DEBEVOISE & PLIMPTON

Agency decision

Ask Donna

What actually matters in this document.

Text

~"Ol~

WUJMI .. ...-nDON

",-1Il""-'

- - . . .. ADWS

.... e QOCIQtoL£

U)IlDIICII\II

e -m.L. JIl.

u:IlaElUY

(212) 9C)9.6()()()

OMD v. -.w.LZY

CIiCIL WlUft'. JIl.

ADH8Dr

~ F. Jl:MCTCN 2I'Cl

M:lePr L. ICN:i

7!OQlI~

5!15 IJ'TH ~. N.•

~ ClC 3ClllOoI

1UIJIICINE, CIDZ JD«lOO

ee.-

TUIl(,

~WUUD

'TUECCP'IEJt, l2ClZl . . .118

eOIlOUTHl'QIJERQr. ITMET

IJ:)S ANGELIS. Qt. 1llOl1

'TEI..EJ'HClNI, C213IIIO«lOO

"rtI.D. Cl15Z7 CPIJ,

'I'U.E~. l2J3l1lOo81OO

~ CD-U Cl13 12 12

1E.I)(, 6111WF Cl"lIUl

'T'Il.ECClPmt. CD-U ~ 3D 50 12

I CJIEm CClUItT. 5 I.LIlGoIlT'E HLL

LDNXlNIECoI/ll1M

~ l&4'7UGZlll779

TI!.ZX. 1101!69

1'II..ECOP'ER. l&4'7U 321 c:.&o

llllI5~

...... 1CIZ21112

'TEl.EPHClNE. c.U 131 ee.e

'T1:UOCClPIER. CJ6.U 131 tee

...-:v.

1W.PH1t.~

-.a~~

e-no

.-.nz

IDINID .... il'UIn.L

n«xlOiC A.ICLMZ

M.IQH~JlIl

~.-eNS

JCHIl .. IIW'\'. JlIl

..-.n-

~MA.~

JCJNoCrHAN A. IMAl.L

WCINT M. -.wTW

MA.". WLIClN. JIl.

NCHAIlID GOClC'I'EM

lIlQ.COTT .. DUNHAIoI. ;,If.

APni£Y .. WOOD

STr-JIN II&. AUlEN

Jl>'NH.HAU

JI>'N ~ IlClG.n.

tCHAIL W &AIIl

~,.. CU'lAN)'

.lQMlI T. CUM'l'••

IDWIN~~

.w::o.D...,.....

.lClNoCnWIIlIl E1.

0UlaJ$ '!W'ICZA

JCHIl M. AI.LIN. II.

swos.. l'OlDE MBlINA. II.

QoINSTc.HP ..-..u.

'III..IJAM" ~

l.MIlINCE K. CM1H£'f

oIClIIPH ~ IIICXlClHE

ElClNALD "ItANQS l)()NC7MoI

"'-- ... -..v

~M.MClIiN

-.aD.~

JCHIls.~

~L.1IClIEN

OMDA.CIUFF

IW:lePT ~

IIIC D. II:lI'lD

IW:lePT No

_LOoGSiiC'"

21~GIOAGEV

OMDW_

-...n' ItClE'I

fU't~

........

IIH:IIfCW

NEW 'tIORK. NY 10022

DUlE.. ... ~

M.CI ~ ICILUII

~1Il111UCr

MAHS~

~ l'MI:lENC r.AaIS

~e~

"""'1Il M:IU --,,-IIClGIIIt ~ P'OCISIl'

IoIoUIO L.

1ICClQAOlfW ~ II.

MMCUS H. ST'WOCK

~~-.sa

S75 THIRD AVENUE

~A.JGDINMj.

•

1W:lePT~~

GoUt'f M. I'IIECMAN

NCHAIIDF._

\.OllNA ~ IQo4CI'lEl.O

/IICfIe#I L. SCUMER

I'IWC~~

~ICLIJQMAN

M:HAIlDD. . . . .

N'T1JIL.~

~...a

ClDOIW4 F. ST1.ES

IIHJIIIDI No . . . .

MoUlOA L. MlIC _

HoUIOI.D ... HEALY. JR.

IICHAIIC D. KAHN

~QSTl\IUl

CIEOl'QI N. LIClSAY

.lMID .. WEI.LES. JR.

OFCCUNSEL

ROeIRT F. QUU/'llW'C£ JR.

...:HAEL~-.s

July 13, 1992

VIA HAND DELIVERY

Thomas S. Harman, Esq.

Associate Director and Chief Counsel

Division of Investment Management

Securities and Exchange Commission

450 5th Street, N.W.

Washington, D.C. 20549

Unibanco - Uniao de Bancos de Brasileiros S.A.:

Investment Advisory Activities

Dear Mr. Harman:

In connection with your reques~ for

clarification of certain matters pertaining to our May 11,

1992 letter, we submit this supplemental lett;er on behalf

of our client Unibanco - Uniao de Bancos de Brasileiros

S.A. ("unibanco") and its investment adviser subsidiary,

Unibanco Consultoria de Investimentos SIC Ltda. ("UC").

Our client has confirmed that, apart from UC, no

affiliated persons of ~nibanco are engaged in the

investment management business. In addition, as we

discussed, all Unibanco employees involved in UC's United

States advisory activities, including research analysts

and other employees of Unibanco whose functions or duties

relate to the determination of recommendations that UC

makes to its united states clients, shall be deemed to be

"associated persons" of UC.

Thomas S. Harman, Esq.

- 2 -

July 13, 1992

•

We appreciate the time and attention that the

staff has qiven to our request. Please feel free to

Ve~

10620029

truly yours,

1lMul~\ ll1al 1!at./

Marcia L. ~acHarg ~

,. "" v

DESEVdISE & PLIMPTON

875 THIRD AVENUE

NEW YORK. NY 10022

<212} 909-6000

~C.-"'RA

~ . IQN MEHR£N

JMlES A. I<EJ'NNoI •

"08EJfT ~ .

