Gabriela Falcão and Kamille S. Florido   After four years of discussion with the market, on March 26, the Brazilian Securities Commission (CVM) issued Ruling No. 558, amending, significantly, the rules applicable to the professional administration and management ​​of securities portfolios.  

Gabriela Falcão and Kamille S. Florido

After four years of discussion with the market, on March 26, the Brazilian Securities Commission (CVM) issued Ruling No. 558, amending, significantly, the rules applicable to the professional administration and management ​​of securities portfolios.

With the new ruling, the portfolio management activity was separated from the fiduciary management by creating two record categories, which can be obtained together or separately, namely: (i) trustee, responsible for custody, controlling assets and liabilities, and for overseeing the management and (ii) resource manager, responsible for the investment decision-making process.

There are also new requirements and procedures for the registration of managers. For individuals, passing the certification exam is now mandatory. As for legal entities, there is now a need to assign responsibility to an executive officer for complying with internal procedures and controls and, in the case of registration under the category of "asset manager", for managing risk.

Another change involves the expansion of information and documents that the portfolio manager must make available periodically on his website. It is now mandatory to disclose the reference form with information about the manager and his activities (as is currently the case with public companies) with the content set forth in the new ruling.

Moreover, given the market demand, CVM Ruling No. 558 shall allow the portfolio manager - legal entity – to act in the distribution of units of investment funds administered or managed by him without the need to hire any intermediary institution.

The changes will only enter into force on January 4, 2016, when CVM will automatically transfer the portfolio managers already registered to the categories created by the new ruling, according to their historical performance in the last two years. Portfolio managers already registered by CVM shall adjust to the terms of the new ruling by June 30, 2016.