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Brazil’s lowest-ever benchmark interest rates propelled the number of individual investors trading on São Paulo’s B3 stock exchange to triple to almost 3 million in the past twelve months. Not even the pandemic sell-off and the fact that benchmark stock index Ibovespa remains in the red have scared the newcomers away. At the same time, new Brazilian investors are becoming keener on diversifying, which fuels regulatory responses to make markets more accessible, including foreign assets. In the latest move in this direction, the Brazilian Securities Commission (CVM) has decided to allow ordinary retail investors to purchase Brazilian Depositary Receipts (BDRs) as of September 1.
These are negotiable instruments traded on B3 and backed by shares of foreign companies.
Previously, only qualified investors with more than BRL 1 million in net worth had access to these stock equivalents of global giants such as Alphabet, 3M and Coca-Cola. Now, regular Brazilian investors will also be able to increase their exposure to foreign economies and get protection from local market swings, as BDR prices also take forex rates into account.
In a press statement, CVM chairperson Marcelo Barbosa said the new rule “provides investors and issuers with more freedom, in the...
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