Publications
- Category: Infrastructure and energy
Executive Order (MP) No. 863/2018, which extinguishes the 20% limit on the participation of foreign capital in Brazilian airlines, should be reviewed by the plenary session of the Chamber of Deputies later this month. On last April 25, the joint committee of senators and federal deputies that examined the matter approved the final text of Conversion Bill (PLV) No. 6/2019, which makes changes to the proposal originally submitted by the Executive Branch.
The deadline for approving the conversion of the MP into law expires on May 22, the deadline by which the text must have also been submitted to a vote on by a plenary session of the Federal Senate. If this does not occur, the MP will expire and lose its effects. As the approved PLV does not replace the text of MP 863 currently in force, the amendments made, if approved by a plenary session of Congress, will only take effect upon publication of the law.
The main amendment adopted by the Joint Committee concerns the abolition of the limit on foreign equity interest in airlines. While the original text of MP 863 eliminated any restriction on such equity interest, the PLV re-established the articles of the Brazilian Aeronautical Code that provided for a 20% limit on foreign equity interest and the need for Brazilian officers. To be exempted from observing these articles, the airline must operate at least 5% of its flights on regional routes.
Although it seeks to promote regional aviation, which is still deficient in Brazil, the amendment imposes a burden on potential foreign investors, since regional routes tend not to be profitable, and may limit the entry of international airlines into Brazil independently of domestic companies.
The industry's opening to foreign capital also includes air taxi companies, which were also obliged to respect the limit of 20% foreign equity interest of their capital before the issuance of MP 863. The text amended by Congress is not clear, however, regarding the treatment to be given to air taxi services that have more than 20% foreign ownership. Since their operation is by nature due to demand, it would not be reasonable to require the obligation of 5% of the flights of these companies to be on regional routes.
Another point that draws attention to the amended text of MP 863 is the reinstatement of the minimum baggage allowance per passenger, which places Brazil within the group of countries that do not charge for checked baggage, as opposed to Resolution No. 400 of the National Civil Aviation Agency (Anac), which authorized this charge starting in 2017.
If the new law originated from MP 863 conflicts with Anac's rule, there is no doubt that the law will prevail, which will certainly cause market turmoil. Since the publication of Resolution 400, airlines have been advocating charging as a way to lower the price of air tickets, in accordance with the model of low-cost airlines operating abroad. Reestablishment of the baggage allowance practically makes the low cost model in Brazil impossible, which may also be considered a factor impeding the entry of investors in Brazil.
It will be necessary, however, to wait until May 22 to actually discover the new policies of the Brazilian government for this industry and to be able to evaluate the impact they will have on air services in Brazil.
- Category: Intellectual property
Creativity has economic potential. Concrete manifestations of this statement are startups, companies whose goal is to execute their innovations to generate economic value.
Intellectual property law recognizes this situation and provides the necessary legal instruments to protect creativity. Therefore, through the proper use of intellectual property rights, startups have more chance to convert creativity into economic returns.
The Brazilian legislature is aware of the startups’ relevance and promulgates statutes to grant them adequate legal treatment, including the startup’s intellectual property protection.
Complementary Law No. 167/2019 and Inova Simples
In this sense, Complementary Law No. 167/2019, published on April 25th, created Inova Simples, a simplified special regime for startups, with the purpose of stimulating their creation, formalization, development, and consolidation.
According to the law, startups are innovative companies that (i) aim to improve existing systems, methods, business models, production, services, or products (a scenario in which the startup is incremental), or not, when they relate, therefore, to the creation of something new (a situation in which the startup is disruptive); and ii) develop their innovations under uncertain conditions, requiring constant experimentation and validation before they can fully start their business and earn revenue.
The differentiated treatment by Inova Simples consists of a summary procedure for opening and closing startups, which will occur in a simplified and automatic form on an official website of the federal government. The owners of the startup submitted to the system must provide, on their own form, among other information, a description of the scope of the innovative business intention and a definition of the corporate name, in which the expression "Inova Simples (I.S.)" must be included.
To better protect the startup’s intellectual property, the digital form will have a field or icon for automatic reporting to the National Institute of Intellectual Property (INPI) of the scope of the startup’s inventive content for the purposes of trademarks and patents’ registration. The INPI must create a mechanism that directs the startup’s data for summary processing of the startup’s requests for trademark and patent registrations.
