Banco Safra de Investimentos S.A. has filed an appeal against the Institutional Investor Relations Superintendence's decision that requires changing the rules and prospectuses of several funds managed by the bank. According to the CVM, the bank is required to: 1) detail the investment policy and risk factors to which the funds are exposed; and 2) adapt the provision for automatic alteration of the vehicles' classification in order to obey the regulatory requirement that such alterations be previously approved at a general shareholders meeting.

Rapporteur Otavio Yazbek stated that, according to their current rules, funds can have their classification changed automatically from "stocks" to "fixed rate" depending on the price variation of Vale and Petrobras shares in their portfolios. In the rapporteur's view, which is in line with the Institutional Investor Relations Superintendence and the Specialized Federal Attorney General's Office, the information available about the funds in the regulations and prospectuses is insufficient. Furthermore, the automatic classification change of these funds goes against the rule that prescribes exclusive authority to the general shareholders meeting to appraise such a change.

The remaining members of the CVM board agreed with the rapporteur's vote and rejected the appeal filed by Banco Safra de Investimentos S.A.. Hence the CVM decided for mandatory compliance with the official requirements: 1) that the fund documents, especially their prospectuses, give a detailed account of the investment policies and risk factors to which they are exposed; and 2) inclusion of the need for approval of any classification change of the vehicles by a general shareholders meeting or alteration of their classification to "multimercado" (hedge funds). (Proceeding RJ2008/7977. Rapporteur: Director Otávio Yazbek)