Joint Circular CVM/SNC/SSE/SIN No. 01/25

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

Joint Circular No. 1/2025/CVM/SNC/SSE/SIN
Rio de Janeiro, January 23, 2025.

SUBJECT: General guidelines on the preparation of financial statements of investment funds and share classes, regarding the effectiveness of CVM Resolution No. 175/22.

Fund Administrator, Manager, and Independent Auditor,

The objective of this Joint Circular is to provide guidelines and clarifications on the application of accounting criteria set forth in CVM Instructions 489, 516, 577, and 579, in light of the structural changes brought by CVM Resolution 175/22, regarding the constitution and operation of investment funds.
Law No. 13.874/19 amended the Civil Code (Law No. 10.406/02), ensuring, among other changes, the possibility of constituting investment funds with share classes having distinct rights and obligations, with the permissibility of establishing segregated assets for each share class. In this regard, the Law also established that each segregated asset shall respond exclusively for obligations linked to the respective class.
In the regulation of the provisions of Law 13.874/19 related to investment funds, CVM issued CVM Resolution No. 175, providing that, in the case of constituting investment funds with share classes having distinct rights and obligations, the administrator must establish segregated assets for each class. The respective Resolution prohibited the linking of a portion of the assets of one share class to any sub-class.
Furthermore, CVM Resolution 175, in its articles 66 to 69, presented some determinations regarding the preparation of financial statements and the performance of audit services. Art. 66 establishes that the investment fund and its share classes must have their own accounting records, with segregation of accounts and financial statements; paragraph 1 of Art. 67 establishes that the financial statements of funds, which have different share classes, are composed, at minimum, of the balance sheet, statement of profit or loss, and statement of cash flows, with no obligation to prepare consolidated statements; Art. 68 determines that the preparation and disclosure of financial statements must observe the specific rules issued by CVM, according to each category of investment fund; and Art. 69 determines that the financial statements of investment funds and their share classes must be audited by an independent auditor registered with CVM.
The Superintendence of Accounting Standards and Auditing (SNC) received a consultation from the Brazilian Association of Financial and Capital Market Entities (ANBIMA), which contains additional and specific doubts regarding accounting issues related to the criteria brought by CVM Resolution 175 vis-à-vis the accounting standards currently in force for investment funds. It is important to highlight that some accounting matters were previously addressed in the Public Hearing Report SDM 08/20, prepared by the Superintendence of Standards Development (SDM), and in Joint Circulars issued by the Superintendence of Institutional Investor Supervision (SIN) and the Superintendence of Securitization and Agribusiness (SSE).
To facilitate the guidelines and the adequate understanding to be given to the listed doubts, it was decided to reproduce these questions here, in order to provide targeted treatment.

The general rule of RCVM 175 provides, in its Art. 67, regarding the financial statements of funds that have different classes. Considering the provision in the rule, there is an indication of a new obligation in the presentation of the fund's financial statements, which is the cash flow statement. Regarding this theme, we understand that it will be possible to maintain the current model of financial statements, as provided in ICVM 577 (COFI), until a new standard is issued with the model of the required cash flow statement. Is this understanding correct? Furthermore, we understand that such obligation is valid only for funds that have multiple classes in their structure. Is this understanding correct?

It is important to highlight that CVM Instructions 489, 516, 577, and 579 currently regulate accounting matters applicable to the investment funds they govern, and, with the advent of CVM Resolution 175, there will be a migration of this accounting regulation to the different share classes existing in the fund, due to them having segregated assets, being, therefore, reporting entities for the purposes of applying the respective Instructions. That is, in funds with different share classes, each share class will be a reporting entity, for the purposes of applying the reference standards, including the preparation and disclosure of specific financial statements for each class. This must also be adopted for funds with a single class, which, having no distinct classes, are limited to the preparation of a single set of accounting statements, as is currently done.
Regarding the application of the criteria of ICVM 577, specifically regarding item 1.3.1.2.III.a, which stipulates a different set of accounting statements to be prepared and presented, namely, the Statement of Composition and Diversification of the Portfolio (Document No. 3), Statement of Changes in Shareholders' Equity (Document No. 4), and explanatory notes, it is understood that this set of accounting statements must be presented by the different share classes of a fund, as well as by the fund with a single class. Regarding the set of financial statements of the "shell" fund, which has different share classes, it must follow, when applicable, what is determined in §1 of Art. 67 of RCVM 175. This understanding must also be applied to funds in Normative Annexes II, III, and IV, whose share classes will follow, respectively, CVM Instructions 489, 516, and 579, with the presentation of the "shell" fund's financial statements restricted to what is provided in §1 of Art. 67 of RCVM 175.

Considering the inclusion of the cash flow statement in financial statements, we understand that it will be possible to maintain the current DF model, as provided in the current accounting rules, including only the cash flow statement. Is this understanding correct or will CVM provide new models?

For the purposes of funds (as well as their different share classes) governed by CVM Instructions 489, 516, 579, due to these Instructions already providing for the preparation and disclosure of the Statement of Cash Flows, the criteria of the respective Instructions currently adopted are maintained, to be applied to the different share classes, as well as to the funds, during the validity of CVM Resolution 175. In the case of funds (and their different share classes) governed by ICVM 577, see the answer in item 8.

The public hearing report of AP 08/20 presents, in its item 3.8, more details on financial statements considering the new rule and the new structure of funds. Considering the provision in the aforementioned report, we understand that the inclusion of the cash flow statement should occur only for funds whose fiscal years begin from 01/10/2024. Is this understanding correct?

The current paragraph 2 of Art. 140 of CVM Resolution 175 determines that the application of Art. 5 of the resolution (possibility for funds to have different classes and sub-classes of shares) enters into force on October 1, 2024. Thus, the application of paragraph 1 of Art. 67 of CVM Resolution 175 must be observed for funds with different share classes that are constituted or adapted from October 1, 2024, observing the answer in item 8.

What is the minimum expected structure for the presentation of the fund's financial statements? Should we consider the same report models and list of explanatory notes mentioned in the standards of each fund category? In our understanding, considering that the accounting standards (CVM Instructions 489, 516, 577, and 577) have not been revoked, the structure of the financial statements are those listed in the aforementioned normative documents.

Regarding the financial statements of funds and their share classes, the current criteria existing in specific accounting standards must be observed, taking into account the materiality of the events to be treated, observing the answer in item 8.

As provided in Joint Circular CVM/SIN/SSE 01/23, question 25, fee payments can be made directly by the classes or sub-classes of the funds. Without any resources passing through the fund's account, including the CVM regulatory fee, would there be a need to prepare financial statements and audit the shell fund?

Law 14.754/23 provides the following in its Art. 37:
Art. 37. In cases where the investment fund regulation provides for different share classes, with distinct rights and obligations and segregated assets for each class, in accordance with item III of the caput of Art. 1.368-D of Law No. 10.406, of January 10, 2002 (Civil Code), observed the regulation of the Securities and Exchange Commission, each share class shall be considered as an investment fund for the purposes of applying the tax rules provided in legislation.
Thus, we understand that the aforementioned Law equates share classes to investment funds, with respect to the application of tax rules provided in legislation, meaning that, for the purposes of calculating and paying the aforementioned tax, each share class will be treated as an investment fund. Thus, the payment of the regulatory fee must be made by each share class separately, according to its net assets.
Respecting the procedures established in applicable accounting standards, specifically the entity principle, as well as that provided in item III, of Art. 1368-D of Law 10.406/02, for share classes, if there is no passage of resources through the fund and there is no existence of any asset, liability, or result attributed to it, we understand that it does not make sense to present financial statements of the fund, even because, in this situation, there will be no value to be presented.
It is worth noting that, in the form of Art. 117 of RCVM 175/22, the expenses listed in the aforementioned article constitute charges on the fund when the fund is constituted with a single class, and the reading must be applied to share classes, when the fund is constituted with different classes, in respect of the principle of asset segregation, with distinct rights and obligations.

According to Art. 5 of the general rule of RCVM 175, the classes of a fund have distinct rights and obligations among themselves. Furthermore, the assets of the existing classes under the same fund are segregated, and therefore, there is no type of communication between the assets of the possible different classes of the same fund.

