New Exciting Release: FIDC and 100% Funds Unleashed to Individual Investors This Monday!

Fund investors, be alert: this Monday (2nd) a resolution comes into effect that changes the way this type of investment works, with an impact on shareholders, managers and portfolio administrators.

Resolution 175 was published by the Securities Commission (CVM) in December 2022 to simplify the regulatory framework for investment funds, replacing CVM Instruction 555 and 38 other regulations. Its validity would begin in April, but ended up being postponed until October.

In practice, the most important changes for investors are three: the liability of shareholders in case of losses, the flexibility of investments abroad and the release of FIDC (investment funds in credit rights) for retail investors .

FIDC: Is it worth the risk for the small investor?

With the changes, any investor will be able to make investments in FIDCs, which until now were restricted to qualified investors (with more than R$ 1 million in financial investments) and professionals (with more than R$ 10 million).

In practice, FIDCs invest in credit claims, securities that represent amounts that a company must receive, such as installments from credit card sales or future rents. They can also be court orders, compensation for legal actions or credits from companies in the process of extrajudicial recovery.

For Beatrice Ferrari, founding partner of Blackbird Investimentos, the FIDC is an attractive product, but warns of the difficulty for investors in understanding the different associated risks. “It is a product that is going to become popular, because it has good profitability and helps to break away from the norm, but it has risks. “We are talking about credit, where there is non-payment,” she evaluates.

To take the first step, Beatrice’s suggestion is that investors opt for FIDC from larger companies, such as Vale (VALUE3) and Petrobras (PETR3;PETR4), due to the lower risk of defaulting on payments.

“The investor would be investing in a single right, but they are players big. It is usually more stable than an account receivable from a technology company, for example,” he says. “The ideal is to start with the most obvious ones.”

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Also pay attention to the types of FIDC shares. Older women, for example, are the least at risk because they have priority when it comes to receiving payments. Subordinates, on the other hand, are at greater risk, because they function as a kind of guarantee given by whoever is granting the credit. Precisely for this reason they usually have a more advantageous profitability.

Houses like Integral have taken advantage of the change in regulations to launch more FIDCs. Cristiano Greve, partner of the manager, says that there are R$ 4 billion in operations scheduled for the coming months, involving sectors such as the automotive industry, in addition to payroll loans from states and municipalities. “Assets will demand product to allocate and sell to retailers,” he says.

Despite the optimism, other managers believe that the arrival of retail investors to the FIDC market will be gradual, because it will be necessary to previously invest in education about the product. “You have to understand who the originator is, who will grant the credit, the profile of the operations. It is very different from buying an obligation, more tangible,” says Gustavo Belger, risk director at Empírica.

100% “abroad” funds: geographical diversification on the agenda

With the changes, from now on investors will be able to access funds that invest up to 100% of their resources abroad, highlights André Mileski, partner in the funds practice of the Lefosse law firm.

Until now, the rule only allowed retailers to invest in funds that invested up to 20% of their assets abroad. Only professional investors (with at least R$ 10 million in financial investments) had those who allocated up to 100% abroad.

“It was a market very concentrated in qualified and professional people, but there was an asymmetry and it was recognized by the CVM. Today, retail investors can buy BDRs (B3-traded foreign stock receipts) from Apple, for example. It was necessary to change the market,” Mileski evaluates.

The move should please investors: 47% of them are interested in investing abroad, as well as in equities, according to an XP survey of advisors conducted in September. It is the highest percentage since April, when it reached 52%.

For Beatrice Ferrari, founding partner of Blackbird Investimentos, the change is positive, because the international market is considered more solid than the local one and can offer opportunities in terms of geographical diversification. “It’s a change that will be accepted,” she says.

Limited liability, lower risk for the investor

The new rule will also reduce the risk for shareholders in the event of a fund’s insolvency. Mileski, from Lefosse, explains that, if the fund’s net assets become negative, the investor will no longer be obliged to make additional contributions, as was the case until now.

“It is a concept similar to investing in companies, in which the investor’s exposure, as a general rule, is limited to the subscribed capital.”

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To achieve this, Mileski says that the product regulations will have to provide that the shareholder’s liability will be limited to the subscribed capital.

That is to say, as a general rule, if the investor has committed to allocate R$ 1,000 in a certain fund, his committed capital will only be R$ 1,000, even if the fund fails and declares bankruptcy.

Changes for managers and administrators

In addition to the changes focused on investors, the first phase of the new rule also foresees changes for fund managers and administrators.

One of them involves funds that are allocated in crypto assets. Now, Mileski explains, these products will be able to invest directly in assets, as well as indirectly, through ETFs (index funds) or other funds backed by digital currencies.

With Resolution 175, the responsibilities of the manager and administrator must also be delimited and divided, according to their due importance to the structure of the fund.

To facilitate adaptation to the market, the changes will occur in phases. According to the CVM’s forecast, the second phase will address the segregation of fund commissions (administration, management and maximum distribution rate), in addition to the remuneration and adaptation agreements of the already existing FIDCs. The funds will have to comply with the new rule from April 2024.

The last part establishes that investment funds that come into operation before September 29 will have until December 31, 2024 to adapt to the new regulatory framework.

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