Resolution CMN No. 2536 — Provisions on the Execution of Investments in Funds Regulated by the Central Bank of Brazil Through Institutions Acting on Behalf and Order of Clients

RESOLUTION NO. 002536

Dispenses on the execution of investments in funds regulated by the Central Bank of Brazil through institutions that are acting on behalf and order of clients.

THE CENTRAL BANK OF BRAZIL, in accordance with Article 9 of Law No. 4.595, of 12.31.64, makes public that the NATIONAL MONETARY COUNCIL, in a session held on 08.26.98, considering the provisions of Law No. 4.728, of 07.14.65,

RESOLVED:

Article 1. Admit that investment fund administrators regulated by the Central Bank of Brazil issue quotas of these funds in the name of institutions that are acting on behalf and order of clients.

Paragraph 1. The intermediation of investments as provided in the "caput" may be carried out by a multiple bank, commercial bank, investment bank, economic savings bank, credit financing and investment company, securities brokerage firm, or securities distribution company.

Paragraph 2. For the purposes of using the facility provided in this article, the fund quotas must be issued in the name of the institution, followed by the denomination of the code that allows the identification of the final investor, to be provided by said institution.

Paragraph 3. The provisions of this article do not apply to Fixed Income Funds - Foreign Capital, nor to Individual Programmed Retirement Funds - FAPI, as provided in Resolutions Nos. 2.034, of 12.17.93, and 2.424, of 10.01.97, and subsequent regulations.

Article 2. Institutions acting on behalf and order of clients as provided in this Resolution shall:

I - ensure that the final investor has full access to all documents and information provided in the current regulations regarding other quota holders of the investment fund subject to the investment;

II - keep permanently updated:

a) the information that allows the identification, at any time, of each of the final investors, along with the corresponding codes provided;

b) the record of all investments and redemptions made in the name of each of the final investors.

Sole Paragraph. The documentation referred to in item II must remain at the institution's headquarters, available to the Central Bank of Brazil.

Article 3. Institutions that exercise the activity of managing third-party resources solely as provided in this Resolution are exempt from designating a director or managing partner exclusively responsible for the management and supervision of the aforementioned resources, as provided in Resolution No. 2.451, of 11.27.97, and subsequent regulations, such designation falling upon a director or managing partner who may have ties to other activities other than the management of the institution's own resources.

Article 4. The Central Bank of Brazil is authorized to adopt measures and issue complementary regulations deemed necessary for the execution of the provisions of this Resolution.

Article 5. This Resolution enters into force on 10.01.98.

Brasília, August 26, 1998

Gustavo H. B. Franco
President