In this sense, we understand that the process of preparing Financial Statements, as well as review and audit, occurs in a segregated and independent manner (example: if the financial statement of a specific class suffers some type of qualification or disclaimer of opinion, we understand that such opinion would not affect the financial statement of the other classes). Is this understanding correct? That is, is it correct to state that the audit of one class does not prevent or benefit the progress of the audit process of another class, as well as the audit process of the fund itself (if necessary)?

According to §2 of Art. 5 of the general part of Res. 175, “each segregated asset responds only for obligations related to the respective share class”. The process of preparing, reviewing, and auditing financial statements must occur in a segregated and independent manner in the classes of the same fund, as well as in the fund itself that has more than one class, when applicable. In principle, a modified opinion by the auditor on the financial statements of one class should not influence the opinion on the statements of the other classes of the same fund or on the fund, except, for example, in the situation of failures in the control system (for example, expense allocation) of the administrator that could affect, in a generalized way, the assets of the other classes and funds administered by it.

We understand that in the Financial Statements of the classes, only one explanatory note will be included demonstrating in tables the main accounting information of the sub-classes (for example: movement of Net Assets, Share, Yield, benchmark, and the values of charges debited in the portfolios of each sub-class), and that the other information will be demonstrated in each supplement of the Fund's regulation. Is this understanding correct?

It is relevant to cite the need for adequate accounting records that allow segregating the charges debited in each sub-class, in order to calculate the movement of Net Assets, the share value of each sub-class, and the respective yield. This information can be presented in the body of each accounting statement to be presented or disclosed in Explanatory Notes, as described by the participant.

How will comparability between fiscal years work in financial statements from the entry into force of RCVM 175?

Considering that the accounting criteria required by the specific Instructions have not been altered, there is no question of dispensing with the presentation of comparative information. The non-presentation of comparative information will occur upon the creation of different share classes (or fund), in the adoption of RCVM 175, due to the lack of information from the period prior to the adoption of RCVM 175. For funds existing prior to the entry into force of RCVM 175, which came to be represented by a single class or that have been transformed into share classes of another fund, there is no reason for comparability to be dispensed with.

Art. 121 of the general rule of RCVM 175 provides that in cases of corporate events, a series of documents must be sent to CVM “through a system available on the worldwide computer network”. For FIPs and FIFs, there is still no field for inclusion of these specific financial statements – for FIFs, there is only the recent creation of the possibility of uploading the closing financial statement. Is there an expectation of releasing these functionalities for uploading financial statements of all events for all types of Funds?

There is still no provision for the availability of such a tool. Until they are put into production, fund administrators must keep such statements archived and available for CVM inspection when requested.

Does CVM understand that there will be any difference in the preparation of the trial balance of classes that have a sub-class, from that of classes that have more than one sub-class (e.g.: information about fees, among others)?

There is no question of a patrimonial and financial position of sub-classes, because the regulation adopted as a concept of the structure of sub-classes an internal arrangement adopted for the segregation of shareholders of a given class, and thus, there is no segregation of assets at the sub-class level.

As provided in Joint Circular CVM/SIN/SSE 01/23, question 15, the shell fund will no longer be required to present the statement of changes in shareholders' equity. Does this understanding start to apply from fiscal years starting in 10/2024 or for submission deadlines from 10/2024?

As each share class will have distinct rights and obligations and will have segregated assets, it does not make sense for the aforementioned statement to be presented for the "shell" fund, considering that paragraph 1 of Art. 67 of RCVM 175 does not require the obligation to prepare consolidated statements. As answered in item 10, the validity of structuring funds with distinct share classes is stipulated in the current paragraph 2 of Art. 140 (October 1, 2024). Thus, this understanding will begin to be adopted from periods starting on or after this date.

Will it be necessary to open the sub-class information in the statement of changes in shareholders' equity of the classes?

We understand that such information is relevant for shareholders of the different sub-classes, and can be presented in the body of the accounting statement or as information to be included in an explanatory note, as commented in item 17.

