CVM Resolution No. 34 of May 19, 2021

THE PRESIDENT OF THE COMMISSION OF SECURITIES AND EXCHANGE COMMISSION - CVM makes public that the Board, in a meeting held on May 18, 2021, based on the provisions of Articles 8, item I, and 18, item II, of Law No. 6.385, of December 7, 1976, and Resolution No. 3,539, of the National Monetary Council, of February 28, 2008, as well as Articles 5 and 14 of Decree No. 10.139, of November 28, 2019, APPROVED the following Resolution:

CHAPTER I – SCOPE AND PURPOSE
Art. 1. This Resolution provides for the provision of securities lending services by clearinghouses and providers of compensation and settlement services for securities transactions.

CHAPTER II – SECURITIES LENDING SERVICE
Art. 2. Only clearinghouses and providers of compensation and settlement services for securities transactions authorized by the CVM may maintain a securities lending service. § 1. The securities lending service must be governed by regulations issued by the entities referred to in the main text, observing the provisions of this Resolution. § 2. The regulations for the securities lending service, as well as any subsequent amendments, must be made available to the public through the information dissemination systems used by the entity, including on its website. § 3. Without prejudice to the provisions of § 2, amendments to the regulations must be communicated in writing to intermediary institutions and direct users of the system.

CHAPTER III – INTERMEDIATION OF SECURITIES LENDING OPERATIONS
Art. 3. The management of the securities lending system must be exercised by clearinghouses and providers of compensation and settlement services for securities transactions. § 1. Securities brokerage firms and securities distribution companies authorized before the entity providing the lending service may intermediated the operations referred to in the main text of this article. § 2. The institutions referred to in § 1 of this article may conduct lending operations on their own account or on behalf of third parties. § 3. Investors must authorize in advance the conduct of operations of this nature, in the manner established in the authorization term referred to in Art. 7. § 4. Intermediary institutions must notify investors of any changes to the regulations for the service governed by this Resolution.

CHAPTER IV – AUTHORIZATION FOR THE PROVISION OF SECURITIES LENDING SERVICES
Art. 4. The entities mentioned in Art. 2 of this Resolution must request authorization from the Market and Intermediaries Superintendence – SMI to provide the securities lending service, by presenting the following documents:
I – draft of the regulations for the securities lending service; II – draft of the adherence term to the regulations for the securities lending service and to the other applicable norms of the entity to be executed by intermediaries; III – draft of the authorization term to be executed between investors and intermediaries; and IV – indication of the director responsible for securities lending operations. § 1. The regulations for the securities lending service must include, at minimum:

COMMISSION OF SECURITIES AND EXCHANGE COMMISSION 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 RESOLUTION NO. 34, OF MAY 19, 2021 I – the commitment of the borrower to settle the loan by delivering securities of the same kind and quality as the lent security; II – the treatment to be given to the rights inherent to the securities used in the lending operation; III – the obligation of the borrower to offer collateral to the clearinghouse or to the compensation and settlement service provider, in an amount sufficient to ensure the settlement of its operations, in accordance with the provisions of Art. 4 of Law No. 10.214, of March 27, 2001, and complementary regulation; IV – the option for the entity providing the securities lending service to demand the delivery of additional guarantees, at any time and according to the criteria established in its regulations; V – description of the calculation and updating method for the value of the guarantees to be presented by the borrower; VI – the option for the entity providing the securities lending service to enforce the guarantees, regardless of judicial or extrajudicial notification, when the borrower fails to meet obligations arising from this operation, in accordance with the regulations; and VII – the form of remuneration for the loan and the collection of taxes and charges applicable. § 2. Amendments to the regulations and other documents provided for in this article are subject to prior approval by the SMI. Art. 5. The authorization request must be addressed to the SMI, which must express its opinion within 30 (thirty) days, counted from the date of receipt of the request. § 1. The 30 (thirty) day period may be interrupted, only once, if the SMI requests additional information from the interested party, with a new 30 (thirty) day period starting from the date of compliance with the requirements. § 2. To meet the requirements, a period of no more than 60 (sixty) days must be granted, counted from the receipt of the respective correspondence, under penalty of denial of the request.

CHAPTER V – CANCELLATION OF AUTHORIZATION
Art. 6. The authorization for the provision of the securities lending service may be cancelled if:
I – the falsity of any of the information or documents presented to obtain the authorization is found; or II – due to a subsequent fact duly proven, it becomes evident that the institution authorized by the CVM no longer meets any of the requirements established in this Resolution for the granting of the authorization. § 1. The authorization referred to in the main text of this article may also be cancelled at the request of the interested party. § 2. The cancellation referred to in the main text of this article does not preclude the possibility of an eventual administrative sanctioning process.

CHAPTER VI – AUTHORIZATION TERM
Art. 7. The authorization term referred to in § 3 of Art. 3 must mention, at minimum:
I – its validity period;
II – the method of transmission of investor orders to conduct lending operations and the information that must be included in the orders; and III – declaration by investors that they are aware of and adhere to the regulations for the securities lending service.

CHAPTER VII – OBLIGATIONS OF THE SECURITIES LENDING SERVICE PROVIDER
Art. 8. Entities providing the securities lending service must maintain a registration and control system for these operations, which allows the identification, at any time, of the following data:
I – final lenders and borrowers of the loans;
II – intermediaries of lending operations;
III – characteristics, quantities, and current market value of the securities subject to the loans; and IV – characteristics, quantity, and current market value of the guarantees for the loans. § 1. When conducting and closing securities lending operations, the entity must communicate to the final lenders and borrowers, specifying the securities lent and the conditions of the loan. § 2. The communication referred to in § 1 may be carried out electronically, provided that such possibility is expressly stated in the authorization term referred to in Art. 7, along with the investor's consent and the indication of the respective electronic address to which it must be sent. Art. 9. Except for the provisions of securities lending contracts, entities providing this service are responsible, before the holders of the lent securities, for their replacement and that of any rights attributed to them during the lending period, with no relationship being established between the lenders and the borrowers. Sole paragraph. Without prejudice to the provisions of the main text of this article, intermediaries of securities lending operations incur the same responsibilities attributed to them in the intermediation of securities transactions. Art. 10. Entities providing the securities lending service must disclose, daily, through their information systems, the accumulated balances lent, for each security, at the end of the immediately preceding business day.

CHAPTER VIII – FINAL PROVISIONS
Art. 12. Entities providing the securities lending service must maintain, for a minimum period of 5 (five) years, or for a longer period as expressly determined by the CVM, all documents and information required by this Resolution. § 1. Digitized images are admitted in substitution for original documents, provided that the process is carried out in accordance with the law governing the preparation and archiving of public and private documents in electronic media, and with the decree establishing the technique and requirements for the digitization of these documents. § 2. The original document may be discarded after digitization, except if it presents physical damage that impairs its legibility. Art. 13. The following are revoked:
I – CVM Instruction No. 441, of November 10, 2006; and II – CVM Instruction No. 466, of March 12, 2008.
Art. 14. This Resolution enters into force on June 1, 2021.
Electronically signed by
MARCELO BARBOSA
President

CVM Resolution No. 34 of May 19, 2021

Lineage: In force

Timeline

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