On April 4th, 2023, the Superintendence of Securitization Supervision (SSE) of the Brazilian Securities and Exchange Commission (CVM) issued Circular Letter CVM/SSE 4/2023 addressed to service providers involved in tokenization activities – credit consultants, structurers, and creditors of credit rights. Based on the understanding consolidated in CVM´s Opinion No. 40/2022 regarding the application of securities regulation to certain cryptocurrencies, the letter discusses the hypotheses for classification and characterization of Receivables Tokens or Fixed Income Tokens (TR) as securities.
The Circular Letter provides context to the current scenario where Receivables Tokens and Fixed Income Tokens are increasingly being offered on platforms under the guise of being an investment, attracting various interested parties. The technical area of CVM detected issuances and public offerings of fixed income tokens whose particularities fit within securities, without due respect to applicable regulations. Therefore, the guidance from the technical area about the likely security nature of the tokens becomes essential and indispensable in order to mitigate possible irregularities and misconduct, according to the opinion of Bruno Gomes, Superintendence of Securitization Supervision of CVM.
An important point highlighted by the Circular Letter is that the characterization of a certain asset as a security does not depend on CVM ´s prior approval. In other words, if the asset fits within the parameters established in CVM´s Opinion No. 40/2022, it will be considered a security regardless of proactive designation by the Comission. Therefore, private agents have a duty to pay attention to the characteristics of the tokens and comply with regulations on issuer registration and public offerings, among other rules applicable to the capital market.
The requirements for the classification of receivables and fixed income tokens as securities are as follows: compatibility with the concept of Collective Investment Contract (CIC) of Law No. 6,385/1976 (an instrument whose process occurs through crowdfunding) or with securitization operations of Law No. 14,430/2022, whose core is the acquisition of credit rights to back the issuance of Receivables Certificates or other securities.
The characteristics of the tokens usually include, for example, public offerings through exchanges or tokenizers; investor remuneration; representational character, linked or backed by credit rights or debt securities; payment of interest and principal to the investor from the cash flow of credit rights or debt securities; assignment or issuance of credit rights or debt securities to final investors or third parties (for the custody of the underlying assets); and the definition of remuneration by a third party (issuer, assignor or structurer).
After the classification analysis, if the tokens are indeed characterized as securities, the regulations on issuer registration and public offerings must be respected.
The Securitization Supervision Superintendence (SSE) has ensured the possibility of issuing debt securities up to R$ 15 million (fifteen million reais) using regulatory models such as Receivables Certificates or crowdfunding (note that SSE understands that securities offered through crowdfunding platforms do not need to be deposited, as an exception to Article 4, Sole Paragraph, item IV, of CVM Resolution No. 88/2022). Although there is no need to register securities with the CVM, the rules set out in Law No. 14.430/2022 and CVM Resolution No. 88/2022 must be observed by securitization companies.
The technical area highlighted, above all, the recommendation of CVM´s Guidance Opinion No. 40/2022, for issuers of securities using blockchain technology to seek to disclose clear information about tokenized assets, prioritizing transparency through language appropriate to the general public – thus respecting the principle of full and fair disclosure and the duty to promote full informational transparency.
It is of utmost importance to highlight that the nature of the security remains unchanged, regardless of its format or registration. As long as there is a consistent expectation of economic benefit resulting from the work of others, the security remains a security. In this regard, item I, 5, of Circular Letter CVM/SSE No. 4/2023 emphasizes that the use of any technology in the issuance does not alter the nature of the security as a security.
The Opice Blum, Bruno e Vainzof law firm has a team specialized in innovation in financial services, which monitors the news in the financial and capital markets and is available to provide clarification on this matter and others through the channel inovacaoservicosfinanceiros@opiceblum.com.br.