Regarding the monthly trial balance, is there an expectation of presentation of a new layout for the current CADOC 4010 by CVM? If so, from which month of competence will it be required?

There is no provision for altering the layout in the aforementioned document. The current standard must be adopted as a reference for the provision of regulatory information required by the new regime. If there are doubts in providing information related to the new regime with the current document structure, the competent superintendencies are available to clarify how such information can be provided in the document.

We understand that it will not be necessary to perform an audit in cases of incorporation in the process of transforming the current master/feeder structures into classes/sub-classes, since the events will be carried out by force of adaptation to the new standard. Is this understanding correct?

In cases of adapting the current master/feeder structure to the class/sub-class structure, where the master fund will be converted into a class and the feeder funds will be the sub-classes of this class, we understand that there will be no incorporation of net assets/unification of shareholders, but simply the conversion of it into a class, not being necessary, in our view, the performance of an audit in this procedure. In this specific situation, the master fund (which will become a class) must continue to present comparative financial statements, considering the date of conversion of the structure. Regarding the feeder funds (which will become sub-classes of the class), due to the fact that sub-classes do not have asset segregation and are not reporting entities for the purposes of applying accounting standards, we understand that the financial statements of the feeder funds will cease to be presented from the date of conversion of the structure. An example of this possibility would be a master fund with four feeder funds being converted into a share class with four sub-classes linked.
We also emphasize that it is not necessary to prepare a closing accounting statement for Funds whose CNPJs will be cancelled, provided that specific explanatory notes include useful and sufficient information so that the investor can clearly understand the migration process that occurred, whether it is from master fund to share class or feeder fund to sub-class.
However, it is good to note, in the occurrence of any event of incorporation or spin-off of assets, whether due to adaptation to RCVM 175 or not, it will be necessary to perform an audit, as parameterized in ICVM 577. An example of this possibility would be two feeder funds that transform into a single sub-class linked to the same master or the incorporation of two feeders linked to two different masters.

We understand that the Financial Statements prepared according to RCVM 175 will be required from fiscal years starting after 01/10/2024, both for fiscal year and for corporate events. Is this understanding correct?

Yes, the structural change in operation is established given the possibility of the fund being constituted by different share classes, whose validity, as already mentioned previously, will occur according to paragraph 2 of Art. 140 of RCVM 175 (October 1, 2024). Thus, the preparation of financial statements to reflect this new structure must be observed from the validity of paragraph 2 of Art. 140 of RCVM 175.

Considering the provision in the analysis report of the public hearing of AP 08/20, item 3.8 mentions that the accounting records of the class must allow recording the liabilities of each sub-class separately. In this sense, we would like to understand if the term “liability” refers to the movements of shareholders' equity (shareholder positions) or includes any movement in the obligations and provisions of the sub-class (accounting liability)?

According to item 17, there is a need for adequate accounting records that allow segregating and demonstrating the charges debited from each sub-class and the movement of Net Assets. In this sense, the term “liability” used in the aforementioned SDM 08/20 public hearing report should be understood in this context.

In which scenario does the maximum period of 120 days provided for in item VI of Art. 121 of the general rule of RCVM 175 apply, since Financial Statements must be audited within a maximum period of 90 days, according to Art. 120 also of the general rule of RCVM 175?

Art. 120 determines that the financial statements of each share class subject to spin-off, incorporation, merger, transfer of administration or

transformation of category, raised on the date of the operation, must be audited, within a maximum period of 90 days, counted from the date of the event's effective date. Art. 121, on the other hand, determines that these audited financial statements must be sent to CVM and to the entity administering the organized market where the quotas are admitted to trading within a maximum period of 120 days, counted from the date of the effective date of the mentioned events. That is, considering the effective date of the mentioned events, the financial statements must be audited within 90 days and delivered within 120 days.

Considering the provisions in question 10 of Circular CVM/SIN/SSE 01/23, we would like to confirm: how will the accounting of the sending of money/funds from the class to the payment of possible subclass fees work?

