Chamber approves MP that creates regulatory framework for securitization

Chamber approves MP that creates regulatory framework for securitization

The Chamber of Deputies approved today (15) the provisional measure that establishes a regulatory framework for securitization companies and creates the Letter of Insurance Risk (LRS). The matter goes to the Senate.Chamber approves MP that creates regulatory framework for securitization

The MP was edited in March by the federal government to update rules previously dispersed in various types of legislation. The text defines rules for the securitization (conversion) of credit rights (credits that a producer is entitled to receive and that can be used to convert debts into rural bonds).

“The instruments created will serve as important risk management tools that are today non-existent, allowing companies to achieve a more diverse set of economic activities. This will tend to reduce the cost of risk-taking, and in turn, this benefit should be passed on to families in the form of a wider range of services and products and more favorable credit conditions”, the government justified when editing the measure.

Securitization companies are non-financial companies specialized in placing on the market securities representing rights to receivables. These bonds, called receivables certificates (CR), are purchased by investors who receive remuneration (interest plus monetary correction, for example). Until the MP, the legislation contemplated the issuance of real estate (CIR) and agribusiness (CRA) certificates.

Those interested in obtaining a more affordable structured financing than that of the banking sector (a mall being expanded, for example) seeks the securitization company to assemble a certificate to be launched on the market, guaranteeing the rents receivable from the stores to be built.

Insurance Risk

The measure also regulates the issuance of Letters of Insurance Risks (LRS), a type of private bond that covers rural insurance risks. These papers can only be issued through Special Purpose Insurance Companies (SSPE), companies that can only operate in the insurance, supplementary pension, supplementary health, reinsurance (insurance for insurers) or retrocession (expropriation) risk market. carried out by the Government).

*With information from the Chamber Agency

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