CVM Instruction No. 521 of April 25, 2012 (Revoked)

CVM INSTRUCTION No.
521, OF APRIL 25, 2012, WITH THE CHANGES INTRODUCED BY CVM INSTRUCTIONS No. 605/19 AND 609/19.
Provides for the activity of credit risk rating within the scope of the securities market.

The PRESIDENT OF THE SECURITIES AND EXCHANGE COMMISSION - CVM makes public that the Collegiate Board, in a meeting held on April 18, 2012, based on arts. 8 o , item I and 27 of Law No. 6.385, of December 7, 1976, APPROVED the following Instruction:

CHAPTER I – DEFINITIONS
Art. 1º For the purposes of this Instruction, the following are considered:
I – credit rating agency: a legal entity registered or recognized by the CVM that professionally exercises the activity of credit risk rating within the scope of the securities market; and II – credit risk rating: the activity of opining on the credit quality of an issuer of participation or debt securities, of a structured operation, or any financial asset issued in the securities market.

Sole Paragraph. This Instruction applies only to credit risk ratings intended for publication, dissemination, or distribution to third parties, even if restricted to clients.

CHAPTER II – AUTHORIZATION FOR THE EXERCISE OF THE ACTIVITY
Art. 2º Credit risk rating within the scope of the securities market is an activity exclusive to credit rating agencies registered, in the case of agencies domiciled in Brazil, or recognized, in the case of agencies domiciled abroad, by the CVM.

Section I – Requirements for Registration
Art. 3º For the purposes of obtaining and maintaining registration with the CVM, the credit rating agency must meet the following requirements:

CVM INSTRUCTION No. 521, OF APRIL 25, 2012
I – be domiciled in Brazil;
II – include in its corporate purpose the activity of credit risk rating and be regularly constituted and registered in the National Registry of Legal Entities - CNPJ; III – assign responsibility for its activities and for compliance with the rules established by this Instruction to an administrator, who possesses all powers necessary to represent the agency; IV – assign responsibility for supervising compliance with rules, procedures and internal controls and this Instruction to an administrator distinct from the one mentioned in item III, who possesses all powers necessary to exercise their function; and V – constitute and maintain adequate human and technological resources for its size and area of operation.

§ 1º In the case of credit rating agencies that are part of a conglomerate operating in other jurisdictions, the person responsible for supervising compliance with rules, procedures and internal controls and this Instruction, provided for in item IV of the main text, may be domiciled abroad, provided that:
I – they are an administrator linked to the credit rating agency domiciled abroad that is a related party to the credit rating agency domiciled in Brazil; and II – they maintain a representative in the country who is an administrator linked to the agency domiciled in Brazil, with powers to receive any citations, summonses or notifications against them, based on the principles of this Instruction.

§ 2º The technological resources provided for in item V of the main text must:
I – be protected against tampering; and
II – maintain records that allow for audits and inspections.

Art. 4º The registration application must be sent to the Superintendence of Relations with Institutional Investors - SIN and be accompanied by the documents identified in Annex 4.

CVM INSTRUCTION No. 521, OF APRIL 25, 2012
§ 1º The SIN has 45 (forty-five) business days to analyze the application, counted from the date of filing, provided that the application is accompanied by all documents necessary for the granting of the authorization.

§ 2º If any of the documents necessary for the granting of the authorization are not filed with the registration application, the period referred to in the main text will be counted from the date of filing of the last document that completes the instruction of the authorization application.

§ 3º The period referred to in the main text may be interrupted only once, if the SIN requests additional information or documents from the applicant.

§ 4º The applicant has 20 (twenty) business days to comply with the requirements formulated by the SIN.

§ 5º The period for complying with the requirements may be extended, only once, by 10 (ten) business days, upon prior and justified request made by the applicant to the SIN.

§ 6º The SIN has 30 (thirty) business days to respond regarding the compliance with the requirements and the approval of the application, counted from the date of filing of the documents and information delivered for the compliance with the requirements.

§ 7º If the requirements have not been met, the SIN, within the period established in § 6º, will send a letter to the applicant indicating the requirements that were not considered met.

