BRAZIL Law and Practice Contributed by: Guilherme Bueno Malouf, Luciana Costa Engelberg, Bruna Marrara and Thales Saito, Machado Meyer Advogados
CVM Resolution 175 also sets forth that there will be no limits per issuer when the issuer is an investment fund, and the investment policy provides for the acquisition of fungible assets
There is no concentration limit per type of finan - cial asset for investment in: • federal public securities and repo operations backed by these securities; • gold, provided it is negotiated in an organised market; • the issuance or co-obligation of securities of a financial institution authorised to operate by the Central Bank of Brazil; • promissory notes, debentures and shares, provided publicly held companies have issued them and are subject to a public offer - ing; • FIFs targeted at the public in general; • ETFs, BDR-shares, BDR-corporate debt and BDR-ETF; • derivative contracts, unless referenced to the assets listed above; and • assets, perfectly fungible from a single issue of securities, provided that this specific appli - cation constitutes the investment policy of the class and the assets have been issued by publicly held companies and are the subject of a public offering. FIFs targeted at professional investors are exempted from the concentration limits. FIFs targeted at qualified investors may increase the percentage of the concentration limits. For ETFs that seek to reflect the variations and profitability of fixed-income indexes (ie, fixed- income ETFs), financial assets that are not part of the benchmark index but are of the same nature as those with different issuances will be admitted, limited to 20% of the ETF’s net equity. 3.3.2 Requirements for Non-Local Service Providers Please see 2.3.2 Requirements for Non-local Service Providers .
from a single issue of securities. Limits by type of financial asset
According to the general rules, the concentration limits per type of financial asset for retail funds are as follows. • Up to 20% of the fund’s net equity for the fol - lowing assets: (a) FIF’s quotas targeted at qualified inves - tors, of which 5% may be directed at FIFs’ quotas targeted exclusively at pro - fessional investors; (b) quotas of FII; (c) quotas of FIDC, of which 5% may be di - rected at FIDCs investing in non-standard credit rights; (d) Certificates of Real Estate Receivables (CRI); and (e) securities issued by privately held com - panies. • Up to 15% of the fund’s net equity for the fol - lowing assets: (a) FIP’s quotas; (b) quotas of agro-industrial investment funds (FIAGRO); • Up to 10% of the fund’s net equity for the fol - lowing assets: (a) collective investment bonds and con - tracts; (b) crypto-assets, carbon credits and CBIO; (c) securities issued through electronic participatory investment platforms, as long as they are subject to bookkeeping carried out by a bookkeeper authorised by the CVM; and (d) other financial assets not provided for above.
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