On July 13, 2021, the Brazilian Securities Commission (CVM) published CVM Resolution 39/2021, which allows, temporarily and with experimental character, the registration of Investment Funds in Agroindustrial Productive Chains (FIAGROs), instituted by Law 14,130/2021 (“Resolution”).
As reported in the Moreira Menezes, Martins Newsletter no. 79 (April 2021), the FIAGRO is a type of investment fund established in the form of a special mutual ownership pool, intended for investment in the following assets:
(i) Rural real estate;
(ii) Equity interests in companies engaged in activities that integrate the agroindustrial productive chain;
(iii) Financial assets, credit instruments and other securities issued by individuals and legal entities that integrate the agroindustrial productive chain, in the form of regulations pending issuance;
(iv) Agribusiness credit rights and securitization instruments backed by agribusiness credit rights, including: (a) certificates of agribusiness receivables; and (b) shares of investment funds in credit rights or investment funds in non-standardized credit rights that invest more than 50% of their net worth in the referred credit rights;
(v) Real estate credit rights related to rural properties and securitization instruments issued backed by these credit rights, including: (a) certificates of agribusiness receivables; and (b) shares of investment funds in credit rights or investment funds in non-standardized credit rights that invest more than 50% of their net worth in the referred credit rights; and
(vi) Shares of investment funds that invest more than 50% of their net worth in the assets described above.
The need for temporary and experimental regulation of the functioning of FIAGROs results from the fact that the definitive governance of this matter will require previous studies and submission of the draft of a regulatory document to public hearing, which will not occur in the short run considering the regulatory agenda of the CVM.
In this context, the Resolution, which will take effect on August 1, 2021, will enable immediate registration of FIAGROs, which can be classified in the following categories:
(i) Investment fund in credit rights, in which case the official denomination must include the expression “FIAGRO-Direitos Creditórios”;
(ii) Real estate investment fund, in which case the official denomination must include the expression “FIAGRO-Imobiliário”; and
(iii) Equity investment fund, in which case the official denomination must include the expression “FIAGRO-Participações”.
The Resolution stipulates that the investment policy of FIAGROs must be compatible with the rules on portfolio composition and diversification applicable to the respective category of registration (i.e., “FIAGRO-Direitos Creditórios”, “FIAGRO-Imobiliário” or “FIAGRO-Participações”).
Furthermore, according to the Resolution, FIAGROs are subject to: (i) the specific rules of each category mentioned above; (ii) the general rules on the constitution, functioning and disclosure of information by investment funds; and (iii) the rules related to the provision of services to investment funds.
Finally, the Resolution indicates that the registration and supervision of FIAGROs-Direitos Creditórios and FIAGROs-Imobiliários will be entrusted to the Superintendency for Supervision of Securitization (SSE), while the Superintendency for Supervision of Institutional Investors (SIN) will have competence for registration and supervision of FIAGROs – Participações.
More information, including the full content of the Resolution (in Portuguese) can be found at the website of the CVM (www.gov.br/cvm).
