BRAZIL Law and Practice Contributed by: Guilherme Bueno Malouf, Luciana Costa Engelberg, Bruna Marrara and Thales Saito, Machado Meyer Advogados
ments accompanied by the independent audi - tor’s opinion and a standard form with basic information about the fund, whenever there is an amendment to the by-laws. The administrator shall also immediately dis - close to the quota holders, CVM and the organ - ised market where the quotas are admitted for trading any relevant act or fact that occurred or is related to the functioning of the fund or the assets that are part of the portfolio, which might reasonably influence the value of the quotas or the decision of the investors to acquire, sell or keep such quotas. 2.2 Fund Investment 2.2.1 Types of Investors in Alternative Funds The following investors have been active in alter - native investments: • institutional investors, notably development banks, other financial institutions and pension funds; • foreign investors, including sovereign funds and private equity funds; • family offices; and • high net worth individuals (qualified or profes - sional investors). 2.2.2 Legal Structures Used by Fund Managers Please see 2.1.1 Fund Structures for the legal structures typically used by alternative fund managers in Brazil. According to Brazilian law, investment funds shall generally have a fiduciary administrator (principal fund “gatekeeper”) and an asset man - ager (responsible for the investment and divest - ment decisions, subject to the limitations set out in the fund’s by-laws), both of which are duly
authorised by CVM to provide securities portfo - lio management services. The fiduciary administrator shall be a legal entity, while asset managers may be either an individual or a legal entity (for FIPs, the manager shall be a legal entity in any event). In addition, entities may be registered as “full administrators”, meaning they can act as both fiduciary administrators and asset managers, provided they comply with the Chinese wall requirements. CVM Resolution No 21 of 25 February 2021 set forth the minimum criteria applicable to fiduci - ary administrators and asset managers, includ - ing that they must be domiciled or have their headquarters in Brazil. FIIs may be administered by commercial banks, multiple banks with investment portfolios or real estate loan portfolios, investment banks, brokerage companies or securities dealerships, real estate credit companies, savings banks or mortgage companies. 2.2.3 Restrictions on Investors Investors are divided into three categories in Brazil:
• professional investors; • qualified investors; and • non-qualified investors.
According to current CVM regulation, FIPs and FIDCs are restricted to qualified investors, while FIIs can also be marketed to non-qualified inves - tors (ie, retail investors). As mentioned in 2.1.1 Fund Structures , CVM Resolution 175 allows senior quotas of FIDCs to be targeted at non- qualified investors.
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