Public securities: Treasury, BC and CVM announce negotiation – 06/16/2023 – Market

The Ministry of Finance, the Central Bank and the CVM (Comissão de Valores Mobiliários) will evaluate the possibility of allowing Brazilian domestic public debt securities to be traded simultaneously in the domestic and international markets, the National Treasury informed this Friday (16) .

According to a statement, the three institutions signed a joint ordinance the day before creating a working group to evaluate the adoption of an international central depository (DCI) for Internal Federal Public Debt securities, which would allow for concomitant trading.

In February, the Secretary of the Treasury, Rogério Ceron, predicted that in about two years, government bonds in reais would be being traded on the Euroclear platform, headquartered in Belgium, facilitating access by non-residents to Brazilian securities.

On the occasion, he anticipated the creation of a task force with the Central Bank to start the first technical preparations to make the measure feasible, with which the government intends to attract institutional investors and individuals.

A source with direct knowledge of the matter told Reuters on Friday that the task force was targeting Euroclear as a potential but not exclusive option, opening the door for domestic debt to be traded through any international central depository.

Today, the trading of these securities is done only on the Treasury platform and requires the activation of brokers that operate in the domestic system. With the change, the secretary said in February that he hoped that, in addition to facilitating access, the cost of operations for these investors would be reduced.

According to the Treasury note, the working group will last for 120 days, extendable for an equal period, and will carry out the technical feasibility analysis and the possible proposal of operational measures and changes in legislation necessary for the adoption of a DCI.

The group will be coordinated by the National Treasury _which will release a report with the conclusions of the studies at the end of the group’s activities_ and will have representatives from the Federal Revenue Service, the Central Bank and the CVM.

“With such an initiative, it is expected to expand the access of non-resident investors to the public securities market, generating significant benefits for the national financial market, such as increased liquidity, cost reduction and greater attractiveness of public securities for investors in general,” the Treasury said in the statement.

In April, Brazil announced the issuance of government bonds in dollars on the international market, marking the return of the country’s debt sales abroad after almost two years without operations of this type.