§ 8º Within 10 (ten) business days counted from the receipt of the letter referred to in § 7º or in the remainder of the period for the end of the period referred to in § 4º, whichever is longer, the applicant may comply with the requirements that were not considered met.

§ 9º The SIN has 30 (thirty) business days to respond regarding the compliance with the requirements and the approval of the registration application, counted from the date of filing of the documents and information delivered for the compliance with the requirements in response to the letter mentioned in § 7º.

§ 10 Non-compliance with the periods mentioned in §§ 4º, 5º and 8º implies automatic denial of the authorization application.

§ 11 The absence of response from the SIN within the periods mentioned in the main text, §§ 6º and 9º implies automatic approval of the authorization application.

CVM INSTRUCTION No. 521, OF APRIL 25, 2012
Section II – Requirements for Recognition
Art. 5º For the purposes of obtaining and maintaining recognition by the CVM, the credit rating agency not domiciled in Brazil must meet the following requirements:
I – be registered and subject to supervision by a competent authority in its country of origin; II – be regulated by rules at least equivalent to the provisions of this Instruction; and III – constitute a legal representative in Brazil, with express powers to receive, on behalf of the credit rating agency, any citations, summonses or notifications.

§ 1º For the purposes of item I of the main text, a competent authority is considered to be one with which the CVM has signed a mutual cooperation agreement that allows for the exchange of information about their supervised entities, or that is a signatory to the multilateral memorandum of understanding of the International Organization of Securities Commissions - IOSCO.

§ 2º The provisions of Art. 4º apply to credit rating agencies not domiciled in Brazil that seek recognition by the CVM.

Art. 6º The credit rating agency registered with the CVM may validate the credit risk ratings issued abroad by related parties, provided that:
I – such ratings are intended for the securities market; and II – the requirements provided for in items I and II of Art. 5º are met.

CHAPTER III – CANCELLATION OF AUTHORIZATION
Section I – Ex Officio Cancellation
Art. 7º The SIN must cancel the authorization of the credit rating agency in the following cases:
I – extinction of the credit rating agency;

CVM INSTRUCTION No. 521, OF APRIL 25, 2012
II – if the falsity of the documents or information presented for obtaining the registration is found; or III – if, due to a supervening fact duly proven, it becomes evident that the credit rating agency no longer meets the minimum requirements and conditions for the exercise of the credit rating activity.

§ 1º The SIN will previously communicate to the credit rating agency the decision to cancel its authorization, in accordance with items II and III of the main text, granting it a period of 10 (ten) business days, counted from the date of receipt of the communication, to present its reasons for defense or to regularize its registration.

§ 2º From the cancellation decision provided for in items II and III of the main text, an appeal may be filed to the CVM, with suspensive effect, in accordance with current regulations.

Art. 8º Credit risk ratings issued by agencies with canceled authorization may be used in the securities market for up to:
I – 10 (ten) business days, if there is a credit risk rating of the same financial asset or entity evaluated prepared by another credit rating agency; or II – 3 (three) months, if there is no credit risk rating of the same financial asset or entity evaluated prepared by another credit rating agency.

Section II – Voluntary Cancellation
Art. 9º The application for cancellation of the authorization of a credit rating agency must be requested to the SIN.

§ 1º The application referred to in the main text must be accompanied by a declaration that, on the date of the application, the applicant no longer exercises the activity of credit risk rating within the scope of the securities market, having discontinued the monitoring of all risk ratings issued.

§ 2º The SIN has 20 (twenty) business days, counted from the filing, to approve or deny the cancellation application.

CVM INSTRUCTION No. 521, OF APRIL 25, 2012
§ 3º The period referred to in § 2º may be interrupted only once, if the SIN requests additional information or documents from the applicant, with a new period starting from the compliance with the requirements.

§ 4º The applicant has 20 (twenty) business days to comply with the requirements formulated by the SIN.

§ 5º Non-compliance with the period mentioned in § 4º implies automatic denial of the application for cancellation of the applicant's authorization.

§ 6º The absence of response from the SIN within the period mentioned in § 2º implies automatic approval of the application for cancellation of the applicant's authorization.

CHAPTER IV – INFORMATION REPORTING
Section I – General Rules
Art. 10. The credit rating agency must take measures to avoid the issuance of any credit risk rating that:
I – contains false statements; or
II – induces the user to error regarding the credit situation of an issuer or of a financial asset.