JOHNs._

...,.., ~. IM'taN

HAIn'ZEU.. JR

~~~R

YANC~UoE2A

LCUS8EGL£Y

GIJV "'SCMAL

MAI'CUS H. ST"OO<

c:.

TE1.LX IM!lI!Il

T'EI.S:lOP'IEJl' -.711 JZ9 c.o

ItOQEJIl E. ~A

~W~JA

c.II) v. SMAi.LEY

~It..,.gm

CEiCL_.JR

JMlES c:. CiIOClO'LE

c.II)A.DJ"

1CJlEI:lmoI'" III'OMII

1 CtlEED CXlUIn'. !l1...l.OaoCT'E HL1.

lD'lDO'< EO....., ....

~ 1-71143211 077'11

-~~

MAlmN FJIEIlPC E'oN'IS

STE\I&I1t lJIIIOSS

JOHN"~2NC

~~KNO

8E111S~

?5OC8_

~ , lU-U~ 73 12 12

TE1.LX 541.1" e-.R

~ . lU-U ~ 2ll!lO12

.-va-

QEDIlQIE •. ADl'MS

~ J. QINIESSE

.AA:W48EST

21 AoIiNUE QIEOOIGE v

...

~.~

-..uAIol .. WlTTESON

MJaD_

~ "OIlDf IlolEDNA. JR.

ICWt>IlD A. IIEMU.

'nClDOIIE A. KUla

Hl.O'I "OWI.NCl JR.

LJ:lMI'< KEVE

MuCEG-~'

JONoCTHAN II. E.L

~H.MLEY

"OeERT .I.

a..-no

ewe. D. IIOlTEJI

"OeERT N _1fTZ

IIOeERT J SllU'MIIClN

8RUC£P~

~W:1lM<lN

8Ul'f ItOSEN

CHIlIST"QPHER $MEAU.

-uw.t • jIEEP<MAN

...::HAIl.. w: ~

~PCUNAIlD'

JOHNT.~ .•

lin>< ~ "OSEN

IDMNG-~

~O(.CtQNEY

..osEJI'W P IolCICCHE

ClONAI.D ~ l)C)NO\AN

JiIIClQ\,Q ..,.-0.'

GAl'\' .... f'9lII[lYAN

~,,-'

lDIINAG-~

~~IOYMER

DMIUS 'IVCZA

JOHN l1li. AI..I.IN. JR.

J'lUoHO J 8I..ASSKI'G

~J~

~-....~

JOHN • 1IUOf. JR

~"8Io\AU.

IIICHAIID D. .:MIil

WCINT l1li IYTlo4

_ _ IIIIU.S

~~8l)IMITZ

-.... H. lIIL8ON. JR.

~ QCXlDI'Vdt

~".sn..a

STE\I&I1CLUliIMAN

NCfeIIN . . .

IolAIICIA ~ .....::_

HA"OI.D H HE,U.Y. JR

~N.LJN)SAY

JOHN H. HALl.

~"~JR.

JC)I+o Q:

MC:KfoEl. E. M.ES

.IUolES. ~ JR

01' CClUNS£I..

WOI..l:X7". ~. JR.

.. woeo

~IIII.ALDEN

1ClEI."'- -------..

~D.~

•..ar Ao-ITTl:O 'II1II "a:w .oa-

~ection

May 11, 1992

r~~ ~~l::-:: - - - - - - - r - - - - , - - - - .

: oJb.dC'

Investment Advisers Act of 1940

dlabllity

;-- Sections 203 and 208 -'

Thomas S. Harman, Esq.

Associate Director and Chief Counsel

Division of Investment Management

Securities and Exchange Commission

450 5th Street, N.W.

Washington, D.C. 20549

Unibanco - Uniao de Bancos de Brasileiros S.A.:

Investment Advisory Activities

Dear Mr. Harman:

We are writing on behalf of our client, Unibanco

- Uniao de Bancos de Brasileiros S.A. ("Unibanco" or the

"Bank"), one of Brazil's largest banking organizations, to

request your concurrence with our opinion that Unibanco is ~

not required to register under the Investment Advisers Act

of 1940, as amended (the "Advisers Act") if its wholly

owned Brazilian investment adviser SUbsidiary, Unibanco

Consultoria de Investimentos SIC Ltda. ("UC"), an invest

ment adviser which has registered on Form ADV under the

Advisers Act, prov~des investment advisory services to

u.s. institutional clients under the circumstances

described below. In addition, we seek assurance from the

•

'\~r4,.: .

Thomas S. Harman, Esq.

- 2 -

May 11, 1992

staff of the Securities and Exchange Commission (the

"SEC") that it will not recommend enforcement action

against Unibanco, UC or any of their affiliates if UC

provides investment advisory services to its non-U.S.

advisory clients solely in accordance with the require

ments of the securities laws of Brazil (or other

applicable foreign law) without also applying the

provisions of the Advisers Act to such non-U.S. advisory

activities, except as otherwise described below.

DESCRIPTION OF UNIBANCO AND UC

Unibanco

Unibanco, founded in 1924, is the third largest

nongovernmental banking organization in Brazil. Unibanco

has a 400-branch network in Brazil, as well as branches or

representative offices in New York, London and the Cayman

Islands. Unibanco's common shares are listed on the Sao

Paulo Stock Exchange and on the Rio de Janeiro stock

Exchange, and it has over 200,000 registered shareholders,

including the following major international banking

organizations: The Dai-Ichi Kangyo Bank Ltd. of Japan

(11.72%); Germany's Cornrnerzbank AG (10.17%); and Security

Pacific National Bank (2.63%). Unibanco is effectively

controlled by the Moreira Salles family, the members of

which indirectly hold a controlling block of the stock of

Unibanco.

In the field of asset management, Unibanco is

one of the most experienced and well-established invest

ment managers in Brazil. It offers its Brazilian clients

a wide range of investment vehicles, including stock and

fixed-income funds, pension funds, foreign investment

funds, debt conversion funds, individual portfolios and

specialized savings vehicles termed "investment clubs."

At year-end 1990, Unibanco's assets under management

totalled Cr$57.3 billion. Unibanco manages the oldest

stock market fund in Brazil and was a pioneer in

introducing foreign investment funds in 1975. As

discussed in further detail below, Unibanco is regulated

by the Central Bank of Brazil and is registered as an

investment manager with the Comissao de Valores

Thomas s. Harman, Esq.

- 3 -

May 11, 1992

Mobiliarios (the "CVMtI). Unibanco does not currently

provide advisory services to u.s. clients and will not

solicit u.s. advisory clients in the future.

In 1989, in accordance with a resolution adopted

by the Central Bank of Brazil, Unibanco became a multiple

service (or universal) bank by incorporating into Unibanco

the noncommercial banking businesses of previously

separate affiliates. Accordingly, Unibanco now operates

in the investment management, commercial banking, invest

ment banking, real estate financing and consumer credit

sectors. As a mUltiple service bank with integrated

services, Unibanco seeks to offer the highest quality

customer services, devoted to the specialized needs of its

customers on a global basis.

Unibanco will continue to provide a wide range

of discretionary (and, in limited instances, nondiscre

tionary) investment management services to non-U.S.

clients. Unibanco employs approximately 45 analysts on

its research staff, which provides investment research

and analysis with respect to economic factors and trends

in Brazil, Brazilian securities and other investments.

The research staff does not issue buy, sell or hold

recommendations; it concentrates solely on data analysis

and reporting. Unibanco has established a separate

investment management group, which provides discretionary

portfolio management services to the Bank's clients. The

investment management group presently consists of five

portfolio managers.

The Bank has a committee (the "Investment

Committee") currently comprised of 13 individuals who are

either members of the Bank's Board of Directors or senior

managers, including the president of Unibanco, the execu

tive directors of the Bank's corporate finance, trust

management and international divisions, and the directors

responsible for corporate finance, research and Brazilian

fund management. The Investment Committee, which is not

formally constituted, meets on a weekly basis to discuss

matters relating to overall investment strategy with

respect to the management of assets for client accounts as

well as for the Bank's own account. Based generally on

information provided by the Bank's research staff and on

Thomas S. Harman, Esq.

- 4 -

May 11, 1992

the expertise of the Bank's senior managers, the Invest

ment Committee sets general investment policies and

guidelines based on macroeconomic analyses as well as

interest rate and stock market trends. The Investment

Committee does not discuss individual securities,

portfolio companies, or portfolio performance and makes no

recommendations as to specific securities. These

functions are entrusted solely to the Bank's portfolio

managers, who make investment decisions as to specific

securities based on the investment objectives and needs of

