CVM Instruction No. 593 of November 17, 2017, with amendments introduced by CVM Resolution No. 21/21

SECURITY AND EXCHANGE COMMISSION OF BRAZIL (CVM) Seven of September Street, 111/2-5th and 23-34th Floors – Center – Rio de Janeiro - RJ – ZIP Code: 20050-901 – Brazil Tel.: (21) 3554-8686 - www.cvm.gov.br

CVM INSTRUCTION No. 593, OF NOVEMBER 17, 2017, WITH THE AMENDMENTS INTRODUCED BY CVM RESOLUTION No. 21/21.

Amends provisions of CVM Instructions No. 497, of June 3, 2011, No. 539, of November 13, 2013, and No. 558, of March 26, 2015.

THE PRESIDENT OF THE SECURITY AND EXCHANGE COMMISSION OF BRAZIL - CVM makes it known that the Collegiate Board, in a meeting held on November 1, 2017, in view of the provisions of Articles 8, I; 15, III and § 1º; 16, I and III; and 23 of Law No. 6.385, of December 7, 1976, APPROVED the following Instruction:

Art. 1. Article 13 of CVM Instruction No. 497, of June 3, 2011, shall be effective with the following wording:

“Art. 13. ......
......
§ 1º To exercise the activities of portfolio administration, consulting, or securities analysis, the autonomous investment agent who is registered with the CVM for the exercise of those activities in accordance with the current regulation must request the cancellation of their accreditation as an autonomous investment agent with the accrediting entity. ......” (New wording)

Art. 2. Articles 6 and 9 of CVM Instruction No. 539, of November 13, 2013, shall be effective with the following wording:

“Art. 6. ......
......
Sole Paragraph. The measures required in the main text are waived when the client is demonstrably implementing recommendations provided by a securities consultant authorized by the CVM.” (New wording)

“Art. 9. ......
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II – the client is a legal entity of public law; III – the client has their portfolio of securities administered discretely by a portfolio administrator of securities authorized by the CVM; or IV – the client already has their profile defined by a securities consultant authorized by the CVM and is implementing the recommendation provided by them. § 1º In the case of item IV, persons qualified to act as members of the distribution system must require the client to provide the profile assessment made by the securities consultant. § 2º The waiver provided for in item IV does not extend to cases where the products, services, and operations commanded by the client do not relate directly to the implementation of recommendations from the consultant they hired.” (New wording)

Art. 2. REVOKED
Art. 2 revoked by CVM Resolution No. 21, of February 25, 2021.

Art. 3. Articles 2, 3, 4, 5, 9, 10, 14, 16 of CVM Instruction No. 558, of March 26, 2015, shall be effective with the following wording:

“Art. 2. ......
......
§ 1º Registration in the asset manager category authorizes the management of a portfolio of securities, including the application of financial resources in the securities market on behalf of the investor.
......
§ 4º REVOKED” (New wording)

“Art. 3. ......
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II – be graduated in a higher education course or equivalent, in an institution officially recognized in the country or abroad;
......
VII – not be prevented from administering their assets or disposing of them due to a judicial or administrative decision; VIII – not be included in the credit protection services registry; IX – not be included in the list of defaulting principals of an entity administering an organized market; X – not have titles protested against them; and XI – fill out the form in Annex 15-I to prove their aptitude for the exercise of the activity.
......
§ 4º In the cases provided for in items VIII to X of the main text, the SIN may evaluate the convenience and opportunity of granting the requested authorization, considering the individual situation of the applicant, as well as the circumstances and materiality of the case.” (New wording)

“Art. 4. ......
......
§ 2º The director responsible for the administration of securities portfolios cannot be responsible for any other activity in the capital market, in the institution, or outside it.
......
§ 4º The directors responsible for the administration of securities portfolios, for the implementation and compliance of rules, policies, procedures, and internal controls and of this Instruction, for risk management, and for the distribution of investment fund shares:
I – may exercise the same functions in controlling, controlled, affiliated companies, or under common control; and II – cannot obtain or maintain registration as an autonomous investment agent. ......” (New wording)