§ 1º The information disseminated by the credit rating agency must be written in simple, clear, objective and concise language.

§ 2º The credit rating agency must adopt, implement and enforce written procedures that ensure that the opinions it disseminates are based on a detailed analysis of all information that is known to the agency and relevant to its analysis, in accordance with its credit risk rating methodology.

Art. 11. The SIN may determine that the information provided for in this Instruction be presented by electronic means or through the CVM's page on the worldwide computer network, in accordance with the structure of the database and programs provided by the CVM.

Art. 12. The credit rating agency must maintain a page on the worldwide computer network with the following information:

CVM INSTRUCTION No. 521, OF APRIL 25, 2012
I – reference form;
II – code of conduct;
III – description of the rules, procedures and internal control mechanisms, developed for the compliance with this Instruction; IV – updated methodologies; V – cross-reference table between credit risk ratings on the national and global scales; VI – credit risk rating reports that it has prepared and their updates; and VII – preliminary opinions of the agency on the credit risk ratings that are not used by the issuer at the time of the operation's dissemination, even if the agency has not been hired definitively.

Sole Paragraph. The preliminary opinions provided for in item VII of the main text must be disseminated, immediately after the dissemination of the operation, by the agency on its page on the worldwide computer network.

Section II – Periodic Information
Art. 13. The credit rating agency must send to the CVM, by March 31 of each year, through an electronic system available on the CVM's page on the worldwide computer network, a reference form, the content of which must reflect Annex 13.

Sole Paragraph. The credit rating agency must update the corresponding fields of the reference form within 7 (seven) business days counted from the replacement of the administrator responsible for the agency with the CVM or of the administrator responsible for the supervision of compliance with rules, procedures and internal controls and this Instruction.

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Section III – Eventual Information
Art. 14. The credit rating agency must send to the CVM, through an electronic system available on the CVM's page on the worldwide computer network, the following eventual information:
I – relevant changes in the methodologies, procedures and criteria used for the preparation of the risk rating, as well as new methodologies, within 7 (seven) business days counted from their approval; II – decision to discontinue monitoring of the risk rating, on the date of the decision; and III – preliminary opinions provided for in item VII of Art. 12, within the period provided for in the sole paragraph of Art. 12.

Section IV – Risk Classification Report
Art. 15. Credit risk rating reports must be prepared in strict observance of the procedures and methodologies adopted by the agency.

Art. 16. The risk classification report must highlight:
I – the designation of the credit risk analyst responsible for the preparation of the report and the person responsible for approving the assigned rating or the members of the credit risk committee of credit rating, if applicable; II – the relevant information sources used in the preparation of the risk rating; III – the main elements that underpinned the credit risk rating; IV – the methodology used to determine the risk classification; V – the date on which the risk rating was first issued and the last date it was updated; VI – the update frequency;

CVM INSTRUCTION No. 521, OF APRIL 25, 2012
VII – the attributes and eventual limitations of the issued rating, regarding the extent, quality and truthfulness of the existing documents and historical data; VIII – whether the agency is evaluating the type of financial asset for the first time; IX – whether the risk rating was communicated to the evaluated entity or related parties and if, as a result of this fact, the assigned rating was altered before the issuance of the report; X – other services provided to the evaluated entity in the last 12 months; XI – services provided to the evaluated entity by related parties to the credit rating agency, in the last 12 months; and XII – situations that evidence potential conflicts of interest.

§ 1º In the case of a risk rating that was not contracted by the evaluated entity or related parties, this fact must be highlighted in the report.

§ 2º Examples of situations that evidence potential conflicts of interest, regarding the specific risk rating:
I – if the evaluated entity or a related party is responsible for more than 5% of the annual revenue of the agency; II – if the agency, the credit risk analysts or other people involved in the process of issuing a specific risk rating, their spouses, dependents or partners, have, directly or indirectly, relevant financial and commercial interests regarding the evaluated entity; and III – if the credit risk analysts or other people involved in the process of issuing a specific risk rating have a link with a natural person who works for the evaluated entity or a related party.

