BRAZIL Law and Practice Contributed by: Guilherme Bueno Malouf, Luciana Costa Engelberg, Bruna Marrara and Thales Saito, Machado Meyer Advogados
CVM Resolution No 30/2021 set forth the criteria for qualified investors (including individuals or legal entities that hold financial investments in an aggregate amount exceeding BRL1 million) and professional investors (including individuals or legal entities that hold financial investments in an aggregate amount exceeding BRL10 million and non-resident investors). Non-professional or non-qualified investors are considered retail investors. 2.3 Regulatory Environment 2.3.1 Regulatory Regime For more information on the regulatory regime applying to alternative funds in Brazil, please see 2.1.1 Fund Structures . ANBIMA establishes rules for the market for enforcement and control, as well as codes of best practice for its members, which include asset managers, banks, brokers, securities dealers and investment advisers. It monitors the application of such codes and issues penalties for non-compliance. Brazilian regulations set forth rules regarding the composition of the portfolio of alternative funds and certain limitations, as summarised below. FIPs A FIP must maintain at least 90% of its net assets invested in securities (90% Rule), which will not apply during the term set forth in the regulations for the FIP to consummate an invest - ment after a capital call. Considering the 90% Rule, the regulations set forth that amounts may be added to the net assets invested in securities, such as amounts for the payment of the FIP’s expenses (limited to 5% of the committed capi - tal), funds deriving from a divestment (subject to certain conditions), etc.
If the issuer of the securities targeted by the FIP is a privately held company, certain governance requirements must be observed by such issuer. There is no maximum or minimum number of companies in which a FIP may invest, nor is there a maximum or minimum percentage of shares (ie, equity interest) that a FIP must hold in an invested company, provided in any case that the Influence Test is met and subject to certain • 33% of their subscribed capital in foreign assets (securities) unless the fund is targeted at professional investors, in which case the FIP may invest up to 100% of its subscribed capital in foreign assets; and • 33% of their subscribed capital in non-con - vertible debentures or other non-convertible debt instruments, except for FIP-IEs, which may invest up to 100% in such debt instru - ments. FIPs may invest in quotas of other FIPs or equi - ty funds. FIPs may not invest in credit rights – except those issued by fund-invested compa - nies. FIDCs FIDCs may acquire credit rights and other assets of the same debtor or a co-obligation of the same debtor within the limit of 20% of its net equity. This limit may not apply if the fund tar - gets professional investors. The limit may also be increased if certain requirements are met (eg, the debtor is a publicly-held company or has financial statements audited by an independ - ent auditor registered with CVM). The fund may acquire credit rights originated or assigned by the administrator, manager, custodian or spe - concentration limits. FIPs may invest up to:
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