of transactions carried out, including regarding any eventual discrepancy in relation to standards of similar transactions, and the refusal to register discrepant transactions is permitted.

Section III

Application for Registration

Art. 100. The application to the CVM for authorization to operate the organized over-the-counter market must be accompanied by the documents and information listed in Annex III and must observe the procedures provided for in Chapter VIII.

Sole Paragraph. The CVM may:

I – request from the applicant complementary elements and information, as well as carry out investigations it deems necessary; and

II – dispense with the presentation of documents and information contained in Annex III when they do not appear justified by the weighing, among others, of the following factors:

a) smallness of the structure of the administering entity;

b) number of persons authorized to operate;

c) number and nature of investors who have access to the organized over-the-counter market;

d) volume of transactions; and

e) size and relevance of the market.

Section IV

Organization of Organized OTC Markets

Art. 101. The entities administering organized over-the-counter markets are exempt from observing:

I – the limitations on the acquisition of participation in the equity or share capital referred to in Arts. 33 and 34, ensured, however, the existence of legal instruments that ensure the exercise of the CVM's police power over shareholders, administrators, and persons authorized to operate; and

II – the obligation to have an Audit Committee as provided for in Art. 27.

Art. 102. The Board of Directors of the administering entity of the organized over-the-counter market must be composed of, at least, 25% (twenty-five percent) of independent directors, as defined by Art. 26.

Art. 103. Without prejudice to the provisions of Arts. 101 and 102, the CVM may fix limits to the exercise of voting rights in an entity administering an organized over-the-counter market or decide on the application of independence requirements to its administrators, in which case, the analysis criteria established in item II, sole paragraph, of Art. 100 shall apply.

Section V

Authorization to Operate in an Organized OTC Market

Art. 104. Admission as a person authorized to operate in an organized over-the-counter market depends on authorization by the administering entity, applying the provisions of Arts. 71 and 72.

Section VI

Disclosure of Information

Art. 105. The entity administering the organized over-the-counter market must make available information about each transaction carried out, including price, quantity, and time.

§1º The information referred to in the caput may be or not be disclosed continuously during trading sessions, as well as individually or grouped by set of transactions, and the disclosure policy of the entity must be previously approved by the CVM, which may authorize deferred or grouped disclosure of the information referred to depending on:

I – the model of the organized over-the-counter market;

II – the degree of standardization of the asset or contract traded;

III – whether or not it concerns a market segment for large blocks; and

IV – the type of investor who has access to the segment or the market.

§2º The summary of transactions carried out in the organized over-the-counter market must be included in its daily information bulletin, which will be made available on its website.

§3º When it concerns a registration market, the disclosure policy referred to in § 1º may provide for alternative forms and contents of transaction disclosure that, in the judgment of the CVM, produce an effect similar to that referred to in this article.

Section VII

Supervision and Oversight of Organized OTC Markets

Art. 106. The entity administering an organized over-the-counter market may adopt self-regulation structures different from those provided for in Chapter IV, provided that:

I – it maintains bodies responsible for the supervision and oversight of transactions carried out in its environments and systems, and of the persons authorized to operate therein; and

II – it observes, regarding the bodies referred to in item I of this article, the principles of independence and autonomy provided for in Art. 37.

Sole Paragraph The supervision and oversight bodies referred to in the caput must prepare and send to the CVM the reports referred to in Arts. 44 and 45, in the form and deadlines defined therein.

Art. 107. The CVM must evaluate, in each case, the structure intended for the performance of the functions provided for in this Section, and may determine the alterations that are necessary to guarantee the reliability of the market in question, using, for this purpose, the analysis criteria described in the sole paragraph, item II, of Art. 100.

Section VIII

Mechanism for Compensation of Losses

Art. 108. It is not mandatory to have, in an organized over-the-counter market, the mechanism for compensation of losses provided for in Section VIII of Chapter VI.

Sole Paragraph. The entity administering the organized over-the-counter market must give prominent disclosure, in the informational material intended for the investing public, as well as in its advertising actions, of the non-existence of the compensation mechanism referred to in the caput.

