Resolution CMN No. 2424 - Approves the Regulation Governing the Establishment and Operation of Individual Scheduled Retirement Funds (FAPI) and Provides for Individual Scheduled Retirement Incentive Plans

RESOLUTION NO. 002424

Approves the Regulation that disciplines the establishment and operation of Individual Scheduled Retirement Funds - FAPI and provides for the establishment of Individual Scheduled Retirement Incentive Plans.

THE CENTRAL BANK OF BRAZIL, in accordance with Article 9 of Law No. 4,595, of December 31, 1964, makes public that the MONETARY COUNCIL, in a session held on September 30, 1997, considering the provisions of Law No. 9,477, of July 24, 1997,

RESOLVED:

Article 1. Approve the attached Regulation, which disciplines the establishment and operation of Individual Scheduled Retirement Funds - FAPI and provides for the establishment of Individual Scheduled Retirement Incentive Plans.

Article 2. The Central Bank of Brazil and the Superintendence of Private Insurance - SUSEP, each within their sphere of competence or by joint decision, as well as the Securities and Exchange Commission (CVM), within its sphere of competence, are authorized to adopt measures and issue complementary norms necessary for the execution of the provisions of this Resolution.

Article 3. This Resolution enters into force on the date of its publication.

Brasília, October 1, 1997

Gustavo H. B. Franco
President

Regulation attached to Resolution No. 2,424, of October 1, 1997, which disciplines the establishment and operation of Individual Scheduled Retirement Funds - FAPI and provides for the establishment of Individual Scheduled Retirement Incentive Plans.

CHAPTER I

On Establishment and Characteristics

Article 1. The Individual Scheduled Retirement Fund - FAPI, constituted in the form of an open-end condominium, is a pooling of resources destined for application in a diversified portfolio of securities, securities, other financial assets, and operational modalities admitted under the terms of this Regulation and current regulations.

Paragraph 1. Meeting the conditions established in current legislation and regulations, workers and/or employers holding an Individual Scheduled Retirement Incentive Plan, intended for their employees and administrators, may apply resources in the FAPI.

Paragraph 2. The FAPI has an indefinite duration, and its name, which cannot contain terms incompatible with its objective, must include the expression "Individual Scheduled Retirement Fund," with the addition of word(s) identifying the employer being permitted, in the case of an FAPI intended to receive resources from a single Individual Scheduled Retirement Incentive Plan established under the terms of Chapter XI, as well as the respective employees and administrator participants.

Article 2. The establishment of the FAPI is considered authorized when, within a period of 5 (five) days from its occurrence, the administering institution communicates the fact in writing to the Regional Branch of the Central Bank of Brazil under whose jurisdiction it is located.

Paragraph 1. The communication referred to in this article must contain information on:

I - the name and the General Taxpayer Registry (CGC) number of the administering institution;

II - the designation of a statutory member of the administration of the administering institution, technically qualified, to answer, civilly and criminally, for the management, supervision, and monitoring of the FAPI, as well as for providing information regarding it;

III - the date of establishment of the FAPI.

Paragraph 2. The communication referred to in this article must be accompanied by a declaration signed by the administrator designated by the administering institution stating that:

I - he is aware of his obligations to the FAPI;

II - he is responsible, primarily, under current legislation, including towards third parties, for situations indicating fraud, negligence, imprudence, or incompetence in the administration of the FAPI, subjecting himself, furthermore, to the application of penalties of suspension or disqualification for leadership positions in financial institutions, other institutions authorized to operate by the Central Bank of Brazil, and companies and entities authorized to operate by the Superintendence of Private Insurance - SUSEP, without prejudice to the application of other sanctions provided for in current legislation and regulations.

Paragraph 3. In the case of an FAPI administered by an insurance company, the communication referred to in this article must be sent to the Regional Branch of the Central Bank of Brazil defined by the Superintendence of Private Insurance - SUSEP as being under the jurisdiction of the administering institution, without prejudice to the obligation to send communication in the same terms also to that Superintendence.

Article 3. The establishment document must reproduce the full text of the FAPI regulation, be registered in a deeds and documents registry office, and remain, at the headquarters of the administering institution, available to the Central Bank of Brazil and the Superintendence of Private Insurance - SUSEP, in the latter case when it concerns an FAPI administered by an insurance company.

Sole Paragraph. The Central Bank of Brazil and the Superintendence of Private Insurance - SUSEP, in the latter case when it concerns an FAPI administered by an insurance company, may determine changes to the fund's regulation.

Article 4. The FAPI regulation must contain, at a minimum, the following information:

I - the administration fee, observing the provisions of Article 11;

II - the investment policy, in a manner characterizing the segment in which the FAPI must predominantly operate;

III - rules for contribution plans, observing the maximum interval of 1 (one) year between the acquisitions of quotas by participants;

IV - conditions for the issuance and redemption of quotas;

V - explicit statement of the conditions for exercising the right to portability of resources by condominium owners, observing the provisions of Article 20;

VI - criteria for the disclosure of information to condominium owners, in accordance with Chapter IX.

Paragraph 1. In defining the investment policy, information must be provided regarding:

I - the general characteristics of the FAPI's operation, including criteria for portfolio composition and diversification, aiming at prudence and risk diversification;

II - the possibility of carrying out applications that imply assuming a higher level of risk for the FAPI's assets.

Paragraph 2. The rules for contribution plans must:

I - be established independently of those governing Individual Scheduled Retirement Incentive Plans, whose characteristics do not need to appear in the FAPI regulation;

II - provide, among other conditions, for the minimum value and periodicity for the acceptance of applications by the FAPI.

Paragraph 3. The timeframes adopted by the FAPI must be identical for all condominium owners.

CHAPTER II

On Administration

Article 5. The administration of the FAPI may be exercised by a multiple bank, commercial bank, savings bank, investment bank, or insurance company authorized to operate by the Superintendence of Private Insurance - SUSEP.

Sole Paragraph. For the administration of the FAPI, the institution must:

I - have paid-in capital and net equity not less than R$15,000,000.00 (fifteen million reais);

II - be accredited in the Central Bank Information System - SISBACEN.

Article 6. The administering institution, observing the limitations of this Regulation, has the power to perform all acts necessary for the administration of the FAPI and to exercise the rights inherent to the securities, securities, other financial assets, and operational modalities that make up its portfolio, including the right to vote and attend general or special assemblies.

Article 7. The obligations of the administering institution include:

I - keeping up-to-date and in perfect order:

a) the documentation related to FAPI operations;

b) the registry of condominium owners;

c) the records of quotas acquired with worker resources and those acquired with employer resources;

d) the minutes book of general assemblies;

e) the attendance book of condominium owners;

f) the opinions of the independent auditor;

g) the record of all accounting events related to the FAPI;

h) the documentation related to the FAPI's tax obligations;

II - receiving any income or values from the FAPI portfolio;

III - making available to the condominium owner, free of charge, a copy of the FAPI regulation, as well as informing him of the name of the periodical used for providing information, the administration fee actually charged, and, when applicable, the delegation of portfolio administration powers, with identification and qualification of the legal entity to which such powers were delegated;

IV - disclosing, in the periodical referred to in item III:

a) daily, the value of the FAPI quota, keeping available at its headquarters and branches, as well as at those of institutions acting in the placement of quotas of this fund, the updated value of net equity;

b) monthly, within a maximum period of 3 (three) days after the end of each month, the value of the FAPI's net equity, the value of the quota, and the accumulated returns for the month, the calendar year, and the last 12 (twelve) months, based on data relating to the last day of the month to which they refer;

V - covering the FAPI's advertising expenses;

VI - providing condominium owners annually, in addition to proof for income tax purposes, a document containing information on:

a) the number and value of quotas acquired by them and/or by the employer in the calendar year and the returns related to the period;

b) the number and value of quotas in their ownership, based on data relating to the last day of December.

Paragraph 1. The disclosure of information provided for in item IV may be provided by entities of the National Financial System or the National Private Insurance System, in the latter case when it concerns an FAPI administered by an insurance company, provided it is carried out in periodicals of wide circulation, observing the responsibility of the administrator designated under Article 2, Paragraph 1, Item II, for the regularity in providing this information.

Paragraph 2. In exceptional situations, duly justified to the Central Bank of Brazil or the Superintendence of Private Insurance - SUSEP, in the latter case when it concerns an FAPI administered by an insurance company, the disclosure of information provided for in item IV may be provided in a different manner and frequency than those provided therefor.

Article 8. The administering institution may, observing the provisions of Article 40, Sole Paragraph, upon deliberation of the general assembly of condominium owners:

I - hire consulting services from legal entities duly accredited by the Securities and Exchange Commission, aiming to analyze and select securities, securities, other financial assets, and operational modalities to integrate the FAPI portfolio;

II - delegate powers to administer the FAPI portfolio to third parties duly identified, without prejudice to its responsibility and the responsibility of the administrator designated under Article 2, Paragraph 1, Item II, including regarding the provision of information to the Central Bank of Brazil and the Superintendence of Private Insurance - SUSEP, in accordance with Chapter VIII.

Paragraph 1. The administration powers referred to in item II may only be delegated to legal entities dedicated to providing services for managing third-party resources, whether or not part of the National Financial System.

Paragraph 2. The legal entity to which powers to administer the FAPI portfolio are delegated responds jointly with the administering institution and the administrator designated under Article 2, Paragraph 1, Item II, for any damages caused to the fund.

Article 9. The administering institution is prohibited, in the specific exercise of its functions:

I - granting, with FAPI resources, loans, advances, or credits under any other modality, except for the exceptions provided for in this Regulation;

II - providing surety, guarantee, acceptance, or assuming obligations under any other form based on the FAPI's assets, except when it concerns margin requirements in operations carried out in derivatives markets;

III - carrying out, with FAPI resources, operations other than those expressly provided for in this Regulation or those that may be authorized under Article 13;

IV - charging condominium owners any fees and/or expenses other than the administration fee;

V - acquiring quotas of its own FAPI with resources from that fund;

VI - using FAPI resources to pay or reimburse fines imposed on it due to non-compliance with provisions of this Regulation;

VII - selling FAPI quotas on installment;

VIII - promising predetermined returns to condominium owners;

IX - making, in its advertising or other documents presented to investors, promises of withdrawals or returns, based on its own performance, the performance of others, or of securities, securities, other financial assets, and operational modalities available within the financial market.

Article 10. The administering institution, by means of a notice disclosed in the periodical referred to in Article 7, Item III, or by means of a registered letter or telegram with delivery communication addressed to each condominium owner, may renounce the administration of the FAPI, provided it convenes, in the same act, a general assembly to decide on its substitution or on the liquidation of the fund, observing the provisions of Articles 25 and 27.

Sole Paragraph. In the event of substitution of the administering institution, the provisions in force regarding civil or criminal liability of administrators, directors, and managers of financial institutions and insurance companies will apply, as applicable, independently of those governing the civil liability of the administering institution itself.

Article 11. The administering institution must establish remuneration as an annual percentage on the FAPI's net equity, to be received for the provision of administration services for the fund.

Paragraph 1. The remuneration referred to in this article may be established as a fixed or maximum annual percentage.

Paragraph 2. To determine the remuneration of the administering institution, the rate "pro rata" per business day equivalent to the annual percentage actually charged on the value of the FAPI's net equity on the corresponding day must be applied.

Paragraph 3. The remuneration of the administering institution must be paid as provided in the FAPI regulation, for expired periods.

Paragraph 4. The administration fee actually charged by the administering institution must prevail over the maximum annual percentage referred to in Paragraph 1 and may only be increased by decision of the general assembly of condominium owners.

CHAPTER III

On Portfolio

Article 12. The FAPI's applications must be represented by:

I - up to 100% (one hundred percent) in securities issued by the National Treasury and/or the Central Bank of Brazil and securitized credits of the National Treasury;

II - 80% (eighty percent), at maximum, individually or cumulatively, in the following fixed-income investments:

a) state and municipal securities, observing a maximum of 50% (fifty percent) and provided that the conditions established in Resolution No. 2,327, of October 30, 1996, are respected;

b) time deposits, with or without certificate issuance, public distribution debentures other than those referred to in item III, letter "b", bills of exchange accepted by financial institutions, debenture pledge certificates, mortgage certificates, mortgage letters, and promissory notes issued by joint-stock companies, intended for public offering;

c) quotas of financial investment funds and funds applying quotas in investment funds predominantly focused on investments in financial assets and/or fixed-income operational modalities, and quotas of investment funds abroad, observing a maximum of 5% (five percent);

III - 49% (forty-nine percent), at maximum, individually or cumulatively, in the following variable-income investments:

a) shares issued by open companies registered for trading on stock exchanges or organized over-the-counter markets, in accordance with the regulation established by the Securities and Exchange Commission;

b) subscription warrants for shares issued by open companies, public distribution debentures with profit participation that do not predominantly originate from financial applications, and deposit certificates for shares whose distribution has been authorized by the Securities and Exchange Commission;

c) quotas of mutual investment funds in modalities regulated by the Securities and Exchange Commission, and quotas of financial investment funds and funds applying quotas in investment funds predominantly focused on investments in financial assets and/or variable-income operational modalities, observing a maximum of 5% (five percent).

Paragraph 1. The application of FAPI resources in securities, securities, other financial assets, and operational modalities issued, accepted, or guaranteed by:

I - the administering institution, its controlling entity, companies directly or indirectly controlled by it, and its affiliates under common control;

II - the institution to which powers to administer the fund's portfolio were delegated under Article 8, Item II, its controlling entity, companies directly or indirectly controlled by it, and its affiliates under common control;

is prohibited.

Paragraph 2. The application of FAPI resources is also prohibited:

I - in the acquisition of shares outside stock exchanges and organized over-the-counter markets, except for the scenarios of exercising preemptive rights and primary distribution;

II - in debentures whose maturity, renegotiation, or sale option exceeds 10 (ten) years from their respective subscription or acquisition;

III - in the acquisition of securities, other financial assets, and operational modalities not classified as securities, issued, accepted, or guaranteed by the creator of the Individual Scheduled Retirement Incentive Plan, its controlling entity, companies directly or indirectly controlled by it, and its affiliates under common control.

Paragraph 3. The securities, securities, other financial assets, and operational modalities comprising the FAPI portfolio must:

I - be registered in the Special Settlement and Custody System (SELIC) or in a registration and financial settlement system administered by the Custody and Financial Settlement Center for Securities - CETIP;

II - be custodied or maintained in deposit accounts at institutions or entities authorized to provide these services by the Central Bank of Brazil or the Securities and Exchange Commission.

Paragraph 4. The provisions of Paragraph 3, Item I, are exempted for FAPI applications in shares and quotas of investment funds.

Paragraph 5. Regarding the securities, securities, other financial assets, and operational modalities comprising the FAPI portfolio:

I - the total issuance and/or joint obligation of the same legal entity, its controlling entity, companies directly or indirectly controlled by it, and its affiliates under common control, as well as of the same State or Municipality, may not exceed 10% (ten percent) of the fund's net equity;

II - the total issuance and/or joint obligation of the same financial institution, its controlling entity, companies directly or indirectly controlled by it, and its affiliates under common control may exceed the percentage referred to in Item I, observing a maximum of 20% (twenty percent) of the fund's net equity.

Paragraph 6. The realization of FAPI applications in securities is conditioned upon authorization by the Securities and Exchange Commission for the administering institution or the legal entity to which powers to administer were delegated under Article 8, Item II, to exercise the activity referred to in Article 23 of Law No. 6,385, of December 7, 1976.

Paragraph 7. The FAPI is permitted to contract operations:

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I - of loan of shares, in accordance with the regulation issued by the Central Bank of Brazil and/or the Securities and Exchange Commission, in the capacity of lender, observed that the shares subject to loan must continue to be computed for the purpose of verifying compliance with the percentages established in the "caput", item III, and in paragraph 5;

II - in organized derivatives markets, provided that the following conditions are observed:

a) the contracting of operations is permitted only in public auction - public bidding - or through an electronic system that meets the same conditions of competitive bidding, in markets administered by stock exchanges or commodities and futures exchanges;

b) the contracting of operations in the over-the-counter market, including when in systems administered by stock exchanges or commodities and futures exchanges, will depend on regulation to be issued, by joint decision, by the Central Bank of Brazil, the Private Insurance Superintendence - SUSEP and the Securities and Exchange Commission;

c) the operations must be linked to contracts referenced in assets eligible to integrate the FAPI portfolio, as well as in indices representing these assets and their respective remuneration rates;

d) the sum of the values corresponding to the guarantee margins, added to the sum of the values paid as premium in option purchase operations, may not exceed 5% (five percent) of the FAPI's net equity, limiting the values corresponding to the margins in operations for the sale of uncovered call options and the sale of put options to 1% (one percent);

e) the contracting of funding operations is prohibited.

Paragraph 8. The compliance with the percentages referred to in this article will be verified at the end of each month, based on the arithmetic mean of the FAPI's net equity calculated from the respective values on the corresponding business days.

Paragraph 9. The following will not be considered in determining the percentages established in paragraph 5: shares received as bonus or resulting from the conversion of debentures, and shares or convertible debentures resulting from the exercise of the preferential right, as well as the appreciation of securities, securities, other financial assets and operational modalities included in the FAPI portfolio, provided that the excesses are eliminated within 6 (six) months, extendable, only once, at the discretion of the Central Bank of Brazil or the Private Insurance Superintendence - SUSEP, in this case when it concerns a FAPI administered by an insurance company.

Art. 13. The Central Bank of Brazil and the Private Insurance Superintendence - SUSEP may, by joint decision, authorize the application of FAPI resources in other securities, other financial assets and operational modalities, exclude any of the investment alternatives referred to in this article, as well as establish or alter requirements for the composition and diversification of the respective applications.

CHAPTER IV

On Net Equity

Art. 14. FAPI's net equity is understood as the algebraic sum of available funds with the value of the portfolio, plus amounts receivable, minus liabilities.

Sole Paragraph. For the purpose of determining the value of the portfolio, the norms and procedures provided for in the Accounting Plan of the Institutions of the National Financial System - COSIF must be observed.

CHAPTER V

On the Issuance, Placement and Redemption of Quotas and the Portability of Resources

Art. 15. FAPI quotas must be:

I - registered, non-transferable to third parties and maintained in a deposit account in the name of their holders;

II - issued and registered, in a differentiated manner, in quotas acquired with worker resources or quotas acquired with employer resources.

Paragraph 1. The quality of co-owner is characterized by the opening of a deposit account in their name.

Paragraph 2. It is indispensable, upon the entry of the co-owner into the FAPI, their adherence to the terms of the respective regulation, with the administrative institution being responsible for defining the form and ensuring that such adherence is effected.

Art. 16. FAPI quotas may be placed by a multiple bank, commercial bank, savings bank, investment bank, insurance company authorized to operate by the Private Insurance Superintendence - SUSEP, securities brokerage firm and securities distribution company.

Art. 17. FAPI quotas must have their value calculated and updated daily, based on an asset evaluation that considers the market value of securities, securities, other financial assets and operational modalities included in the portfolio, in accordance with the content of art. 14 and the norms and procedures provided for in COSIF.

Art. 18. The application and redemption of FAPI quotas may be effected by check, debit and credit in a current account or credit order document.

Art. 19. In the issuance of FAPI quotas, the value of the quota in force on the same day or on the first subsequent business day after the effective availability of the resources entrusted by the worker or by the employer to the administrative institution, at its headquarters or branches, must be used, as provided in the respective regulation.

Art. 20. The portability of resources of a FAPI co-owner is permitted for each period of at least 6 (six) months counted from the first issuance of quotas or from the last transfer of individual equity.

Paragraph 1. Portability is understood as the possibility, at the exclusive discretion of the co-owner, to transfer resources of which they are the holder from one FAPI to another.

Paragraph 2. From the first transfer of individual equity, the 6 (six) month period for the new exercise of the right to portability of resources of a FAPI co-owner must be counted from the last transfer effected in their name.

Paragraph 3. The portability of resources of a FAPI co-owner implies recognition of the capitalization period elapsed in the fund from which the individual equity is being transferred, in accordance with the legislation and regulation in force.

Paragraph 4. The Central Bank of Brazil and the Private Insurance Superintendence - SUSEP will establish, by joint decision, the conditions and procedures for the exercise of the right to portability of resources of a FAPI co-owner, observed the provisions of art. 9, item IV.

Art. 21. For the purpose of exercising the right to redeem FAPI quotas, the following conditions must be observed:

I - those acquired with worker resources may be redeemed at any time, with exemption or incidence of the Tax on Credit, Exchange and Insurance Operations, or on Securities and Financial Assets, in accordance with the legislation and regulation in force;

II - those acquired with employer resources may only be redeemed after a period of 10 (ten) years counted from the first acquisition of quotas in the name of the employee or administrator participating in an Individual Scheduled Retirement Incentive Plan, regardless of the plan that originated it and the plan to which the co-owner is linked at the time of redemption.

Sole Paragraph. The provisions of item II do not apply to cases of permanent disability, retirement or death of the employee or administrator participating, in which case the redemption of FAPI quotas will be carried out in accordance with civil legislation.

Art. 22. The redemption of quotas must be effected, without charging any fee and/or expense, by the 5th (fifth) business day following the respective request, as provided in the FAPI regulation.

Paragraph 1. In redemption, the value of the quota in force on the same day or on the first subsequent business day after the respective request must be used.

Paragraph 2. The FAPI regulation must provide for the effective redemption of quotas on holidays of a state or municipal scope in the area where the administrative institution is headquartered.

Art. 23. The administrative institution is responsible for verifying compliance with the conditions provided for in this Chapter, and the respective documentation must be kept available to the Central Bank of Brazil or the Private Insurance Superintendence - SUSEP, in this case when it concerns a FAPI administered by an insurance company.