Once the registration is correctly completed, the system will create a specific CNPJ number for the startup submitted to Inova Simples, which must immediately open a corporate bank account to capture and pay its capital, which may come from the owners, an investor domiciled abroad, or a public or private credit line, among other sources provided by law.
If the startup is not successful in developing its scope, the holders can cancel the startup’s CNPJ by a simple declaration on the same website where they registered the startup.
Conclusions
The law is unclear on the summary processing of startup trademark and patent application requests. The details will need further regulation, when it will be possible to analyze the change in an in-depth manner.
On the other hand, the law has the merit of drawing attention from startup’s owners to the importance of protecting the startups’ intellectual property. The possibility that a startup may be legally born with its trademarks and patents registered or applied for is an advance in terms of protection, especially at the startup’s initial moment, when the disclosure of innovations to third parties is necessary in order to obtain investments.
With attention focused on protecting the startup’s intellectual property, it is important that the owners seek appropriate legal advice in this area. Despite limited resources, a “do-it-yourself” attitude is risky. After all, innovation is the startup’s main asset.
- Category: Labor and employment
Since November of 2017, when the Labor Reform established that the "premiums" are not subject to the application of labor and social security charges, much has been discussed about the Federal Revenue Service's interpretation of this concept and the requirements to apply it. The issue gains importance when one takes into account that the social security legislation does not define the concept of a premium either.
As we have already discussed in this article, based on the new provisions implemented by the Labor Reform, the main factor capable of generating different interpretations is the lack of clarity in the definition of the requirements "payment out of liberality" and "payment for performance greater than what is ordinarily expected." What would a payment out of liberality be? What would be performance above that ordinarily expected that would authorize payment of the premium?
At that time, we identified two main currents of interpretation for "payment out of liberality."
The first is that liberality would be all that is granted by the company, but not required by the law. In this case, it would be possible to argue that the premiumwould cover any and all forms of variable remuneration, even if contractually agreed upon, since, in an absolute majority of cases, the company is not obliged to pay variable remuneration.
The second is that liberality would be all that is granted by the company and that, aside from not being required by the law, has also not been contractually agreed upon. In this case, the premium would have its scope limited only to payments made spontaneously and unexpectedly by the employer. Premiums paid by way of mere liberality could not be equated with a bonus contractually agreed upon (in contracts, policies, job offers, etc.), inasmuch as this prior arrangement would remove from it the nature of being liberality, transforming it into a contractual obligation.
The requirement of "payment by reason of performance above what is ordinarily expected" could also lead to different interpretations: one of them is that the fixed salary would compensate normally expected performance, and variable remuneration would reward performance above that ordinarily expected. The other is that only the part of the variable remuneration due to exceeding targets would reward performance above the ordinary. The latter would be a more restrictive interpretation.
Very well. The Federal Revenue Service, through Cosit Consultation Resolution No. 151, dated May 14, 2019, expressed its interpretation on these requirements.
In summary, in the Federal Revenue Service’s, as of November 11, 2017, premiums, even if habitual, are not included in the calculation basis for social security contributions,[1] when they (i) do not arise from a legal obligation or an express agreement, which would rule out the liberality of the employer; and (ii) result from performance higher than that which is ordinarily expected, and the employer must objectively demonstrate the performance expected and also by how much this performance has been exceeded.
In other words, in interpreting the "payment out of liberality" requirement, the Federal Revenue Service opted for the second, more restrictive interpretation, limiting the scope of the premiums to only payments made in a spontaneous and unexpected manner that do not result from contractual arrangements (in contracts, policies, job offers, etc.).
We believe that this interpretation, however, goes beyond what is provided for by law and may be challenged in court, insofar as the Labor Reform did not restrict premiums to payments that have not been expressly agreed upon. In establishing this requirement, the Internal Revenue Service went beyond the limits established by law.
As the Consolidated Labor Laws (CLT) are very clear regarding the possibility of regular payment of a premium, the IRS recognizes that sporadic nature is not a requirement classifying a payment as a premium. If this were not the case, in general terms, the interpretation given to premiums would very much resemble a sporadic gratuity, which was not previously agreed upon and was also not subject to labor and social security charges. In this perspective, the interpretation hollows out the treatment given to premiums by the Labor Reform. Now, if the premium is equivalent to a sporadic gratuity, why would the Labor Reform have created a new concept?
