CVM Instruction No. 608 of June 25, 2019

COMMISSION OF SECURITIES AND EXCHANGE - CVM
Rua Sete de Setembro, 111/2-5th and 23-34th Floors, Center, Rio de Janeiro/RJ – ZIP: 20050-901 – Brazil - Tel.: (21) 3554-8686 Rua Cincinato Braga, 340/2nd, 3rd and 4th Floors, Bela Vista, São Paulo/SP – ZIP: 01333-010 – Brazil - Tel.: (11) 2146-2000 SCN Q.02 – Bl. A – Ed. Corporate Financial Center, S.404/4th Floor, Brasília/DF – ZIP: 70712-900 – Brazil - Tel.: (61) 3327-2030/2031 www.cvm.gov.br

CVM INSTRUCTION NO. 608, OF JUNE 25, 2019

Provides for coercive fines and revokes CVM Instruction No. 452, of April 30, 2007.

The PRESIDENT OF THE COMMISSION OF SECURITIES AND EXCHANGE - CVM makes public that the Collegiate Board, in a meeting held on May 30, 2019, based on items II and IV, and § 1 of art. 9, and § 11 of art. 11 of Law No. 6.385, of December 7, 1976, APPROVED the following Instruction:

CHAPTER I – SCOPE AND PURPOSE

Art. 1. This Instruction regulates the imposition of coercive fines by the CVM on persons who fail to provide the periodic or occasional information required in normative acts, or who fail to comply with specific orders issued by the CVM.

CHAPTER II – TYPES OF COERCIVE FINES

Art. 2. For the purposes of this Instruction, the coercive fines imposed by the CVM are of two natures:
I – ordinary fine, understood as the fine applied due to the delay in providing periodic or occasional information provided for in specific regulation; and II – extraordinary fine, understood as the fine applied due to the non-compliance with a specific order issued by the CVM in the cases and legal forms.

Sole Paragraph. For the purposes of this Instruction, consider:
I – periodic information, the information due by the market participant on a certain date or upon the verification of a routine event of certain occurrence; and II – occasional information, the information due by the market participant upon the verification of an extraordinary event or of uncertain occurrence.

CVM INSTRUCTION NO. 608, OF JUNE 25, 2019

CHAPTER III – APPLICABLE RULES TO THE ORDINARY FINE

Section I – Calendar for submission of periodic information

Art. 3. The superintendencies responsible for monitoring the submission of periodic information must publish, by December 15 of each year, on the CVM page on the worldwide computer network, a list of the periodic information that must be disclosed by participants in the following fiscal year, indicating the respective submission deadlines and normative bases, and alerting that the non-disclosure of the information within the indicated deadlines subjects the application of the daily fine provided for in Annex 3 of this Instruction.

§ 1. A copy of the calendar for submission of periodic information must be sent monthly to the electronic address recorded in the participant's registration with the CVM by the last business day of the month prior to that in which information must be provided.

§ 2. The monthly sending provided for in § 1 may be interrupted after 60 (sixty) days counted from the last periodic information due by each type of participant in the fiscal year.

§ 3. If a new obligation to disclose periodic information is created after the deadline provided for in the caput, the submission calendar must be updated on the CVM page on the worldwide computer network and communication regarding this update must be sent to the electronic address recorded in the participant's registration with the CVM.

§ 4. The disclosures made by the CVM under the terms of this article:
I – have an informative character and seek only to alert about the calendar for submission of periodic information, not exempting the participant from paying attention to the disclosure deadlines established in the regulation; and II – must discriminate the information due by the types of participants based on the nature of their respective registrations, considering, including, in the case of investment funds, the different due dates of obligations associated with each type of fund.

CVM INSTRUCTION NO. 608, OF JUNE 25, 2019

Section II – Prior communication to the application of ordinary fine for occasional information

Art. 4. Upon verification of the non-compliance with the obligation to provide occasional information, the superintendency responsible for monitoring the information must send specific communication, addressed to the person responsible recorded in the participant's registration with the CVM, alerting that the non-presentation of the information by the end of the deadline indicated in the communication subjects the application of the daily fine provided for in Annex 3 of this Instruction.

