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History of Investments

The FSB had as initial contribution the issuance of 10.201.373 National Treasury Bonds at December 30th, 2008, corresponding to amount of R$ 14.243.999.592,36 at market prices, as provided in National Treasury's Ordinance No. 736 of 2008.

At the same date, the FSB promoted the initial placement in Fiscal Fund of Investments and Stabilization (Fundo Fiscal de Investimentos e Estabilização – FFIE) quotas, as described in Law No. 11,887 of 2008 article 7, the total value of received assets, pursuant to Presidential Decree No. 6,713 of 2008. It's a single owner private fund registered at the Securities and Exchange Commission (Comissão de Valores Mobiliarios - CVM) and therefore regulated by CVM Normative Instruction No. 409 of 2004 and the administrator is Banco do Brasil Gestão de Recursos Distribuidora de Títulos e Valores Mobiliários S.A. - BB DTVM.

On February 19th, 2010, through Presidential Decree No. 7113, was established the Deliberative Council of the FSB (CDFSB), which has as one of its responsibilities to approve the main guidelines for FSB to invest, defining how, when and what type of assets the FSB may invest.

On April 23th, 2010, was enacted Presidential Act No. 487, 2010, amending Law No. 12,096 of 2009, authorizing capital increase in state controlled companies, through transferring the rights of future capital increase. On May 27th, 2010, was issued Presidential Decree No. 7,184 of 2010, authorizing the capital increase of Banco do Brazil SA – BB, with the issuance of up to 286,000,000 common shares through a public offering of primary distribution of shares.

Based upon these two acts, the FFIE decided at an extraordinary general meeting held on June 16th, 2010, to participate in the Public Offering of Common Shares issued by Banco do Brasil SA, through the subscription of 62,500,000 shares, totaling R$ 1,540,625,000.00. The physical and financial settlement, as well as its record in the Securities and Exchange Commission, occurred on July 1st, 2010.

Temporary Law No. 500 of 2010, subsequently converted into Law No. 12,380 of 2011, authorized the Federal Government , through the Executive Branch, and entities of indirect federal government to hire reciprocally or with private fund of which National Treasury is the sole owner, to acquire, sale, transfer shares, including their economic rights, in the equity of the companies in which government has minority control or in the stocks that exceeds the necessary to maintain control of the Government-owned companies. Presidential Decree No. 7,295 of 2010 article 2 authorized Banco Nacional de Desenvolvimento Econômico e Social – BNDES (National Bank for Economic and Social Development) and Caixa Econômica Federal – CEF (Federal Savings Bank) to sell or exchange up to 217,395,982 common shares issued by Petrobras, for FFIE.

Additionally, in September 2010, the general assembly included in FFIE's provisions the possibility of applying up to 100 % of shares issued by publicly traded companies in which the Union holds the majority of shares.

These legal instruments allowed the FFIE to acquire on September 10th, 2010, 77,641,422 common shares (PETR3) with CEF in the amount of R$ 2,426,294,437.50, equivalent to 0.6% of the equity of Petrobras .

After that, the Temporary Law No. 500 of 2010 enabled the Federal Government to transfer the rights of the public offering's shares subscription from its companies (Federal Savings Bank - CEF - and National Bank of Economic and Social Development – BNDES) to FFIE, as shown in the public offering's final prospectus. On September 24th, 2010 the registration and settlement of the public offering occurred, having FFIE subscribed 266,413,905 common shares (PETR3) in the amount of R$ 7,899,172,283.25, representing 2.04% of the equity, and 161,596,958 preferred shares (PETR4) in the amount of R$ 4,249,999,995.40, representing 1.24% of the equity, leaving at the end of the public offering with 3.9% of the equity of Petrobras.

On August 30th, 2012, 51,853,846 common shares of Petrobras owned by the FFIE were exchanged with 48,150,000 common shares of Banco do Brasil held by the Union, in cash amount equivalent to US$ 1,139,229,000.00. This transaction was approved by the Presidential Decree of August 29th, 2012 and approved by ad referendum decision by the President of CDFSB, pursuant to article 3 of Resolution n ° 1 of 2010, and ratified by other members of the CDFSB at the meeting of September 26th, 2012.

Another significant transaction was the partial withdrawal of 11,579,306,053.645 quotas from the FFIE, in the amount of R$ 12.4 billion, occurred in late 2012. This transaction was approved by an ad referendum decision, of the CDFSB's President, pursuant to the Resolution No. 1 of 2010 article 3. These resources were applied in the National Treasury Single Account (Conta Única do Tesouro - CTU), as an FSB resource, pursuant to Law No. 11,887 of 2008 article 4 paragraph 1.

Besides applications in Brazil, the FSB may apply its resources in foreign financial assets through investment in special deposits, held by federal financial institution or through a Ministry of Finance direct investment. The investments abroad will occur from strategic decision of the CDFSB, aligned with FSB Investment Policy.

