MP securitization is converted into law

Provisional Measure no. 1103/22, which established the legal framework for Securitization companies and disposed, among other measures, of receivables certificates, was converted into Law no. 14.430 last Wednesday (08/03).

Despite having been the object of several amendments, the final wording of Law 14,430 largely reflects the provisions of Provisional Measure 1103/22.

Law 14,430 unified the legal regulation of Securitization Companies, which was dispersed in Laws 9,514/97 and 11,076/04, establishing general rules in order to provide greater legal security for securitization operations.

The new law ratified, in the terms of Provisional Measure 1103/22, the possibility of securitization operations by means of any type of credit right through the issue of certificates of receivables ("Certificates of Receivables") or other securities representing securitization operations.

Securitization companies will also have the possibility of establishing a fiduciary regime for all assets and rights that are linked to the Receivables Certificates. Previously, the fiduciary regime was only available for CRAs and CRIs. The fiduciary regime offers security to investors, since it ensures that the assets and rights related to each operation will be kept in a separate account, unrelated to the Securitization Company's assets.

It is now up to the Securities and Exchange Commission of Brazil ("CVM") to regulate the issuances and public offerings of Certificates of Receivables, as well as to bring CVM Resolution No. 60 into conformity with the provisions of the new Law No. 14,430.

Click here to access Law 14,430 in its entirety.

For further information, please contact our Capital Markets team at our office([email protected]).