“Art. 5. In the event of the impediment of any of the directors responsible for the administration of securities portfolios for a period exceeding 30 (thirty) days, the substitute must assume said responsibility, and the CVM must be notified in writing within 7 (seven) business days from its occurrence.” (New wording)

“Art. 9. ......
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III – if the falsity of the documents or declarations presented to obtain the authorization is found;

IV – if, due to a subsequently proven fact, it becomes evident that the person authorized by the CVM no longer meets any of the requirements and conditions established in this Instruction for the granting of the authorization; or V – if the suspension of the authorization referred to in Art. 8-A is not reversed within a period of 12 (twelve) months. § 1º The SIN must previously notify the portfolio administrator of the opening of a cancellation procedure for their registration, in accordance with items III, IV, and V of the main text, granting them a period of 10 (ten) business days, counted from the date of receipt of the notification, extendable by an equal period, to present their defense reasons or regularize their registration. § 2º From the decision to cancel registration according to the provisions of items III, IV, and V of the main text, an appeal to the CVM with suspensive effect may be filed, in accordance with current regulations.” (New wording)

“Art. 10. ......
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§ 6º Failure to observe the deadline mentioned in § 4º implies automatic denial of the cancellation request.” (New wording)

“Art. 14. ......
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V – policy for trading securities by administrators, employees, collaborators, and the company itself; ......” (New wording)

“Art. 16. ......
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IX – in the case of an administrator, a legal entity, establishing a policy related to the trading of securities by administrators, employees, collaborators, controlling partners, and the company itself. ......” (New wording)

Art. 3. REVOKED
Art. 3 revoked by CVM Resolution No. 21, of February 25, 2021.

Art. 4. CVM Instruction No. 558, of 2015, shall be effective with the addition of the following Articles 8-A and 16-A:

“Art. 8-A. The SIN must suspend the authorization of the portfolio administrator, natural or legal person, if the periodic obligations provided for in Art. 15 of this Instruction are not complied with for a period exceeding 12 (twelve) months. § 1º The SIN must inform the respective securities portfolio administrator of the suspension of their authorization by means of a letter sent to the electronic address contained in their registration form, and by means of a communication on the CVM page on the worldwide computer network. § 2º The securities administrator whose registration is suspended may request the reversal of the suspension through a reasoned request, sent to the SIN, accompanied by documents proving compliance with the overdue periodic obligations. § 3º The SIN has 15 (fifteen) business days to analyze the request for reversal of the suspension, counted from the date of protocol of all documents necessary to prove compliance with the overdue periodic obligations. § 4º The period referred to in § 3º may be interrupted, only once, if the SIN requests additional information or documents from the applicant, with a new period starting to run from the fulfillment of the requirements. § 5º The applicant has 10 (ten) business days, extendable by an equal period upon prior and reasoned request formulated by the applicant to the SIN, to fulfill the formulated requirements. § 6º The absence of manifestation by the SIN within the period mentioned in § 3º implies automatic approval of the request for reversal of the suspension of the administrator's registration. § 7º Failure to observe the period mentioned in § 5º implies automatic denial of the request for reversal of suspension.” (New wording)

“Art. 16-A. The provision of portfolio administration services of securities using automated systems or algorithms is subject to the obligations and rules provided for in this Instruction and does not mitigate the responsibilities of the administrator. Sole Paragraph. The source code of the automated system or the algorithm must be available for inspection by the CVM at the company's headquarters in an uncompiled version.” (New wording)

Art. 4. REVOKED
Art. 4 revoked by CVM Resolution No. 21, of February 25, 2021.

