CVM Resolution No. 179 of February 14, 2023

SECURITIES COMMISSION OF BRAZIL (CVM)
Seven of September Street, 111/2-5th and 23-34th Floors, Center, Rio de Janeiro/RJ – ZIP: 20050-901 – Brazil - Tel.: (21) 3554-8686 Cincinato Braga Street, 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 RESOLUTION NO. 179, OF FEBRUARY 14, 2023, WITH THE CHANGES INTRODUCED BY CVM RESOLUTION NO. 196/23.

Amends CVM Resolution No. 35, of May 26, 2021, and updates the denomination of investment advisors in several resolutions.

THE PRESIDENT OF THE SECURITIES COMMISSION OF BRAZIL – CVM makes public that the Board, in a meeting held on February 8, 2023, based on the provisions of arts. 8, I, 15, II, and 16, sole paragraph, of Law No. 6.385, of December 7, 1976, APPROVED the following Resolution:

Art. 1 CVM Resolution No. 11, of November 18, 2020, shall enter into force with the following wording:

“Art. 17. The partners, directors, employees, and agents of the administrator or the contracted manager and of companies linked to them, including the investment advisors who provide services to them, are prohibited from voting in the general assemblies of the Club. Sole paragraph. The prohibitions contained in the caput do not apply to Clubs formed exclusively by partners, directors, employees, agents, and investment advisors of the administrator or the contracted manager or of companies linked to them.”(NR)

“Art. 20. ..........................................................
..................................................................
§ 1st. The management of the Club’s portfolio by an investment advisor is prohibited, even if he is a shareholder.
..................................................................”(NR)

Art. 2 CVM Resolution No. 19, of February 25, 2021, shall enter into force with the following wording:

“Art. 1st. ..........................................................
..................................................................
§ 4th. Investment advisors, investment managers of financial institutions, and other persons who act in the distribution of securities may provide information about the products offered and about the services provided by the financial institution integrated into the securities distribution system for which they work or have been contracted, without configuring the activity referred to in the caput. ..................................................................”(NR)

CVM RESOLUTION NO. 179, OF FEBRUARY 14, 2023

“Art. 3rd. ..........................................................
..................................................................
§ 2nd. ..................................................................
..................................................................
IV – acting as an investment advisor.
..................................................................”(NR)

“Art. 4th. ..........................................................
..................................................................
§ 7th. The responsible directors referred to in items II and III of the caput and the natural person securities consultant referred to in art. 3rd cannot obtain or maintain registration as an investment advisor. ..................................................................”(NR)

Art. 3 CVM Resolution No. 20, of February 25, 2021, shall enter into force with the following wording:

“Art. 10. The natural person securities analyst and the persons responsible for the activities referred to in items IV and V of art. 11 cannot obtain or maintain registration as an investment advisor.”(NR)

Art. 4 CVM Resolution No. 21, of February 25, 2021, shall enter into force with the following wording:

“Art. 3rd. ..........................................................
..................................................................
§ 5th. The natural person portfolio manager and the responsible directors referred to in § 4th of art. 4th cannot obtain or maintain registration as an investment advisor.”(NR)

“Art. 33. ..........................................................
..................................................................
§ 2nd. If it is not an institution authorized to operate by the Central Bank of Brazil, the securities portfolio manager cannot hire an investment advisor to distribute shares of investment funds.”(NR)

CVM RESOLUTION NO. 179, OF FEBRUARY 14, 2023

Art. 5 CVM Resolution No. 24, of March 5, 2021, shall enter into force with the following wording:

“Art. 39. ..........................................................
I – to act in the activities of registration, supervision, guidance, sanction, and support for regulation within the scope of entities administering organized markets, clearing and settlement, custodians, registrars, central depositories, brokers, distributors, investment advisors, and self-regulatory entities;
..................................................................
V – to suspend the irregular intermediation of securities in the market, by persons not part of the distribution system, in accordance with art. 15 of Law No. 6.385, of December 7, 1976, and the activity of investment advisors in disagreement with applicable legislation; ..................................................................”(NR)

“Art. 42. ..........................................................
..................................................................
IV – to supervise and inspect the activities of accrediting and self-regulatory entities of investment advisors and of self-regulatory entities of custodians and registrars of securities; ..................................................................”(NR)

Art. 6 CVM Resolution No. 30, of May 11, 2021, shall enter into force with the following wording:

“Art. 11. ..........................................................
..................................................................
VII – investment advisors, securities portfolio managers, securities analysts, and securities consultants authorized by CVM, regarding their own resources; and ..................................................................”(NR)

“Art. 12. ..........................................................
..................................................................

CVM RESOLUTION NO. 179, OF FEBRUARY 14, 2023

III – natural persons who have been approved in technical qualification exams or possess certifications approved by CVM as requirements for registration as investment advisors, securities portfolio managers, securities analysts, and securities consultants, regarding their own resources; and ..................................................................”(NR)

Art. 7 CVM Resolution No. 35, of May 26, 2021, shall enter into force with the following wording:

“Art. 2nd. ..........................................................
..................................................................
XII – ..................................................................
..................................................................
b) investment advisors who provide services to the intermediary; ..................................................................”(NR)

“CHAPTER VII-A – INFORMATION ON REMUNERATION AND CONFLICTS OF INTEREST
Section I – General Principles
Art. 26-A. The intermediary must inform its clients, in the manner provided for in the provisions of this Chapter, about its remuneration for the offering of securities, as well as about potential conflicts of interest to which it is subject. § 1st. The information must be true, complete, consistent, and not induce the investor to error. § 2nd. The information must be written in simple, clear, objective, and concise language.
Section II – Qualitative Information Maintained on the Worldwide Computer Network
Art. 26-B. The intermediary must make available on its page on the worldwide computer network a qualitative description of all forms and arrangements of remuneration and conflicts of interest that are pertinent to its activity, in accordance with arts. 26-C and 26-D. § 1st. It is not necessary to disclose on the page on the worldwide computer network referred to in the caput the values or percentages actually practiced by the intermediary, but rather the parameters and general terms adopted.

CVM RESOLUTION NO. 179, OF FEBRUARY 14, 2023

§ 2nd. The page on the worldwide computer network referred to in the caput must be updated on the same day that any information to be disclosed on it is modified. Art. 26-C. The qualitative description of remuneration must cover all forms and types of remuneration received directly or indirectly by the intermediary and the arrangements resulting from them, including, among others, the applicability of:
I – fees directly charged to investors;
II – percentage of administration fee;
III – percentage of performance fee;
IV – difference between acquisition and sale cost (“spread”); V – distribution fees; VI – fees related to the conversion of resources from national to foreign currency and vice-versa, when offered by the intermediary as a condition for investment or divestment in securities; VII – percentage of the volume of orders directed to other intermediaries; and VIII – percentage of the volume of orders directed to specific trading environments. Art. 26-D. The qualitative description of potential conflicts of interest must consider the forms and arrangements of remuneration practiced in the offering of securities, including, among others, cases where the following circumstances are present:
I – incentive to recommend operations to clients due to the receipt of remuneration through brokerage fees; II – sales effort promoted by investment advisors linked to multiple intermediaries, with potential variations in the remuneration rate for the sale of similar securities; III – receipt of rebates and commissions by the intermediary when it sells certain securities; IV – receipt of rebates and commissions by the intermediary when it directs the execution of operations to specific trading environments; and

CVM RESOLUTION NO. 179, OF FEBRUARY 14, 2023

V – offering of securities issued, held, managed, or under fiduciary administration by the intermediary itself or by other institutions part of its economic group. Sole paragraph. The intermediary may complement the description referred to in the caput with the measures adopted to mitigate potential conflicts.
Section III – Quantitative and Specific Information Provided to the Client
Art. 26-E. The intermediary must indicate, at the same moment and environment granted to the client for transmitting the investment or divestment order, its form of remuneration and respective arrangements, accompanied by the values or percentages actually practiced, for the distribution of the specifically offered product or service. § 1st. The information referred to in the caput may be presented in a summarized form, but must be consistent with that disclosed on the intermediary’s page on the worldwide computer network, in accordance with art. 26-B, and accompanied by hyperlinks or access instructions to said page. § 2nd. In cases where the form or arrangements of the intermediary’s remuneration involves a difference in buy and sell prices of securities (“spread”) or is associated with market parameters that are not known to the intermediary at the time of the client’s order transmission, the intermediary must estimate the values or percentages whose disclosure is required by this article, provided that it does so in a reasonable and consistent manner with values usually observed in similar situations.
Section IV – Quarterly Statement
Art. 26-F. The intermediary must send quarterly to its clients a statement with information about the remuneration earned due to investments in securities made by them. § 1st. The statement must contain the total value of the remuneration earned directly or indirectly by the intermediary due to the investments of the investor recipient of the statement, discriminating:
I – type of investment made;
II – nature of the remuneration, considering, among others, the parameters of art. 26-C; and III – portion corresponding to remuneration of investment advisors.

CVM RESOLUTION NO. 179, OF FEBRUARY 14, 2023

§ 2nd. The statement must also contain the address of the page on the worldwide computer network where more information about the intermediary’s remuneration practices and potential conflicts of interest can be obtained, in accordance with art. 26-A. § 3rd. The statement must be sent within 30 (thirty) days after the end of the quarter. § 4th. The statement must cover the total remuneration earned in the period by the intermediary, even if resulting from investments made in previous periods. § 5th. The provisions of art. 26-E, § 2nd, apply to values that could not be known by the intermediary at the end of the quarter to which the statement refers. § 6th. The sending of the statement is waived for clients whose investments have not generated remuneration for the intermediary.
Section V – Applicability of the Norms of this Chapter
Art. 26-G. The provisions of this Chapter:
I – do not apply to information intended for investors considered professionals, in accordance with specific regulation; and II – apply to Brazilian intermediaries also regarding client solicitation services contracted by foreign intermediaries with the objective of enabling the provision of intermediation services to Brazilian investors.” (NR)

