With an eye on the increase in individual investors and the heated scenario for stock offerings and investment funds, the Securities and Exchange Commission of Brazil (CVM) published, on Tuesday (13), CVM Resolution No. 39, which will allow the registration of the Investment Fund in Agroindustrial Productive Chains (Fiagro), on a temporary and experimental basis. The measure will be effective as of August 1st of this year.

In a press conference, CVM officials informed that the rule will allow three types of Fiagro to be traded: Fiagro - Credit Rights, investment funds focused on agribusiness that invest in credit rights, constituted under CVM Instruction 356; Fiagro - Real Estate, funds with real estate assets, such as Certificates of Agribusiness Receivables (CRAs) and Agribusiness Letters of Credit (LCAs), constituted under CVM Instruction 472; and Fiagro - Equity, equity investment funds, constituted under CVM Instruction 578.

According to the Fiagros Law, the new instrument may invest in liquid assets, such as CRAs or Rural Product Notes (CPRs), and may also acquire rural real estate properties. There is also the option for Fiagro to acquire shares of other funds that invest up to 50% of their net assets in credit-backed assets or other assets linked to agribusiness.

The similarity with products already regulated by the CVM was even what allowed the autarchy to approve a resolution on a provisional basis. Marcelo Barbosa, president of CVM, explains that the idea was to take advantage of rules already known by the market to insert Fiagro according to the specific rule that governs the fund to which it is similar. To this end, the "three boxes" in which Fiagro can be inserted were established: real estate investment funds (FIIs), equity investment funds (FIPs), and receivables investment funds (FIDCs).

Thus, Fiagros that invest in real estate assets have to obey the rules of real estate investment funds and those that invest in credit rights have to follow the rules that apply to credit rights investment funds. The same applies to Fiagros that are similar to FIPs.

The norm was widely expected by the market, which had already started to structure products even without the approval of the autarchy. Fiagro may reach the shelves, however, with some uncertainties. Among them is whether or not taxes will be charged.

According to Law No. 14.130/2021, which instituted the product, the income distributed periodically to individual investors in Fiagros would in principle be exempt from Income Tax as long as the fund had at least 50 shareholders; the shareholder had less than 10% of the fund's shares; and the fund's shares were traded exclusively on the stock exchange or organized over-the-counter market.

The tax reform proposal presented by the government last June 25, however, generated mistrust in the market regarding the granting of the tax benefit, with the concern that the new product would not be contemplated by the exemption. Today, however, the market became more confident, given the changes presented in the government's text with the disclosure of the preliminary opinion of Deputy Celso Sabino (PSDB-BA).

Another point of doubt was in the collection of Fiagro quotas. Because there is no clear mention of the product in the government's proposal, tax lawyers heard by InfoMoney said that the text could give rise to a possible collection of this tax by the tax authorities, since the proposal pointed to the incidence of this income tax anticipation in closed funds.

For Ana Carolina Monguilod, a partner at i2a Advogados, the opinion presented today by Sabino made important clarifications about Fiagro, by making it clear that these funds would not be subject to the incidence of come-quotas. "I believe it makes a lot of sense because they are funds that present a great variability of return," said the specialist.

According to the CVM, the rule will follow what is foreseen in the law approved by Congress and that today guarantees tax exemption for Fiagros, without the incidence of quotas.

With the new CVM rule, as of the beginning of next month, administrators that are already in the final phase of structuring their offerings will be able to request the registration of Fiagros in order to be able to negotiate them on the stock exchange or organized over-the-counter market.

Although the law offers the possibility of the product being hybrid, Bruno Gomes, superintendent of securitization supervision at the CVM, says that the autarchy will not allow the products to have a hybrid character. At least for the time being.

"Within this proposal, for example, there would have to be two Fiagros: a real estate and a credit right," he says. "We are not saying that Fiagro will not be able to invest in credit rights, but we will fit it into the credit rights box.

In the same way, Gomes pointed out that the rules for a Fiagro to be open or closed will depend on the type of fund that it should follow. "In the case of a real estate fund, for example, which is closed, Fiagro must also be closed. The rule for each product that we have in the platform will apply", he says. The same goes for the type of investor that will be able to invest.

Gomes said, however, that the rule that will allow only monoactive funds to be traded should be transitory and that the objective, at this first moment, will be to test the product.

The CVM president also sees with good eyes the learning that should be obtained with these funds that will be "tested" in the market. "It is experimental while we reflect on the rule. And it even helps in the process of editing the rule that will come. For us, it is a model that involves little or no change in the structure, in the framework that exists today", he observes.

For Barbosa, the issuance of a provisional rule for Fiagro helps to enable the immediate registration of products "with legal certainty and predictability". Without this, Barbosa says that the creation of a specific rule for this type of investment would require prior studies and a public hearing, something that could only occur in 2022.

Even so, the president of the autarchy says that there is no way to estimate the probability that the agenda for the discussion of a specific rule for Fiagro will be on the autarchy's agenda next year.

"The agenda is especially intense with topics such as offerings, 555 funds, reference form. Making a change in the planning that already exists now may even address this important issue, but the other issues that are addressed are also important. It is a challenge of prioritization," he pointed out.