Rural producers will have less bureaucracy when it comes to providing guarantees for financial operations. In addition, a new legal framework aims to reduce the risk of converting debt into private securities.
The news consists of two provisional measures (MP) signed today (15) in the afternoon by President Jair Bolsonaro. The first measure improves the rules of rural guarantees, goods given by producers as a guarantee to cover possible defaults with financial institutions. The second measure creates the New Securitization Framework, updating rules previously dispersed in various types of legislation.
In relation to rural guarantees, the MP creates the Solidarity Guarantee Fund (FGS), which will guarantee any financial operation linked to rural business activity. The fund will cover credit operations (such as loans and financing) and capital market operations (such as derivatives operations in the futures market). With the fund, it is expected that the guarantee requirements of financial institutions will be reduced and that rural producers will have more access to the financial and credit market.
The MP also updates the rules for electronic signature in book-entry Rural Product Certificate (CPR) and in endorsements and collateral records linked to these notes. The deadline for registering or filing CPRs was extended from 10 to 30 days. This extension will run until the end of 2023.
The second provisional measure, which creates the New Securitization Framework, updates legal provisions. 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 MP 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).