CHAPTER VIII

PROCEDURES

Section I

Authorization Procedure for Administering Entity of an Organized Market

Art. 109. The application for authorization to operate as an administering entity of an organized market must be formulated by presenting a petition accompanied by the documents described in Annex I, and necessarily accompanied by an application for authorization to operate an organized market, accompanied by the documents described in Annex II, when it concerns a stock exchange market, or in Annex III, when it concerns an organized over-the-counter market.

§1º The authorization will be considered automatically granted if the application is not denied by the CVM within 90 (ninety) days from the protocol of its delivery.

§2º The period referred to in §1º may be interrupted only once if the CVM requests from the applicant additional documents and information related to the authorization application, and a period of 90 (ninety) days will start to run, from the fulfillment of the requirements, for the final manifestation of the CVM.

§3º To meet the eventual requirements referred to in § 2º, a period not exceeding 60 (sixty) days must be granted.

Section II

Authorization Procedure for Operation of an Organized Market

Art. 110. The application for authorization to operate an organized market must be formulated jointly with the application of the administering entity, in the form of Art. 109, or by an authorized administering entity by presenting a petition accompanied by the documents described in Annex II, when it concerns a stock exchange market, and in Annex III, when it concerns an organized over-the-counter market.

§1º The authorization must be considered automatically granted if the application is not denied by the CVM within 120 (one hundred and twenty) days, when it concerns a stock exchange market, or 90 (ninety) days, when it concerns an organized over-the-counter market, from the protocol of its delivery.

§2º The period referred to in §1º may be interrupted only once if the CVM requests from the applicant additional documents and information related to the authorization application, and a period of 90 (ninety) days, when it concerns a stock exchange market, and 60 (sixty days), when it concerns an organized over-the-counter market, will start to run, from the fulfillment of the requirements, for the final manifestation of the CVM.

§3º To meet the eventual requirements referred to in §2º, a period not exceeding 60 (sixty) days will be granted.

§ 4º In cases where the activity is subject to the recommendations and principles formulated by the Committee on Payments and Settlement Systems (CPSS) and the International Organization of Securities Commissions (IOSCO), the administering entity must also present a document proving compliance with those recommendations and principles.

§ 5º The Superintendence of Market and Intermediary Relations – SMI will define the form and minimum content of the document referred to in the previous paragraph, as well as the periodicity for its update after obtaining the authorization.

• §§ 4º and 5º included by CVM Instruction No. 544, of December 20, 2013.

Section III

Common Provisions to the Preceding Sections

Art. 111. The authorizations referred to in Arts. 109 and 110 will be denied if:

I – the application is not accompanied by the elements necessary for its appreciation, or if the complementary elements and information requested are not delivered;

II – false or inaccurate information is identified in the documents presented with the application, when, due to their extent or content, they appear relevant for the appreciation of the authorization application;

III – the applicant does not have the human, technical, and material means, or the adequate financial resources for the administration of the market or for compliance with the provisions of this Instruction; or

IV – the requirements formulated by the CVM are not met in their substance, or it is verified that the requirements and conditions established in this Instruction for the constitution and operation of the applicant, in the case of Art. 109, or for the operation of the market, in the case of Art. 110, were not observed.

Sole Paragraph. The denials referred to in this article are subject to appeal to the Collegiate Body, in the form and deadline established in the current regulations.

Art. 112. The CVM may submit the effectiveness of the authorization it grants for the operation of an administering entity of an organized market, or for the operation of an organized market, to the implementation of future events, described in the decision granting the authorization, which must also indicate the maximum deadline for the occurrence of the referred events, after which, if not implemented, the authorization will cease to be in force.

Art. 113. The authorizations for the operation of an administering entity of an organized market, or for the operation of an organized market, will be granted by the Superintendence of Market and Intermediary Relations – SMI, but will only produce effect within 30 (thirty) days after its communication.

