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The Brazilian Securities and Exchange Commission (CVM) opened, on October 30, Public Consultation SDM No. 06/2025, proposing amendments to Normative Annex III of CVM Resolution 175, which sets out the specific rules applicable to Real Estate Investment Funds (FIIs).

With the issuance of CVM Resolution No. 175/2022, the regulatory framework for investment funds was consolidated into one single rule. However, FII regulation was not subject to a comprehensive overhaul, having only been adjusted to align with the general framework.

The current initiative therefore aims to update and improve the regulatory framework for FIIs, harmonizing their specific provisions with the general regime applicable to other types of investment funds, as well as incorporating interpretations already consolidated by the CVM Board and technical areas over time.

Main points of the proposal

• Subordination between share subclasses
Allows FII classes that invest exclusively in debt securities (“paper funds”) to structure subclasses with subordination between them.

• Rules on buybacks and public tender offers for shares
Allows share classes to conduct public offerings (OPAC) and regulate the buyback of their own shares in a manner similar to what is already allowed for equity funds.

• Treatment of dissenting shareholders in corporate actions
Allows the exclusion of reimbursement rights for dissenting shareholders in cases of mergers, spin-offs, consolidations, or transformations, aligning FIIs with rules already applicable to closed classes.

• Improved governance and shareholder representation
Adjusts minimum qualified quorum requirements according to the size of the shareholder base:

· 50% of shares for classes with up to 100 investors;

· 25% for classes with 100 to 10,000 investors;

· 15% for classes with more than 10,000 investors.

• Redefinition of roles of administrators and managers
Revises the allocation of responsibilities between administrators and managers in line with CVM Resolution 175 and the Economic Freedom Act. Administrators retain fiduciary ownership of assets, while managers gain greater autonomy in implementing investment policies, including the ability to hire service providers for project analysis and property management.

• Modernization of periodic reporting requirements
Allows supervisory areas to adjust the content of monthly, quarterly, and annual reports to better reflect market dynamics. Electronic reporting will be published directly on the CVM website, no longer appearing as a supplement to Resolution 175.

Suggestions may be submitted to the CVM until January 30, 2026.