BRAZIL Law and Practice Contributed by: Guilherme Bueno Malouf, Luciana Costa Engelberg, Bruna Marrara and Thales Saito, Machado Meyer Advogados
cialised consultant, or parties related to them in certain situations, namely: • when the manager, registering entity and cus - todian of the credit rights are not related par - ties between themselves, and, cumulatively, the registrar and the custodian are not parties related to the originator or assignor; and • in the case of classes of quotas intended exclusively for professional investors. Other rules regarding the composition of the portfolio and limitation on investment by the issuer and by type of investment can also be included in the fund’s by-laws. FIIs The properties, assets, and use rights to be acquired by FIIs must be subject to prior evalu - ation by the administrator, the manager, or an independent third party and subject to the requirements set out in the regulations. FIIs that invest predominantly in securities must respect the limits of application by the issuer and by the type of financial assets established in the gen - eral rules on investment funds. Such limits do not apply to investments by FIIs in quotas of FIPs, FIIs and certificates of real estate receiva - bles and quotas of FIDCs. FIIs can maintain a portion of their assets per - manently invested in investment funds or fixed- income securities, public or private, to meet liquidity needs. 2.3.2 Requirements for Non-Local Service Providers The main service providers of Brazilian invest - ment funds, such as the fiduciary administrators, asset managers, custodians and bookkeepers, have to be established in Brazil and shall be duly
authorised by CVM (with the exceptions appli - cable to FIIs) or by a recognised local authority. Administrators and portfolio asset managers must comply with the requirements of CVM Resolution 21, as explained in 2.2.2 Legal Struc- tures Used by Fund Managers . 2.3.3 Local Regulatory Requirements for Non- Local Managers Please see 2.3.2 Requirements for Non-local Service Providers . 2.3.4 Regulatory Approval Process Please see 2.1.2 Common Process for Setting Up Investment Funds . 2.3.5 Rules Concerning Pre-Marketing of Alternative Funds Conduct rules outlined in CVM Resolution 160, specifically the silence period regulations, stip - ulate that the participants in the offering are explicitly prohibited from publicising the public offering or making statements regarding the fund during the following periods: • from the moment the public offer is approved through a deliberative act or on the 30 days prior to the filing of the offer registration request with the CVM, whichever is earlier; and • ending on the date of announcement of the closing of the public offering (quiet period). 2.3.6 Rules Concerning Marketing of Alternative Funds The marketing and distribution of quotas of investment funds in Brazil shall be made by members of the Distribution System. Under the applicable regulation, the asset man - ager may act as the distributor of quotas of
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