“Art. 37. ..........................................................
..................................................................
VII – to maintain an employment relationship or service provision contract with analysts, investment advisors, consultants, or securities managers who are not expressly authorized by CVM to exercise these activities, and to promote the end of the employment or contractual relationship as soon as it becomes aware of the deregistration of said persons; ..................................................................”(NR)

“Art. 49. A serious infraction, for the purpose of the provisions of § 3rd of art. 11 of Law No. 6.385, of 1976, is considered the infraction of the norms contained in arts. 3rd to 6th, 10, 12 to 14, 20 to 24, 26-A to 26-G, 29, 31 to 34, 37, 38 to 46 and 48”. (NR)

CVM RESOLUTION NO. 179, OF FEBRUARY 14, 2023

Art. 8 CVM Resolution No. 43, of August 17, 2021, shall enter into force with the following wording:

“Art. 2nd. ..........................................................
..................................................................
§ 2nd. The Ombudsman Offices of the institutions referred to in item I of the caput must attend to demands related to investment advisors contracted by such institutions. ..................................................................”(NR)

Art. 9 CVM Resolution No. 45, of August 31, 2021, shall enter into force with the following wording:

“ANNEX A TO CVM RESOLUTION NO. 45, OF AUGUST 31, 2021 Maximum value of the base pecuniary penalty referred to in art. 62 ADMINISTRATIVE INFRACTION GROUP MAXIMUM VALUE OF BASE PECUNIARY PENALTY GROUP I
..........................................................
V – violation of norms that provide for the activities of investment advisor, securities analyst, and securities consultant.
..........................................................
R$ 300,000.00
(three hundred thousand reais)
GROUP
II
..........................................................
III – violations that constitute serious infractions to the norms that provide for the activities of investment advisor, securities analyst, and securities consultant;
..........................................................
R$ 600,000.00
(six hundred thousand reais)

CVM RESOLUTION NO. 179, OF FEBRUARY 14, 2023

GROUP
III
..........................................................
VI – irregular exercise of the activity of investment advisor, securities analyst, and securities consultant, registrar, and custodian;
..........................................................
R$ 3,000,000.00
(three million reais)
”(NR)

Art. 10 CVM Resolution No. 50, of August 31, 2021, shall enter into force with the following wording:

“Art. 3rd. ..........................................................
..................................................................
§ 2nd. The institutions integrated into the securities distribution system must submit investment advisors and other agents linked to them to their respective AML/CFT policy, as well as to the rules, procedures, and internal controls established in accordance with this Resolution. ..................................................................”(NR)

“Art. 6th. ..........................................................
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II – if applicable, analysis of the activity of agents, investment advisors, or relevant service providers contracted, as well as the description of governance and duties associated with the maintenance of the simplified registration, in accordance with Annex C; ..................................................................”(NR)

“Art. 7th. ..........................................................
I – ..................................................................
..................................................................

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 RESOLUTION NO. 179, OF FEBRUARY 14, 2023

b) the selection and monitoring of administrators, employees, investment advisors, and relevant service providers hired, with the objective of guaranteeing high standards for their staff; and
............................................................................
II – maintain a continuous training program for administrators, employees, investment advisors, and relevant service providers hired, intended to also disseminate its AML/CFT policy, as well as the respective rules, procedures, and internal controls.
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2º The rules, procedures, and internal controls referred to in this article must provide that the administrators, employees, investment advisors, and relevant service providers hired, if applicable, of the legal entities mentioned in items I to III of art. 3º must report, within the limits of their duties, to their area responsible for internal controls the proposals or occurrences of the operations or situations provided for in art. 20. ............................................................................”(NR)

Art. 11. CVM Resolution No. 51, of August 31, 2021, shall enter into force with the following wording:
“Art. 2º ............................................................
............................................................................
§ 2º Investment advisors, whether legal entities or natural persons, must comply with the provisions of items I and II of the caput according to rules:
...........................................................................”(NR)

Art. 12. CVM Resolution No. 60, of December 23, 2021, shall enter into force with the following wording:
“Art. 43. ..........................................................
............................................................................
“§ 2º If it acts in the distribution of securitization titles, the securitization company cannot hire an investment advisor to act in the distribution.”(NR)

CVM RESOLUTION NO. 179, OF FEBRUARY 14, 2023

Art. 13. This Resolution enters into force on June 1, 2023, except for sections III and IV of Chapter VII-A of CVM Resolution No. 35, of 2021, with the wording given by art. 7º, which enter into force on January 2, 2024. Art. 13. This Resolution enters into force on June 1, 2023, except for sections III and IV of Chapter VII-A of CVM Resolution No. 35, of 2021, with the wording given by art. 7º, which enter into force on November 1, 2024.

Art. 13 with wording given by CVM Resolution No. 196, of December 20, 2023.

Signed electronically by
JOÃO PEDRO NASCIMENTO
President

CVM Resolution No. 179 of February 14, 2023

Lineage: Amended

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