each particular client, consistent with the general

economic policies set by the Investment Committee.

Deviation from the Investment Committee's general policies

is permitted on a case-by-case basis.

Consistent with its mission to provide a full

range of financial services to Brazilian and non-Brazilian

clients, Unibanco has organized UC, a wholly-owned sub

sidiary formed as a limited liability corporation under

Brazilian law, to provide nondiscretionary investment

management services to u.s. institutional clients, includ

ing a registered investment company, The Brazilian

Investment Fund, Inc. 1 UC serves as the Brazilian

investment portfolio and economic adviser to that

registered fund pursuant to a Brazilian Advisory Agreement

containing terms and conditions required pursuant to

Section 15 of the Investment Company Act of 1940, as

amended. UC believes that it will provide a new and

unique service that is tailored specifically to non

Brazilian clients seeking nondiscretionary advice with

respect to statistical matters and general economic and

investment trends in Brazil, as well as specific

information about particuiar Brazilian companies. UC

expects that its nondiscretionary advisory services will

be utilized primarily by U.S. investment advisers with

Under its Articles of Association, UC is presently

authorized to provide only nondiscretionary

investment advice. In the future, UC may register

with the CVM to provide discretionary advisory

services as well.

Thomas s. Harman, Esq.

- 5 -

May 11, 1992

discretionary responsibility for institutional client

portfolios. 2

Before discussing the composition of UC's

management and Board of Directors, it may be helpful to

place these corporate organs in the context of Brazilian

company or corporation law. 3 Under Brazilian company law,

the management of a company is entrusted to its Conselho

Administrativo (corresponding to a Board of Directors) and

its Diretoria (Managing Directors), or, in certain cases,

only to its Managing Directors. A company such as UC,

which is a wholly-owned sUbsidiary, is not required to

have a Board of Directors; the management of such a

company may be entrusted exclusively to its Managing

Directors. Nonetheless, as discussed below, UC has a

Board of Directors with full power and authority to manage

its business. The Board of Directors of a Brazilian

company is a collegial, deliberative body, similar in

concept to the Board of Directors of an American company.4

UC does not contemplate providing investment advisory

services to natural persons who reside in the U.s.

In the -future, UC may seek to expand its services to

non-U.S. clients, including Brazilian institutions

and high net worth individuals.

Within Unibanco, officer-level titles held by members

of the executive management staff, in descending

order of responsibility, are as follows: Executive

Vice President, Senior Vice President, Managing

Director, Executive Director, Director, Sector

Director and Deputy Director. Persons without an

executive title are generally referred to as

employees.

The Board of Directors has reserved to it by law the

following basic supervisory powers over a company's

business:

establishing general policies with regard to

company business;

(continued ••• )

Thomas S. Harman, Esq.

6 -

May 11, 1992

Managing Directors, by contrast, are executive officers,

each of whom has the power to bind the company in the

normal course of its business.

4. ( ... continued)

electing and discharging Managing Directors and

establishing their powers and duties pursuant to

pertinent provisions in the corporate by-laws;

supervising the activities of the Managing

Directors of the company, examining the books

and papers of the company at any time and

requesting information on contracts which have

been signed or are about to be signed, and doing

all other necessary acts;

calling a general meeting of shareholders

whenever deemed necessary;

giving its opinion on reports made by Managing

Directors and on accounts rendered by the

Managing Directors:

giving a prior opinion on any act or contract

whenever required to be authorized by the by

laws;

deciding whether to issue shares of the company

whenever authorized by the by-laws;

unless not permitted by the by-laws, authorizing

the transfer of property which is part of the

fixed assets of the company, creating mortgages

and providing guarantees of obligations of third

parties; and

selecting and discharging independent aUditors,

if any.

Thomas S. Harman, Esq.

- 7 -

May 11, 1992

VC's Management structure

None of the members of VC's Board of Directors

and none of its Managing Directors is a u.s. citizen or

resident. Initially, UC's Managing Directors will be

Mr. Cesar Augusto Sizenando, Mr. Sergio Zappa and

Mr. Walter Mendes. S Mr. Sizenando has been with the Bank

since 1976. The Bank's Board of Directors elected

Mr. Sizenando to serve as the Bank's Executive Vice

President. As a senior officer of the Bank, Mr. Sizenando

has ultimate supervisory responsibility for the

management, development, and operational aspects of

Unibanco's wholesale £inancial products; Unibanco's

funding and lending operations; investment management with

respect to third-party accounts and Unibanco's own

account; treasury and exchange operations; and brokerage.

Five directors and managers, with supervisory authority

over more than 100 employees, report directly to

Mr. sizenando, who meets with each of them periodically

(approximately once a week).6 Mr. Sizenando serves on the

Investment Committee of Unibanco. He performs no

portfolio management functions and is simply not involved

in the day-to-day research or investment management

activities of the Bank except to set broad policy

direction and, as an Executive Vice President, to set

objectives and to review the performance of those

reporting to him. Mr. Sizenando does not make investment

recommendations or decisions for the Bank's own account or

for accounts belonging to clients of the Bank, and is not

informed of such recommendations or decisions before they

are communicated to clients. At UC, Mr. Sizenando will

Although UC currently has no other officers or

employees, in the future, as its business expands, it

anticipates that it will be in a position to add

additional Unibanco personnel as well as persons who

are not associated with Unibanco.

Messrs. Farath, Dania, Brasil and Mendes and Ms.

Camargo. These five individuals each have the

authority to hire and dismiss employees under their

own supervision, but, as a practical matter, would

consult with Mr. Sizenando before doing so.

Thomas S. Harman, Esq.

- 8 -

May 11, 1992

have similar general oversight responsibility for the

activities of Messrs. Zappa and Mendes. He will not be

involved in the day-to-day operations of UC.

Mr. Zappa joined Unibanco in 1988 and is

currently Director of its Corporate Finance Group, which

engages in securities underwriting and dealing activities

and is responsible·for international business development.

While Mr. Zappa is also a member of Unibanco's Investment

Committee, he is not involved in the day-to-day investment

management business of Unibanco and has no portfolio

management responsibilities. At UC, Mr. Zappa will be

responsible for marketing UC's services; in particular, he

will develop and maintain relations with non-Brazilian

clients.

Mr. Mendes, who has been an employee of Unibanco

since 1978, serves as the Manager of Unibanco's research

staff for Brazilian equity securities. He is a member of

