Business Model under CVM’S Opinion 33

The CVM’s Opinion 33 is a regulatory statement which sets the rules for the operations’
intermediation and offering of Securities negotiated outside Brazil to investors resident in the Brazilian
territory.

Under Brazilian Law only CVM registered institutions have the authorization to publicly
prospect, contact and offer services to Brazilian resident investors. In the case of a foreign institution
pretending to explore the Brazilian market, the operation shall be held thought the hiring of a Brazilian
institution, dully registered under CVM, to conduct the intermediation. Thus, the regular offering of
a foreign broker’s products to the Brazilian resident investor has to be done following Opinion 33
requirements. This business model is innovative and have been done by foreign brokers through an
“Securities operations intermediation conduction contract”.

The CVM does not regulate strictly how these contracts should be structured but, when
pronouncing on the cases of two foreign companies offering foreign securities intermediation 1 ,
declared as a minimum criterion for them to be in compliance with the Opinion 33, CVM’s general
regulation and Brazilian Law the following:

• verification of the regularity of the foreign contractor by the national partner, ensuring that it
is an institution duly authorized to operate in its country of origin;
• The foreign contractor shall be from a jurisdiction with which CVM maintains bilateral
cooperation agreement or which are signatories to IOSCO multilateral memorandum of
understanding;
• The efforts to attract Brazilian resident investors shall be conducted by the Brazilian institution;
• The Brazilian intermediary shall provide, clearly and in Portuguese, all information for the
proper investment decision-making (including risks, tax requirements, investor protections
within the foreign jurisdiction and limitations of the CVM’s jurisdiction);
• Prohibition of mentioning specific assets (for example “Buy Tesla Stocks”), in order to
guarantee that the service offered is only intermediation;
• Verification and following of appropriateness rules;
• Maintenance by the Brazilian Institution of the register of investors raised;
• Obligation of the foreign institution to provide periodic information to the Brazilian
intermediary so that the Brazilian intermediary monitors the clients in common and act as a
gatekeeper, in relation to the procedures of suitability, best execution, know your client
(KYC) and prevention of money laundering and terrorist financing – PLDFT;
• Compromise, by the foreign institution, of not accepting any Brazilian resident customer
without the Brazilian institution acknowledgement.

In conclusion, within ActivTrades Group, we can offer the account opening in ActivTrades
Corp to the Brazilian investor having ActivTrades CCTVM as a gatekeeper.

1
https://conteudo.cvm.gov.br/decisoes/2021/20210223_R1.html