As already mentioned in items 17 and 28, there must be adequate accounting records that allow segregating and demonstrating the charges debited to each subclass and the movement of Equity.
Since the subclass does not represent segregated assets, being necessarily linked to a class of quotas, the expense recording will take place in the equity corresponding to that class of quotas to which the subclass is linked (as a specific charge of the subclass).

Currently, in ICVM 577, we have the provision below. Considering that the class of quotas is an asset organization arrangement, can we understand that the control below will be discontinued? For classes with only one subclass of quotas, should this control still be used?

Title: QUOTA MOVEMENT – CONTROL 9.0.9.17.00-0
Issuances 9.0.9.17.05-5
Redemptions 9.0.9.17.10-3
Circulation 9.0.9.17.15-8
Function: Register the value of quotas issued, redeemed, and in circulation of the fund.

The class of quotas is a segregated asset pool and since we are dealing with the issuance of "quotas" within this pool, the control must be carried out at the level of these classes of quotas.

Still regarding the explanatory notes of the classes, should the specific expenses of each subclass be detailed? And in the note on transactions with related parties, what level of detail could be required for subclass fees, if any?

Regarding the possibility of detailing information in the explanatory notes, see item 17.
Regarding the second inquiry, as commented in item 20, the regulation adopted as the concept of the subclass structure an internal arrangement adopted for the segregation of quota holders of a given class, and thus, there is no segregation of assets at the subclass level. Therefore, it does not make sense to consider subclasses as "transactions with related parties," as subclasses are an integral part of the classes of quotas to which they refer.

Circular 1 (2245301) SEI 19957.008288/2024-75 / pg. 8

In the reservations of Art. 63 of the general rule of RCVM 175, can we consider cases of sending information directly to external auditors of investment funds, as requested by their administrators to the administrator of the invested fund?

Additionally, currently we have many reservations or even abstention of opinion in the audit report in cases where the invested fund has a lag between the fiscal year of the fund subject to audit and the invested funds.

The sending of information to the external auditor of the investing fund can be considered among the reservations provided for in art. 63 of RCVM 175, which, although not the external auditor of the fund itself, is the auditor of the invested fund, being therefore considered, within the concept of service provider. In addition, the information that the external auditor obtains, within the scope of the execution of its work, is covered by the professional secrecy of the auditor, according to applicable professional standards.
Regarding the reservation in the auditor's report on the lag of the fiscal year of the fund subject to audit and the invested fund, there is a logic in this procedure, to ensure that the information reported in the investing fund is not outdated and, thus, adequately represents the financial position of the fund on that reporting date. In this sense, this issue must be taken into consideration when making an investment in another fund, with a reporting date with some lag relative to the investing fund.
We emphasize, however, that the fact that the base date of the invested fund is different from the base date of the investing fund does not, by itself, constitute a reason for reservation. The auditor can obtain additional audit evidence on the period subsequent to the last audited financial statements of the invested fund, in addition to the other audit procedures required. These evidences must be provided by the Administrator of the investing fund, as responsible for the proper preparation of the financial statements, with the active participation of the managers of the funds involved. That is, to correctly report the value of investments in funds, the Administrator must obtain the necessary comfort on the net asset value of the invested funds and, thus, provide the auditor with the necessary information for him to form his opinion. We understand that keeping accounting records related to operations and the net asset value of the fund updated and in perfect order is part of the Administrator's duty of diligence (art. 104 of the general part of RCVM 175) and that a reservation or abstention in the audit opinion regarding the financial statements of the fund may indicate a serious failure of the Administrator regarding such duty.

How will the rotation of Independent Auditors work between the classes of the same fund, as well as for the fund itself (if necessary)? Can the fund have different Independent Audit service providers in its classes? Will there be any change in the 5-year period for the rotation of this service provider?

The rule regarding auditor rotation is maintained and will follow what is stipulated in RCVM 23/21. A single auditor can be hired for all classes or different auditors, depending on the definition of the administering institution.

Circular 1 (2245301) SEI 19957.008288/2024-75 / pg. 9

Considering that the classes will have their assets, liabilities, and equities segregated, can the fiscal year of the different classes of the same fund be closed in different months?