Sole Paragraph. The communication referred to in the caput:
I – must be issued within 5 (five) business days after the superintendency becomes aware of the occurrence of the non-compliance with the obligation to provide occasional information; and II – must indicate the norms that support both the obligation to present the information and the imposition of the daily fine and its respective value.

Section III – Non-application of the ordinary fine

Art. 5. The ordinary coercive fine will not be applied if the responsible superintendency deems it convenient to adopt another administrative procedure related to the non-compliance with the deadlines for submission of periodic and occasional information.

Art. 6. The application of the ordinary fine is prohibited:
I – if the information is delivered late, but before the communication referred to in art. 4; II – to a market participant who, at the time of the application of the fine, has its registration suspended or cancelled.

CVM INSTRUCTION NO. 608, OF JUNE 25, 2019

CHAPTER IV – APPLICABLE RULES TO THE EXTRAORDINARY FINE

Section I – Prior communication to the application of extraordinary fine

Art. 7. The responsible superintendency, the General Superintendent, or the member of the Collegiate Board acting as Rapporteur, when determining the abstention or practice of an act, must notify the recipient of the order that its non-compliance by the end of the deadline indicated in the communication subjects the application of the extraordinary fine.

Sole Paragraph. The notification referred to in the caput must indicate the norms that support both the determination and the imposition of the daily fine and its respective value.

Section II – Value of the extraordinary fine

Art. 8. Except as provided in arts. 9 and 10, the extraordinary fine may be fixed at a daily value of up to R$ 10,000.00 (ten thousand reais).

Art. 9. In Deliberations approved by the Collegiate Board with the aim of preventing or correcting abnormal market situations, the daily value of the extraordinary fine cannot exceed the limits established in Annex 9 and, when it is possible to ascertain, must be fixed considering:
I – the economic capacity of the person involved in the irregular conduct; II – the degree of harm or the potential for harm caused to the capital market and to investors; III – the values involved in the irregular conduct; IV – the advantage sought by the person involved in the irregular conduct; V – the duration of the irregular conduct; VI – the collaboration of the person involved in the irregular conduct in the provision of information required by the CVM; and

CVM INSTRUCTION NO. 608, OF JUNE 25, 2019

VII – the fact that the person involved has already been subject to a CVM determination to abstain from acting irregularly in the market.

Sole Paragraph. If the prohibition involves more than one conduct, the coercive fine must be fixed considering the activity subject to the highest value defined in Annex 9.

Art. 10. The responsible superintendency may apply an extraordinary fine of up to R$ 25,000.00 (twenty-five thousand reais) to the person who, previously communicated, fails to appear to provide information on the indicated date.

§ 1. The value of the fine may be increased to up to R$ 50,000.00 (fifty thousand) in cases where the person, duly notified:
I – fails to appear on the previously agreed date, at their request, to provide information; or II – reiterates the non-appearance on a new date scheduled by the CVM to provide information.

§ 2. The fines referred to in the caput and § 1 apply on the date when the non-appearance to provide information is verified.

CHAPTER V – APPLICABLE RULES TO THE ORDINARY AND EXTRAORDINARY FINES

Section I – Possibility of assessment of administrative liabilities

Art. 11. The application of a coercive fine does not preclude the eventual assessment of liability under the terms of art. 11 of Law No. 6.385, of 1976.

Section II – Communications

Art. 12. Except when expressly indicated otherwise, the communications provided for in this Instruction may be carried out:
I – by electronic means;
II – by postal mail, with receipt acknowledgment; or III – in case of urgency, by a CVM server, who will certify the delivery of the communication.

§ 1. The communications referred to in the caput are also valid when carried out by any other means that ensures the interested party's knowledge.