Regarding performance above what is expected, the Internal Revenue Service’s understanding is that it is the duty of the employer to objectively prove the performance expected and also how much this performance has been exceeded. Here, again, the interpretation reveals itself to be contradictory, being incompatible with the very requirement of "liberality." How can the employer objectively prove what performance would be expected and what would be higher than expected without having explicitly defined this parameter?
In the final analysis, according to the Federal Revenue Service’s interpretation, if the company discloses its performance expectation for each position and/or employee without providing for any premium, it may, at the end of the period, decide, out of liberality, which is the moment to reward those who went beyond the performance expected. This procedure would certainly also generate tax questions.
In establishing this restrictive interpretation, the Internal Revenue Service causes obstacles to the payment of premiums by companies, acting against the provisions of article 28, paragraph 9, "z", of Law No. 8,212/91, which expressly excludes premiums from salary for purposes of social security contributions. Instead of clarifying the issue and providing guidelines on the use of premiums, the body maintained the scenario of uncertainty and lack of legal certainty, because, although it does not have the force of law, the Cosit consultation resolution binds the public administration and guides the actions of tax inspectors.
In this context, our understanding is that companies that pay premiums to their employees must pay attention to the above requirements and, if they prove to be incompatible with their practices, evaluate their interest in seeking judicial support in order to recognize that they acted in strict compliance with the law, since, by reason of the aforementioned Cosit Consultation Reolution No. 151/2019, tax inspectors tend to enter assessments against these taxpayers.
[1] In the Federal Revenue Service’s view, there is a limitation on the number of annual payments only in the period between November 14, 2017, and April 22, 2018, during the validity of Presidential Decree No. 808/2017, according to which the bonus could not exceed the maximum limit of two payments per year.
- Category: Labor and employment
The new Collective Bargaining Agreement for Bank Employees 2018/2020 (CCT) brought in an important change by including the first paragraph in section 11,[1] which provides for offsetting between the value of the 7th and 8th hours granted as overtime and the bonus of function, in the event of de-qualification, in a labor claim, of the position with the bank as being one of trust.
The working hours of ordinary bank employees is six hours a day, while the working hours of bank employees with a position of trust is eight hours per day, remunerated via payment of a bonus of function, pursuant to paragraph 2 of article 224 the Consolidated Labor Laws (CLT).[2]
There are decisions by the courts of labor appeals, however, which remove the position of trust of bank employees whose differentiated position of trust is not proven by the employer banks. In such cases, the request for the payment of overtime beyond the sixth daily hour is granted as though it were for an ordinary bank employee, without allowing for the offsetting of the bonus already paid during the employment contract in the exercise of the eight-hour working day.
The possibility of offsetting between these amounts has historically been the subject of various requirements by the employer banks, since the initial purpose of paying the bonus of function to bank employees with an eight-hour working day was precisely in order to remunerate the two hours of overtime over six hours, as was even established in Precedent No. 102, item II,[3] of the Superior Labor Court (TST).
It should be noted that the wording of the above-mentioned precedent merely repeated what had already been determined in 1982 by the former Precedent No. 166 of the TST, which was canceled following its incorporation into Precedent No. 102, in the light of the revision carried out by Resolution No. 129/2005. In addition, transitory Jurisprudential Guideline No. 70 of Subsection I Specialized in Individual Disputes (SDI-1)[4] of the TST (transitional OJ No. 70), issued in 2010, also provides for the possibility of offsetting between the bonus of function and overtime hours.
Over time, the labor courts began to adopt the view that the classification of bank employees into positions of trust was often designed to avoid bank employees' special work hours. Thus, in contradiction to the understandings previously expressed by the TST (and even later, if we consider transitional OJ No. 70), Precedent No. 109 of the TST was issued,[5] establishing that bank employees not classified in paragraph 2 of article 224 of the CLT via judicial decision, but that receive a bonus of function, cannot have wages relating to extra hours offset by the value of that bonus.
In other words, necessarily, the new wording of the CCT supposedly contradicted the current case law of the TST on the subject, which has generated great repercussions among the parties covered by the negotiation.
At the outset, the possibility of negotiating collective labor issues related to employees' working hours may be defended as of the publication of Law No. 13,467/2017, known as the Labor Reform, which included article 611-A[6] in CLT and provided in section I that collective bargaining agreements have prevalence over the law when they establish provisions regarding working hours, subject to the constitutional limits.
