CVM chair announces Brazil’s plans to allow retail investors access to private equity funds

The head of the Brazilian Securities and Exchange Commission (CVM), João Pedro Nascimento, believes that 2025 will be a crucial year for advancing regulatory improvements and expanding access to capital markets. He shared with Valor that one of the top priorities is updating private equity investment funds (FIPs) to make them accessible to retail investors, as opposed to only professional and certified investors as is the current practice.

With two weeks left before the deadline for the adaptation period for Resolution 175—the updated investment fund framework for Brazil—expires, Nascimento outlined the CVM’s approach to monitoring compliance. The agency plans to differentiate between asset managers who are still in the process of adjustment and those engaging in illicit activities. Those lagging behind will receive guidance, while those involved in wrongful practices will face sanctions.

When asked about the provisional presidential decree proposing alternatives to increasing the Tax on Financial Transactions (IOF), Nascimento refrained from commenting directly on the tax implications. Instead, he emphasized that the CVM’s focus is on providing solutions that support market growth during such challenging times.

The CVM is also working on regulating financial influencers, with plans for a second public consultation on the matter. Nascimento highlighted the importance of increasing transparency, especially regarding compensations from brokerages, as well as bringing influencers under the regulatory umbrella.

Furthermore, Nascimento disclosed that the CVM’s agenda for 2025 includes reevaluating suitability rules, aiming to align investment products with investor profiles by updating the definition of qualified investors and streamlining the investor onboarding process.

In preparation for investment portability going live in 2026, allowing investors to transfer holdings between institutions, the CVM is embracing the broader “open finance” movement to enhance competition and empower investors.

Regarding risk exposure among retail investors, Nascimento underscored the CVM’s efforts to mitigate risks associated with products such as structured transaction certificates (COEs) and contracts for difference (CFDs).

On the sustainability front, Nascimento assured that the CVM is committed to promoting integrity and balance within the ESG space without discouraging company participation. He mentioned that the Americanas case is currently under review by the relevant technical departments.

In response to inquiries about how the CVM plans to enforce compliance with Resolution 175, Nascimento highlighted the agency’s support for firms operating in good faith and stressed the distinction between inadvertent noncompliance due to adaptation and deliberate violations.

When asked about the potential impacts of the provisional presidential decree on investments, Nascimento reiterated the CVM’s focus on providing solutions that enable market growth in challenging circumstances.

Looking ahead, the CVM is working on various initiatives, including Fácil, a program aimed at simplifying capital access for small and midsize enterprises, and the opening up of FIPs to retail investors. These efforts align with the agency’s goal to democratize access to capital markets and encourage listings for smaller companies.