According to the standard, which comes into force on March 3, fiagros must adapt to the new regulations by September 30, 2025 (iStock.com/Juan DeLeon)
The Securities and Exchange Commission (CVM) published this Monday (30) CVM Resolution 214, which creates specific regulations for Investment Funds in Agribusiness Production Chains (Fiagros)
According to the CVM, the new regulation seeks to:
- facilitate access for dynamic and innovative local agribusiness to Brazilian public savings resources through investment funds.
- provide Fiagros with standards of conduct, informational transparency and governance that serve to protect investors, a fundamental mandate of the Authority.
“Fiagros were introduced in Brazil by Law No. 14,130/2021, which was promptly regulated, on an experimental basis, by the CVM. Since then, the funds have been growing and consolidating themselves as an important tool for agribusiness to raise funds in the Capital Market. After learning from the experimental rule, the CVM now delivers CVM Resolution 214, a complete and modern rule for Fiagros”, said João Pedro Nascimento, president of the CVM.
According to the rule, which comes into force on March 3, 2025, funds that are already in operation must adapt to the new regulations by September 30, 2025, a deadline that coincides with the completion of the adaptation of other investment funds to the CVM Resolution 175. The measure aims to facilitate the task of adaptation for market agents.
Between the publication of the temporary rule, in July 2021, and the date of the last information available in the CVM Agribusiness Bulletin, with the base date of June 2024, the Fiagros' net worth reached around R$37 billion, distributed between 115 funds, of which 12 funds already have more than 15 thousand shareholders.
Greater dynamism and access to the carbon market
Fiagros will be able to operate as a type of agribusiness multimarket fund, with an investment policy that involves exposure to different risk factors, without the commitment to concentrate investments in any specific factor. Nothing prevents funds from concentrating their portfolio on assets typical of other categories of funds, as long as, naturally, their investment policies are focused on agribusiness.
“The new Fiagros standard makes it possible to expand the investment capacity of these vehicles, making it possible to acquire, in the same fund, all assets listed in Law 8,668, such as operations with physical and financial CPR, exploration of rural properties and acquisition of participation in companies in the agribusiness production chain”, Bruno Gomes, superintendent of Securitization and Agribusiness (SSE) at CVM.
Other than that, Fiagros will be allowed to participate in the carbon market. Despite this, it is important to consider that, for now, this market in Brazil still has extra-market risks, so the regulation imposes additional governance requirements on the operation, aimed at protecting fund shareholders, more related to controlling the existence, integrity and ownership of agribusiness carbon credits.
Additionally, considering that ethanol production is an agribusiness activity, Fiagros will be allowed to acquire decarbonization credits, CBIOs, a product traded on an organized over-the-counter market. “The origination of carbon credits and CBIOs for assets invested by Fiagros, which should not be confused with the acquisition of these assets by the fund, has the potential to become an interesting source of income for investors in funds that participate in this market”, Claudio Maes , Manager of Standards Development (GDN-2) at CVM.
See the new CVM resolution for Fiagros