In this scenario, the declaration of validity of the new provision by the courts of labor appeals seemed to be surpassed, especially if considered in conjunction with the provisions of article 611-A, section I of the CLT and article 8, paragraph 3,[7] of the CLT, which determines that, in an examination of collective bargaining agreements, the Labor Courts will examine only fulfillment of the essential elements of the legal transaction, subject to the provisions of article 104 of the Civil Code,[8] and shall support their activities on the principle of minimum intervention into the autonomy of the collective will.
In the first article published in the Legal Intelligence Portal on the subject,[9] in March of 2019, we emphasized that it was not yet possible to evaluate the impressions expressed by the Labor Courts on the subject, given the scarce material then existing. However, after approximately six months since the entrance into effect of the new CCT, there are already several divergent positions regarding the validity of the new provision.
Part of the judgments handed down, such as those published in the record of cases No. 0000169-61.2019.5.19.0003 (3rd Labor Court of Maceió/AL), No. 1000153-07.2019.5.02.0701 (1st Labor Court of São Paulo - Southern District), and No. 1000354-70.2019.5.02.0063 (63rd Labor Court of São Paulo - Barra Funda), defends the validity of the new provision, limited to the period of validity of the CCT, on the grounds that it is constitutional, in view of the provisions of article 7, paragraph XXVI, of the Federal Constitution[10] and article 611-A of the CLT, and that analysis of potential invalidity of the provision could only be done by the Labor Courts if the subscribing trade unions participated in the labor action as necessary co-litigants, in accordance with article 611-A, paragraph 5, of the CLT.[11]
In turn, other judgments, such as those published in the records of cases No. 1001613-43.2018.5.02.0061 (61st Labor Court of São Paulo - Barra Funda), No. 1000242-15.2019.5.02.0706 (6th Labor Court of São Paulo - Southern District) and No. 1000116-74.2019.5.02.0605 (5th Labor Court of São Paulo - Eastern District), argue for the invalidity of the new provision. One of the bases is that it supposedly constitutes intervention in the judicial activity, exclusive to the Judiciary, and, therefore, is not a question of the prevalence of what is negotiated over what is legislated. Another allegation is that employees hired before the effective date of the provision cannot undergo prejudicial changes in the conditions of the contract, under the terms of article 468 of the CLT.[12]
The divergence between the positions expressed by the Labor Courts only shows that the issue will still undergo a process of maturation and stabilization, until there is greater consolidation of the case law of the labor courts on the subject or a final ruling by the TST or STF, although the validity of the norm is fully defensible, under the terms of article 7, XXVI, of the Federal Constitution and article 611-A of the CLT.
[1] “SECTION 11 - BONUS OF FUNCTION
The value of the bonus of function, referred to in paragraph 2 of article 224, of the Consolidated Labor Laws, shall not be less than fifty-five percent (55%), except for the State of Rio Grande do Sul, whose percentage is fifty percent (50%), always applicable over the salary of the actual position plus the additional pay for length of service, already readjusted under the terms of the first section, following the most advantageous criteria and other specific provisions set forth in the Amended Collective Bargaining Agreements.
Paragraph one. If there is a judicial decision that declassifies the employee from the exception provided for in paragraph 2 of article 224 of the CLT, who is receiving or has already received the bonus, which is the consideration for the work performed beyond the sixth (6th) hour per day, such that work is only considered overtime after the eighth (8th) hour worked, the amount owed relative to overtime and related payments shall be fully deducted/offset, with the value of the bonus and related payments paid to the employee. The deduction/offset provided for in this paragraph shall be applicable to the suits filed as of December 1, 2018.
Paragraph two. The deduction/offset provided for in the paragraph above shall comply with the following requirements, cumulatively:
- a) it shall be limited to the months in question in which overtime has been granted and in which the bonus payment provided for in this section has been paid; and,
- b) the amount to be deducted/offset may not be higher than the amount earned by the employee, limited to the percentages of fifty-five percent (55%) and fifty percent (50%), mentioned in the head paragraph, such that there can be no negative balance."
[2] Article 224. The normal working hours of employees at banks, banking houses, and Caixa Econômica Federal shall be six (6) continuous hours on weekdays, with the exception of Saturdays, for a total of thirty (30) hours of work per week.
Paragraph 2. The provisions of this article do not apply to those who exercise positions of direction, management, oversight, supervision, and the like, or that exercise other positions of trust, provided that the amount of the bonus is not less than one third of the salary of the actual position.