On July 28th, 2013 the Investment Policy of the FSB was approved, through Resolution CDFSB No. 11, which came to enhance and regulate its previous rules:

Investments in the Law No. 11,887

Law No. 11,887 of 2008, provided, among other statements, that:

"Article 2 The FSB resources will be used exclusively for investment in the purposes specified in article 1 of this Law, by the following forms:
I - Acquisition of external financial assets:
a) Application in special deposits held by a federal financial institution, or
b ) Directly by the Ministry of Finance.
II - Through the establishment of a private fund, as referred to in article 7 of this Law.
Paragraph 1 It is forbidden to the FSB, directly or indirectly, to provide guarantees.
Paragraph 2 Expenses related to the operation of the FSB will be charged to the fund.
Paragraph 3 The FSB investments in financial assets will have a minimum estimated yield per operation, weighted by risk, equivalent to six-month Libor (London Interbank Offered Rate). "

Investments in Presidential Decree No. 7,055

Presidential Decree No. 7,055 of 2009, states that:

"Article 3 FSB investments must suit its purposes, provided in article 1 of Law No. 11,887 of 2008, noting the following:
I - Investments in financial assets abroad should have minimum return equivalent to six-month Libor (London Interbank Offered Rate);
II - Investments in financial assets in Brazil should have minimum return equivalent to Taxa de Juros de Longo Prazo – TJLP  (Long-Term Interest Rate), established by Conselho Monetário Nacional – CMN (National Monetary Council);
III - FSB investments will be held in financial instruments issued by entities that hold investment grade assigned by at least two credit rating agencies."

Fiscal Stabilization and Investment Fund - FFIE

FFIE regulation, the composition of the portfolio and the monthly balance sheets, quota value, it's total equity, as well as applications and withdrawals are published at the Securities and Exchange Commission (CVM) web site ( To refer to them simply go to guide "Access Rápido", click on "Fundos de Investimentos" and fill "FFIE" or "10.539.257/0001-70" in the first field.

Key Features of Investment Policy

The process of creating the Investment Policy held a wide-ranging discussion, in which were studied international best practices the governance structure of the Central Bank of Brazil in the management of international reserves and the Santiago Principles, which are a voluntary set of practices and values developed by the International Working Group (IWG) of Sovereign Wealth Funds (SWFs) (International Working Group of Sovereign Wealth Funds).

The Investment Policy was drawn from this wide range of information and is organized in 4 main tiers:

1. Governance Structure;
2. Benchmark Portfolios;
3. Operating Limits for Portfolio Management, and
4. Measurement of Results.

Tier 1 - Governance Structure

The first tier of Investment Policy refers to the details of the structure of governance, with the establishment of two chambers: the Technical Advisory Chamber (CCT) and the Investment Planning Chamber (CPLIN). For more information on the Governance of the FSB, click here.

Tier 2 - Benchmark Portfolios

Investment Policy presents the Benchmark Portfolios that serve as parameters for the optimal allocation of resources FSB, among several investment alternatives and applications in order to fulfill the purposes set out in article 1 of Law No. 11,887 of 2008, of its institutional mission, and their level of risk tolerance. Three types of benchmark portfolios with specific characteristics are established:

a) Domestic Benchmark Portfolio (Carteira de Referência Doméstica – CRD): allocation related to fixed income assets in the portfolio of the Fiscal Fund of Investments and Stabilization - FFIE, which is the instrument used by the FSB to allocate its resources in Brazil;

b) International Benchmark Portfolio (Carteira de Referência Internacional – CRI): allocation related to the portion of the portfolio of the FSB to be invested in international financial instruments; and

c) Special Portfolios: refer to portions of the portfolio to be managed and monitored separately, due to the implementation of government policies consistent with the purposes specified in article 1 of Law No. 11,887 of 2008, which could incorporate domestic and international assets. This investment policy considers two special portfolios:

I) Special Portfolio 01 (Carteira Especial 01 – CE1): refers to the set of stocks that are part of the FFIE;

II) Special Portfolio 02 (Carteira Especial 02 – CE2): refers to the portion temporarily invested in the National Treasury Single Account, as provided in article 4 paragraph 1 of Law No. 11,887 of 2008.

Quantitative information regarding the implementation of this Investment Policy will be presented quarterly in the Performance Report, and semiannually in the Management Report.

Tier 3 - Operational Limits

One of the tiers of the Investment Policy refers to a set of operational limits to be observed during the execution of investment strategies, which serve to monitor and helps to mitigate risks as well as to contribute to align the effective portfolios to the strategic guidelines established by CDFSB. The main types of risks monitored are: market, credit, liquidity and operational risks.

Furthermore, the operational limits also restrict the concentration of the portfolio in asset classes, issuers and asset instruments.

The operating limits are strictly linked to the authority policy, establishing three levels of authority, and assigning maximum exposure to specific risks to each of them. The levels are:

a) Strategic: responsibility of CDFSB in order to approve the general investment guidelines, as well as other strategic guidelines of the FSB.

b) Executive: responsibility of CCT, which aims to ensure alignment of National Treasury operations relative to the guidelines defined by the CDFSB;

c) Operational: responsibility of National Treasury, assigned as the FSB's manager, in order to comply with the Investment Policy approved by CDFSB, as well as other CDFSB determinations.

Operational and quantitative aspects relating to the third pillar of the Investment Policy will be reviewed periodically by CDFSB and incorporated into the National Treasury assignments for monitoring the investment portfolio.

Pillar 4 - Measurement of Results

Fourth tier of Investment Policy refers to the systematic monitoring of the results in order to ensure that the portfolio is being managed properly, considering the objectives of the Fund. Thus, the performance of the FSB can be measured by an integrated analysis of a set of indicators, including:

a) Adjusted Sharpe Ratio (ISA);
b) Differential Performance of the Effective Portfolio (RDPR);
c) Differential Performance of the Effective Portfolio to the Legal Frameworks (RDPL);
d) Tracking error of the Effective Portfolio (TEPR);
e) Performance Assignment Study (RAS);
f) Evolution of the Global Portfolio Value at Risk (VaR);
g) Stress testing, and
h) Backtesting of the Global Portfolio VaR.

Investment Policy of the FSB (English)
Investment Policy of the FSB (Portuguese)