New regulation relating to the investment funds sector will be applied as of July 1, 2015 in Brazil. These are the instruction 555 of the Securities and Securities (CVM), which will replace the instruction 409, in force for the last ten years. The new instruction establishes improved regulation on the constitution, administration, functioning and dissemination of fund information, proposing to modernize and simplify the sector.

Among the innovations implemented by Instruction 555, those referring to: 1. Reduction of fund classes to Fixed income, actions, multimerciated and currency 2. Payment of rebate and prohibition of receipt of any remuneration that undermines independence in fund management; 3. Obligation to disclose the Distribution Policy of Funds Quotas; 4. Rules for investment in assets abroad; 5. Performance rate calculation; 6. Responsibilities of the administrator and manager; and 7. Possibility of funds intended for qualified investors to provide assurances for direct or indirectly related to their portfolio.

It is also highlighted the creation of the simple fund, that CVM presents as an alternative to the savings book. Subclass of the fixed income fund, the simple bottom is characterized by low risk and reduced cost, dispensing signature of adhesion term and customer submission the profile analysis for investment compliance.

Also in July 2015, instruction 554 will come into force, which establishes new concepts for qualified investor and Professional investor and can be attributed, as a rule, physical or legal whose financial investments exceed R $ 1 million (qualified investor) or R $ 10 million (professional investor). To compatibilize with these new concepts, the Suitability criteria were updated, altering the duties of verification of the adequacy of the products, services and operations to the client's profile.

Funds in operation will have until January 4, 2016 to suit instruction 555 and should pay attention to the specificities of transition rules.

Source: Open Capital Magazine