Exchange has potential to reach 10 million CPFs, says CVM – 05/31/2023 – Market

The president of CVM (Comissão de Valores Mobiliários), João Pedro Nascimento, stated that the Brazilian Stock Exchange has the potential to double the number of CPFs that invest in stocks and funds listed on the market, jumping from around 5 million to 10 million investors in the coming years.

According to Nascimento, studies by the OECD (Organization for Economic Cooperation and Development) indicate that, in developing countries, around 5% of the population has some type of participation in the capital market.

Considering the size of the Brazilian population around 220 million, the local market has the potential to double the number of investors, said the CVM president.

Nascimento stated that FIAgro, investment funds aimed at investing in agribusiness, are an alternative with great potential to attract a greater number of investors in the country.

“FIAgro is a driver of growth [do mercado de capitais]”, said the expert during the XP event this Wednesday (31). He added that agro represents about 25% to 28% of GDP, while the sector’s market share is only 5%.

The president of the CVM stated that instruction 175, which deals with the rules for investment funds and which comes into force in October, should contribute to the growth of funds aimed at agribusiness, as it brings greater security and increases the transparency of the product. The FIAgro have the ability to improve and simplify the dialogue between market agents and the field, said Nascimento.

“If we bring more adequate tools, agribusiness will be able to finance itself through the market, even with more attractive rates than the traditional banking system”, said the specialist.

The president of the CVM also stated that the issue of sustainable finance should also contribute to the growth of investors in the Brazilian capital market.

He raised the possibility of structuring FIAgros dedicated to low carbon strategies which, in his assessment, would be in great demand from financial agents. “Brazil has a vocation to be a leader in the area [das finanças sustentáveis]”, Nascimento said.

Among the priorities on the municipality’s radar is also that of regulating the cryptocurrency market, in order to increase the level of security and allow an expansion of this market niche on more solid bases.

According to Nascimento, given the informality of the crypto market, it is not possible to accurately measure the number of people investing in the segment, but preliminary data indicate around 15 million investors in the country.

Finally, the president of the CVM said that the SAFs (Sociedades Anônimas do Futebol) are also on the radar of the CVM. The groups that started to buy control of football clubs in Brazil in recent months, if regulated, would have the potential to issue securities and have a broader capacity to operate in the local market, said Nascimento.

“Bringing SAFs into the capital market can make us increase the number of issuers and investors,” said Nascimento, adding that the CVM plans to release a guidance opinion regarding corporations in the coming months.