CHAPTER VI

On the General Assembly

Art. 24. It is the exclusive competence of the general assembly of co-owners:

I - to take annual accounts, within a maximum period of 4 (four) months after the end of the social exercise, the accounts of the FAPI and deliberate on the financial statements of the same;

II - to amend the FAPI regulation;

III - to deliberate on the replacement of the administrative institution;

IV - to deliberate on the increase in the management fee effectively charged by the administrative institution;

V - to deliberate on the transformation, incorporation, merger, spin-off or liquidation of the FAPI.

Paragraph 1. The FAPI regulation, as a result of legal or regulatory norms, may be amended independently of the holding of a general assembly, in which case the fact must be disclosed to the co-owners within a maximum period of 30 (thirty) days.

Paragraph 2. Deliberations on the transformation and liquidation of the FAPI are conditioned on the possibility of exercising the right to redeem all quotas issued.

Art. 25. The convocation of the general assembly must be made by announcement published in the periodical referred to in art. 7, item III, or by means of a letter with acknowledgment of receipt or telegram with delivery communication addressed to each co-owner, which must contain the date, time and place of the assembly and the matters to be discussed.

Paragraph 1. The convocation of the general assembly must be made 8 (eight) days in advance, at least, counted from the date of publication of the first announcement or the sending of letter or telegram to the co-owners.

Paragraph 2. In the cases of art. 24, items III to V, if the general assembly is not held, a new announcement of second convocation must be published or the sending to the co-owners of a letter with acknowledgment of receipt or telegram with delivery communication must be provided again, with a minimum advance notice of 5 (five) days.

Paragraph 3. Unless there is a force majeure reason, the general assembly must be held in the location where the administrative institution has its headquarters; when held in another location, the announcements or letters or telegrams addressed to the co-owners must clearly indicate the place of the meeting, which in no case may be held outside the location of the headquarters.

Paragraph 4. Regardless of the formalities provided for in this article, the general assembly shall be considered regular if all co-owners attend.

Art. 26. In addition to the annual meeting for the rendering of accounts, the general assembly may meet by convocation of the administrative institution or by co-owners holding quotas representing at least 30% (thirty percent) of the total.

Art. 27. In the general assembly, to be installed with the presence of at least one co-owner, deliberations must be taken by the criterion of the absolute majority of quotas of co-owners present, with each quota corresponding to one vote.

Paragraph 1. In deliberations taken in a general assembly regarding the cases of art. 24, items III to V, the absolute majority must be calculated in relation to the total number of quotas issued.

Paragraph 2. Deliberations must be taken by a majority of quotas of co-owners present at the general assembly, even in the cases of art. 24, items III to V, when the "quorum" of the absolute majority of quotas issued in a meeting held at first convocation is not reached, subject to the provisions of paragraph 3.

Paragraph 3. If it concerns a general assembly of a FAPI aimed at receiving resources from a single Individual Scheduled Retirement Incentive Plan, as well as the respective employees and administrator participants, deliberations regarding the cases of art. 24, items III and V, must be taken by an absolute majority of issued quotas.

Paragraph 4. The provisions of paragraph 3 do not apply to the case of replacement of the administrative institution due to resignation from the administration of the FAPI or as a result of a determination by the Central Bank of Brazil or the Private Insurance Superintendence - SUSEP, in accordance with art. 42.

Paragraph 5. Legal representatives of co-owners have the quality to attend the general assembly.

CHAPTER VII

On Financial Statements

Art. 28. The FAPI must have separate accounting from that of the administrative institution.

Art. 29. The social exercise of the FAPI must coincide with the calendar year.

Art. 30. The FAPI is subject to the procedures for accounting, preparation, submission and publication of financial statements provided for in COSIF.

Paragraph 1. In the event of a zero balance in all accounting titles, the preparation, submission and publication of the FAPI's financial statements are waived, and the administrative institution must provide, in writing, communication of the fact to the Regional Office of the Central Bank of Brazil to which it is subject.

Paragraph 2. Failure to comply with the deadlines set for the submission of financial statements to the Central Bank of Brazil subjects the administrative institution and the administrator designated in accordance with art. 2, paragraph 1, item II, to the sanctions provided for in the legislation and regulation in force.

Paragraph 3. The annual financial statements of the FAPI must be audited by an independent auditor registered with the Securities and Exchange Commission.

