CVM clarifies new rules for cryptocurrency investment funds

CVM clarifies new rules for cryptocurrency investment funds

The Securities and Exchange Commission (CVM) through two of its regulators clarified some rules in the cryptocurrency investment fund market last Wednesday (3).
a Resolution 175 of 2022 includes permission from the CVM to allow investment funds to expose themselves, albeit with limits, to the cryptocurrency market.
According to the publication of live coinsResolution 175 released FIF investment funds to invest up to 10% of their net worth in bitcoin and other cryptocurrencies.
Still, many who follow the arrival of the rules remained skeptical about the subject, questioning the autarchy about the details.
CVM superintendent explains that many still have doubts, including about cryptocurrency funds
Daniel Maeda, Superintendent of Supervision of Institutional Investors, points out in a note that many doubts about the standard reached the CVM. Thus, the new circular CVM/SIN 02/23, organized in questions and answers, aims to better clarify the doubts of the market.
“We received several questions about the standard, which was innovative in many different ways. As in the joint circular CVM/SIN/SSE 1/2023 that we released in April, the proposal is to provide clarity to the market. For this we have organized it in a question-and-answer format, accompanied by an index, to facilitate reading and searching for the points listed.
CVM had already provided some explanation in April about the December 2022 rule, which changed rules for investment funds.
With the new explanations, the capital market regulator hopes to further clarify the vague points.
At a public event last Wednesday, CVM President João Pedro Nascimento clarified the rules of Resolution 175. According to him, “this is how we carry out our mandate of developing the capital market very efficiently“, which indicates trust in the rules.
Check out what are the questions related to cryptocurrencies and their answers
Question 37 of the new CVM Official Letter asks about whether or not there are limits on investments in cryptocurrency ETFs and shares of funds abroad that allocate funds in cryptocurrencies.
In its response, the CVM stated that “the 10% investment limit (in the case of funds for the general public) in cryptoassets includes investments in shares of offshore funds whose main risk factor described in their documents is exposure to cryptoassets“.
Regarding the limit on cryptocurrency ETFs, the municipality stated that “meets the specific limit foreseen in the standard for ETFs (Article 45, IV, “g”, of Normative Annex I), as ETFs are considered a final asset for the purposes of regulation“.
On this subject, the CVM states that the associated risk factor should be respected,”so that a crypto asset ETF, for example, can only be invested by funds that are characterized as multimarket (since this asset does not have the typical risk of equities or fixed income)“.
Finally, another question relates to the rule regarding a company’s custody of cryptocurrencies and tokenized assets.
In response, the CVM recommended that the “Circular CVM/SIN/Nr 11/2018, remains applicable on the subject, except for the concentration limits per issuer and per type of authorized asset“.
The answer also points out that “the notion of “custody” mentioned in the Circular should not be interpreted nor does it refer, even indirectly, to CVM’s Securities Custody Rules (CVM Resolution No. 32) and the requirements set forth therein“.
Source: Live Coins
Barry Siefert is an accomplished journalist and author at The Nation View. He is known for his expertise in the field of cryptocurrency, and has written extensively on the topic. With a background in finance and economics, Barry has a deep understanding of the underlying technology and market forces that drive the crypto industry.

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