[3] Precedent No. 102 of the TST
BANK EMPLOYEE. POSITION OF TRUST (upheld) - Res. 174/2011, made available in the State Labor Court Gazette (DEJT) on May 27, 30, and 31, 2011
I - A demonstration, or lack thereof, of the exercise of a position of trust referred to in article 224, paragraph 2, of the CLT, depending on proof of the actual duties of the employee, is not subject to review by means of a writ of review or motion to review.
II - Bank employees who perform the function referred to in paragraph 2 of article 224 of the CLT and receives a bonus of not less than one-third of their salary already receive the two overtime hours over six. (former Precedent No. 166 - RA 102/1983, published in the Gazette of the Judicial on October 11, 1982 and October 15, 1982)
[4] 70 - CAIXA ECONÔMICA FEDERAL. BANK EMPLOYEE. CAREER PLAN IN COMMITTEE. CHOICE FOR EIGHT-HOUR WORKDAY. INEFFICACY. EXERCISE OF MERELY TECHNICAL FUNCTIONS. NO ESTABLISHMENT OF EXERCISE OF POSITION OF TRUST. (published in the Electronic Gazette of the Labor Judiciary on May 26, 27, and 28, 2010)
In the absence of the special trust referred to in article 224, paragraph 2, of the CLT, the employee's adherence to the eight-hour workday in Caixa Econômica Federal’s Career Plan is ineffective, which is results in return to the six-hour workday, with the seventh and eighth hours worked being due as overtime. The difference in bonus of function received in the view of ineffective adherence may be offset with the overtime hours provided.
[5] Precedent No. 109 of the TST: Bank employees not classified within paragraph 2 of article 224 of the CLT that receives a bonus cannot have the overtime wages offset by the value of that bonus.
[6] Article 611-A, subsection I. Collective conventions and collective bargaining agreements take precedence over the law when, among other things, they set forth provisions with respect to: I - agrees as to working hours, subject to the constitutional limits.
[7] Article 8, paragraph 3. In examining collective conventions or collective bargaining agreements, the Labor Courts shall exclusively examine fulfillment of the essential elements of the legal transaction, respecting the provisions of article 104 of Law No. 10,406, of January 10, 2002 (the Civil Code), and shall support their activities on the principle of minimum intervention on the autonomy of the collective will.
[8] Article 104. The validity of the legal transaction requires:
I - competent agent;
II - purpose that is lawful, possible, determinate, or determinable;
III - manner provided for or not prohibited by law.
[10] Article 7, subsection XXVI. The following are rights of urban and rural workers, in addition to others that seek the improvement of their social condition: XXVI - recognition of collective bargaining conventions and agreements;
[11] Paragraph 5. The trade unions subscribing a collective convention or a collective bargaining agreement must participate, as necessary co-litigants, in individual or collective actions whose subject-matter is the cancellation of provisions of these instruments.
[12] Article 468 - In individual contracts of employment, it is only lawful to change the respective conditions by mutual consent, and provided that they do not directly or indirectly result in prejudice to the employee, under penalty of nullity of the provision in breach of this guarantee.
- Category: Labor and employment
New decision by the Superior Labor Court (TST) reopened discussions on the concept of a stigmatizing disease adopted by the labor courts. In an opinion published in April, the Justices of Subsection I Specialized in Individual Disputes (SDI-1) of the TST, unanimously, denied relief to a motion for clarification filed by a company and upheld a decision by the Seventh Panel of the TST that recognized prostate cancer as a stigmatizing disease.[1]
The judgment and appellate opinion by the Court of Labor Appeals of the 9th Circuit (TRT) had denied the claimant's petition for reinstatement on the grounds that the evidence produced in the record did not demonstrate the alleged discriminatory dismissal by the company. At the time, it was further alleged that the claimant's experience had been praised, admired, and recognized by the employers, especially because he was a well-paid executive.
The reversal of the appellate decision handed down by the TRT brought into question the very definition of a stigmatizing disease, since Precedent No. 443 of the TST, by presuming as discriminatory dismissal of employees "carrying the HIV virus or other serious disease causing stigma or prejudice," did not define what these serious diseases would be, which led to the most varied of interpretations by the labor courts.
In order to discuss the recent decision by the TST, it is important to define the concept of "stigmatizing" and to analyze whether it has in fact been relativized. Strictly speaking, "stigmatizing" is something that can provoke people's prejudice and lead to distancing by co-workers, as well as judgment of a certain condition.
