BRAZIL Trends and Developments Contributed by: Roberto Panucci Filho, Tiago Severo Pereira Gomes, Diogo Octavio Nebias and Guilherme Teles, Panucci, Severo e Nebias Advogados
invested exclusively in Brazilian federal government securities (phased 2026–28). Together, these measures raise the marginal cost of over-reliance on insured deposit funding and curb riskier allocation of guaranteed liabilities. Why it matters The reform aims to protect the scheme’s solvency while strengthening market discipline. Retail con- fidence remains intact, but extreme deposit offers should moderate as institutions rebalance funding. Banks and finance companies must demonstrate prudent asset liability management and adopt more stringent risk-reporting practices to align with global standards. These changes also open the door for more capital market funding. As insured deposits become cost- lier at the margin, smaller banks and SCFIs may turn more to securitisations (FIDCs), commercial notes, or private credit lines to diversify funding. This will likely deepen Brazil’s private debt market while ensur- ing that deposit insurance continues to serve its true purpose – ie, protecting small savers, not subsidising speculative strategies. In short, the 2025 FGC reform shows how regulators are tuning incentives by bal- ancing inclusion and protection with discipline. For clients, the message is that Brazil’s financial stability framework is not static; it evolves quickly to address risks, ensuring that innovation in credit and payments is matched with prudent oversight. Private Credit: FIDCs and Commercial Notes Fuel Market Depth Brazil’s private credit market has accelerated rapidly in 2024 and 2025, emerging as a genuine alternative to traditional bank lending. Driven by high interest rates, investor demand for yield, and securitisation reforms, companies of all sizes are tapping private markets for working capital, receivables finance and expansion funding. The result is a diversified ecosys- tem in which fintechs, funds and companies interact
invoices, consumer loans, payroll-deductible credit, and credit card portfolios, as well as issuing quotas to investors – thereby providing bankruptcy remoteness, credit enhancement, and liquidity. Warehouse FIDCs season portfolios before placement into larger FIDCs for institutional investors. Regulatory improvements from the CVM and the Brazilian National Association of Financial and Capital Market Institutions ( Asso- ciação Nacional das Entidades dos Mercados Finan- ceiro e de Capitais , or ANBIMA), CVM Resolution 175, and guidance on accounting and segregation have increased transparency and confidence, expanding participation by pension funds and retail investors in senior FIDC tranches. Commercial notes boom Another star is the nota comercial (commercial note), introduced in 2021 as a flexible, non-convertible debt instrument. Commercial notes allow companies to raise short- to medium-term funds with “simpler requirements” than debentures, while still benefiting from CVM registration. By mid-2025, issuance vol- umes of commercial notes were nearly 40% higher than the previous year. For companies, commercial notes offer speed and simplicity; for investors, they offer exposure to corporate credit with tradable secu- rities. Integration with fintech origination Fintechs originate loans under SCD, SEP or SCFI licences, then package receivables into digital prom- issory notes, FIDCs or commercial notes, creating a funding pipeline: origination upfront, structured finance at the back end. Investors gain access to diversified credit pools with professional servicing and governance; borrowers gain faster access to credit at potentially better rates. Foreign private equity and hedge funds are increasingly investing in mezzanine FIDC tranches or buying commercial notes, enticed by yields above developed-market benchmarks. The expansion of private credit signals the matura- tion of Brazil’s capital markets. As deposit funding becomes more expensive under new FGC rules, mid- sized banks and SCFIs will lean further on FIDCs and notes to diversify liabilities. Regulators aim to preserve transparency and investor protection so growth does not come at the cost of hidden risks. For clients, pri-
through structured vehicles. FIDCs as the core vehicle
The FIDC remains the cornerstone of Brazilian pri- vate credit. These funds purchase receivables trade
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