3/10/2023
On December 23, 2022, Resolution CVM 175 (“RCVM 175“) was enacted, establishing the new regulatory framework for the constitution, operation and disclosure of information of investment funds.
Named as “Regulatory Framework for Funds”, this normative is the result of CVM’s wide work on the subject, public hearings with broad participation of several market agents (such as individuals, associations with great activity in the capital market and financial institutions of global relevance), as well as of the incorporation of the innovations brought by Law 13,874/2019 – Economic Freedom Law (Lei de Liberdade Econômica) to the Brazilian capital market.
The Regulatory Framework for Funds seeks to bring to the Brazilian investment fund industry greater efficiency, competitiveness, transparency and alignment with international standards and best practices, providing the market with tools for the safe and diversified structuring of new products.
RCVM 175 is composed, on one hand, of general rules applicable to all investment funds and, on the other hand, of several regulatory annexes applicable to certain categories of investment funds.
The general rules provide regulations regarding the limited liability of the quotaholders (limitation of liability to the value of the quotas subscribed by them), the creation of classes and subclasses of quotas with distinct political and/or economic rights and obligations, the civil insolvency regime for investment funds, the alignment with international practices of sustainable finances (focus on transparency and the fight against greenwashing), the improvement of the governance’s instances (with greater clarity of the scopes of action and segregation of responsibilities of the main service providers in the fund industry) and the reduction of compliance and suitability costs.
As for the specific rules, the Regulatory Framework for Funds deals, with greater direction and specificity, with those now called Financial Investment Funds (FIFs) and Receivables Investment Funds (FIDCs). In addition, it is expected that the Regulatory Framework for Funds will bring in the course of 2023 the normative annexes that will regulate the other categories of investment funds, especially the Private Equity Investment Funds (FIPs) and the Real Estate Investment Funds (FIIs).
RCVM 175 will come into effect on April 3, 2023. Except for the ongoing FIDCs, which must be adjusted by December 31, 2023, the other investment funds that are in operation on the effective date of the new rule must be updated with the new rules by December 31, 2024.
The Corporate Law team at L.O. Baptista Advogados is available to provide any information and guidance on the subject.
Co-authorship of Renata Castro Veloso and Marcos Yuuki Matheus Okamoto
