Joint Circular CVM/SIN/SSE/SPREV No. 5/2021

SECURITIES AND EXCHANGE COMMISSION OF BRAZIL
Rua Sete de Setembro, 111/2-5th and 23-34th Floors - Center - Rio de Janeiro - RJ - CEP: 20050-901 - Brazil Tel.: (21) 3554-8686 - www.cvm.gov.br Joint Circular No. 5/2021/CVM/SIN/SPREV Rio de Janeiro, June 7, 2021

To the Directors Responsible for the Administration and Management of Investment Funds

Subject: Clarifications on the interpretation of Article 15 of CMN Resolution No. 3,922, of November 25, 2010 - Substitution of administrator or manager of an investment fund

Dear Sirs,

1. The Resolution of the National Monetary Council - CMN No. 4,695, of November 27, 2018, amended CMN Resolution No. 3,922, of November 25, 2010, and introduced, among other points, criteria related to service providers authorized to administer or manage investment funds in which the Own Social Security Regimes - RPPS may apply their resources, as provided in the new wording given to art. 15 of said Resolution, as already clarified by SIN-SPREV Joint Circulars No. 02, of December 3, 2018, and No. 03, of February 8, 2019.

2. For investment funds whose administrators and managers do not meet these requirements, such agents must: a) seek the proper reframing of the fund's situation, which necessarily implies finding substitutes for one of these functions considered eligible under the cited regulation; or b) when such attempts prove unsuccessful, promote the liquidation of the fund, through the presentation of an objectively defined liquidation plan, to be deliberated by the unitholders in a specific assembly convened for this purpose.

3. Once the investment fund is in the liquidation process, alternative measures aimed at its regularization remain valid, such as the substitution of service providers by eligible institutions, even in exceptional conditions. In this case, if authorized by the unitholders also in a specific assembly, the liquidation of the fund may even be reversed.

4. However, the substitution of the administrator or manager of investment funds in liquidation, as described above, by other equally ineligible service providers should only be admitted if this is the only identified means to continue a liquidation process that is obstructed by a proven impasse, with the new administrator or manager responsible for continuing the liquidation process.

5. Below are concrete examples of possible substitution by an ineligible administrator or manager:

a) a situation involving administrators who have been subject to the decree of extrajudicial liquidation by the Central Bank of Brazil, under Law No. 6,024, of March 13, 1974;

b) a situation involving an institution whose authorization to administer securities portfolios has been cancelled ex officio by the Securities and Exchange Commission of Brazil, in the form of CVM Instruction No. 558, of March 26, 2015;

c) a situation in which the inaction of the administrators and managers of the out-of-compliance funds is characterized regarding the requirements of CMN Resolution No. 3,922, of 2010, without adopting the measures and diligences provided for in this Joint Circular to reframe the funds.

6. In any of the above cases, the new service provider must convene a general assembly with the objective of presenting and deliberating on the fund's liquidation plan, thereby evidencing its entry into the fund as a necessary measure to enable the process of reframing the investment fund.

7. It is worth highlighting that the aforementioned inaction is not characterized solely by the non-existence of a liquidation plan instituted and approved by the unitholders, but also by other elements, such as the establishment of generic plans without defined deadlines and conditions; the non-compliance with the deadlines established therein; the liquidation of assets in a manner discordant with that established in the plan; the verification by unitholders representing the majority of shares that the plan is unfeasible due to a conflict of interest position of the manager; or if any act incompatible with the fund's situation is practiced (for example, new asset acquisitions or efforts to raise resources or new unitholders).

8. Finally, it is noted that the CVM and the SPREV, under the Technical Cooperation Agreements published on December 24, 2015, and December 16, 2020, have intensified over the last years the exchange of information and the execution of coordinated supervision actions in the segments under their responsibility, aiming to achieve greater efficiency and effectiveness in their respective areas of operation.

Sincerely,

Signed Original

DANIEL WALTER MAEDA BERNARDO
Signed Original

BRUNO DE FREITAS GOMES
Superintendent of Institutional Investor Supervision Securities and Exchange Commission of Brazil

Signed Original

NARLON GUTIERRE NOGUEIRA
Secretary of Social Security
Special Secretariat of Social Security and Labor of the Ministry of Economy