Unibanco's Investment Committee. Mr. Mendes supervises 25

analysts engaged in industry and company research. He and

his staff perform fundamental analysis and prepare

research reports on approximately 240 companies in 100

industry sectors. As noted above, the research staff does

not make investment recommendations. Mr. Mendes has no

portfolio management responsibilities for any Bank

customer accounts or for the Bank's proprietary account. 7

At UC, Mr. Mendes will be responsible for furnishing

advice to UC's clients. In this regard, he will make

specific investment recommendations to clients of UC based

on research conducted by Unibanco's research department as

well as research obtained from other sources.

unibanco has in place "Chinese Walls" which

insulate Unibanco's portfolio managers from other opera

tions of the Bank. Specifically, Mr. Mendes and his

research staff are located on a separate floor from the

Unibanco's proprietary account is managed by Mr.

Walter Brasil and his staff. Accounts belonging to

clients of Unibanco are managed by Mr. Flavia Dania

and his staff. Neither Mr. Brasil nor Mr. Dania will

serve any role with UC.

Thomas S. Harman, Esq.

9 -

May 11, 1992

Bank's portfolio management operations, and the Bank's

policies prohibit its portfolio managers from discussing

their prospective investment recommendations or decisions

with members of the research staff. 8 In addition,

Mr. Mendes will be prohibited under the Bank's policies

from discussing recommendations he makes to UC's clients

with any other member of the research staff or any

Unibanco portfolio manager until such recommendations are

effectively disseminated to clients.

Mr. Zappa and Mr. Mendes will be responsible for

the day-to-day activities of UC and will devote such time

as is required or necessary to carry out their

responsibilities at, and conduct the business of, UC.

Messrs. Sizenando, Zappa and Mendes will continue to serve

in their positions at Unibanco described above.

UC will have a Board of Direc~ors initially

consisting of three members: Mr. Josephino Alderico

Benvenutti, Mr. Norberto Fassina and Mr. Mauro Agonilha.

Mr. Benvenutti is a self-employed independent accountant

who received his degree in Economical Science. Apart from

serving as a director of UC, he is not, and will not in

the future be, associated with Unibanco or any Unibanco

affiliate. Mr. Fassina is the managing director of Brasil

Warrant Adm. de Bens e Emprs. Ltda. ("Brasil Warrant"), a

nonoperating holding company owned by the Moreira Salles

family. Neither Brasil Warrant nor its subsidiaries are

involved in the banking or investment management business.

Mr. Agonilha is an Executive Director of Caminho

Editorial SIA, a pUblishing company owned by Brasil

Warrant. Caminho Editorial is not involved in the banking

or investment management business and does not pUblish

financial periodicals.

None of the members of the Board of Directors of

UC is a member of the Board of Directors of Unibanco or is

in any way involved in the operations of Unibanco, includ

ing its investment management business. In addition,

In addition, Mr. Brasil and his staff are prohibited

from discussing investment strategies and decisions

with Mr. Dania and his staff, and vice versa.

Thomas S. Harman, Esq.

- 10 -

May 11, 1992

Brazilian law prohibits Brasil Warrant and Caminho

Editorial from borrowing from Unibanco or its subsid

iaries.

Messrs. Benvenutti, Fassina and Agonilha will

provide a layer of independent supervision between UC and

Unibanco in the exercise of the ordinary management and

oversight role of a Board of Directors of a Brazilian

company. In addition to the basic powers described above

in Note 4, UC's Articles of Association provide that the

Board of Directors shall have the exclusive responsibility

to supervise the activities of UC's Managing Directors, to

establish UC's basic objectives and goals and to oversee

its business operations. The Board of Directors will meet

quarterly to review the operations of UC and its financial

performance. The members of the Board of Directors will

not participate in the f~rmulation of investment advice.

UC will be solely responsible for the conduct of

its investment advisory business. UC will have the power

and authority to make its own recommendations and will not

be bound or restricted by the policies set by Unibanco's

Investment Committee. Its investment advice and

recommendations will be based upon the investment policies

developed primarily by Mr. Mendes.

Messrs. Mendes, Sizenando and Zappa will keep

the investment advice and recommendations of UC confiden

tial and will not disclose them to any other member of

Unibanco's Investment Committee, the investment management

group or the research staff until effectively disseminated

to UC's clients. 9 In particular, Mr. Mendes, who will be

primarily responsible for formulating specific investment

advice for UC's clients based on research provided by,

among others, Unibanco's research staff, will not discuss

his recommendations with any Unibanco personnel (for this

In fact, Messrs. Sizenando and Zappa will not be

involved in formulating or communicating investment

advice about specific investments to UC's clients,

and, therefore, as a practical mater, simply will not

be aware of the specific recommendations to be

provided to such clients by Mr. Mendes.

Thomas S. Harman, Esq.

- 11 -

May 11, 1992

purpose, Mr. Sizenando and Mr. Zappa are considered ue

personnel) until such recommendations have been

effectively disseminated to clients. None of Mr.

Sizenando, Mr. Zappa or Mr. Mendes will manage any

advisory portfolios for Unibanco or its clients.

In addition, it will be clear in communications

with ue's clients that such communications are from ue,

not Unibanco. When dealing with clients or potential

clients, ue personnel will also make it clear that they

are acting in their capacity as representatives of ue, not

Unibanco. Further, ue will disclose to its clients that

Unibanco and customers of Unibanco may also trade in

securities that are the subject of recommendations to ue's

clients.

ue will contract, on an arm's-length basis, with

Unibanco for investment research. The terms of the

contract will be negotiated by the Boards of Directors of

ue and Unibanco and will contain compensation arrangements

that, in the jUdgment of such Boards of Directors, are

fair and reasonable to both parties. It is expected that

ue will initially obtain most of its research from

Unibanco, although it will contract with other research

providers for research that is not available from

Unibanco. 10

Unibanco made an initial capital contribution to

ue of approximately $50,000 (U.S.). Asa nondiscretionary

investment adviser formed under the laws of Brazil, ue is

adequately capitalized to conduct its business. ue's

offices are located on the same premises as Unibanco. ue

10.

In this regard, we note that, in Brazil, a registered

investment manager is required to have personnel that

specialize in investment research and securities

analysis. A company may satisfy this requirement by

entering into an agreement with a registered entity

to use that entity's technical knowledge, expertise

and services with respect to investment research and

analysis. It is accepted practice in Brazil for an

adviser, such as ue, to obtain its investment

research from other sources.

Thomas S. Harman, Esq.

- 12 -

May 11, 1992

have neither an office nor personnel in the u.s.

Further, UC will not have custody or possession of client

