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The Securities and Exchange Commission of Brazil (CVM) has created a new regulatory framework for investment funds in Brazil that establishes rules for exposure in crypto assets such as bitcoin.

According to the governmental autarchy, regulated investment funds can maintain an exposure of up to 10% of their assets in digital assets. The rule was released through CVM Resolution 175 and represented a modernization of the regulation for national investment funds.

With the new resolution, 38 rules were repealed by CVM. In addition to establishing a 10% limit for exposure in crypto assets, the document creates rules for financial investment funds (FIF) and receivables investment funds (FIDC).

Investment in crypto assets

Seeking to modernize the regulation for investment funds in Brazil, the CVM has released a new resolution to provide more security for investors.

According to João Pedro Nascimento, president of CVM, Resolution 175 is a modernization of the rules involving investment funds in Brazil.

“The new Investment Funds rule portrays the relevance of a stable and functional regulatory environment for this significant industry in Brazil’s Capital Markets. We followed an innovative methodology in which we adopted General Rules applicable to all Investment Funds, which are complemented by specific rules contained in each of the annexes, which regulate the different categories of existing investment funds.”

Crypto assets are classified as financial assets by Resolution 175, provided they are traded by companies previously authorized by the Central Bank or the CVM.

The new regulatory framework established a 10% limit for exposure to crypto assets in national investment funds. Before the rule publication, this investment was made indirectly and by funds with assets allocated abroad. In addition to Resolution 175, the CVM and the Central Bank have already presented initiatives on the regulation of crypto assets in Brazil which the country’s President sanctioned at the end of 2022.