CVM Instruction No. 531 of February 6, 2013 (Revoked)

CVM INSTRUCTION NO. 531, OF FEBRUARY 6, 2013
Amends provisions of CVM Instruction No. 356, of December 17, 2001, and CVM Instruction No. 400, of December 29, 2003.

THE PRESIDENT OF THE SECURITIES AND EXCHANGE COMMISSION - CVM makes public that the Collegiate Body, in a meeting held on January 30, 2013, based on the provisions of Articles 2, item IX, and 8, item I, of Law No. 6,385, of December 7, 1976, APPROVED the following Instruction:

Art. 1. Articles 2, 24, 34, 38, 39, 40-A, 46, and 56 of CVM Instruction No. 356, of December 17, 2001, shall enter into force with the following wording:

“Art. 2. ...
...
XIV – amortization: is the payment to the closed-end fund's unitholders of a portion of the value of their units, without reducing their number; and XV – co-obligation: is the contractual obligation or any other form of substantial retention of the credit risks of the asset acquired by the fund assumed by the assignor or third party, in which the risks of exposure to the variation of the asset's cash flow remain with the assignor or third party.

“Art. 24. ...
...
V – investment policy, discriminating, among other things:
a) eligibility criteria; and b) if applicable, the conditions for the assignment of credit rights; ...

CVM INSTRUCTION NO. 531, OF FEBRUARY 6, 2013
XI – ...
... b) specialized consulting; c) custody; and d) collection agent; ...
§ 1. ...
...
IV – the possibility of carrying out operations in which the managing institution acts as the counterparty to the fund, provided that the exclusive purpose is to manage the fund's cash and liquidity; ... VI – subject to the provisions of § 9 of Art. 40-A, the limits for the fund's investments in assets issued by or involving co-obligation:
a) by the managing institution and related parties, as defined by the accounting rules dealing with this subject; and b) by the service providers listed in Art. 39 and related parties, as defined by the accounting rules dealing with this subject; and VII – the validation of credit rights, subject to the provisions of § 12 of Art. 38, regarding:
a) eligibility criteria, as provided in item I of Art. 38; and b) assignment conditions, if applicable, with the indication of the responsible institution.

CVM INSTRUCTION NO. 531, OF FEBRUARY 6, 2013
...
§ 3. The attributes of credit rights that must be classified as eligibility criteria are those validated based on information:
I – that is under the control of the custodian; II – that is under the control of the service providers contracted by the custodian as provided in § 6 of Art. 38; or III – that can be obtained through reasonable efforts. § 4. Examples of information obtained through reasonable efforts referred to in item III of § 3, without excluding others, are any information provided by credit protection services.” (NR)

“Art. 34...
...
VIII – to provide, at least quarterly, the update of the fund's risk classification or the credit rights and other assets comprising the fund's portfolio; IX – in the case provided for in item “b”, item V of Art. 24, to have adequate and verifiable written rules and procedures that allow it to verify the compliance by the responsible institution with the obligation to validate credit rights regarding the assignment conditions established in the fund's regulations; and X – to provide information regarding acquired credit rights to the Credit Information System of the Central Bank of Brazil (SCR), in accordance with the specific regulation. § 1. The disclosure of the information provided for in item IV of this article may be provided through entities of the National Financial System institutions, provided that it is carried out in widely circulated periodicals, observing the responsibility of the designated administrator under Art. 8 of this instruction for the regularity of providing this information.

CVM INSTRUCTION NO. 531, OF FEBRUARY 6, 2013
§ 2. The rules and procedures provided for in item IX must:
I – be included in the fund's offering prospectus, if any; II – be made available and kept updated on the fund administrator's website, along with the other information referred to in Art. 53-A.” (NR)

“Art. 38. The custodian is responsible for the following activities:
I – validate credit rights regarding the eligibility criteria established in the regulations; II – receive and verify the documentation that evidences the collateral of credit rights represented by financial, commercial, and service operations; III – during the fund's operation, quarterly, verify the documentation that evidences the collateral of credit rights represented by financial, commercial, and service operations; IV – carry out the physical and financial settlement of credit rights, evidenced by the credit assignment instrument and documents proving the operation; V – hold custody and safeguard the documentation related to credit rights and other assets comprising the fund's portfolio; VI – ensure that the credit rights documentation is kept, at its own expense, updated and in perfect order, with a pre-established methodology and freely accessible for independent audit, credit rating agencies contracted by the fund, and regulatory bodies; and VII – collect and receive, on behalf of the fund, payments, title redemptions, or any other income related to the custodied titles, depositing the received amounts directly into:
a) an account owned by the fund; or