§1º Within the period provided for in the caput, the Collegiate Body may confirm the authorization granted, formulate additional requirements to the applicant, or revoke the authorization decision.

§2º In the case of the Collegiate Body formulating new requirements, as provided for in §1º, the period for their compliance cannot exceed 30 (thirty) days, after which the Superintendent must inform the Collegiate Body of the result of the compliance with the requirements, and the Collegiate Body will decide, within a maximum period of 15 (fifteen) days, confirming the authorization, with or without amendments or suspensive conditions, or revoking it.

§3º When formulating the initial requirements for the application for authorization to operate an administering entity of an organized market, or for the operation of an organized market, the Superintendent will send them to the Collegiate Body, for knowledge, reporting on the stage of the process in the first ordinary meeting of the Collegiate Body held after the sending of the information.

§4º The procedure referred to in the preceding sections also applies to the authorization of access screens to trading in a foreign stock exchange provided for in Art. 67.

Art. 114. In the analysis of applications for authorization to operate an administering entity of an organized market, or for the operation of an organized market, the CVM must prioritize the substantial compliance with the norms of this Instruction, whenever the purposes of such norms can be achieved by alternative, and substantially less burdensome, means than those established herein.

Section IV

Cancellation of Authorization Procedure

Art. 115. The authorization for the operation of an administering entity or for the operation of an organized market may be cancelled:

I – at the request of the administering entity of the organized over-the-counter market, through a petition containing its justifications, together with a copy of the general assembly minutes that deliberated on the matter;

II – by the CVM Collegiate Body, after an administrative process in which due process and full defense are ensured, in the following hypotheses:

a) if it is found that the authorization for operation was obtained through false declarations or other illicit means;

b) if, due to a supervening fact duly proven, it becomes evident that the authorized entity or market no longer meets any of the requirements and conditions established in this Instruction for the granting of the authorization; or

c) if it is proven that the entity failed to comply with CVM determinations or does not have the capacity to observe and ensure compliance, by persons authorized to operate, with its rules and contracts, as well as with the law and CVM regulations; and

d) if the authorized entity does not start its activities within the period established in its authorization application.

Art. 116. The process referred to in Art. 115 must observe the following procedure:

I – the SMI, after analyzing the evidence it deems necessary, must summon the administering entity of the organized market to present a response within 15 (fifteen) days, extendable by at most 10 (ten) days, indicating in the summons:

a) that it concerns a process that may result in the cancellation of authorization, in the form of this Section;

b) the authorization, or authorizations, that may be cancelled by virtue of the process; and

c) in detail, the failures or omissions of the administering entity, among those described in item II of Art. 115.

II – the administering entity of the organized market, within the period for response, may:

a) contest the allegations of the SMI or justify the unnecessary adoption of the measures determined by it; or

b) request a period, not exceeding 60 (sixty) days, for compliance with the requirements formulated or for the remedy of the deficiencies pointed out by the SMI.

III – the SMI, within 10 (ten) days, must decide the case:

a) accepting the allegations of the administering entity;

b) granting the requested period for compliance with the requirements formulated or for the remedy of the deficiencies; or

c) cancelling the authorization for the operation of the market or of the administering entity, as the case may be.

§1º From the decision referred to in item III, “c”, an appeal to the Collegiate Body may be filed, within 15 (fifteen) days, with suspensive effect.

§2º The Collegiate Body will decide the appeal in at most 5 (five) ordinary sessions after its distribution to the Rapporteur.

§3º The sanctioning process against administrators, controlling partners, or other responsible parties for the administering entity or the organized market, based on the same facts that give rise to the process referred to in Art. 115, cannot be initiated before the final decision of the latter.

§4º The process referred to in Art. 115 must necessarily be preceded by at least one summons, with a period of at least 30 (thirty) days for compliance, in which the SMI indicates the measures it deems necessary on the part of the administering entity of the organized market.

§5º The cancellation of authorization for the operation of an administering entity implies the cancellation of the authorization for the operation of all markets administered by it.

