Types of FIP. CVM Ruling 578 consolidated the various types of FIP and created new categories, classifying them as follows:

(i) Seed Capital: these are FIP for investments in corporations or limited liability companies with annual gross revenues of up to R$16,000,000.00, in the fiscal year preceding the fund's first capital contribution. Such corporations or limited liability companies are exempt from following any governance requirements provided for in CVM Ruling 578;

(ii) Emerging Companies: these are FIP designed for investments in corporations or limited liability companies with annual gross revenues of up to R$300,000,000.00, earned in the fiscal year preceding the fund's first capital contribution. Such corporations or limited liability companies are exempt from following some governance requirements provided for in CVM Ruling 578;

(iii) Infrastructure and Intensive Economic Production regarding Research, Development and Innovation: these are FIP whose main characteristic is the obligation to keep their net equity invested in companies that develop, respectively, new infrastructure projects or intensive economic production regarding research, development and innovation in Brazil, in the energy, transport, water and basic sanitation, irrigation and other sectors deemed as priorities by the Federal Executive Branch, and

(iv) Multi-Strategy: these are FIP that do not fit into the other categories and that may allocate resources to companies in various sectors and development stages.

Innovations. Furthermore, CVM Ruling 578 brings several innovations. Here is a summary of the main ones.

Assets and Governance. FIP may invest in securities and bonds representing equity interest in limited liability companies and simple debentures (in this case, up to 33% of the subscribed capital), and perform Advances for Future Capital Increase, provided certain conditions are met. In addition, FIP can invest funds in units of other FIP and Equity Funds, and such investments will be computed for the purposes of verifying the minimum limit of 90% of the FIP's net equity that must be represented by assets allowed by CVM Ruling 578. FIP may obtain direct financial support from development agencies, including through borrowings and loans, limited to an amount equal to 30% of the FIP's assets. Moreover, the new ruling now softens the FIP's participation in the decision-making process of the invested companies, making it unnecessary when the investment in a given company (i) has been reduced to less than half of the percentage originally invested; and (ii) represents a portion corresponding to less than 15% of the invested company's capital.

Investments Abroad. FIP may now invest up to 20% of their subscribed capital in assets abroad, provided that these assets have the same economic nature of other assets eligible for investment by FIP. Additionally, Multi-Strategy FIP may allocate up to 100% of their subscribed capital in assets located abroad, without the requirement of a minimum percentage, provided they are exclusively offered to professional investors.

Rights attaching to Units. The classes of units may now grant different economic and financial rights as to the order of preference in the payment of distributions to investors in addition to the possibility of different calculation basis for administration and management fees. Additionally, in the case of FIP intended only for professional investors, a certain class of units may grant different and additional economic rights.

Votes/Quorums. The unitholders must now exercise the right to vote in the FIP's interest and, if they have defaulted their obligation to pay up their subscribed units, they will lose their right to vote as regards their respective subscribed and unpaid units. The bylaws may also impose additional penalties, including the impediment to vote with respect to all units paid up and held by the defaulting unitholder. Notwithstanding the matters listed on CVM Ruling 578, which are subject to qualified voting quorum, the FIP´s bylaws may establish other matters subject to qualified voting quorum, thus resolving a controversy in this regard.

Committees/Boards. The resolutions of the unitholders' meetings do not exempt the administrator and/or manager of their responsibility for the FIP's operations. It is important to note that there has been an increase in the manager's duties and obligations regarding the procurement of services related to investment or disinvestment, as well as its influence on the pricing of the FIP's investments. Members of boards and committees of the FIP cannot be paid directly by the FIP, and, in some cases, the bylaws may set forth that part of the administration fee will be directed to them.

Manager. CVM Ruling 578 now lists the duties of the portfolio manager of a FIP, which involve the power to (i) negotiate and contract, on behalf of the FIP, the assets and intermediaries to perform the FIP's operations, representing the FIP for that purpose, (ii) negotiate and hire, on behalf of the FIP, third parties for the provision of advisory and consulting services related directly to the investment or disinvestment in assets permitted by CVM Ruling 578, as set forth in the FIP's investment policy, and (iii) monitor the assets invested by the FIP and exercise the voting rights arising from these assets, performing all other acts necessary for such an exercise, subject to the provisions of the manager's voting policy.

Finally, CVM Ruling 578 establishes a period of 12 months from August 30, 2016, for the current FIP and FMIEE to adjust to the new ruling (except for FMIEE intended for nonqualified investors, which may continue operating without any adjustment).

Accounting. CVM Ruling 579 established rules on the accounting criteria for recognition, classification and measurement of assets and liabilities of the FIP, as well as the criteria for revenue recognition, appropriation of expenses and disclosure of information in the financial statements.

Classification and Measurement. As a general rule, FIP shall now apply the accounting criteria for recognition, classification and measurement of assets and liabilities and recognition of revenues and expenses set forth in CVM regulations applicable to public companies. The assets and liabilities of FIP which are considered, according to the administrator’s discretion, as investment entities shall be recognized at their fair value and the gains and losses from valuation of assets and liabilities, although not actually monetized , shall be recognized in the results of the relevant period.

The fair value shall reflect the market conditions at the time of measurement, including on the date of their initial recognition, the date of the financial statements or the date on which the information on the net equity of the FIP is disclosed to the market. If the administrator reasonably concludes that the fair value is not measurable reliably, it can classify the assets at cost. Additionally, the administrator must continually assess the existence of events that may change the fair value of the FIP net equity.