On March 18, the Brazilian Securities and Exchange Commission (CVM) published Circular Letter 2/25/CVM/SSE, aiming to guide administrators and managers on the liability of Real Estate Investment Fund (FII) shareholders in situations of negative net worth.
According to article 13, subparagraph II, of Law 8,668/93, FII shareholders are not personally liable for legal or contractual obligations related to the properties and projects that are part of the fund's portfolio, except for the obligation to pay the full amount of the subscribed quotas:
"Art. 13. The holder of the Real Estate Investment Fund's quotas: II - is not personally liable for any legal or contractual obligation in relation to the properties and projects that are part of the fund or the administrator, except for the obligation to pay the full amount of the subscribed quotas."
The provision establishes a limitation of the liability of FII shareholders in relation to the assets of the portfolio, restricting it to the amounts they invested in the fund.
This rule predates the inclusion of article 1,368-D – more precisely its subparagraph I and paragraph 1 – to the Civil Code by Law 13,874/19 (Economic Freedom Law), which extended the possibility of providing for limited liability for investment funds in general.
In relation to FIIs, the CVM clarifies, to avoid doubts in the market, that the hedging of liability includes all assets that can be part of the FIIs' investment portfolio. This is because the concept of "Real Estate Developments", used in the article transcribed above, was detailed in article 40 of Normative Annex III of the CVM Resolution 175 (Regulatory Framework for Investment Funds).
Thus, the concept covers all assets subject to investments by FIIs. Among the assets listed in article 40 of Normative Annex III are:
- real estate and real rights over real estate;
- certificates of real estate receivables;
- securities and other securities of issuers registered with the CVM whose preponderant activities are allowed to FIIs;
- shares or quotas of companies in the housing industry; and
- eligible fund quotas.
However, if the hedging is not expressed in the regulation, the FII's shareholders will have unlimited liability in relation to contractual and legal obligations that are not related to the properties and projects invested by the fund, that is, arrears of the FII with its administrator, trustee or other service provider.
In this sense, even for FIIs, which have this hedging of liability based on Law 8,668/93 explained above, it is recommended to use the general rule of funds provided for in the Civil Code and expressly provide in its regulations that the liability of the quota holder is limited to the amount subscribed by him, based on the provisions of article 18 of the General Part of CVM Resolution 175:
"Art. 18. The regulation may provide that the liability of the quota holder is limited to the amount subscribed by him.
Exclusive Paragraph. If the regulation does not limit the liability of the quota holder, the quota holders are liable for any negative net worth, without prejudice to the liability of the service provider for the losses caused when proceeding with intent or bad faith."
This is because, if the fund's liability remains unlimited, the provisions of the paragraph exclusive transcribed above apply, which admits the capital call of the quota holders to cover negative net worth. In the case of FIIs, this situation will be restricted to those exclusively arising from arrears not related to the assets of the portfolio, but rather to obligations with service providers of the fund.
The CVM understands that this matter must be treaty format open and aboveboard with investors. The agency warns that FII regulations should not contain generic provisions that state that shareholders can be called upon to contribute funds in case of negative net worth.
The regulator advised that the administrators and managers of FIIs that choose to remain in the unlimited liability modality must necessarily amend their regulations to expressly provide for the cases in which, in the face of negative net worth, the contribution of funds
In this case, it should be clear that unlimited liability refers to any arrears with service providers that may lead to the need for additional contribution of funds. It does not, however, cover legal or contractual obligations related to the assets of the FII portfolio, which are covered by the hedging provided for in Law 8,668/93.
It is worth remembering that FIIs have a lot of comprehensiveness and attractiveness among the public investor of retail. In this sense, rectitude and clarity in the responsibilities of shareholders are fundamental for the confidence and integrity of the market. Especially considering the possible burden of additional contribution of funds by retail investors or, even, misinterpretations about the scope of this liability, which, by act of law, is limited in any case, so as not to cover obligations related to the FII's assets.
By ensuring that information never plural is communicated and that liability limitations are clearly established, managers and administrators promote a safer and more reliable investment environment, which is essential for attracting new investors and strengthening the business.
Reforms brought about by the regulatory framework for investments funds
CVM Resolution 175 entered into force on October 2, 2023, except in relation to specific topics, such as the existence of different classes of quotas – which came into force later.
The rule updates the rules on the constitution, operation and reporting of information of investments funds. It also deals with the rules on the rendering of services to the funds – generally formatting to all types of funds. The specific rules for each modality were provided for in normative annexes.
Recently, Normative Annex VI was issued, jointly with regulation definitive of Investment Funds in Agribusiness Production Chains (Fiagro). The measure may to approach even further the capital market of Brazilian agribusiness financing.
The CVM's clarifications presented in Circular Letter 2/2025/CVM/SSE reinforce the correct implementation of the provisions of CVM Resolution 175 by to calculate more clarity to administrators and managers about compliance with regulatory requirements.
To learn more about the regulatory framework for investments funds, access our ebook:
The details of the CVM's new regulation on investments funds
See also our articles that address other CVM guidelines on the regulatory framework for investments funds:
Extended fitness to the regulatory framework of the funds
Regulatory framework for investments funds: new CVM guidelines
CVM discloses normative annexes for investments funds
Regulatory framework for funds: new CVM guidelines
Regulatory framework for investments funds comes into force
CVM modernizes regulation of investments funds
Investments funds: CVM publishes new guidelines
CVM provides guidance to administrators and managers of FII and FIDC
New CVM guidelines on real estate investments funds
New guidelines for CVM's technical areas for investments funds
For more information never plural about Fiagro, access our articles:
New CVM regulation allows Fiagros to be structured as of August
Fiagro: new private financing alternative for Brazilian agribusiness
