Structured notes in Brazil, locally known as certificados de operações estruturadas (COEs), have reached BRL1bn ($432.58m) in sales, according to Cetip, the clearing house authorised by the Central Bank of Brazil and the Securities and Exchange Commission (CVM). Structured notes were authorised by Brazilian regulators back in January and reached US$200m in sales in mid-February.
Cetip said that a total of seven banks have registered more than 3,470 transactions between January 6 and March 20. According to the clearing house, 96% of the new products were fully capital-protected, while only 53% of the issues had a term of two years or more. In terms of asset classes, equity stocks and indices were the preferred underlying assets followed by currency and interest rates.
“The growth in less than three months proves the potential of COE increasingly presenting itself as an alternative funding instrument for banks and for the investor to diversify investment portfolios,” said Fabio Zenaro, executive manager of products and business at Cetip.
It is not yet clear whether retail investors will have access to COEs in the near future as Brazilian structured notes are offered to private banking clients only.
Cetip, which manages the country’s registration and settlement of structured notes, also provides tools to determine performance scenarios.
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