§6º The provisions of this section also apply to the authorization of access screens to trading in a foreign stock exchange referred to in Art. 67.

Section V

Procedures Related to Acts Dependent on Prior Approval

Art. 117. Without excluding other matters provided for in this Instruction, the following are subject to prior approval by the CVM to produce effect:

I – the operating rules of organized markets for securities, or segments of organized markets for securities, as well as their alterations;

II – the alterations of the corporate statutes of the administering entities of organized markets;

III – corporate deliberations and those of the administration bodies that imply a substantial alteration of the organization of the administering entity, of the organized market for securities, or of the self-regulation activities of organized markets for securities;

IV – the procedures to be observed by the Department and the Self-Regulation Council of the administering entities of organized markets for securities in the initiation and processing of disciplinary administrative processes and in the celebration of commitment terms; and

V – if existing, the regulation disciplining the operation of the mechanism for compensation of losses (Art. 78).

§1º In the matters referred to in this article, the period for approval by the CVM is 20 (twenty) business days counted from the date of presentation of the respective petition or of the alteration of the corporate statutes, as the case may be, or of the provision of clarifications or complementary information requested by the CVM.

§2º After the fulfillment of requirements, which may be formulated only once, with a maximum period of 10 (ten) business days for compliance, the CVM will have a period of 10 (ten) business days to manifest itself, counted from the presentation of the respective petition or of the provision of clarifications or complementary information requested.

§3º If the CVM does not manifest itself regarding the application or the fulfillment of the requirements within the periods referred to in §§ 1º and 2º of this article, the documents presented will be considered approved.

§4º The provisions of this article do not apply to alterations arising from determinations of other public bodies, regarding matters not covered by the legal competence of the CVM.

CHAPTER IX

CVM COMPETENCE

CVM INSTRUCTION NO. 461, OF OCTOBER 23, 2007

Art. 118. In addition to the competencies described in this Instruction, the CVM may, regarding any of the regulated markets addressed by this Instruction:

I – suspend the execution of rules adopted by organized securities markets, if deemed inadequate to their functioning, and determine the adoption of those it considers necessary;

II – stay the application of decisions made by organized securities markets, in whole or in part, especially when it comes to protecting investors' interests;

III – cancel transactions carried out, and not yet settled, in regulated markets, or determine to clearing and settlement entities the suspension of their settlement, in cases of operations that may constitute violations of legal and regulatory norms;

IV – decree the recess of an organized securities market, with the aim of preventing or correcting abnormal market situations, defined in current regulation;

V – suspend or revoke the operating authorization of an organized securities market;

VI – determine to the organized securities market, on a preventive basis, the immediate removal of counselors or directors when there is evidence of the commission of an offense incompatible with the exercise of the position for which they were elected or appointed, until the conclusion of the respective administrative process, which must be concluded at the CVM within 120 (one hundred and twenty) days from the presentation of defenses, after which the administrator in question may be reinstated in their functions, if applicable;

VII – determine to the organized securities market the suspension of the activities of members and persons authorized to operate, who are related to transactions carried out in their environments and systems, or the immediate removal of their administrators from the exercise of functions in this scope, when there is evidence of the commission of an offense incompatible with the exercise of their activity in an organized market, until the conclusion of the respective administrative process, which must be concluded at the CVM within 120 (one hundred and twenty) days;

VIII – determine the redoing of the financial statements of the entity administering an organized securities market that are in disagreement with Law No. 6,404/, of 1976, and applicable regulation;

IX – determine the responsibility, through an administrative process, of the entity administering an organized securities market that has not provided for the recomposition of the resources of the loss compensation mechanism, when existing, within 60 (sixty) days, counted from the day when this balance became lower than the minimum value fixed in the regulation;

X - refuse the approval of rules or procedures, or require alterations, whenever they are considered insufficient for the adequate functioning of the organized securities market, or contrary to legal or regulatory provisions.