funds or securities.

wil~

Designation of Agent

In connection with its request for no-action

assurance, Unibanco agrees to designate and appoint

Debevoise & Plimpton as agent for service (I'Agent"), at

555 13th Street, N.W., Washington, D.C. 20004. The Agent

is authorized to accept the service of administrative

subpoenas from the SEC ("Administrative Subpoenas") for

the production of documents and testimony from Unibanco

and for the production of persons, as described below.

Moreover, the Agent will be authorized to receive any

notice, pleading, summons, or other process in any action

or other proceeding, or a subpoena related thereto,

arising out of or relating to any investment advisory

service of UC ("Subject Investment Advisory Service") or

related securities transaction.

Unibanco will also appoint a successor Agent for

service if Unibanco discharges the Agent or if the Agent

is unwilling or unable to accept service on behalf of

Unibanco at any time until six years have elapsed from the

date of Unibanco or UC's last investment advisory service

or the date the last related securities transaction is

effected pursuant to this letter. Unibanco further

undertakes to advise the SEC promptly of any change to the

Agent's name or address during the same time period.

Books and Records

The books and records of UC will be kept in

English separately from Unibanco's books and records, and

all of UC's books and records will be kept and maintained

in accordance with the Advisers Act. Such records will

clearly reflect the investment advice given to UC's

clients. UC undertakes that all books and records

maintained by it will be made available to the SEC for

inspection.

In addition, Unibanco undertakes that it will

cause UC to make and keep true, accurate and current books

Thomas S. Harman, Esq.

- 13 -

May 11, 1992

and records relating to the Subject Investment Advisory

Services in accordance with the Advisers Act and Brazilian

law. Furthermore, Unibanco will make and keep true,

accurate and current books and records relating to any

related securities transactions in accordance with

Brazilian law and such books and records of related

securities transactions will include books and records of

the type described in subparagraphs 1, 2, 3, 6, 7, 8, 9,

10 and 13 of Rule 204-2(a) of the Advisers Act. All of

the above-described records will be maintained and

preserved by UC or Unibanco in an easily accessible place

for a period of not less than five years from the end of

the fiscal year during which the last entry was made on

such record. Unibanco and employees and persons under the

control of Unibanco (collectively, "Employees") will

produce promptly, or cause UC to produce promptly, to the

SEC upon receipt of a request for production, including

without limitation an Administrative Subpoena, any and all

such books and records, at such place as the SEC may

designate in the u.S. or, at its option, in Brazil at the

offices of Unibanco or UC.

Production of Personnel and Documents

With the exception of clerical and ministerial

personnel, Unibanco undertakes to produce for testimony

pursuant to an Administrative Subpoena or a request for

voluntary cooperation all Employees who are identified by

the SEC, its staff, Unibanco, or UC as being involved in

the SUbject Investment Advisory Services or related

securities transactions.

Except with respect to the identity of customers

of Unibanco, Unibanco will authorize an Employee

identified in an Administrative SUbpoena or pursuant to a

request for voluntary cooperation to testify about all

SUbject Investment Advisory Services and related

securities transactions in which the Employee has

experience or knowledge. If Unibanco agrees, any Employee

identified in an Administrative SUbpoena or appearing

pursuant to a request for voluntary cooperation may

testify about the identity of customers of Unibanco.

Thomas S. Harman, Esq.

- 14 -

May 11, 1992

Unibanco also agrees that it will produce,

pursuant to an Administrative Subpoena or a request for

voluntary cooperation, any documents, including without

limitation books and records as set forth above, relating

to the Subject Investment Advisory Services or related

securities transactions.

Except with respect to the identities of

customers of Unibanco, Unibanco represents and agrees that

it will not in any way contest the validity of an

Administrative Subpoena for testimony or documents, nor

will it contest the appearance of its Employees for

testimony, under any laws or regulations other than those

of the United states.

Unibanco undertakes to report to the staff of

the SEC changes in Brazilian law that would prevent

Unibanco from performing the undertakings in this letter

and Unibanco understands that, with respect to any such

change in Brazilian law, the staff of the SEC reserves the

right to withdraw this letter if, after discussion,

Unibanco and the staff are unable to agree upon a

satisfactory modification of the terms of the letter.

BRAZILIAN REGULATION OF UNIBANCO AND UC

As a universal bank in Brazil, Unibanco is

highly regulated by the Brazilian Central Bank. Among

other things, Unibanco is required to meet certain capi

talization, liquidity, and reserve requirements and is

subject to limitations on foreign exchange exposure and

credit exposure. Further, its Managing Directors must

meet prescribed standards of education and experience.

In addition, Unibanco is registered with the

CVM as an investment manager. Investment managers in

Brazil are professional portfolio managers with discre

tionary power to purchase and sell securities for their

clients' accounts. As an investment manager, Unibanco is

SUbject to a comprehensive system of regulation similar to

that provided under the Advisers Act. Individuals provid

ing discretionary advice must also register with the CVM.

Among other things, individuals must have certain

Thomas S. Harman, Esq.

- 15 -

May 11, 1992

professional qualifications, including at least three to

five years of relevant professional experience and a

graduate degree from a recognized institution or a non

graduate degree in financial markets.

Under Brazilian law, an investment manager is

required, among other things·, to keep adequate records and

give the CVM access to all documentation related to

investment transactions: comply with regulations concern

ing custody of client assets: provide periodic reports to

its clients: comply with restrictions against principal

transactions with clients: and comply with restrictions on

advertising. Unibanco is also sUbject to inspection and

audit by the CVM.

The CVM has not adopted regulations requiring an

investment adviser, such as UC, that does not have invest

ment discretion over client assets to register with the

CVM. The CVM has confirmed to representatives of UC that

it is not presently required to register. However, the

CVM has broad regulatory authority over, among other

things, (1) all activities involving the issuance and

distribution of securities: (2) securities brokers and

dealers: (3) the stock exchanges and markets: (4) the

custody and management of securities portfolios: (5) com

panies, such as Unibanco, the shares of which are

pUblicly traded: and (6) investment advisory activities.

The CVM exercises this regulatory authority by issuing

rules and regulations, requiring the registration of

certain securities and entities, supervising, inspecting,

and aUditing persons engaged in the securities business,

and investigating and penalizing persons and entities that

