President of Brazil authorizes foreign capital to own up to one hundred percent of Brazilian credit fintech companies.
The President of the Republic issued Decree 9544/18 authorizing foreign capital to own up to one hundred percent of the capital of Direct Credit Companies (SCD) and Peer-to- Peer Lending Companies (SEP). SEPs and SCDs are new types of financial institutions in the Brazilian financial system, created in April of this year to enable credit transactions not based on public savings and peer-to-peer lending, in both cases exclusively through electronic platforms.
The issuance of a blanket authorization eliminates the need for a specific decree from the President of the Republic and places foreign capital at the same level as Brazilian capital.
The measure aims to simplify the process of obtaining authorization for the operation of these institutions, in furtherance of Brazilian Government policy to promote innovation in financial services as a means to foster competition in the Brazilian credit market.
SCDs and SPEs continue to be subject to prior authorization to operate from the Central Bank of Brazil, as do other financial institutions.
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