CVM INSTRUCTION NO. 461, OF OCTOBER 23, 2007

Art. 119. Non-compliance with the norms of this Instruction constitutes a serious offense for the purposes of § 3 of art. 11 of Law No. 6,385, of 1976.

CHAPTER X

FINAL AND TRANSITIONAL PROVISIONS

Section I

Judicial Notifications

Art. 120. Judicial notifications regarding securities or other assets destroyed, missing, or improperly retained must be archived by the respective organized securities market administrative entities, in a manner that allows easy access and verification, when necessary, and must also be disclosed, for the knowledge of persons authorized to operate and other organized securities market administrative entities, preserving the confidentiality of those involved.

Section II

Publication of Normative Acts

Art. 121. Normative acts, resolutions, and deliberations regarding organized securities markets must be published in the official bulletin of the administrative entity and on its page on the worldwide computer network.

Section III

Adaptation to the Instruction

Art. 122. The entities administering organized securities markets currently authorized by the CVM to operate, on a definitive or provisional basis, must adapt their corporate statutes and their rules and the rules of the markets administered by them to the provisions of this Instruction, within a maximum period of 180 (one hundred and eighty) days, from its effectiveness.

Art. 122. The entities administering organized securities markets currently authorized by the CVM to operate, on a definitive or provisional basis, must adapt their corporate statutes and their rules and the rules of the markets administered by them to the provisions of this Instruction, within a maximum period of 270 (two hundred and seventy) days, from its effectiveness.

Article with wording given by CVM Instruction No. 468, of April 18, 2008.

Sole Paragraph. The provisional or conditional authorizations currently existing for entities administering organized markets are converted into definitive ones, without prejudice to the provisions of the main paragraph.

CVM INSTRUCTION NO. 461, OF OCTOBER 23, 2007

Art. 123. CVM Instructions No. 42, of February 28, 1985; No. 179, of February 13, 1992, No. 184, of March 19, 1992; No. 203, of December 07, 1993; No. 263, of May 21, 1997; No. 344, of August 17, 2000; No. 362, of March 05, 2002; No. 379, of November 12, 2002; art. 6 of Instruction No. 312, of August 13, 1999; arts. 1 to 14 and 17 of Instruction No. 243, of March 01, 1996; CVM Instruction No. 250, of June 14, 1996; arts. 2 to 7, main paragraph and §1 of art. 8, arts. 10, 13, 15 and 16 of CVM Instruction No. 297, of December 18, 1998; the sole paragraph of art. 1 and art. 3 of CVM Instruction No. 202, of December 06, 1993; and CVM Deliberation No. 20, of February 15, 1985, are revoked.

Art. 124. This Instruction enters into force on the date of its publication.

Signed by

MARIA HELENA DOS SANTOS FERNANDES DE SANTANA
President

CVM INSTRUCTION NO. 461, OF OCTOBER 23, 2007

ANNEX I

DOCUMENTS NECESSARY FOR THE APPLICATION FOR AUTHORIZATION TO OPERATE AS AN ORGANIZED MARKET ADMINISTRATIVE ENTITY

I – Constitutive acts and subsequent modifications, duly updated and endowed with legal formalities.

II – Consolidated financial statements, prepared in accordance with Law No. 6,404/76 and other norms issued by the CVM, and audited by an independent auditor registered with the CVM, relating to the last three social years.

III – Proof of the full payment of equity or social capital.

IV – Feasibility study demonstrating its economic and financial capacity to fulfill its corporate object, with a description of the human, technical, and material means related to the exercise of its activities.

V – Descriptive report addressing the following points:

a) procedures, structures, and, when applicable, risk controls that ensure compliance with legal norms;

b) governance structure of the administrative entity;

c) internal audit procedures;

d) functional organizational chart of the administrative entity, indicating the number of people related to each area or function, as well as information regarding the type of qualifications required;

e) inspection and supervision structure provided for in Chapter IV, or in art. 111 when it concerns an administrative entity of an organized over-the-counter market, including the name and qualifications of executive office holders; and

f) annual self-regulation program and human and material resources available for its execution.

