The Brazil Securities Commission (CVM), through its Superintendence of Securitisation and Agribusiness (SSE), published Circular Letter CVM/SSE 2/2025 to guide administrators and managers of real estate investment funds (Fundos de Investimento Imobiliário, FII) on unitholder responsibility in situations where a fund may have negative net equity, in light of Law 8.668 and CVM Resolution 175. The guidance notes that Law 8.668 limits FII unitholder liability to the value of subscribed units, while CVM Resolution 175 introduced the possibility of establishing funds with or without limited liability. SSE concludes that FII fund regulations will need to be amended to properly address unitholders’ responsibility to contribute resources in negative net equity scenarios, consistent with Law 8.668.
Brazil Securities Commission (CVM) 2025-03-18
Brazil Securities Commission issues guidance on unitholder liability for real estate investment funds with negative net equity
The Brazil Securities Commission (CVM) issued Circular Letter CVM/SSE 2/2025, providing guidance on unitholder responsibility for real estate investment funds (FII) with negative net equity. The letter clarifies that Law 8.668 limits unitholder liability to subscribed units, while CVM Resolution 175 allows funds to be established with or without limited liability, necessitating amendments to FII regulations.