The Brazilian economy has been among the fastest growing economies in the world. As of 2014, 14,569 investment funds accumulated a net worth of over BRL 2,682 trillion. This data was released by the Brazilian Financial and Capital Markets Association (ANBIMA), which is a self-regulatory body of the investment fund industry.
The Brazilian Securities Commission, also known as the CVM, passed Rule 555/14 that came into effect in 2015. This rule was meant to govern the registration, formation, and operation of investment funds in the country.
Both the Open-ended and closed-ended retail funds require being registered by the CVM. The only difference between the two is that in open-ended retail funds, the process is automatically achieved, provided the documents and paperwork are in order, while the close-ended retail funds’ registration is not automatic.
Under the Brazilian legal framework, any public securities offerings are supposed to be registered by the CVM. The whole process must be handled by the placement agents, even if the securities were meant to be traded in other jurisdiction. The Brazilian Depositary Receipts (BDRs) are certificates that represent the securities of a listed company.
According to the legal and regulation framework of Brazil, only placement agents, e.g. financial institutions, securities houses, brokerage firms, and individuals registered with the CVM are allowed to market retail funds, whether open-ended, close-ended, or foreign funds.
According to Rule 555/14, retail funds can be marketed to the general public. However, depending on several aspects of the investment policy, the complexity, level of disclosure, and the risk that the fund carries, restrictions might exist, and the fund might only be allowed to be marketed to professional investors and qualified investors. According to the Brazilian law, professional investors include;
• Financial institutions and other bodies that are authorized by the Brazilian Central Bank
• Pension Funds
• Insurance and Savings Companies
• Investment Funds
• Individuals with a net worth of more than BRL10 million
Qualified investors might include:
• All professional investors
Cassio Audi is a senior financial management executive. Audi has worked as a senior financial manager in a dozen financial organizations in Brazil.
He attended the Pontifícia Universidade Católica de São Paulo where he graduated with a Bachelor in Business Administration. He enrolled at the Universidade de São Paulo where he earned an MBA. He has an impressive 23 years’ experience in asset and financial management.

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