Considering, in the light of the increasing international activities in the securities markets, the need for mutual cooperation and consultation in order to facilitate the performance of their functions in the matters mentioned hereinafter;

Considering the importance of ensuring compliance with and enforcement of the securities laws and regulations of Brazil and Germany;

Desiring to establish the fullest mutual assistance in order to facilitate the performance of the functions they are entrusted with in their respective States to enforce or secure compliance with any law or regulations, as that term is defined herein;

Have reached the following Understanding:

The purpose of this Memorandum of Understanding ("Understanding") is to establish a system for mutual assistance between the administrative Authorities designated hereinafter, in order to facilitate the performance of the functions they are entrusted with by any law or regulations, as that term is defined herein, including those which:

For the purposes of this Understanding:

(1) "Authority" means:

1. The Authorities intend to provide each other the maximum assistance possible to the extent permitted by their domestic law, in order to facilitate the exchange of information between such Authorities relating to the facts in connection with investigations to determine whether any person has violated the laws or regulations of the State of the requesting Authority. For that purpose, they will:

1. This Understanding does not create binding obligations under international law.

2. Assistance under this Understanding may be denied where:

1. Requests for assistance must be made in writing and addressed to the requested Authority's contact person listed in Appendix A.

2. The request for assistance shall specify the following:

3. In the event of urgency, requests for assistance and replies to such requests may be transmitted by summary or emergency procedures provided that they are confirmed in the manner prescribed in paragraphs 1 and 2 of this Article.

1. Subject to articles 1, 2, 3, 4, and 5, the requested Authority will provide to the requesting Authority the information that it holds or that it may obtain by such means as may determined by the requested Authority, in accordance with the applicable domestic rules.

1. The requesting Authority may use the information furnished solely:

2. To use the information furnished for any purpose other than those stated in paragraph 1 of this Article, the requesting Authority must first inform the requested Authority of its intention and provide it the opportunity to oppose the use. If the requested Authority opposes the use, the information may be used only under conditions imposed by the requested Authority.

Article 8: Confidentiality of Requests and Information Provided

1. Each Authority shall keep confidential, to the extent permitted by law, requests made within the framework of this Understanding, the contents of such requests, and any other matters arising during the operation of this Understanding, including consultations between the Authorities.

2. The requesting Authority shall keep confidential any information received pursuant to this Understanding to the same extent as such information would be kept confidential in the territory of the State of the requested Authority, except in the case where the information provided must be disclosed in the course of its use pursuant to Article 7 above, and will not transmit the requested information to a third party without prior consent of the requested Authority.

3. The Authorities may, by mutual arrangement, make an exception to the principles set forth in paragraphs 1 and 2 above, to the extent permitted by the law applicable to each Authority.

1. In any case of dispute over the meaning of any term used in this Understanding, the Authorities shall define the terms herein by mutual arrangement.

2. The Authorities will keep the operation of this Understanding under continuous review and will consult with a view to improving its operation and resolving any matters that may arise. In particular, the Authorities will consult upon request in the event of:

3. The Authorities may make arrangements on such practical measures as may be necessary to facilitate the implementation of this Understanding.

This Memorandum of Understanding will be effective from the date of its signing by the Authorities.

This Understanding shall remain in force unless terminated by either Authority upon 30 days written notice to the other Authority.

Signed in Lisbon, Portugal, this _____^rd day of May, 1999, in six originals, two in the Portuguese, two in the German and two in the English language, all texts being equally authentic.

Eduardo Manhães Ribeiro Gomes

Superintendent, International Affairs

Rua Sete de Setembro, 111/31.andar

Rio de Janeiro, RJ 20050-901

Phone: 55 21 212-0263

Fax: 55 21 212-0292

E-mail: intl@cvm.gov.br or eduardom@cvm.gov.br

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