With the CVM Resolution No. 184 of May 31st, 2023, the Brazilian Securities and Exchange Commission (CVM) introduced new rules to the Regulatory Framework for Investment Funds disciplined by CVM Resolution No. 175 of December 23rd, 2021.

In addition to the general rules applicable to all investment funds, the Regulatory Framework is now composed of twelve Normative Annexes containing specific guidelines and requirements for the different categories of funds, namely: (I) Finance Investment Funds; (II) Credit Rights Investment Funds; (III) Real Estate Investment Funds (FII); (IV) Equity Investment Funds (FIP); (V) Market Index Investment Funds (ETF); (VII) Privatization Mutual Funds (FMP-FGTS); (VIII) Investment Funds in the National Film Industry (FUNCINE); (IX) Incentivized Stock Mutual Funds (FMAI); (X) Cultural and Artistic Investment Funds (FICART); (XI) Social Security Funds; and (XII) Investment Funds in Credit Rights of Social Interest Projects (FIDC-PIPS).

Among the novelties brought by Resolution 184, a more significant restriction on insider trading by a FII stands out. The new regulation of the Investment Fund in Agribusiness Productive Chains (FIAGRO), which will replace the temporary rules currently in force, is still pending.

Resolution CVM 184 will become effective on October 2nd, 2023, along with CVM Resolution 175.

For any questions or clarifications on the subject, the teams at Fraga, Bekierman & Cristiano Advogados teams are prepared to provide extensive assistance.

The term for submitting the 2021 Five-Year Census for Foreign Capital in Brazil (date basis 2020) is already underway, as provided by Circular No. 3,795/2016 and No. 3,857/2017, both of the Central Bank of Brazil (BACEN).

Find below a summary of the relevant information about the procedure:

1. WHO NEEDS TO DECLARE?

The Five-Year Census refers to years ending in 0 (zero) or 5 (five) (for example, date basis 2020). The Five-Year Census Statement must be submitted by:

i. Legal entities headquartered in Brazil that, on 12.31.2020, have, in their corporate/shareholding structure, direct participation, in any amount, of partners/shareholders non-resident in Brazil (foreigners or Brazilians resident abroad);

ii. Legal entities headquartered in Brazil that, on 12.31.2020, have a total debt balance of short-term commercial credits (due in up to 360 days), in an amount equal to or over USD 1 million, granted by non-residents in Brazil (foreigners or Brazilians resident abroad); and

iii. Investment funds headquartered in Brazil that, on 12.31.2020, have investors non-resident in Brazil (foreigners or Brazilians resident abroad).

2. WHEN DO I NEED TO SUBMIT THE INFORMATION?

The term for filing the Five-Year Census statements began on 07.01.2021 and shall end at 6:00 pm on 08.16.2021.

3. FORM AND ADDITIONAL INFORMATION.

The Five-Year Census Statement Form for Foreign Capital in Brazil, the Declarant’s Manual, and other relevant information about the procedure are available on BACEN’s official website.

4. INFORMATION SAFEKEEPING.

Those responsible must keep the support documentation of the statement for five years, as of the date basis of the respective statement.

5. PENALTIES.

In case of delay, no submission, or submission of incorrect, false, or incomplete statements, the legal entity/investment fund shall be subject to penalties by BACEN, including fines of up to BRL 250,000.00.

The teams of Fraga, Bekierman e Cristiano Advogados are available to provide guidance and clarify any doubts on the matter.

Given the countless social and economic repercussions resulting from the pandemic of the new coronavirus (COVID-19), public authorities have recommended preventive measures and imposed restrictions on the entire population. Public and private entities adopted precautionary protocols and reformulated their activities to better adapt to times of crisis.

The first measures planned to deal with the public health emergency resulting from the spread of COVID-19 were set out in Law No. 13.979, of February 6, 2020, among them: isolation and quarantine of people; temporary closure of ports, highways and airports; compulsory laboratory exams and tests and medical treatments; requisition of goods and services, with subsequent compensation; exceptional and temporary authorization to import products without registration with Anvisa; and exemption from bidding for the purchase of health goods, services, and supplies for dealing with calamity.

With the worsening of the crisis, , the Brazilian Senate recognized the state of public calamity (Legislative Decree No. 6, 2020), with effects until December 31st, 2020. In the same direction, the Governments of mainly all the States, as well as the respective Governments of the biggest Municipalities, declared a situation of public emergency, to implement measures to face the pandemic. General restrictions on the movement of people were imposed, with the suspension of classes in public and private schools and universities, closure or teleworking regime in public agencies, reduction in the operation of public transport, and closure of commercial establishments. Offending agents are subject to civil, administrative and criminal liability, as regulated by the Ministries of Justice and Public Security and Health.

Aware of the repercussions caused by such an emergency, the teams from Fraga, Bekierman & Cristiano Advogados prepared this report with a summary of the main normative acts related to COVID-19 and their impacts on business continuity.

Tax and Customs Aspects
For more detailed information about tax aspects, please access our Newsletter about the main tax measures to mitigate the impacts of Covid-19 clicking here.
Labor Aspects
For detailed information about labor aspects, please click here.
Contractual Aspects
Check out the material that our team has prepared regarding the contractual alternatives in the context of the pandemic by clicking here.
Other Legal and Economic Aspects
Here are the main measures proposed by the authorities so far.
Public Bodies Functioning and Terms
Except for the health area, all public agencies have adjusted their functioning to deal with the emergency scenario of COVID-19.