Paragraph 4. The Private Insurance Superintendence - SUSEP may establish the obligation to prepare, submit and/or publish supplementary statements referred to in the "caput", when it concerns a FAPI administered by an insurance company, in which case the provisions of paragraph 2 also apply.

CHAPTER VIII

On the Provision of Information to the Central Bank of Brazil

Art. 31. The administrative institution must provide the Regional Office of the Central Bank of Brazil to which it is subject, via SISBACEN transaction to be duly published, by the first business day following the start of the FAPI's activities, the following information:

I - name and CGC registration number, of the FAPI itself;

II - date of the start of the FAPI's activities;

III - name of the administrator designated in accordance with art. 2, Paragraph 1, item II;

IV - name, address and CGC registration number of the legal entity to which powers of administration of the FAPI portfolio are delegated, if applicable;

V - name,Cadastro de Pessoas Físicas (CPF) registration number and telephone number of the persons responsible for providing information on the FAPI;

VI - name and CGC registration number of the financial institution holding a "Bank Reserves" account, for the purpose of the provisions of art. 33, item II, when it concerns a FAPI administered by a financial institution.

Sole Paragraph. Any changes to the information provided for in this article must also be communicated to the Regional Office of the Central Bank of Brazil to which the administrative institution is subject, via SISBACEN transaction to be duly published, by the first business day following the date of the respective occurrence.

Art. 32. The administrative institution must provide the Central Bank of Brazil, via SISBACEN transaction to be duly published, with a lag of up to 3 (three) business days from the date to which they refer, the following information relating to the FAPI:

I - balances of applications;

II - value of net equity;

III - value of the quota;

IV - total values of fundings and redemptions on the day, considering the values effectively received and withdrawn;

V - positions held in derivatives markets.

Paragraph 1. The information provided for in this article:

I - is due on each business day, thus considered, including possible holidays of a state or municipal scope;

II - must be provided even in the event that all values are zero.

Paragraph 2. The Central Bank of Brazil must specify the form and periodicity of the provision of the information provided for in items I and V.

Art. 33. The provision of the information provided for in this Chapter, or its alteration, outside the established deadlines implies for the administrative institution:

I - the need to formally request from the Central Bank of Brazil, via SISBACEN transaction to be duly published, the regularization of the information;

II - payment of a fine, in accordance with the criteria established in Resolution No. 2,194, of 31.08.95, when it concerns a FAPI administered by a financial institution.

Sole Paragraph. If it concerns a FAPI administered by an insurance company, the Central Bank of Brazil must communicate the occurrence of situations provided for in the "caput" to the Private Insurance Superintendence - SUSEP, with a view to the application of the fine referred to in item II by that Superintendence.

Art. 34. The Central Bank of Brazil must make available to the Private Insurance Superintendence - SUSEP the information relating to a FAPI administered by an insurance company, as well as make available to the Securities and Exchange Commission the information provided for in art. 32.

Art. 35. The Central Bank of Brazil and the Private Insurance Superintendence - SUSEP, in this case when it concerns a FAPI administered by an insurance company, may request from the administrative institution the provision of other information about the fund.

CHAPTER IX

On Publicity and the Submission of Documents

Art. 36. The administrative institution is obliged to disclose, widely and immediately, any act or relevant fact relating to the FAPI, in such a way as to guarantee all co-owners access to information that may, directly or indirectly, influence their decisions regarding their stay in the same.

Paragraph 1. The disclosure of the information provided for in this article must be made by publication in the periodical referred to in art. 7, item III, and kept available to the co-owners at the headquarters and branches of the administrative institution and at the institutions that place FAPI quotas.

Paragraph 2. The administrative institution must make the publications provided for in this Regulation always in the same periodical and any change must be preceded by notice to the co-owners.

Art. 37. The administrative institution must, within a maximum period of 10 (ten) days after the end of each month, make available to the co-owners, at its headquarters and branches and at the institutions that place FAPI quotas, information on the number of quotas owned by each and respective value, as well as the profitability of the FAPI, based on data relating to the last day of the month to which they refer.

Sole Paragraph. If it concerns a FAPI aimed at receiving resources from a single Individual Scheduled Retirement Incentive Plan, as well as the respective employees and administrator participants, the administrative institution must send to the employer, within a maximum period of 10 (ten) days after the end of each month, the statement of the composition and diversification of the fund's applications and its respective monthly profitability.

Art. 38. The administrative institution must publish, annually, based on data relating to the last day of the month of December, a document containing the financial statements of the FAPI, provided for in COSIF, and the profitability of the same in the 3 (three) last social exercises, always taken as complete exercises.