violate the securities laws. The CVM has jurisdiction

over all Brazilian territory.

Although the CVM has not issued specific rules

or regulations regarding nondiscretionary advisers such

as UC, it is our understanding that the CVM could exercise

its regulatory authority over UC if UC/s conduct involved

any of the above-described areas or activities. For

example, if UC were to provide advice with the intention

of manipulatin9 the Brazilian stock markets, the CVM would

have authority to bring an enforcement action against uc.

Moreover, each of the Managing Directors of UC is reg

Thomas s. Harman, Esq.

- 16 -

May 11, 1992

istered with the CVM, which has jurisdiction over them in

their capacities as Managing Directors or Directors of

Unibanco.

In addition, as you are aware, the SEC entered

into a Memorandum of Understanding ("MOU") with the CVM in

July 1988 providing for mutual cooperation in matters

relating to U.S. and Brazilian securities laws. The scope

of assistance called for is broad.

PISCUSSION

In the past, the staff of the Division of

Investment Management has taken the position that a non

U.s. company need not register as an investment adviser

provided that it establishes a registered sUbsidiary that

meets certain criteria. See Richard Ellis (pub. avail.

Sept. 17, 1981).11 The staff has also taken the position

11.

Under Richard Ellis, a sUbsidiary will be regarded by

the staff as having a separate, independent existence

and to be functioning independently of its parent

only if it:

(1)

is adequately capitalized;

(2)

has a buffer, such as a board of directors a

majority of whose members are independent of the

parent, between the sUbsidiary's personnel and

the parent;

(3)

has employees, officers, and directors, who, if

engaged in providing advice in the day-to-day

business of the sUbsidiary entity, are not

otherwise engaged in an investment advisory

business of the parent;

(4)

itself makes the decisions as to what investment

advice is to be communicated to, or is to be

used on behalf of, its clients and has and uses

sources of investment information not limited to

(continued ••• )

Thomas S. Harman, Esq.

- 17 -

May 11, 1992

in recent years that all registered investment advisers,

both domestic and foreign, are sUbject to the relevant

substantive provisions of the Advisers Act with respect to

both u.s. and non-U.S. clients. See Investment Company

Act Release No. 17534 (June 15, 1990) and Gim-Seong Seow

(pub. avail. Nov. 30, 1987).

It is our view that Unibanco has created a

workable approach that will enable it to serve clients

efficiently and effectively, and will also provide the SEC

staff with access to the investment advisory operations of

UC and to relevant aspects of Unibanco's advisory

business. Therefore, it is our opinion that UC is

sUfficiently separate and distinct from Unibanco to be

registered under the Advisers Act and that, to the extent

that all of the criteria established in Richard Ellis are

not met, Unibanco need not register as an investment

adviser under the circumstances described in this letter.

Extraterritorial Application of the Advisers Act

We also seek assurance from the staff that it

will not recommend enforcement action against Unibanco, UC

or any of their affiliates if UC provides investment

advice to its non-U.S. clients solely in accordance with

the requirements of applicable foreign law without also

applying the provisions of the Advisers Act to such non

U.S. activities, except as otherwise discussed in this

letter.

* * * * *

For the reasons set forth above, we respectfully

request your concurrence with our opinion that Unibanco is

not required to register under the Advisers Act if UC, as

11. ( ••• continued)

its parenti and

(5)

keeps its investment advice confidential until

communicated to its clients.

Thomas s. Harman, Esq.

- 18 -

May 11, 1992

a registered investment adviser, provides investment

advisory services to u.s. institutional clients under the

circumstances described above. In addition, we seek

assurance from the staff that it will not recommend

enforcement action against Unibanco, Uc or any of their

affiliates if UC provides investment advisory services to

its non-U.S. advisory clients solely in accordance with

the requirements of the securities laws of Brazil (or

other applicable foreign law) without also applying the

provisions of the Advisers Act to such non-U.S. advisory

activities, except as otherwise discussed in this letter.

Should you have any questions regarding this

request, please do not hesitate to telephone me at (202)

383-8058 or Roberta R.W. Kameda at (202) 383-8047.

Very truly yours,

M~~~~~~

10'87968

----------.-ij

JUl28J992

RESPONSE OF THE OFFICE OF CHIEF COUNSEL

DIVISION OF INVESTMENT MANAGEMENT

Our Ref. No. 92-273-CC

Uniao de Bancos de

Brasileiros S.A.

File No. 132-3

By letters dated May 11, and July 13, 1992, you request

assurance that the staff would not recommend enforcement action

to the Commission if, as more fully described in your letters,

Uniao de Bancos de Brasileiros S.A. ("Unibanco") does not

Act ll ) notwithstanding the fact that its wholly owned sUbsidiary,

Unibanco Consultoria de Investimentos SIC Ltda. ("UC"), a

registered investment adviser, provides investment advisory

services to united States clients. 1/ You also request assurance

that the staff would not recommend enforcement action to the

Commission if UC provides investment advisory services to non

United States clients solely in accordance with Brazilian

securities laws (or other applicable foreign law) without also

complying with the provisions of the Advisers Act, except as

described in your letter.

Unibanco, the third largest non-governmental banking

organization in Brazil, provides investment management,

commercial banking, and investment banking services. Unibanco is

regul~ted by the Central Bank of Brazil and is registered as an

investment manager with the Comissao de Valores Mobiliarios (the

"CVM"). Unibanco provides a wide range of discretionary and non

discretionary investment management services to non-United States

clients. 2/ Apart from UC, no affiliated person of Unibanco is

engaged in the investment management business.

UC, organized under Brazilian law, was formed to provide

investment management services to United States clients,

including the Brazilian Investment Fund Inc., a registered

closed-end investment company. UC initially expects to obtain

most of its research from Unibanco, although it will contract

with other research providers for research that is not available

from Unibanco. As a non-discretionary adviser, UC is not

required to register with the CVM nor is it sUbject to regulation

under Brazilian law.

In the future, however, UC may register

with the CVM to provide discretionary advisory services.

uc is a distinct legal entity with capital of approximately

$50,000. UC's offices are located on the same premises as

We interpret "United States client" to inclUde, among

others, any client that is a resident of the united States.

You represent that Unibanco does not currently provide

advisory services to united States clients and will not

solicit United States advisory clients in the future.

Unibanco. UC is managed by its Conselho Administrativo ("Board

of Directors") and its Diretoria ("Managing Directors"). V

All

of UC's Managing Directors are employees of Unibanco. Mr. Caesar

Augusto Sizenando is responsible for the oversight of UC and also

has ultimate supervisory responsibility, among other things, for

