Brazilian Securities and Exchange Commission changes the definition of ‘qualified investor’ and creates the ‘professional investor’ category
Luciana Burr and Tiffanye Esteves de Queiroz
On December 17, 2014, Brazilian Securities and Exchange Commission (local acronym CVM) published Rule No. 554/2014 (the ‘ICVM 554’) changing the definition of ‘qualified investor’ and creating the ‘professional investor’ category.
Under the ICVM 554, professional investors are: (i) financial institutions and any other institutions authorized to operate by the Central Bank of Brazil; (ii) insurance and capitalization companies; (iii) open pension funds (local acronym EAPC) and closed pension funds (local acronym EFPC); (iv) individuals or legal entities that hold financial investments exceeding BRL 10,000,000.00 and that represent in writing that they are ‘professional investors’ (the minimum amount used to be BRL 300,000.00); (v) investment funds; (vi) investment clubs whose portfolio is managed by a portfolio manager authorized by the CVM; (vii) independent investment agents, portfolio managers, securities analysts and consultants authorized by the CVM, in relation to their own resources; and (vii) non-resident investors.