Changes in rules guiding foreign portfolio investment in the Brazilian market are expected to improve local companies’ access to international funding sources and boost cross-border financing.
Resolution No. 4,373, which was passed by Brazil’s National Monetary Council last week, will apply to portfolio investments by non-residents in Brazil’s capital markets and means foreign investors will be able to use Brazilian bank accounts to make portfolio investments in companies’ assets. Those transactions, as well as investment orders from abroad, will be able to be done in reais, something that was previously limited to direct foreign investments and foreign credit transactions. It also widens the scope of fundraising using depositary receipts (DRs), giving more companies access to international financing. It becomes effective in March next year.
Latin Lawyer