the management, development, and operation of Unibanco's

investment management area both with respect to customer accounts

and Unibanco's own account. Mr. Sergio Zappa is responsible for

marketing UC's services and also is Director of Unibanco's

Corporate Finance Group, which engages in securities

underwriting. Mr. Walter Mendes makes specific investment

recommendations to UC's clients and also serves as the Manager of

Unibanco's research staff for Brazilian equity securities. All

three Managing Directors are members of Unibanco's Investment

Committee, which sets general investment policies and guidelines

for Unibanco's investment management services on the basis of

macroeconor:ic analyses as well as interest rate and stock market

trends.

Section 203(a) of the Advisers Act requires any investment

adviser that uses the United States mails or any other means or

instrumentality of interstate commerce in connection with its

business as an investment adviser to register with the

Commission, unless the adviser is exempted from registration.

The Division of Investment Managem~nt previously has taken the

position ttl~t, once registered, domestic and foreign advisers are

subject to ~ll the substantive provisions of the Advisers Act

with respect to both their United States and non-United States

cl ients. ~.'

As interest in investing outside of the United States has

grown, so has interest in obtaining the advice of foreign

investment managers.

Foreign advisers may be reluctant to

may prohibit then from engaging in business practices with their

foreign clients that are both legal and customary in their home

countries.

Further, non-United States clients would not expect

the Advisers Act to govern their relationship with a non-United

States adviser.

The Division has permitted a foreign adviser to avoid

SUbjecting all of its operations to the Advisers Act by forming a

separate and independent SUbsidiary to provide advice to United

In Brazil, a Board of Directors is a collegial, deliberative

body, similar in concept to a Board of Directors of an

American company. Managing Directors, on the other hand,

are executive officers, each of whom has the power to bind a

company in the normal course of its business.

See,~,

Reavis & McGrath (pub. avail. Oct. 29, 1986).

- 2

States clients. Under the Division's position in Richard Ellis

(pub. avail. Sept. 17, 1981), a sUbsidiary will be "regarded as

having a separate, independent existence and to be functioning

independently of its parent, II thereby permitting the foreign

parent to remain unregistered, only if the sUbsidiary: (1) is

adequately capitalized: (2) has a buffer between the sUbsidiary's

personnel and the parent, such as a board of directors a majority

of whose members are independent of the parent: (3) has

employees, officers and directors, who if engaged in providing

advice in the day-to-day business of the subsidiary entity, are

not otherwise engaged in an investment advisory business of the

parent: (4) makes the decisions as to what investment advice is

to be communicated to, or is to be used on behalf of, its clients

and has and uses sources of investment information not limited to

its parent; and (5) keeps its investment advice confidential

until communicated to its clients. 21

While the Richard Ellis conditions have provided a framework

that permits foreign advisers to offer advice to United States

clients, many foreign advisers find it difficult to operate under

these conditions.

For example, foreign advisers often have been

unwilling to dedicate their most senior personnel solely to a

United St~tes-registered subsidiary. United States clients

therefore nay find it difficult to gain access to the services of

the adviser's ~ost experienced employees.

The Uivision recently reexamined its interpretation of the

reach of the Advisers Act and recommended that it be modified. §J

The Division concluded ~hat the policies and purposes of the

Advisers Act, coupled uith legal analyses that have been applied

in other securities la~,.. contexts (Le., the conduct and effects

See also Investment Advisers Act ReI. No. 353· (Dec. 18,

1972) (proposing Rule 202-1 under the Advisers Act which set

forth conditions SUbstantially identical to Richard Ellis

under which the Commission would consider a SUbsidiary

company formed to provide advisory services to be an

autonomous entity).

§J

SEC Division of Investment Management, Protecting Investors:

A Half Century of Investment Company Regulation, Chapter 5,

The Reach of the Investment Advisers Act of 1940 (May 1992)

["Protecting Investors ReportllJ.

tests), 11 lead to the conclusion that a more flexible

interpretation is appropriate.

Under the Division's approach, the substantive provisions of

the Advisers Act generally would not apply with respect to a

foreign registered adviser's non-United states clients. Foreign

registered advisers, however, will be required to keep certain

records and to provide the Commission access to foreign personnel

with respect to all of their activities, since activities

involving non-United States clients may have a significant effect

on United states clients or markets. This will enable the

Commission to monitor and enforce the adviser's performance of

its obligations to its United states clients and to ensure the

integrity of United States markets. ~

Consistent with the conduct and effects approach, the

Division also will allow non-United states advisers greater

flexibility than permitted under Richard Ellis in organizing

United States-registered subsidiaries. The Division will

recognize separateness if the affiliated companies are separately

organized (~, two distinct entities); the registered entity is

staffed with personnel (whether physically located in the United

States or abroad) who are capable of providing investment advice;

all persons involved in United States advisory activities are

Under a conduct test, conduct that takes place in the United

States, wholly or in substantial part, would be sufficient

to justify application of the securities laws. See,~,

Leasco Data Processing Equip. Corp. v. Maxwell, 468 F.2d

1326 (2d Cir. 1972); Continental Grain (Australia) Pty. Ltd.

v. Pacific Oilseeds, Inc., 592 F.2d 409, 421 (8th Cir. 1979)

(misrepresentations made in the United States for securities

transactions consummated abroad). Under an effects test,

the securities laws would be applied to conduct outside the

territory of th~ United States that has or is intended to

have substantial effects within the United States. See,

~, Consolidated Gold Fields, PLC v. Minorco, S.A., 871

F.2d 252 (2d Cir. 1989): Bersch v. Drexel Firestone, 519

F.2d 974, 993 (2d Cir.), cert. denied, 423 U.S. 1018 (1975);

Schoenbaum v. Firstbrook, 405 F.2d 200 (2d Cir.), rev'd on

other grounds, 405 F.2d 215 (2d Cir. 1968) (en bane), cert.

denied, 395 U.S. 906 (1969).

For example, the Commission wants to ensure that non

resident and United States clients pay the same price when a

foreign adviser purchases securities on their behalf at the

same time.

- 4

deemed "associated persons" of the registrant: V and the

Commission has adequate access to trading and other records of

each affiliate involved in United states advisory activities, and

to its personnel, to the extent necessary to monitor and police

conduct· that may harm United states clients or markets. lQ/

On the basis of the facts and representations in your

letters, and without necessarily agreeing with your legal

analysis, we would not recommend enforcement action to the

