The Brazilian Securities and Exchange Commission (CVM) proposed innovations in the regulation of Investment Funds in Agroindustrial Production Chains (Fiagros).

It is proposed that, in addition to complying with the rules related to Fiagro, set out in Annex VI of Resolution 175/22, these funds should also comply with the rules relating to other types of funds based on the composition of their portfolio.

As per the proposal, if a certain type of asset exceeds 1/3 of Fiagro’s portfolio, the fund will be subject to the rules related to the corresponding market (such as, for example, real estate if the fund invests in assets of this class).

The proposal is under public consultation until January 31, 2024.

Annex VI of Resolution 175/22, which will be applicable to Fiagros, is set to replace Resolution 39/21, created on a provisional basis, so that products of this type could be launched soon after the sanction of Law 14,130/21, which introduced Fiagros.

Furthermore, the proposed text provides for the creation of a multimarket Fiagro, which can invest in all types of assets linked to agribusiness, and Fiagros dedicated to carbon credits, which can invest in credits generated in agribusiness, provided that they are traded on regulated markets or carbon volunteer markets.

According to the Regulatory Agenda of CVM, it is expected that the development of this type of product will continue safely, gaining more prominence in the market as soon as it receives its own regulation, which should occur throughout 2024.