§ 3º The conclusions of the analysis may be anticipated to the market through the dissemination of a brief statement, provided that the credit risk rating report is disseminated within a maximum period of 7 (seven) business days after the dissemination of the statement.

CVM INSTRUCTION No. 521, OF APRIL 25, 2012
Art. 17. The risk classification report for structured financial products must also highlight:
I – information about the analysis performed, or on which it is based, regarding default and cash flows, as well as the indication of possible modifications in the risk rating; and II – the level of evaluation that the agency performed regarding the diligence processes of structured financial products or other underlying assets to structured financial products.

§ 1º Examples of structured financial products:
I – shares of investment funds in credit rights - FIDC and their share funds - FICFIDC; II – shares of investment funds in credit rights within the scope of the Program for Incentive to Implementation of Projects of Social Interest - FIDC-PIPS; III – shares of non-standardized investment funds in credit rights - FIDC-NP and their share funds - FICFIDC-NP; IV – real estate receivable certificates - CRI; V – agribusiness receivable certificates - CRA; and VI – debentures whose payment of principal and interest arises from the financial flow resulting from the assignment of credit rights.

§ 2º In the case of item II of the main text, the credit rating agency must disclose if it conducted any evaluation of the diligence processes or if it used the evaluation of third parties, indicating how the result of the evaluation affects the credit risk rating.

Art. 18. The credit rating agency must make the differentiation, from the use of symbols, between ratings issued for structured financial products and those intended for the other financial assets.

CHAPTER V – CODE OF CONDUCT RULES
Section I – General Rules
Art. 19. The credit rating agency must:
I – exercise its activities with probity, good faith and professional ethics; II – communicate to the CVM, as soon as it becomes aware, conduct by analysts and other people involved in the process of issuing credit risk ratings that may indicate a violation of the rules issued by the CVM; III – in the event of a conflict of interest, inform the applicant that it is acting in conflict of interest and what the sources of this conflict are, before issuing the risk rating; IV – review all relevant work of the credit risk analyst in the 2 (two) years prior to their departure from the rolls of employees of the credit rating agency, if they have gone to work for evaluated entities or related parties; and V – prepare a code of conduct.

Art. 20. The code of conduct of the credit rating agency must provide, at minimum, for:
I – the adoption of procedures that ensure the quality of the risk rating issuance process; II – the commitment to seek honest and reliable information to be used in the preparation of its risk ratings; III – the monitoring and updating of risk ratings, except for those with a clear indication that there is no continuous monitoring, including:
a) regular review of the credit situation of the evaluated entity; b) review of the risk rating after becoming aware of any information that may result in an action by the agency, in accordance with the applicable methodology; and

CVM INSTRUCTION No. 521, OF APRIL 25, 2012 c) updating of the rating, as appropriate, in a timely manner, based on the results of the reviews described in items “a” and “b”; IV – the independence of the agency, the credit risk analysts and the other people involved in the risk rating issuance process, including regarding the policy of remuneration and segregation of activities; V – the adoption of mechanisms for identifying, eliminating, managing and disseminating situations of conflict of interest in the exercise of the credit risk rating activity; VI – the treatment of confidential information; VII – the policy for negotiating the terms of the contract with the evaluated entities; and VIII – the adoption of a policy for negotiating securities by the credit risk analysts and by the other people involved in the issuance of the risk rating.

Sole Paragraph. The agency's code of conduct must observe the Principles of the Code of Conduct for Credit Rating Agencies of the International Organization of Securities Commissions - IOSCO (Code of Conduct Fundamentals for Credit Rating Agencies of the International Organization of Securities Commissions - IOSCO).

Art. 21. Analysts and other people involved in the issuance of the risk rating must not:
I – request or accept money, gifts or favors from anyone who has commercial relations with the credit rating agency; and II – omit from the administrator responsible for supervising compliance with rules, procedures and internal controls and this Instruction any information about any irregularities committed by other people involved in the process of issuing credit risk ratings.

Section II – Prohibitions
Art. 22. It is prohibited for the credit rating agency:
I – issue risk ratings for the purpose of obtaining, for itself or for others, undue advantage;

CVM INSTRUCTION No. 521, OF APRIL 25, 2012

II – omit information about conflicts of interest; III – allow credit rating analysts or other persons involved in the credit rating issuance process to participate in the negotiation process of the service hiring terms; IV – condition the remuneration and performance evaluation of credit rating analysts and other persons involved in the credit rating issuance process on revenue from the rated entity or a related party; V – provide consulting services or any other services to the rated entity or a related party that may compromise the independence of the agency's work; VI – make proposals or recommendations, formally or informally, regarding financial assets on which the agency must issue a rating; and VII – issue or continue to monitor the credit rating, if:
a) the agency holds, directly or indirectly, financial assets of the rated entity or a related party; b) the rated entity or a related party is part of the control block, directly or indirectly, of the credit rating agency; c) the analysts or other persons involved in the credit rating issuance process hold, directly or indirectly, financial assets of an entity they have evaluated or a related party; d) the analysts or other persons involved in the credit rating issuance process are members of the board of directors or have some power of interference over the rated entity; e) the analysts or other persons involved in the credit rating issuance process have maintained any relationship with the rated entity or a related party that could cause a conflict of interest; or

CVM INSTRUCTION No. 521, OF APRIL 25, 2012 f) there are no reliable data or the complexity of the structure of the new type of financial asset may jeopardize the quality of the credit rating to be issued.

§ 1º The provision in item "a" of item VII does not apply to negotiations with investment fund shares, except if:
I – the agency can influence, directly or indirectly, the administration or management of the fund; or II – the fund concentrates its investments in sectors or companies covered by the credit rating produced by the agency.

§ 2º The provision in item "c" of item VII does not apply to negotiations with investment fund shares, except if:
I – the analysts or other persons involved in the issuance of the credit rating can influence, directly or indirectly, the administration or management of the fund; or II – the fund concentrates its investments in sectors or entities evaluated by them.

Art. 23. It is prohibited for credit rating analysts and other persons involved in the issuance of the credit rating to participate or influence in any way the credit rating of the rated entity if:
I – they hold, directly or indirectly, financial assets of the rated entity or a related party, applying the provisions of § 2º of art. 22; and II – they have maintained any relationship with the rated entity or a related party that could cause a conflict of interest.

CHAPTER VI – RULES, PROCEDURES AND INTERNAL CONTROLS
Section I – General Rules

Art. 24. The credit rating agency must implement rules, procedures and internal controls that enable the permanent compliance with current norms and regulations, referring to its own credit rating activity and the applicable ethical and professional standards.

CVM INSTRUCTION No. 521, OF APRIL 25, 2012
§ 1° The agency must prepare written manuals to ensure the implementation of the provisions in the caput.

§ 2° The agency must adopt an operational structure compatible to promote the effective compliance with the provisions in the caput.

Art. 25. The credit rating agency must organize its activities in such a way as to:
I – ensure that credit rating analysts and other persons involved in the issuance of the credit rating perform their function with independence; II – have control over the confidential information to which its administrators, credit rating analysts and other persons involved in the credit rating issuance process have access; III – punish infractions to the code of conduct; IV – identify any conflicts of interest that may affect the impartiality of credit rating analysts and other persons involved in the credit rating issuance process and the notes attributed by them, eliminate or manage them, as the case may be, and disclose; V – disclose any rotation of credit rating analysts, if adopted by the agency; VI – implement training programs for credit rating analysts and other persons involved in the credit rating issuance process, in order to give full effect to the rules provided in art. 24; and VII – ensure that employees who report any irregularities committed by other persons will not suffer negative consequences as a result of this attitude.

Art. 26. The administrator responsible for supervising the compliance with rules, procedures and internal controls and with this Instruction must:
I – exercise his function with independence; and

CVM INSTRUCTION No. 521, OF APRIL 25, 2012
II – send to the credit rating agency's administration bodies, by March 31 of each year, a report relating to the exercise ended on December 31, containing:
a) the conclusions of the examinations carried out; b) recommendations regarding any deficiencies, with the establishment of remediation schedules, if applicable; and c) the statement of the administrator responsible for the agency regarding the deficiencies found in previous checks and the measures planned, according to a specific schedule, or effectively adopted to remedy them.

§ 1º The administrator mentioned in the caput cannot act in functions related to the issuance of the credit rating and to any commercial activity.

§ 2º The report referred to in item II of the caput must be available to the CVM at the credit rating agency's headquarters.

Section II – Remuneration Policy

Art. 27. The credit rating agency must prepare and disclose a remuneration policy, highlighting, at a minimum:
I – method of performance evaluation of credit rating analysts, other persons involved in the issuance of credit rating and the credit rating committee, if any; II – remuneration model of the administrator responsible for the agency and of the administrator responsible for supervising the compliance with rules, procedures and internal controls and with this Instruction; and III – periodicity of review of the agency's remuneration policy.

Sole paragraph. The remuneration of the administrator responsible for supervising the compliance with rules, procedures and internal controls and with this Instruction cannot be associated with the agency's commercial performance.

CVM INSTRUCTION No. 521, OF APRIL 25, 2012
Section III – Segregation of Activities

Art. 28. The credit rating agency must ensure adequate segregation between credit rating activities and other activities carried out by the agency or by related parties, adopting operational procedures aimed at:
I – physical segregation of facilities between areas responsible for different activities provided regarding the securities market; II – the proper use of facilities, equipment and files common to more than one sector of the agency; III – the preservation of confidential information by administrators, credit rating analysts and other persons involved in the credit rating issuance process; and IV – restricted access to files, as well as the adoption of controls that restrict and allow identifying the persons who have access to confidential information.

§ 1º Outsourcing of operational functions cannot be done if it prejudices:
I – substantially the quality of the internal controls of the credit rating agency; or II – the supervision of the compliance with the obligations arising from this Instruction.

§ 2º The provision in item IV of art. 25 also applies to service providers subcontracted by the credit rating agency.

Section IV – Methodologies

Art. 29. The rating agency must:
I – adopt rigorous, systematic analysis methodologies, and whenever possible, that generate credit ratings capable of objective verification; and II – review, at least annually, the methodologies and models adopted by it.

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Sole paragraph. The review function provided for in item II of the caput must be independent of the function related to the issuance of the credit rating, and must report directly to the agency's administration bodies.

Art. 30. In the event of significant changes in the methodologies and procedures used for the preparation of the credit rating, the agency must:
I – immediately disclose, in the communication media it has used to disclose the credit rating, the list of likely credit ratings affected; and II – proceed to the review of the affected credit ratings as soon as possible, within a maximum period of 6 (six) months from the alteration.

Sole paragraph. In the case of item II of the caput, the agency must immediately highlight that those credit ratings are under observation.

Section V – Performance Information

Art. 31. The credit rating agency must prepare a document, based on the performance history of the ratings carried out since 2002 by the agency, by segment, in order to highlight:
I – initial credit ratings, and the transitions occurred for each rating, within 1 (one) and 3 (three) years (credit rating transition matrix); and II – the default rate relative to the issuer, structured operation, financial obligation or any other financial asset classified with a certain rating within 1 (one) and 3 (three) years (default rate matrix).

Sole paragraph. The credit rating agency that is part of a conglomerate with operations in other jurisdictions must also present the matrices with information from the global market.

CHAPTER VII – ARCHIVE MAINTENANCE

Art. 32. The credit rating agency must maintain, for a minimum period of 5 (five) years, or for a longer period by express determination of the CVM, in the event of an administrative process, all documents and information required by this Instruction, as well as all internal and external correspondence, all working papers, reports and opinions related to the exercise of its activities.

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Sole paragraph. The documents and information referred to in the caput may be stored in physical or electronic media, allowing the replacement of documents by their digitized images.

CHAPTER VIII – PENALTIES AND PENALTY FINE

Art. 33. A serious offense, for the purposes of the provisions of § 3º of art. 11 of Law No. 6.385, of 1976, is the infringement of the norms contained in arts. 19, 20, 22, 25, 28, 29, 31 and 32.

Art. 33. A serious offense, for the purposes of the provisions of § 3º of art. 11 of Law No. 6.385, of 1976, is the infringement of the norms contained in arts. 10, 15, 19, 20, 22, 25, 28, 29, 31 and 32.

• Art. 33 with wording given by CVM Instruction No. 605, of January 25, 2019.

Art. 34. In accordance with the specific norms regarding the subject, the credit rating agency is subject to a daily fine, due to non-compliance with the deadlines provided for in this Instruction for the delivery of periodic information, in the amount of R$ 500.00 (five hundred reais).

Art. 34. The credit rating agency is subject to the daily fine provided for in the specific norm dealing with penalty fines due to non-compliance with the deadlines provided for in this Instruction for the delivery of periodic information, without prejudice to the provisions of art. 11 of Law No. 6.385, of 1976.

• Art. 34 with wording given by CVM Instruction No. 609, of June 25, 2019.

CHAPTER IX – FINAL AND TRANSITIONAL PROVISIONS

Art. 35. The same restrictions and prohibitions imposed by this Instruction apply, where applicable, to applicants for credit ratings that are distinct from the rated entities.

Art. 36. The provisions of this Instruction do not imply any type of interference or influence on the content of the credit ratings or methodologies.

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Art. 37. Credit rating agencies must adapt to the provisions of this Instruction by January 1, 2013.

Art. 38. The deadlines provided for in art. 4º will be considered doubled when requesting the registration of credit rating agencies that are already operating in the country on the date of publication of this Instruction.

Art. 39. This Instruction enters into force on the date of its publication.

Signed original by
MARIA HELENA DOS SANTOS FERNANDES DE SANTANA
President

CVM INSTRUCTION No. 521, OF APRIL 25, 2012
ANNEX 4
Documents for the Authorization Request

Art.1° The authorization request must be accompanied by the following documents:
I – application signed by the administrator responsible for the agency's activities; II – copy of the constitutive acts in their current and updated version, duly registered in the competent notary office, which must contain provision for the exercise of the activity; III – copy of the norms to which the credit rating agency to be recognized by the CVM is subject in its country of origin; IV – registration information provided for in the Instruction that deals with the registry of participants in the securities market; V – reference form contained in Annex 13 of this Instruction, duly filled out and updated until the last business day of the month prior to the protocol of the authorization request at the CVM; VI – code of conduct; VII – description of the agency's internal control mechanisms; and VIII – financial statements accompanied by an independent auditor's report, if any.

CVM INSTRUCTION No. 521, OF APRIL 25, 2012
ANNEX 13
Content of the Reference Form
(information provided based on the exercise ended on December 31 or on positions held on this date, as applicable)

1. Identification of persons responsible for the content of the form
   1.1 Declaration by the administrator responsible for the agency and by the administrator responsible for supervising the compliance with rules, procedures and internal controls and with this Instruction, attesting that:
   a. they reviewed the reference form b. the set of information contained therein is a true, accurate and complete portrait of the structure, business, policies and practices adopted by the agency

2. History of the credit rating agency
   2.1 Brief history of the company's constitution
   2.2 Describe the main corporate events, such as incorporations, mergers, spin-offs, alienations and acquisitions of corporate control, through which the agency has passed in the last 3 (three) years

3. Human Resources
   3.1 Describe the agency's human resources, providing the following information:
   a. number of credit rating analysts (discriminating junior and senior analysts) b. number of other employees (by groups based on the activity performed)

4. Scope of Activities
   4.1 Briefly describe the activities developed
   4.2 Regarding each operational segment, indicate the following information:

CVM INSTRUCTION No. 521, OF APRIL 25, 2012 a. products and services marketed b. percentage of the agency's net revenue from each segment
c. the quantity of issuers, structured operations, financial obligations or other financial assets classified by the agency, by segment

4.3 Identify the rated entities or related parties that are responsible for more than 5% (five percent) of the agency's annual net revenue, informing the total amount of revenues generated for the agency

5. Economic Group
   5.1 Describe the economic group in which the agency is inserted, indicating:
   a. direct and indirect controllers b. controlled and affiliated companies
   c. the agency's participations in group companies
   d. group companies' participations in the agency e. companies under common control

5.2 If the agency wishes, include an organizational chart of the economic group in which it is inserted, provided it is compatible with the information presented in item 5.1.

