Important regulation development impacting Commodity Finance in Brazil.
The Brazilian Central Bank (BACEN) issued Resolution No. 4,927 to extend the deadline for registration and deposit of Rural Product Notes (Cédula de Produto Rural or CPR) of less than BRL 1 million.
The mandatory registration of CPRs equal to or greater than BRL 250,000 was extended to January 1, 2022, while the registration period for CPRs equal to or above BRL 50,000 was extended to January 1, 2023.
The new legislation meets the market’s request since there is a significant volume of CPRs with a value equal to or greater than BRL 250,000, which should be registered from July 1st and many entities did not have enough time to adapt to the provisions.
According to the new resolution, no registration and deposit are required for CPRs of less than:
(i) BRL 1 million until December 31, 2021;
(ii) BRL 250,000 until December 31, 2022; and
(iii) BRL 50,000 until December 31, 2023.
It is important to note that the registration and deposit of CPRs whose reference value exceeds BRL 1 million remains mandatory for the purposes of document validity and effectiveness, and must be carried out within 10 business days of the CPR issuance date.
