Joint Circular No. 2/2018/CVM/SIN/SPREV

SECURITY 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. 2/2018/CVM/SIN/SPREV Rio de Janeiro, December 3, 2018

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

Subject: Amendment of CMN Resolution No. 3922, of November 25, 2010

Dear Sirs,

CMN Resolution No. 4,695, approved in a meeting on November 27, 2018, amended CMN Resolution No. 3,922, of November 25, 2010, and introduced, among other points, criteria related to service providers that may administer or manage investment funds in which Self-Administered Social Security Regimes (RPPS) can invest their resources.

We make special reference to the provision in the new wording given to Article 15 of the aforementioned Resolution, which states:

Art. 15...............................................................................................................................................
§ 2nd Self-Administered Social Security Regimes may only invest resources in shares of investment funds when the following conditions are met cumulatively:
I - the administrator or manager of the investment fund is an institution authorized to operate by the Central Bank of Brazil, obliged to establish an audit committee and a risk committee, in accordance with the regulation of the Monetary Council;
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§ 8th For the purposes of compliance with the provision of item I of § 2nd of this article, it is admitted that the manager or administrator is within the scope of operation of an audit committee and a risk committee, which are constituted mandatorily, in accordance with the regulation of the Monetary Council, by another authorized institution that is part of the same prudential conglomerate.

As expressly defined in this provision of the Resolution, only institutions that, in addition to being authorized to operate by the Central Bank of Brazil, are obliged to establish an audit committee and a risk committee, in accordance with the regulation of the Monetary Council, meet the established requirement. The obligation for an institution to establish a statutory body named an audit committee is provided for in CMN Resolution No. 3,198, of May 27, 2004, and for the risk committee, in CMN Resolution No. 4557, of February 23, 2017.

Therefore, institutions that voluntarily establish committees with this name, without being obliged to do so, do not meet the requirement to offer investment fund shares to RPPS, unless they have as a counterparty an administrator or manager who fully complies with the requirement.

The list of institutions that meet the requirements of item I of § 2nd and § 8th of Article 15 of CMN Resolution No. 3,922/2010, as amended by Resolution No. 4,695/2018, will be published on the SPREV website (www.previdencia.gov.br/regimes-proprios/investimentos-do-rpps/).

It is important to note that the institution meeting these requirements must appear as the administrator or manager of the investment fund that will receive RPPS resource applications.

Therefore, all legal entities registered in accordance with CVM Instruction No. 558, of March 26, 2015, as portfolio administrators of securities, may participate as fiduciary administrator or investment manager of the investment fund, provided that the other institution providing services to the fund, as manager or administrator, complies with the condition now established by CMN Resolution No. 4,695/2018.

Finally, it is noted that 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 for 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 Security and Exchange Commission of Brazil

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