CVM Changes Investment Fund Regulations

In recent years, the Brazilian government has implemented various measures to attract national and foreign investors to the Brazil’s financial and capital markets. One example is the government’s decision to lift the tax burden, on certain conditions, for foreign investors resident or domiciled outside Brazil (with the exception of those countries considered to be tax havens under Brazilian law) on income from investments in investment funds restricted to foreign investors and in equity investment funds, enacted in Law 11,312/2006. Following this lead, on March 30, 2007 the Brazilian Securities Commission (Comissão de Valores Mobiliários – CVM) published Instruction 450, amending Instruction 409/04, which governs investment funds in the Brazilian market.