Art. 67 of RCVM 175 determines that "the fiscal year of the investment fund must be closed every 12 (twelve) months, when the financial statements of the fund and, if any, of its classes of quotas must be raised, all relating to the same closed period" (our emphasis). Thus, based on the current wording of art. 67, we understand that the fiscal year of all classes of quotas of the same fund must cover the same closed period.

As answered in Circular CVM/SIN/SSE 01/23, questions 61, 75, and 76, the update of ICVM 577 is provided for to adapt to the new concepts provided in RCVM 175. Does CVM have a deadline for the update of ICVM 577 to happen? And regarding the update of other accounting rules (FIDC, FII, and FIP), is there a provision for them to be carried out?

There is no provision for the alteration of ICVM 577, nor of the other accounting rules of investment funds. In reality, the autarchy is studying the unification of the accounting rules of investment funds in order to direct the applicable accounting procedures to IFRS. It does not make sense, from a regulatory point of view, to continue having segmentation of rules by product, considering that a financial asset, for example, must be recognized and measured following the requirements of IFRS 9, regardless of the fund in which it is registered. A receivable does not change its characteristic by being in a FIDC or in a FIAGRO, just as an investment in an invested company does not change its characteristics by being in a FIP or in a company.
As already mentioned, the main alteration resulting from RCVM 175, for the application of accounting standards, refers to the alteration of the reporting entity, which becomes the classes of quotas, as they represent segregated assets. Thus, the accounting criteria for recognition, measurement, and presentation of assets and liabilities will be evaluated at the level of the classes of quotas, according to the economic events that impact them. These criteria are the same, whether applied to funds or to classes of quotas. The presentation of financial statements for these classes of quotas must also follow what is defined in the applicable accounting standards, while not altered (ICVM 489, 516, 577, and 579).
Regarding the financial statements of funds with different classes of quotas, the established in paragraph 1 of art. 67 of RCVM 175 must be followed. The difference, with the adoption of RCVM 175, is that the operations will be at the level of the classes of quotas and not at the fund level. Thus, the economic events to be portrayed in the funds are those that impact them. The reported information will be as simple as the economic events to be reported or even non-existent.
Regarding the list of accounts available in ICVM 577 for financial investment funds (including the different classes of quotas), can internal sub-accounts be opened in the current accounting accounts for the necessary registration and control? An example is the case of classes of quotas with subclasses, whose charges must be segregated and recorded in the specific subclasses, for the correct calculation of the movement of Equity, the value of the quota of each subclass, and the profitability.

Circular 1 (2245301) SEI 19957.008288/2024-75 / pg. 10

Sincerely,

OSVALDO ZANETTI FAVERO JUNIOR
BRUNO DE FREITAS GOMES

Substitute Superintendent of Accounting Standards and Audit Superintendent of Securitization and Agribusiness

MARCO ANTONIO VELLOSO DE SOUSA
Superintendent of Institutional Investor Supervision

Document electronically signed by Osvaldo Zanetti Favero Junior, Substitute Superintendent, on 01/23/2025, at 09:48, based on art. 6 of Decree No. 8.539, of October 8, 2015.

Document electronically signed by Marco Antonio Velloso de Sousa, Superintendent, on 01/23/2025, at 10:25, based on art. 6 of Decree No. 8.539, of October 8, 2015.

Document electronically signed by Bruno de Freitas Gomes Condeixa Rodrigues, Superintendent, on 01/23/2025, at 10:47, based on art. 6 of Decree No. 8.539, of October 8, 2015.

The authenticity of the document can be checked on the site https://sei.cvm.gov.br/conferir_autenticidade, informing the verification code 2245301 and the CRC code 81C2A298.

This document's authenticity can be verified by accessing https://sei.cvm.gov.br/conferir_autenticidade, and typing the "Verification Code" 2245301 and the "CRC Code" 81C2A298.

Reference: Process No. 19957.008288/2024-75 SEI Document No. 2245301 Circular 1 (2245301) SEI 19957.008288/2024-75 / pg. 11

Joint Circular CVM/SNC/SSE/SIN No. 01/25

Lineage: In force