 

Our offices in Rio de Janeiro and São Paulo are available to answer any questions about the measures described above.

1Brazilian companies that have foreign direct investment must submit to the Central Bank of Brazil (BACEN) the updates of their periodic social and economic-financial information, through the Foreign Direct Investment (IED) and Electronic Declaratory Registration (RDE) module.

Failure to provide information regarding foreign capital in the country, as well as the provision of false, incomplete, incorrect or late information, is subject to the application of a fine that may reach up to BRL 250,000.00.

The deadlines to provide information, as well as the type of information to be transmitted, may vary depending on the value of the assets or net worth of the company.

See below if your company is subject to the obligations set forth in the legislation1:

    • Companies with foreign direct investment with assets or net worth lower than R$ 250,000,000.00 as of the base date of 12.31.2018. They shall provide the following information up to 03.31.2020:
      • Update its corporate chart for the base date of 12.31.2019;
      • Inform: (i) company’s net worth; (ii) total paid-in social capital; and (iii) paid-in social capital by each foreign investor.
    • Companies with foreign direct investment with assets or net worth higher than R$ 250,000,000.00 as of the base date of 12.31.2019. They shall provide the economic/financial information quarterly, as follows:
      • Up to 03.31.2020, referring to the base date of 12.31.2019;
      • Up to 06.30.2020, referring to the base date of 03.31.2020;
      • Up to 09.30.2020, referring to the base date of 06.30.2020;
      • Up to 12.31.2020, referring to the base date of 09.30.2020.

The teams of Fraga, Bekierman & Cristiano Advogados are prepared to attend to the queries arising from the legislation in question and provide the necessary assistance.

Laws 4,131, of 1962, and 11,371, of November 28, 2006 and Ordinances BACEN 3,857/17 and 3,822/17.

Brazilian companies that have foreign direct investment must submit to the Central Bank of Brazil (BACEN) the updates of their periodic social and economic-financial information, through the Foreign Direct Investment (IED) and Electronic Declaratory Registration (RDE) module.

Failure to provide information regarding foreign capital in the country, as well as the provision of false, incomplete, incorrect or late information, is subject to the application of a fine that may reach up to BRL 250,000.00.

The deadlines to provide information, as well as the type of information to be transmitted, may vary depending on the value of the assets or net worth of the company.

See below if your company is subject to the obligations set forth in the legislation1:

A. Companies with foreign direct investment with assets or net worth lower than R$ 250,000,000.00 as of the base date of 12.31.2018. They shall provide the following information up to 03.31.2019,:

  1. Update its corporate chart for the base date of 12.31.2018;
  2. Inform (i) company’s net worth, (ii) total paid-in social capital and (iii) paid-in social capital by each foreign investor.

B. Companies with foreign direct investment with assets or net worth higher than R$ 250,000,000.00 as of the base date of 12.31.2018. They shall provide the economic/financial information quarterly, as follows:

  1. Up to 03.31.2019, referring to the base date of 12.31.2018;
  2. Up to 06.30.2019, referring to the base date of 03.31.2019;
  3. Up to 09.30.2019, referring to the base date of 06.30.2019;
  4. Up to 12.31.2019, referring to the base date of 09.30.2019.

The teams of the Fraga, Bekierman & Cristiano Advogados office are prepared to attend to the queries arising from the legislation in question and provide the necessary assistance.

1 Laws 4,131, of 1962, and 11,371, of November 28, 2006 and Ordinances BACEN 3,857/17 and 3,822/17.

The partner Marcelo Leonardo Cristiano was recognized as a leading private practitioner in Corporate Law and Contracts and in the Health and Steel and Mining sectors by Análise Advocacia 500, an important Brazilian directory that identifies and points out the country’s most admired lawyers and law firms.

For more information, access: http://www.analise.com/site/maisadmirados

Fraga, Bekierman & Cristiano Advogados was recognized in Tax, Corporate, Contracts, and Labor Law by Análise Advocacia 500, an important Brazilian directory that identifies and points out the country’s most admired lawyers and law firms.

For more information, access: http://www.analise.com/site/maisadmirados

We are glad to inform that Fraga, Bekierman & Cristiano Advogados was recognized in Corporate and M&A by the IFLR1000 Financial and Corporate Guide, edition 2019, published by IFLR – International Financial Law Review, a marketing-leading financial law publication for lawyers in financial institutions, corporates and private practices.

For more information, access: https://www.iflr1000.com/

The partner Helena Fernandes was recognized as a leading private practitioner in Corporate/M&A by the LACCA Approved, an international publication that promotes the key names in the legal market recommended by General Counsel of the biggest companies in Latin America.

For more information, access: http://laccanet.com/approved/

The partner Lycia Braz Moreira was recognized as a leading private practitioner in Tax, Corporate/M&A by the LACCA Approved, an international publication that promotes the key names in the legal market recommended by General Counsel of the biggest companies in Latin America.

For more information, access: http://laccanet.com/approved/