Sole Paragraph. The publication provided for in this article must be provided within a maximum period of 60 (sixty) days after the end of the year to which the information refers.

CHAPTER X

On General Norms

Art. 39. The securities, securities, other financial assets and operational modalities included in the FAPI portfolio, as well as their respective rights, may not be subject to leasing, loan, pledge or surety, except for the exceptions provided for in accordance with this Regulation.

Art. 40. The FAPI's charges, in addition to the remuneration of the services provided for in art. 11, are the following expenses, which may be charged to it by the administrative institution:

I - taxes, federal, state, municipal or autonomous contributions, which fall or may fall on the assets, rights and obligations of the FAPI;

II - expenses with printing, dispatch and publication of reports, forms and periodic information, provided for in the FAPI regulation or in the relevant regulation;

III - expenses with correspondence of interest to the FAPI, including communications to co-owners;

IV - fees of the independent auditor responsible for auditing the financial statements of the FAPI;

V - emoluments and commissions paid on FAPI operations;

VI - legal fees, court costs, and related expenses incurred in defense of the FAPI's interests, in court or out of court, including the value of the judgment, in case the FAPI is found liable;

VII - any expenses inherent to the establishment or liquidation of the FAPI or to the holding of a general assembly of condominium owners;

VIII - custody fees for FAPI assets.

Sole Paragraph. Expenses arising from consulting services regarding the analysis and selection of assets to form the FAPI portfolio, those arising from the delegation of powers to administer said portfolio, as well as any others not provided for as fund charges, must be borne by the administering institution.

Art. 41. Within a maximum period of 5 (five) days from their occurrence, the following acts relating to the FAPI must be communicated in writing to the Regional Branch of the Central Bank of Brazil to which the administering institution is subject:

I - amendment of the regulations;

II - substitution of the administering institution;

III - transformation;

IV - incorporation;

V - merger;

VI - spin-off;

VII - liquidation.

Paragraph 1. For the purposes of this article, the conditions established in Art. 2 shall be observed, where applicable.

Paragraph 2. The documentation corresponding to the acts referred to in this article must be kept at the headquarters of the administering institution, available to the Central Bank of Brazil and the Private Insurance Superintendence - SUSEP, in the case where it concerns an FAPI administered by an insurance company.

Art. 42. Non-compliance with the norms established in this Regulation subjects the administering institution and the administrator designated under Art. 2, sole paragraph, item II, to the sanctions provided for in the legislation and regulations in force, and the Central Bank of Brazil or the Private Insurance Superintendence - SUSEP may, each within its sphere of competence, determine the convening of a general assembly of condominium owners to decide on the transfer of the administration of the FAPI to another institution.

Paragraph 1. Non-compliance with the norms established in Chapters III, V, and VIII may result, without prejudice to the application of other sanctions, in the summary disqualification of the institution as administrator of the FAPI.

Paragraph 2. The provisions of this article do not exclude the competence of the Securities and Exchange Commission (Comissão de Valores Mobiliários) regarding the securities forming part of the FAPI portfolio, nor the action of legal entities providing consulting, custody, and portfolio administration services, in accordance with Law No. 6,385 of December 7, 1976.

CHAPTER XI

Of the Individual Scheduled Retirement Incentive Plan

Art. 43. The establishment of an Individual Scheduled Retirement Incentive Plan is conditioned upon compliance with the following formalities by the employer:

I - preparation of a document that reproduces all characteristics of the Plan to be established, observing the legal and regulatory provisions in force;

II - maintenance of documentation proving that the Plan reaches at least 50% (fifty percent) of its employees, in the event of using the option to deduct as operational expenses the value of FAPI quotas acquired, observing the conditions established in the legislation and regulations in force;

Paragraph 1. The establishment of an Individual Scheduled Retirement Incentive Plan directed at more than one employer is admitted, provided that the condition established in the caput, item II, is met by each employer.

Paragraph 2. The document establishing the Individual Scheduled Retirement Incentive Plan must be signed by the employers' administrators or legal representatives, be registered at the deeds and documents registry office, and remain available to the administering institution.

Paragraph 3. The documentation referred to in this article must be permanently kept updated at the employer's headquarters, available to the administering institution, the Central Bank of Brazil, and the Private Insurance Superintendence - SUSEP, in the case where it concerns an FAPI administered by an insurance company, as well as to the Federal Revenue Secretariat.