Joint Circular No. 1/2018/CVM/SIN/SPREV

SECURITIES COMMISSION OF BRAZIL
Sete de Setembro Street, 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. 1/2018/CVM/SIN/SPREV Rio de Janeiro, August 22, 2018

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

Subject: Receipt of resource applications from unitholders characterized as Self-Administered Social Security Regimes

Dear Sirs,

We refer to Resolution of the National Monetary Council - CMN No. 4,604, of October 19, 2017, which modified Resolution CMN No. 3,922, of November 25, 2010, and introduced various criteria related to the assets that may compose the portfolio of investment funds in which Self-Administered Social Security Regimes - RPPS apply resources, directly or indirectly, as well as eligibility criteria for the manager when it comes to Investment Participation Fund – FIP and Credit Rights Investment Fund – FIDC.

The aforementioned Resolution of the CMN provides for the application of resources from all RPPS, not establishing any distinction between these regimes. Thus, the administrators and managers of the funds, as well as the intermediaries of these investors, within the scope of their competencies and attributions, must observe that any application of RPPS resources in funds must comply with the provisions of that Resolution.

The applications subject to the provisions of the Resolution include:
(i) acquisition of shares through the secondary market; (ii) subscription in a new offering registered or exempt from registration; (iii) capitalization of capital destined for investments, coverage of fund expenses, or applications of any nature; and (iv) capitalization by the unitholders themselves, even when not characterized as a public offering of shares.

In this sense, the criteria introduced by the CMN prevent the manager and administrator of investment funds from accepting any resources from unitholders characterized as RPPS, under any title, when the investment fund, the assets that compose its portfolio, or the manager and administrator (in the case of FIP and FIDC) do not fully comply with the provisions of CMN Resolution No. 3,922, of 2010.

The prohibition includes, as provided in the Resolution, the compliance with limits, including for applications made indirectly, through investment funds in shares of investment funds that have RPPS as unitholders, due to the due diligence duties imposed on such administrators and managers, as applicable, by CVM Instruction No. 558.

RPPS that invested in investment funds on a date prior to the publication of CMN Resolution No. 4,604, of 2017, which do not comply with the provisions of this Resolution, will not be able to make new applications. However, it is important to note the situation of RPPS that may have already signed share subscription forms prior to the effectiveness of the aforementioned Resolution, in which case they may continue to capitalize resources in the funds, up to the limit of the subscription made, provided that the limits and conditions provided in the then-effective wording of CMN Resolution No. 3,922, of 2010, are met.

We remind you that the Secretariat of Social Security of the Ministry of Finance - SPREV/MF publishes a list of investment funds in which RPPS apply their resources and which do not meet the determinations of CMN Resolution No. 3,922, of 2010 (http://www.previdencia.gov.br/regimesproprios/investimentos-do-rpps/) and whose applications are therefore prohibited to RPPS.

The aforementioned list is not exhaustive and does not contain the analysis of all criteria required by the Resolution; therefore, administrators and managers must individually analyze the investment funds under their management and administration to identify their compliance with CMN Resolution No. 3,922, of 2010, before accepting the application of resources from RPPS, regardless of whether the fund is listed or not on the list published by SPREV/MF.

Also regarding RPPS applications, it is necessary to reiterate the duty of due diligence of fund managers and administrators not to accept resource applications in funds destined for qualified and professional investors when the RPPS does not meet this condition, as per art. 9º-C of CVM Instruction No. 539, of November 13, 2013, and arts. 6º-A and 6º B of MPS Ordinance No. 519, of August 24, 2011.

Finally, it is worth noting that the CVM and SPREV, in accordance with the Technical Cooperation Agreement published on December 24, 2015, have intensified the exchange of information and the execution of coordinated supervision actions of 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

NARLON GUTIERRE NOGUEIRA

Superintendent of Institutional Investor Relations Securities Commission of Brazil

Undersecretary of Self-Administered Social Security Regimes Secretariat of Social Security of the Ministry of Finance