Brazil: Brazilian Agribusiness Securities Can Now Be Distributed With Restricted Efforts

The Brazilian Securities and Exchange Commission (Comissão de Valores Mobiliários - CVM) decided to include certain agribusiness securities in the list of instruments that can be distributed with restricted efforts in the Brazilian regulated markets pursuant to CVM Instruction No. 476, of January 16, 2009. As a general rule, no public offer shall be distributed on the Brazilian securities market without prior registration with CVM1. However, public offers distributed with restricted efforts are automatically waived of this registration.

Public offers distributed with restricted efforts are exclusively destined to qualified investors2 and intermediated by participants of the Brazilian securities distribution system3. The regulations expressly prohibit the search of investors through stores, offices, or establishments open to the public, or with the use of mass or electronic media (pages or documents on the worldwide web or other open computer networks and e-mail), and any form of communication directed to the general public.

Originally, the list contained in article 1 of CVM Instruction 476/2009 comprised solely the following securities: (i) commercial paper (notas comerciais); (ii) banking credit bills without liability of a financial institution (cédulas de crédito bancário que não seja de responsabilidade de instituição financeira); (iii) debentures non-convertible or non-exchangeable into shares (debêntures não-conversíveis ou não-permutáveis em ações); (iv) units of closed-end investment funds (cotas de fundos de investimento fechados); and (v) real state or agribusiness receivables certificates (certificados de recebíveis imobiliários ou do agronegócio).

Now, as a result of CVM Instruction No. 500, of July 15, 2011, other additional instruments have been included as follows: (vi) financial bills, provided that they are not related to linked fund-raising transactions (letras financeiras - LFs, desde que não relacionadas a operações ativas vinculadas); (vii) credit receivables agribusiness certificates (certificados de direitos creditórios do agronegócio - CDCA); (viii) rural product certificates - financial (cédulas de produto rural - financeiras - CPR-F); and (ix) agribusiness warrants (warrants agropecuários - WA).

The LF was created by Provisional Measure No. 472 of December 15, 2009, which was approved by the Brazilian Congress and converted into Law No. 12249, of June 11.2010. LFs are debt instruments issued by certain financial institutions duly authorized to operate in the country by the Central Bank of Brazil (Banco Central do Brasil - Bacen)4. CVM has seen fit to make a small adjustment to item VI, paragraph 1 of Article 1 of CVM Instruction 476/2009, in order to clarify that LFs may be subject to public offers distributed with restricted efforts, provided they are not related to linked fund-raising transactions, which are made with funds delivered or placed at the disposal of this issuing financial institution by a third party5. This condition is already contained in paragraph 1 of article 13 of CVM Instruction 400 of December 29, 2003, and therefore CVM only wanted to eliminate any doubt about the issue. CVM believes that the regulation of public offers of LFs, in which the credit risk relevant to the financial institution issuing the security is transferred to a third party would depend on specific future analysis and study.

The CDCA was established by Law No. 11,076, of December 30, 2004, and it is a nominal credit security, negotiable and backed-by credits originated in the agribusiness sector, which represents a promise to pay in legal tender that may be executed without prior legal proceedings. Pursuant to article 24 of Law 11,076/2004, the CDCA may be exclusively issued by agricultural cooperatives and other companies that commercialize, add-value or industrialize agricultural products and raw materials, or machines and equipment used in the agricultural production. The issuer is responsible for the origin and authenticity of the credit rights that back the certificates.

The CPR was established by Law No. 8,939, of August 22, 1994, as subsequently amended, specially by Law No. 10,200, of February 14, 2001, and it is an instrument that promises delivery of rural products, with or without a guarantee included in the security, and permits farmers, ranchers and their agricultural cooperatives to finance the production and presale of their products. It is an uncontested right to the quantity and quality of products described therein or, the case of a CPR-F (CPR with financial settlement) to the amount calculated by multiplying the price by the quantity of the specified product. The CPR-F may be issued by rural producers and their associations, including agricultural cooperatives. Only the CPR-F is admitted for public offer with restricted efforts.

The WA was originally created by Provisional Measure No. 221, of October 1, 2004, which was subsequently converted into Law No. 11,076/2004. The WA is a credit security promising to pay in legal tender that confers the right of a lien on the corresponding agribusiness certificate of deposit (certificado de depósito agropecuário - CPA)6, as well as on the product described therein. The WA is issued by the depositary, at the request of the depositor. The issuer/depositary is any individual or company legally responsible for the safe-keeping and conservation of products delivered by third parties and, the case of cooperatives, by third parties and associated members. The depositor is any individual or company legally responsible for the products delivered to a depositary for safe-keeping and conservation.