6. Operational and Administrative Structure
   6.1 Describe the agency's administrative structure, as established in its contract or articles of association and internal regulations, identifying:
   a. attributions of each body and committee b. regarding administrators, their attributions and individual powers
   c. information on the prerequisites for holding the position of credit rating analyst
   d. information on the minimum qualification required of its credit rating analysts and other persons involved in the credit rating issuance process, distinguishing in junior, mid-level and senior, if applicable, including:
   i. academic background
   ii. professional experience

6.2 Regarding the administrator responsible for the agency, provide:
a. name b. age
c. profession
d. CPF (Individual Taxpayer Registry) e. other positions or functions held in the agency f. curriculum, containing the following information:
i. main professional experiences during the last 5 years,
indicating:

• company name
• position and functions inherent to the position
• main activity of the company in which such experiences occurred

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7. Rules, Procedures and Internal Controls
7.1 Describe the services performed, indicating the supervision and monitoring policies of the activities developed
7.2 Inform the quantity of professionals involved in the supervision process of compliance with rules, procedures and internal controls and with this Instruction
7.3 Describe the technological structure to ensure supervision of compliance with rules, procedures and internal controls and with this Instruction

7.4 Regarding the administrator responsible for supervising the compliance with rules, procedures and internal controls and with this Instruction, indicate:
a. name b. age
c. profession
d. CPF (Individual Taxpayer Registry) e. other positions or functions held in the agency f. curriculum, containing the following information:
i. main professional experiences during the last 5 years,
indicating:

• company name
• position and functions inherent to the position
• main activity of the company in which such experiences occurred

7.5 Describe the internal control policy, identifying:
a. mechanisms for controlling confidential information b. file maintenance procedures
c. analyst rotation procedure, if applicable
d. policy for disclosing unsolicited credit ratings e. policy for segregation of activities f. training program for credit rating analysts and other persons involved in the credit rating issuance process

CVM INSTRUCTION No. 521, OF APRIL 25, 2012
8. Remuneration
8.1 Describe the performance evaluation method for credit rating analysts, other persons involved in the issuance of credit rating and the credit rating committee
8.2 Describe the remuneration model of the administrator responsible for the agency and of the administrator responsible for supervising the compliance with rules, procedures and internal controls and with this Instruction
8.3 Inform the periodicity of review of the agency's remuneration policy
8.4 Provide other information about the remuneration policy that the agency deems relevant

9. Conflicts of Interest
   9.1 Describe the rules and policies for managing conflicts of interest, indicating:
   a. practices that the credit rating agency considers as conflicting b. rules for identifying and managing conflicts of interest
   c. procedure for professional monitoring of the former credit rating analyst who participated in the issuance or approval process of a credit rating, indicating the measures for reviewing the ratings
   d. prohibitions

9.2 Provide other information that the agency deems relevant

10. Credit Rating
    10.1 Procedures and Methodologies
    10.1.1 Describe the procedures and methodology used for assigning the credit rating, indicating:
    a. criteria, methods and adopted symbolism b. relationship with the rated entities or related parties; and weight attributed to the information provided by them
    c. process of preparation, approval and publication of the credit rating
    d. process of monitoring, review and updating of the credit rating e. hypotheses for refusal to issue a credit rating, suspension or withdrawal of the issued rating f. procedure adopted for the preparation of unsolicited credit ratings

CVM INSTRUCTION No. 521, OF APRIL 25, 2012
11. Describe any updates to the agency's code of conduct

12. Credit Rating Transition Matrix
    12.1 Inform, based on the performance history of the ratings carried out since 2002 by the agency, the initial credit ratings, the transitions occurred for each rating within 1 (one) and 3 (three) years. The history must be presented separately for each of the following segments:
    a. financial institutions b. insurance and reinsurance companies
    c. other rated entities
    d. debt securities e. securitization products f. public finance

12.2 Insert credit rating transition matrix, based on the performance history of the ratings carried out by the agency, in the global market, if applicable.

CVM INSTRUCTION No. 521, OF APRIL 25, 2012
13. Default Rate Matrix
13.1 Inform the default rate relative to an issuer, a structured operation, a financial obligation or any other financial asset within 1 (one) and 3 (three) years, based on the agency's performance history since 2002. The rates must be presented separately for each of the following segments:
a. financial institutions b. insurance and reinsurance companies
c. other rated entities
d. debt securities e. structured financial products f. public finance

13.2 Insert default rate matrix, based on the performance history of the ratings carried out by the agency, in the global market, if applicable.