CVM INSTRUCTION NO. 531, OF FEBRUARY 6, 2013 b) a special account established by the parties with financial institutions, under contract, intended to receive deposits to be made by the debtor and held in custody there, for release after the fulfillment of specified requirements verified by the custodian (escrow account). § 1. In funds with a significant quantity of assigned credits and extensive diversification of debtors, the custodian may carry out the collateral verification of credit rights referred to in items II and III by sampling, provided that such option is provided for in the fund's regulations, observing the provisions of § 13. ... § 6. Custodians may only contract service providers for the verification of collateral of credit rights referred to in items II and III and for the custody of the documentation referred to in items V and VI, without prejudice to their responsibility. § 7. The service providers contracted under § 6 may not be:
I – originator;
II – assignor;
III – specialized consultant; or
IV – manager.
§ 8. The restriction mentioned in § 7 also applies to related parties, as defined by the accounting rules dealing with this subject, to the participants listed in items I to IV.
§ 9. In cases of contracting provided for in § 6, the fund's custodian must have adequate and verifiable written rules and procedures to:
I – allow effective control by the custodian over the movement of documentation related to credit rights and other assets comprising the fund's portfolio under the custody of the contracted service provider; and

CVM INSTRUCTION NO. 531, OF FEBRUARY 6, 2013
II – ensure compliance by the contracted service provider with the provisions:
a) in items II and III of the main text, regarding the verification of collateral of credit rights; and b) in items V and VI of the main text, regarding the custody of documentation.
§ 10. The rules and procedures provided for in § 9 must:
I – be included in the fund's offering prospectus, if any; II – be included in the service provision contract; III – be made available and kept updated on the fund administrator's website, along with the other information referred to in Art. 53-A; § 11. For the purposes of this article, credit rights documentation is considered that:
I – original issued in analog format;
II – issued from characters created in a computer or equivalent technical medium and containing the signature of the issuer using a certificate admitted by the parties as valid; III – digitized and certified in accordance with the provisions of law and specific regulation. § 12. The deadlines for the validation referred to in item I of the main text and for the receipt and verification referred to in item II of the main text must:
I – be defined in the fund's regulations;
II – be compatible with the nature and characteristics of the credit rights; and III – be as close as possible to the entry of the credit right into the fund.

CVM INSTRUCTION NO. 531, OF FEBRUARY 6, 2013
§ 13. The verification referred to in item III of the main text must encompass:
I – the credit rights comprising the fund's portfolio; and II – the defaulted and substituted credits in the said quarter, for which the provisions of §§ 1 and 3 of Art. 38 do not apply.
§ 14. The custodian is exempt from the obligation to verify the collateral of credit rights, referred to in item I of § 13, provided that such exemption is provided for in the fund's regulations, if it receives and verifies the documentation that evidences the collateral of credit rights individually and in full, as provided in § 12.” (NR)

“Art. 39. The managing institution may, without prejudice to its responsibility and that of the designated director or managing partner, through resolution of the general meeting of condominium owners or if provided for in the fund's regulations, contract services of:
I – specialized consulting, aimed at supporting and subsidizing the administrator and, if applicable, the manager, in their activities of analyzing and selecting credit rights to comprise the fund's portfolio; II – portfolio management with third parties authorized by the CVM in accordance with the regulation applicable to securities portfolio administrators; III – custody; and IV – collection agent, to collect and receive, on behalf of the fund, defaulted credit rights, subject to the provisions of item VII of Art. 38.

§ 1. If the administrator accumulates the functions of management and custody of the FIDC, it must maintain total segregation of such activities in accordance with the regulation applicable to securities portfolio administrators. § 2. It is prohibited for the administrator, manager, custodian, and specialized consultant or related parties, as defined by the accounting rules dealing with this subject, to assign or originate, directly or indirectly, credit rights to the funds in which they act.

CVM INSTRUCTION NO. 531, OF FEBRUARY 6, 2013
§ 3. The specialized consultant and the assignor may perform the activities of:
a) collection agent referred to in item IV of the main text; and b) validation of assignment conditions referred to in item “b” of item VII of § 1 of Art. 24.
§ 4. In cases of contracting provided for in the main text, the fund's managing institution must have adequate and verifiable written rules and procedures that allow it to ensure compliance by the contracted service provider with its obligations. § 5. The rules and procedures provided for in § 4 must:
I – be included in the fund's offering prospectus, if any; II – be included in the service provision contract; and III – be made available and kept updated on the fund administrator's website, along with the other information referred to in Art. 53-A.” (NR)