Since the publication of CVM Instruction 476/2009, the volume of public offers with restricted efforts has been growing solidly, reflecting patterns of acceptance in respect of such offerings by market participants. The proliferation of such offers has shown an increase in expertise of the issuers, intermediaries and investors on how to implement the rules contained in CVM Instruction 476/2009. The total volume of public offers with restricted efforts reached R$ 26.247 billion and R$ 57.113 billion in 2009 and 2010, respectively7. Therefore, CVM concluded that other agribusiness securities (CDCA, CPR-F and CDA/WA) can also be offered with restricted efforts.

It is expected that the possibility of offering CDCA, CPR-F and WA with restricted efforts will consolidate the use of these instruments in the market. The volume of CDCA registered in the CETIP8 was R$ 2,078,182,558.00 on December 31, 2007; this volume varied in recent years and corresponded to R$ 1,366,338,431.00 on December 31, 2010. The total quantity of rural products evidenced by CPR-F registered in the CETIP increased from 367,013,048 on December 31, 2007 to 1,204,308,563 on December 312, 2010. The quantity of WA registered in the CETIP was 506 on December 31, 2007, varied in recent years and corresponded to 361 on December 31, 20109.


1.This rule is contained in the head of article 19 of Law nº 6.385, of December 7, 1976 (which governs the Brazilian securities market and creates CVM).

2.The following investors are deemed to be "qualified investors": (i) financial institutions; (ii) insurance companies and capitalization societies; (iii) private welfare opened or closed capital organizations; (iv) individuals or legal entities that hold financial investments in an amount superior to R$ 300 thousand, attest in writing their qualified investor condition and subscribe or acquire, in the offer, securities in the amount of at least R$ 1 million; (v) all investment funds, regardless as to whether they are directed exclusively to qualified investors or not. This means that investment funds destined to non-qualified investors are also considered qualified investors; (vi) portfolio administrators and securities consultants authorized by CVM, in relation to their own monies; and (vii) own social security regimes instated by the Federal Government, by the States, by the Federal District or by Municipalities. In public offers distributed with restricted efforts, it is allowed the search of up to 50 qualified investors and the offered securities shall be subscribed or acquired by no more than 20 qualified investors. For the purpose of this limit, investments funds whose investment decisions are taken by the same manager shall be counted as one sole investor.

3.According to the provisions of article 15 of Law 6385/1976, the securities distribution system in Brazil comprises the following participants: I - financial institutions and other corporations engaged in the activity of distributing securities issues: (a) as agents of the issuing corporation; or (b) for their own account, underwriting or purchasing the issue in order to place it on the market; II - corporations engaged in the activity of purchasing securities available on the market, in order to resell them for their own account; III - corporations and independent agents engaged in intermediation activities in the trading of securities, on Stock Exchanges or the Over-The-Counter (OTC) market; IV - Stock Exchanges; V - organized OTC markets; VI – commodities brokers, special operators and the commodities and futures exchanges; and VII – securities clearing and settlement entities.

4.The financial institutions authorized to issue LFs are multiservice, commercial and investment banks (bancos múltiplos, comerciais e de investimentos); savings banks (caixas econômicas); loan, finance and investment companies (sociedades de crédito, financiamento e investimento); mortgage companies (companhias hipotecárias), real estate loan companies (sociedades de crédito imobiliário); and the Brazilian Development Bank (Banco Nacional de Desenvolvimento Econômico e Social – BNDES).

5.Linked fund-raising transactions are presently regulated by the Brazilian Monetary Council (Conselho Monetário Nacional -CMN) by means of CMN Resolution No. 2,921, of January 17, 2002.

6.The CDA is not a security. It is a credit instrument that evidences a promise of delivery of agriculture products, derivatives, by-products or residues of economic value, deposited at a company in the business of safe-keeping and conservation of agricultural products (the warehouse, which is the depositary).

7.Source: CVM/Brazilian Association of Entities of the Financial and Capital Markets (Associação Brasileira das Entidades dos Mercados Financeiros e de Capitais - AMBIMA).

8.CETIP S.A. - Balcão Organizado de Ativos e Derivativos (CETIP) is a society that manages over-the-counter markets, in other words, it manages automated environments of negotiation and registration of securities, public and private fixed income securities and over-the-counter derivatives. The Company operates the leading marketplace for private fixed income securities and over-the-counter (OTC) derivatives in Latin America. It also is the largest private securities chamber of Brazilian's financial market. CETIP holds 96% of the private fixed income assets and about 75% of the notional value of OTC derivatives held in custody in Brazil. This performance ensures the necessary support to the hole operating cycle involving fixed income assets, securities and OTC derivatives.

9.Source: CETIP.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Walter Stuber
Adriana Maria Gödel Stuber
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions