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CVM’s technical areas provide guidance on procedures involving court orders for the unavailability of assets and assets

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Circular Letter highlights the inclusion of FIP administrators among the recipients

The Superintendencies of Market and Intermediary Relations (SMI) and Institutional Investor Relations (SIN) of the Brazilian Securities and Exchange Commission (CVM) announce today, 10/14, the Circular Letter CVM / SMI / SIN 03/20. The document, in addition to reinforcing guidelines on procedures related to court orders for the unavailability of assets and assets, highlights the inclusion of managers of Investment Funds in Participations (FIP) among the recipients of these court orders.

Responsibilities

The Circular Letter emphasizes that “It is the responsibility of the central depositories, custodians and bookkeepers to provide the timely and appropriate treatment of events on the securities deposited, held in custody or bookkeeping”.

In the case of FIPs, the document further specifies that “In the event that the fund’s regulation prohibits the transfer or negotiation of shares in secondary markets, the fund’s shares are exempt from book entry, which is why the responsibility for handling incidences falls on its administrator, who maintains, under his control , book of “Registration of Nominal Shares” or account of deposit of shares opened in the name of the shareholder “.

Compliance with Court Orders

The CVM adopts specific computerized mechanics for the transmission of the Official Letters, as stated in the CIRCULAR OFFICE / CVM / SMI / 04/2015, with the general objective of enabling the enforcement of court orders, facilitating the availability of judicial letters, promoting greater effectiveness in their receipt by the market, and ensuring greater security to the procedure.

The technical areas also emphasize in the Circular Letter the procedures that must be performed by market participants: “In order to access the system, central depositories, custodians and bookkeepers accredited by the CVM for the exercise of these activities, as well as the FIP administrators, must keep registered two people responsible for accessing the functionality”.

Daily access

According to the guidance document, “The central depositories, custodians, bookkeepers and FIP administrators must access the environment daily and take the necessary measures to comply with the orders and requisitions contained in the Official Letters”.

In addition, SMI and SIN reinforce “That responses to requests and orders made available by the CVM to the market (as well as any additional requests for information) must be sent directly to the courts or requesting authorities themselves, without the need to copy or inform the CVM”.

More information

Access the Circular Letter CVM / SMI / SIN 3/20.

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Regulator Information

Abbreviation: CVM
Jurisdiction: Brazil

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