§ 2. The CVM may make public the sending of the communications provided for in this Instruction in order to alert investors and market agents regarding the existence of any irregular practice or activity.

Art. 13. The notification of the application of a coercive fine is considered carried out on the date:
I – of the knowledge by the person subject to the fine or by their attorney constituted in the process in which the fine was applied; II – of the delivery at the recipient's physical address by postal mail; or III – of access to an electronic communication system, when made available by the CVM.

§ 1. If the application of the hypotheses of the caput is unsuccessful, the notification may be carried out by means of publication of a notice on the CVM page on the worldwide computer network.

§ 2. The notification of the application of a coercive fine must inform that, from the decision to apply the fine, an appeal may be filed to the Collegiate Board in the form of arts. 16 and 17.

Section III – Incidence of the coercive fine

Art. 14. The coercive fine applies from the next business day:
I – to the due date for the submission of periodic information; or II – to the end of the deadline indicated in the communications referred to in arts. 4 and 7.

CVM INSTRUCTION NO. 608, OF JUNE 25, 2019

Art. 15. Without prejudice to the provisions of art. 10, § 2, the coercive fine applies until the date when the obligation is fulfilled or for a maximum period of 60 (sixty) days.

Section IV – Appeal against the decision to apply the fine

Art. 16. An appeal may be filed to the Collegiate Board against decisions of the responsible superintendency, the General Superintendent, or a member of the Collegiate Board acting as Rapporteur regarding the application of a coercive fine, within 10 (ten) days counted from the date of notification, observing the provisions of the sole paragraph of art. 21.

Art. 17. The appeal must be presented in a written and reasoned petition, immediately accompanied by the documents on which the appellant's argumentation is based, and must be addressed to the authority indicated in art. 16 who issued the challenged decision.

Art. 18. Within 10 (ten) business days counted from the receipt of the appeal, the authority who issued the appealed decision may reform or maintain it, in a reasoned dispatch, forwarding, in the second case, the process to the Collegiate Board for decision.

Art. 19. The appellant will be considered notified of the result of the Collegiate Board's decision on the date:
I – of the delivery at the recipient's physical address by postal mail; or II – of access to an electronic communication system, when made available by the CVM.

Art. 20. At the request of the appellant, the Collegiate Board may appreciate, within the scope of a request for reconsideration, the allegation of the existence of omission, obscurity, contradiction, or material or factual error in the decision.

§ 1. The request for reconsideration must be presented within 5 (five) business days counted from the communication referred to in art. 19 and must be addressed to the superintendency that analyzed the appeal or to the member of the Collegiate Board who drafted the leading vote, if any.

§ 2. The request for reconsideration will not be known if:
I – it is untimely; or
II – it is formulated by a person who is not the appellant.

§ 3. The provisions of art. 19 of this Instruction apply to the notification of the decision on the request for reconsideration.

CHAPTER VI – FINAL PROVISIONS

Art. 21. Credits arising from unpaid coercive fines at the due date, plus default interest under the applicable legislation, will be registered in the Informative Register of Non-Paid Credits of the Federal Public Sector (Cadin) and in the CVM's Active Debt, and subject to judicial or extrajudicial execution.

Sole Paragraph. Registration in Cadin will not be carried out while the appeals referred to in arts. 16 and 20 are pending decision.

Art. 22. CVM Instruction No. 452, of April 30, 2007, is revoked.

Art. 23. This Instruction enters into force on January 1, 2020 and applies:
I – to the submission of periodic or occasional information whose submission due date is subsequent to the effectiveness of this Instruction; and II – to the non-compliance with a specific order issued by the CVM after the effectiveness of this Instruction.