“Art. 40-A. The fund may acquire credit rights, subject to the prohibition provided in § 2 of Art. 39, and other assets from the same debtor, or co-obligation of the same person or entity, up to 20% (twenty percent) of its net equity. § 1. The percentage referred to in the main text may be elevated when:
I – the debtor or co-obligor:
a) has registration as a public company; b) is a financial institution or equivalent, authorized to operate by the Central Bank of Brazil; or c) is a business entity whose financial statements for the social year immediately preceding the date of the fund's constitution were prepared in accordance with the provisions of Law No. 6,404, of December 15, 1976, and the regulation issued by the CVM, and audited by an independent auditor registered with the CVM, except as provided in § 3 of this article; and II – it concerns investments in:
a) federal public bonds; b) repurchase agreements collateralized by federal public bonds; and c) units of funds that have as an investment policy the exclusive allocation in the bonds referred to in items “a” and “b”. § 2. In the case of item “c” of item I of § 1, the financial statements of the debtor or co-obligor, and the respective opinion of the independent auditor, must be filed with the CVM by the managing institution, and must be updated annually:
I – until the date of the fund's closure; or
II – until the year in which the credit rights of the debtor or co-obligor cease to represent more than 20% (twenty percent) of the credit rights comprising the fund's net equity.
§ 3. The filing with the CVM of the financial statements and the independent auditor's opinion referred to in item “c” of item I of § 1 must occur within a maximum period of 3 (three) months after the closing of the social year, or on the same day they are made available to the partners, if this occurs on an earlier date. § 4. Regarding business entities responsible for more than 20% (twenty percent) of the credit rights comprising the fund's net equity, the filing with the CVM and the preparation of financial statements as provided in item “c” of item I of § 1 of this article are exempt, provided that the fund's units:
I – are the subject of a public distribution offering whose target audience is exclusively companies belonging to the same economic group, and their respective administrators and controlling shareholders, with trading of the units in the secondary market prohibited; or

CVM INSTRUCTION NO. 531, OF FEBRUARY 6, 2013
II – have a unit value equal to or greater than R$ 1,000,000.00 (one million Reais), and are the subject of a public offering intended for subscription by no more than 20 (twenty) investors.
...
§ 9. The cases for raising the limit of 20% (twenty percent) for investment in other assets from the same debtor referred to in item I of § 1 do not apply to assets issued by or co-obligated by the administrator and manager or related parties, as defined by the accounting rules dealing with this subject, for which the limit must be observed. (NR)”

“Art. 46. ...
§ 1. ...
...
II – the change or substitution of third parties contracted to provide custody, specialized consulting, portfolio management, or collection agent services referred to in Art. 39; ...” (NR)

“Art. 56. ...
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XI – expenses with the professional specially hired to safeguard the interests of the condominium owners, as provided in item I of Art. 31; and XII – expenses with the hiring of a collection agent referred to in item IV of Art. 39. ...” (NR)

CVM INSTRUCTION NO. 531, OF FEBRUARY 6, 2013
Art. 2. Items 1 and 2 of Annex III-A of CVM Instruction No. 400, of December 29, 2003, shall enter into force with the following wording:

“1. INFORMATION ON THE OPERATION STRUCTURE:
1.1 Identification of the institutions contracted by the offerer, including, as applicable, the manager, the custodian, the rating agency, the independent auditor, the fiduciary agent, specialized consultant, and other service providers, accompanied by a brief description of their respective functions and the criteria adopted for their hiring.
...
” (NR)

“2. INFORMATION ON CREDIT RIGHTS:
...
2.10.2 procedures of the custodian or fiduciary agent, as applicable, and other service providers regarding defaults, losses, bankruptcies, recovery, including mention regarding eventual execution of guarantees;
2.10.3 procedures of the custodian or fiduciary agent, as applicable, and other service providers regarding the verification of collateral of credit rights; and
2.10.4 procedures of the custodian and other service providers regarding the custody of documentation related to credit rights.
...
2.12 Description of the procedures adopted by the administrator to verify compliance with the obligations of service providers possibly contracted for specialized consulting, management, custody, and collection of defaulted credits.” (NR)

Art. 3. § 7 of Art. 40 of CVM Instruction No. 356, of December 17, 2001, is repealed.
Art. 4. This Instruction enters into force on the date of its publication.

CVM INSTRUCTION NO. 531, OF FEBRUARY 6, 2013
Sole Paragraph. Investment funds in credit rights and investment funds in units of investment funds in credit rights that have already obtained registration of operation under Art. 8, on the date of publication of this Instruction, must adapt to the provisions of this Instruction:
I – by February 1, 2014; or
II – immediately, if they conduct a public offering of units registered or exempt from registration with the CVM.

Original signed by
LEONARDO P. GOMES PEREIRA
President