By: André Jerusalmy and Fernanda Lazzarini.

The Brazilian Securities and Exchange Commission (“CVM”) published CVM Resolution No. 60, which regulates credit securitization companies and, to date, has not had specific regulations governing their operation. In general terms, securitization companies are publicly-held companies that purchase credit rights and receive a percentage of these credits so that they can advance them to the transferor.

The new resolution provides new solutions to existing problems in securitization companies, such as the requirement that they operate as publicly-held companies, which often requires obligations that are not compatible with the operation of a securitization company. Another major new development is the non-obligation of risk classification (rating) for qualified investors, since such an obligation considerably increased the costs of issuing securities aimed at an audience that, in theory, has the capacity and knowledge to assess risks.

Resolution No. 60 was published on December 23, 2021 and comes into force in May 2022. Securitization companies will have until November 2022 to comply with the new legislation.