BRAZIL Law and Practice Contributed by: Ihury Bastos Pereira Darmont, Filipe Starzynski, Karyn Yoshisaki, Ariel Goldstein and Artur Marangoni Cabral Fagundes, Darmont Advogados
month, of the Consolidated Distribution Report, as of the disclosure of the announcement of the start of the offering. 4.5 High Net Worth or Retail Investors Access to Alternative Funds for High Net Worth and Retail Investors In Brazil, alternative investment strategies may be accessed by high net worth investors and, in some cases, by the retail public, provided that the applica - ble regulatory requirements are observed, in particular those set forth in CVM Resolutions No 175 and No 160, as well as in the rules of the market’s self-regu - latory entities, as described in item 4.3. Marketing of Alternative Funds to Investors . Promotional Materials and Disclosure of Strategies Information about these strategies is disclosed through promotional materials prepared by the fund service providers, which are made available to the public through channels such as the websites of the funds themselves, distributors or managers, and may also be sent directly to potential investors. These materials must comply with specific requirements regarding form, content, language and risks high - lighted, as required by regulation and self-regulation. Mandatory Technical Documentation: Prospectus and Fact Sheet In addition to commercial material, regulations require the preparation and wide dissemination of technical documents such as prospectuses and fact sheets containing essential information for public offerings of closed-end funds, as provided for in CVM Resolu - tion No 160. These documents must be made avail - able, at a minimum, on the websites of the fund, the distributors, the organised market administrator (when applicable) and the CVM itself. The requirement for a prospectus and fact sheet will depend on the nature of the fund and the target audience of the offering. In general, alternative fund offerings aimed at non-professional investors, such as qualified or retail investors, must submit these documents. Offers restricted to professional investors may be exempt from this requirement. These manda - tory documents must present, in a clear, complete and accessible manner, information about the fund,
including its investment policy, fee structure, main risks, tax regime, rights of shareholders, among other relevant aspects. Listing on Organised Markets and Expanding Reach Additionally, with a view to expanding the reach of the investor base, it is possible to structure alternative funds with shares admitted to trading on organised or over-the-counter markets managed by entities author - ised by the CVM. The listing of shares on such markets allows for greater visibility and liquidity, in addition to facilitating access by a broader public to alternative investment strategies, provided that the investor pro - file required by the regulations is respected. 4.6 Private Placements Private Placement Regime Under Brazilian Regulations Although some jurisdictions, such as the United States under Rule 506 (c), allow marketing and adver - tising even in the context of a private placement, it is important to note that Brazilian regulations still take a more conservative and restrictive approach to private placements. As mentioned in item 4.4 Rules Concerning Market- ing of Alternative Funds , CVM Resolution No 160 recognises certain situations that constitute private offerings of investment fund shares, providing, in its Article 8, for cases in which the registration regime for public offerings of securities does not apply. However, within the context of Brazilian regulations, for an offering to be validly classified as private, it is essential that it does not contain elements that are characteristic of a public offering, which, for the pur - poses of Brazilian regulations includes: • disclosure or advertising of the offering to the gen - eral public; • prospecting for indeterminate or large-scale inves - tors; • conducting market sounding or collecting invest - ment intentions in a generalised manner; • negotiations in environments open to the public or through public websites; or
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