Signed original by
Marcelo Barbosa
President

CVM INSTRUCTION NO. 608, OF JUNE 25, 2019

Annex 3
Daily value of the ordinary fine for periodic information provided for in specific regulation

Art. 1. The ordinary coercive fine will be applied with the following daily value:

Participant | Daily Value due to non-delivery of information --- | --- Administrator of investment fund in credit rights – FIDC and of investment funds in shares of investment funds in credit rights – FICFIDC | I – R$ 1,000.00 (one thousand reais) for audited financial statements; and II – R$ 500.00 (five hundred reais) for the other documents. Administrator of national cinematographic industry financing fund – FUNCINE | I – R$ 1,000.00 (one thousand reais) for audited accounting statements; and II – R$ 500.00 (five hundred reais) for the other documents. Administrator of investment funds in credit rights within the Program for Incentive to the Implementation of Projects of Social Interest – FIDC-PIPS | I – R$ 1,000.00 (one thousand reais) for audited financial statements; and II – R$ 500.00 (five hundred reais) for the other documents. Administrator of Individual Programmed Retirement Funds – FAPI | I – R$ 1,000.00 (one thousand reais) for audited financial statements; and II – R$ 500.00 (five hundred reais) for the other documents. Administrator of Public-Private Partnership Guarantee Fund – FGP | I – R$ 1,000.00 (one thousand reais) for audited financial statements; and II – R$ 500.00 (five hundred reais) for the other documents. Administrator of investment fund of the Employment Guarantee Fund – FI-FGTS | I – R$ 1,000.00 (one thousand reais) for audited accounting statements; and II – R$ 500.00 (five hundred reais) for the other documents. Administrator of real estate investment fund – FII | I – R$ 1,000.00 (one thousand reais) for audited financial statements; and II – R$ 500.00 (five hundred reais) for the other documents. Administrator of investment funds obliged to send information to the Credit Information System – SCR of the Central Bank of Brazil - BCB | R$ 500.00 (five hundred reais) Administrator of investment funds, regarding the norm that provides for the constitution, administration, operation and disclosure of information of investment funds | I – R$ 1,000.00 (one thousand reais) for audited accounting statements; and II – R$ 500.00 (five hundred reais) for the other documents. Administrator of securities portfolio, regarding the norm that deals with the professional exercise of administration of securities portfolios (1) | I – R$ 500.00 (five hundred reais) for portfolio administrators registered in the category “fiduciary administrator”; II – R$ 200.00 (two hundred reais) for other legal entities; and III – R$ 100.00 (one hundred reais) for natural persons. Administrator of Investment Funds in Participations – FIP | I – R$ 1,000.00 (one thousand reais) for audited accounting statements; and II – R$ 500.00 (five hundred reais) for the other documents. Administrator of Mutual Privatization Funds – FGTS | I – R$ 1,000.00 (one thousand reais) for audited financial statements; and II – R$ 500.00 (five hundred reais) for the other documents. Administrator of Investment Club – FGTS | R$ 500.00 (five hundred reais) Administrator of
Investment Funds in Market Index – Index Funds | I – R$ 1,000.00 (one thousand reais) for audited accounting statements; and II – R$ 500.00 (five hundred reais) for the other documents. Credit risk rating agency | R$ 500.00 (five hundred reais) Independent auditor | I – R$ 100.00 (one hundred reais) for the information and documents required in item “a” of art. 17 of the norm that provides for the registration and exercise of the activity of independent audit; II – R$ 200.00 (two hundred reais) for the information and documents required in art. 16, in items “b” and “c” of art. 17 and in §§ 1 and 2 of art. 28 of the norm that provides for the registration and exercise of the activity of independent audit. Issuer of securities | I – Issuers registered in category A:
a) R$ 1,000.00 (one thousand reais) for the reference form, the quarterly information form - ITR, the standardized financial statements form - DFP and the financial statements accompanied by the documents required in specific regulation; and b) R$ 500.00 (five hundred reais) for the other documents. II – Issuers registered in category A in judicial or extrajudicial reorganization: (2) a) R$ 500.00 (five hundred reais) for the reference form, the quarterly information form - ITR, the standardized financial statements form - DFP and the financial statements accompanied by the documents required in specific regulation; and b) R$ 250.00 (two hundred and fifty reais) for the other documents. III – Issuers registered in category B:
a) R$ 600.00 (six hundred reais) for the reference form, the quarterly information form - ITR, the standardized financial statements form - DFP and the financial statements accompanied by the documents required in specific regulation; and b) R$ 300.00 (three hundred reais) for the other documents. IV – Issuers registered in category B in judicial or extrajudicial reorganization: (2) a) R$ 300.00 (three hundred reais) for the reference form, the quarterly information

SECURITIES AND EXCHANGE COMMISSION OF BRAZIL (CVM) Rua Sete de Setembro, 111/2-5th and 23-34th Floors, Center, Rio de Janeiro/RJ – ZIP: 20050-901 – Brazil - Tel.: (21) 3554-8686 Rua Cincinato Braga, 340/2nd, 3rd and 4th Floors, Bela Vista, São Paulo/SP – ZIP: 01333-010 – Brazil - Tel.: (11) 2146-2000 SCN Q.02 – Bl. A – Corporate Financial Center Building, S.404/4th Floor, Brasília/DF – ZIP: 70712-900 – Brazil - Tel.: (61) 3327-2030/2031 www.cvm.gov.br

CVM INSTRUCTION NO. 608, OF JUNE 25, 2019

quarterly reports - ITR, the standardized financial statements form - DFP and the financial statements accompanied by the documents required by specific regulation; and b) R$ 150.00 (one hundred and fifty reais) for the remaining documents.

Issuer of investment certificates that characterize quotas representing rights to commercialization of works and specific projects of the Brazilian independent cinematic audiovisual area, as well as those for exhibition, distribution and technical infrastructure R$ 500.00 (five hundred reais)

Municipality issuing certificates of additional construction potential - CEPAC R$ 500.00 (five hundred reais)

Participants indicated in Annex 1 of the norm that disposes about the registration of participants in the securities market, regarding the annual confirmation that the information contained in their registration form remains valid I – R$ 200.00 (two hundred reais) for the legal entity participant; and II – R$ 100.00 (one hundred reais) for the natural person participant.

Representative of non-resident investor R$ 500.00 (five hundred reais)

Society beneficiary of resources originating from tax incentives R$ 100.00 (one hundred reais)

Securities consultant I – R$ 200.00 (two hundred reais) for the legal entity consultancy; and II – R$ 100.00 (one hundred reais) for the natural person.

Administrator of electronic platform for participative investment R$ 500.00 (five hundred reais)

(1) In accordance with art. 142 of CVM Instruction No. 555, of December 17, 2014, there is no application of coercive fine regarding the daily report.

CVM INSTRUCTION NO. 608, OF JUNE 25, 2019

(2) In accordance with art. 58 of CVM Instruction No. 480, of December 7, 2009, there is no application of fine for issuer in bankruptcy or liquidation.

CVM INSTRUCTION NO. 608, OF JUNE 25, 2019

Annex 9
Daily value of the extraordinary fine fixed in Deliberation

Art. 1 The daily value of the extraordinary fine provided for in a Deliberation approved by the Collegiate Body with the aim of preventing or correcting abnormal market situations cannot exceed the highest of the following values:

Object of the Deliberation Value

Prohibition of the irregular exercise of
portfolio administration
Prohibition of irregular placement
of securities

a) R$ 100,000.00 (one hundred thousand reais); or b) 0.001 (one thousandth) of the value of the total individual or consolidated revenue of the economic group, obtained in the exercise prior to the application of the fine, in cases where it is possible to ascertain.

Prohibition of the irregular exercise of
other activities subject to prior authorization by CVM
Prohibition of the practice of other acts
that it specifies

a) R$ 50,000.00 (fifty thousand reais); or b) 0.0005 (five tenths of a thousandth) of the value of the total individual or consolidated revenue of the economic group, obtained in the exercise prior to the application of the fine, in cases where it is possible to ascertain.

CVM Instruction No. 608 of June 25, 2019

Lineage: Superseded

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