Commission if Unibanco does not register under the Advisers Act,

notwithstanding the fact that UC provides investment advisory

services to United States clients. We further would not

recommend enforcement action to the Commission if UC provides

investment advisory services to its non-United States clients

solely in accordance with Brazilian securities laws (or other

applicable law) without complying with the provisions of the

Advisers Act with respect to its non-United States advisory

activities, except as specifically noted. Our position is based,

in particular, on the undertakings in your letters, which because

of their significance, are set forth below:

Designation of Agent

Unibanco agrees to designate and appoint Debevoise &

Plimpton as its agent for service ("Agent"), at 555 13th Street,

N.W., Washington, D.C. 20004. 1lJ The Agent is authorized to

Under Section 202(a) (17) of the Advisers Act, persons

associated \-lith an investment adviser include "any partner,

officer, or director of such investment adviser (or any

person performing similar functions), or any person directly

or indirectly controlling or controlled by such investment

adviser, including any employee of such investment adviser

. . . [but not] persons . . . whose functions are clerical

or ministerial . . . . " The Advisers Act imposes certain

obligations on a registered investment adviser with respect

to its associated persons. See,~, Sections 203(e) (5)

and 204A.

lQJ

Protecting Investors Report, supra, note 6 at 233-34 (~,

front running and unauthorized principal and agency cross

transactions). See also Section 201 of the Advisers Act

(finding that investment advisory relationships negotiated

and performed by the use of the mails and means and

instrumentalities of interstate commerce are of national

concern) .

111

Rule 0-2 under the Advisers Act requires UC, as a non

resident entity, to have designated an agent for service of

process for itself on Form 5-R at the time it registered

with the Commission.

- 5

accept the service of administrative sUbpoenas from the SEC

("Administrative Subpoenas") for the production of documents and

testimony from Unibanco and for the production of persons, as

described below. Moreover, the Agent will be authorized to

receive any notice, pleading, summons, or other process in any

action or other proceeding, or a sUbpoena related thereto,

arising out of or relating to any investment advisory service of

UC ("Subject Investment Advisory Service") or any related

securities transaction. l1J

Unibanco also will appoint a successor Agent for service if

Unibanco discharges the Agent or if the Agent is unwilling or

unable to accept service on behalf of Unibanco at any time until

six years have elapsed from the date of Unibanco or UC's last

investment advisory service or the date the last related

securities transaction is effected pursuant to this letter.

Unibanco further underta}~es to advise the SEC promptly of any

Change to the Agent's na~e or address during the same time

period.

Books and Records

The books and records of UC will be kept in English

separately from Unibanco's books and records, and all of UC's

books and records will be kept and maintained in accordance with

the Advisers Act.

UC's records will clearly reflect the

investment advice given to its clients. As required by Section

204 of the Advisers Act, UC undertakes that all books and records

maintained by it ~ill be n~de available to the SEC for

inspection.

Unibanco undertakes that it will cause UC to make and keep

accurate and current books and records relating to the SUbject

Investment Advisory Services in accordance with the Advisers Act

and Brazilian la¥!.

Furthermore, Unibanco will make and keep

true, accurate and current books and records relating to any

related securities transactions in accordance with Brazilian law,

which will include books and records of the type described in

subparagraphs 1, 2, 3, 6, 7, 8, 9, 10 and 13 of Rule 204-2(a)

under the Advisers Act. All of the above-described records will

be maintained and preserved by UC or Unibanco in an easily

accessible place for a period of not less than five years from

the end of the fiscal year during which the last entry was made

on such record.

Unibanco and employees and persons under the

control of Unibanco (collectively, "Employees") will produce

promptly, or cause UC to produce promptly, to the SEC upon

receipt of a request for production, including without limitation

an Administrative Subpoena, any and all books and records

11./

The Division interprets "related securities transaction"

broadly.

- 6

relating to the SUbject Investment Advisory Service or underlying

securities transactions, at any place the SEC may designate in

the United States or, at the SEC's option, in Brazil at the·

offices of Unibanco or UC.

Production of Personnel and Documents

All Unibanco employees involved in UC's United states

advisory activities, including research analysts and other

employees of Unibanco whose functions or duties relate to the

determination of which recommendations UC may make to its United

States clients, shail be deemed to be "associated persons" of UC.

With the exception of clerical and ministerial personnel,

Unibanco undertakes to produce for testimony pursuant to an

Administrative SUbpoena or a request for voluntary cooperation

all Employees who are identified by the SEC,SEC staff, Unibanco,

or UC as being involved in the Subject Investment Advisory

Services or reln~ed securi~ies transactions.

Except with respect to the identity of customers of

Unibanco, Unibanco will authorize any Employee identified in an

Administra~ive SUbpoena or pursuant to a request for voluntary

cooperation to testify about all SUbject Investment Advisory

Services and related securities transactions in which the

Employee has experience or knowledge.

If Unibanco agrees, any

Employee identified in an Administrative Subpoena or appearing

pursuant to a request for voluntary cooperation may testify about

the identity of custoDers of unibanco. Unibanco also agrees that

it will prc~uce, pursuant to an Adninistrative Subpoena or a

request for voluntary cooperation, any documents, including

without limitation books and records as set forth above, relating

to the Subject Investment Advisory Services or related securities

transactions.

Except with respect to the identities of customers of

Unibanco, Unibanco represents and agrees that it will not in any

way contest the validity of an Administrative Subpoena for

testimony or documents, nor will it contest the appearance of its

Employees for testimony, under any laws or regulations other than

those of the United States. Unibanco undertakes to report to the

staff of the SEC any change in Brazilian law that would prevent

Unibanco from performing the undertakings in this letter and

Unibanco understands that, with respect to any such change in

Brazilian law, the staff of the SEC reserves the right to

withdraw this letter if, after discussion, Unibanco and the staff

are unable to agree upon a satisfactory modification of the terms

of the letter.

.- .. /

Because these positions are based on the facts and

representations in your letter, you should note that any

different facts or representations may require a different

conclusion.

Further, this response expresses the Division's

position on enforcement action only, and does not express any

legal conclusions on the questions presented.

61t!h~J{"HrJ.'~

Thomas S. Harman

Associate Director and Chief Counsel

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.