By projecting the same reasoning for "stigmatizing diseases," it is concluded that the concept refers to diseases that, solely and exclusively, may lead to reprehensible behavior by other colleagues in relation to employees with the disease, for no apparent reason, including failing to engage them in important subjects, events, and routines.
It is the case that the concept of a "stigmatizing disease" also has a subjective connotation, if our understanding is that the same diseases may be considered stigmatizing in one place of work and not in another, depending on how they are viewed by co-workers. This situation makes the "stigmatizing disease" the result of jurisprudential construction, which creates insecurity for employers, including in determining whether or not certain employees may be dismissed because of low productivity, for example, but also show some compromise to their clinical condition. This is because, if the employee has a disease considered stigmatizing, and there is no effective demonstration of low productivity, for example, the dismissal will be considered discriminatory by presumption.
Cancer, on the other hand, starting from the assumption that it does not give rise to stigma or prejudice, since it is not even contagious in nature, would necessarily rule out the presumption of a discriminatory disease and would not alter the review/burden of proof in any judicial debate. However, the understanding hitherto advocated by most labor courts is likely to be reconsidered in the face of the new TST decision, which again increases legal uncertainty for companies.
This is a paradigmatic decision, since the SDI-1 of the TST is the body that reviews the decisions of the panels and unifies the case law of the TST. The understanding may change the way the labor courts have interpreted the text of Precedent No. 443 of the TST and even expand the list of diseases considered stigmatizing.
For this reason, it is recommended that all issues related to employee history, performance, and evaluation be duly formalized and documented in order to rule out the presumption of discrimination in the dismissals of those who are suffering from stigmatizing diseases.
[1] See therecord of Case No. TST-RR-68-29.2014.5.09.0245.
- Category: Labor and employment
Published in May of last year, Resolution No. 4661 of the National Monetary Council (CMN) established new guidelines for investment of funds by plans managed by private complementary pension entities (EFPC) and changed some benchmarks for the investments made by these institutions, raising doubts and causing challenges for their managers.
One issue to be solved is the allocation of investments in real estate assets, specifically direct investments in real estate, since Resolution No. 4,661 determined that EFPCs may no longer acquire real estate and must conduct a procedure to divest the properties held in their own portfolio within 12 years.
To make this change, the resolution authorizes these institutions to set up real estate investment funds (FIIs), of which they may hold up to 25% of the units issued. If the FII is organized with properties within the EFPC’s inventory prior to the issuance of the new rule, there will be no concentration limit, that is, the entity may hold up to 100% of the units issued by the FII.
It is precisely this point in the new resolution that raises doubts about the allocation of real estate as a result of EFPCs’ investments. Let us imagine that an entity has invested in credit instruments whose collateral is a property, a perfectly ordinary circumstance and permitted by CMN Resolution No. 3,792, which regulated the matter previously. Should the EFPC execute this guarantee today, under the aegis of Resolution No. 4,661, it will no longer be able to hold the property directly.
It is clear that the objective of the rule was not to prevent the recovery of a secured credit, causing losses to the EFPC. As the institution can no longer acquire/own the property directly, would it be necessary to set up an FII for this? Would it be possible to equate this property with those held in inventory, taking into account that, strictly speaking, it was not owned by the EFPC when Resolution No. 4,661 entered into force? Since the rule does not present an obvious answer to this situation, an expansive interpretation of the concept of inventory would be necessary in order for the entity to recover on its investment in a viable and balanced way from an economic and financial point of view.
If such a property cannot be considered part of the inventory, the solution presented by Resolution No. 4,661 to organize an FII to house it (with concentration per issuer limited to 25%) reveals itself to be complex for EFPC managers, who often will not find partner investors to organize the FII and be able to respect the concentration limit. What then would be the option available to the entity to recover its credit with a property as collateral considering that it cannot hold real estate directly?
Moreover, even if the issue of the concentration limit is overcome, it is necessary to consider that the structure of FIIs presents a series of high costs due to their administration and, as such, represents an unattractive option for the implementation of this change in the rules imposed on EFPCs.
In this context, the National Supplementary Pension Board (Previc) needs to clarify what treatment should be given to real estate subject to recovery of credit instruments granted prior to Resolution No. 4,661 and possibly to relax the restrictions applicable to investments in the real estate segment, seeking to offer EFPCs more interesting options and cost-effective ways of adapting to the provisions and limits of the rule.