VI – List of members of the Board of Directors, Executive Board, Self-Regulation Council, and Director of the Self-Regulation Department, describing, for each of them:

a) name, position, start and end of term;

b) professional and academic experience and qualifications for the exercise of their respective positions;

c) document or declaration proving compliance with the requirements of this Instruction; and

d) activities and sectors under their responsibility.

CVM INSTRUCTION NO. 461, OF OCTOBER 23, 2007

VII – If it concerns an administrative entity organized as a corporation, a report indicating all shareholders who hold, directly or indirectly, 5% or more of any kind or class of securities issued by it. If it concerns an administrative entity organized in associative form, a report of those who have contributed, or who have the right to receive, in case of liquidation, 5% or more of its equity. In both cases, the report must contain, for each of the persons listed therein:

a) full corporate name;

b) number of shares and other securities or quantity of equity titles in their ownership;

c) approximate social participation;

d) the existence or non-existence of control links; and

e) information on the existence of shareholders' agreements.

VIII – Code of Conduct applicable to the staff and executive board of the administrative entity and to the members of the Self-Regulation Department and Council.

CVM INSTRUCTION NO. 461, OF OCTOBER 23, 2007

ANNEX II

DOCUMENTS NECESSARY FOR THE APPLICATION FOR AUTHORIZATION TO OPERATE A STOCK EXCHANGE MARKET

I – Regulations, contracts, and other documents that regulate:

a) trading in their environments and systems;

b) listing, suspension, and exclusion of issuers or securities admitted to trading; and

c) admission, suspension, and exclusion of persons interested in operating, including the criteria and conditions applicable in each case, as well as their representatives with access to the environments and systems for trading;

d) counterpayments charged;

e) loss compensation mechanism.

II – Descriptive report addressing the means of access to the market and trading hours.

III – Descriptive report, audited by an independent auditor registered with the CVM:

a) of the trading, registration, and information duplication systems;

b) of the settlement system, and respective information duplication system, if the administrative entity of the stock exchange market is authorized by the CVM to perform the activity directly, or presentation of a contract with a clearing and settlement entity authorized by the CVM.

IV - Code of conduct applicable to persons authorized to operate and their representatives with access to the environments and systems for trading.

V – Information on affiliated or controlled companies by the administrative entity of the stock exchange market, or with which this entity maintains a relationship, contractual or of another nature, related to the operation of the systems used in transactions carried out in their environments and in the settlement of transactions, if applicable.

VI – As soon as available, a list, in alphabetical order, of all persons authorized to operate in the stock exchange market, as well as their representatives, including the following information:

a) name;

b) date of granting of authorization to operate or permission to act as its representative with access to the environments and systems for trading, informing in this case the name of the institution to which it is linked and the nature of the link maintained;

CVM INSTRUCTION NO. 461, OF OCTOBER 23, 2007

c) address and telephone number of the headquarters;

d) description of the activities developed by the person authorized to operate;

e) associative category or authorization granted.

VII – As soon as available, a list and description of the securities admitted to trading, indicating the issuer, when applicable.

CVM INSTRUCTION NO. 461, OF OCTOBER 23, 2007

ANNEX III

DOCUMENTS NECESSARY FOR THE APPLICATION FOR AUTHORIZATION TO OPERATE AN ORGANIZED OVER-THE-COUNTER MARKET

I – All documents required in Annex II, except for letter “e” of item I.

CVM INSTRUCTION NO. 461, OF OCTOBER 23, 2007

ANNEX IV

DOCUMENTS TO BE PRESENTED BY APPLICANTS FOR POSITIONS OF ADMINISTRATION AND OVERSIGHT IN ORGANIZED MARKETS

I – Complete qualification;

II – Complete description of their professional experience, mentioning the professional activities previously performed, as well as professional and academic qualifications;

III – Type of professional relationship intended with the administrative entity of the organized market;

IV – Information on convictions, even if not final, in disciplinary and judicial processes, in the latter case related to matters linked to the financial and capital markets.