Art. 5. Articles 1 and 2 of Annex 6-I of CVM Instruction No. 558, of 2015, shall be effective with the following wording:

“Art. 1. ......
......
III - copy of the diploma of completion of higher education or equivalent, in an institution officially recognized in the country or abroad; IV – registration information provided for in the Instruction that deals with the registry of participants in the securities market; V - copy of the CPF (Individual Taxpayer Registry) and identity card; and VI – items 1, 3, 5, and 6 of the reference form contained in Annex 15-I of this Instruction, filled out and updated until the last business day of the month prior to the protocol of the authorization request at the CVM.” (New wording)

“Art. 2. ......
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V – registration information provided for in the Instruction that deals with the registry of participants in the securities market; VI – copy of the CPF and identity card; and VII – items 1, 3, 5, and 6 of the reference form contained in Annex 15-I of this Instruction, filled out and updated until the last business day of the month prior to the protocol of the authorization request at the CVM. ......” (New wording)

Art. 5. REVOKED
Art. 5 revoked by CVM Resolution No. 21, of February 25, 2021.

Art. 6. Item 6 of Annex 15-I of CVM Instruction No. 558, of 2015, shall be effective with the following wording:

“6. Additional declarations by the administrator, informing about:
a. accusations resulting from administrative proceedings, as well as punishments suffered, in the last 5 (five) years, as a result of activity subject to the control and supervision of the CVM, Central Bank of Brazil, Superintendence of Private Insurance – SUSEP, or the National Superintendence of Complementary Pension – PREVIC, including that they are not disqualified or suspended from holding office in financial institutions and other entities authorized to operate by the aforementioned agencies b. convictions for bankruptcy crime, malfeasance, bribery, extortion, embezzlement, money laundering, or concealment of assets, rights, and values, against the popular economy, the economic order, consumer relations, public faith, or public property, the national financial system, or a criminal penalty that prohibits, even temporarily, access to public office, by a final and unappealable decision, except in the case of rehabilitation
c. impediments to administer their assets or dispose of them due to judicial and administrative decisions
d. inclusion in the credit protection services registry e. inclusion in the list of defaulting principals of an entity administering an organized market f. titles protested against them g. REVOKED h. REVOKED” (New wording)

Art. 6. REVOKED
Art. 6 revoked by CVM Resolution No. 21, of February 25, 2021.

Art. 7. Items “3.1.d”, “8.5.a.ii”, and “12” of Annex 15-II of CVM Instruction No. 558, of 2015, shall be effective with the following wording:

“3.1.d list of natural persons who are registered with the CVM as portfolio administrators of securities and who act exclusively as proxies, employees, or partners of the company” (New wording)

“8.5.a.ii approval in professional certification exam (optional)” (New wording)

“12 Additional declarations by the director responsible for administration, informing about:
a. accusations resulting from administrative proceedings, as well as punishments suffered, in the last 5 (five) years, as a result of activity subject to the control and supervision of the CVM, Central Bank of Brazil, Superintendence of Private Insurance – SUSEP, or the National Superintendence of Complementary Pension – PREVIC, including that they are not disqualified or suspended from holding office in financial institutions and other entities authorized to operate by the aforementioned agencies b. convictions for bankruptcy crime, malfeasance, bribery, extortion, embezzlement, money laundering, or concealment of assets, rights, and values, against the popular economy, the economic order, consumer relations, public faith, or public property, the national financial system, or a criminal penalty that prohibits, even temporarily, access to public office, by a final and unappealable decision, except in the case of rehabilitation
c. impediments to administer their assets or dispose of them due to judicial and administrative decisions
d. inclusion in the credit protection services registry e. inclusion in the list of defaulting principals of an entity administering an organized market f. titles protested against them g. REVOKED h. REVOKED” (New wording)

Art. 7. REVOKED
Art. 7 revoked by CVM Resolution No. 21, of February 25, 2021.

Art. 8. Managers who also act as securities consultants in accordance with the specific regulation on such participants and whose activity is not limited to incidental and accessory activity to the portfolio administration service itself must adapt to the provisions of the specific regulation on securities consultants within a period of 1 (one) year after the effectiveness of this instruction.

Art. 9. § 4º of Art. 2, items 6.g and 6.h of Annex 15-I, and 12.g and 12.h of Annex 15-II, of CVM Instruction No. 558, of March 26, 2015, are revoked.

Art. 9. REVOKED
Art. 9 revoked by CVM Resolution No. 21, of February 25, 2021.

Art. 10. This Instruction enters into force on the date of its publication.

Original signed by
MARCELO BARBOSA
President