Structured Products

In addition to its simpler derivatives transactions, B3 provides registration for OTC derivatives transactions with no CCP and with more complex scenarios. These structured transactions are known as Strategies.

B3 also provides registration for Structured Transaction Certificates (COEs)

Strategy

B3 has a specialized service for meeting the demand for complex OTC derivatives products. This structure can synthesize a combination of several financial derivative instruments (forwards, options and swaps).

Each structure is customized to meet the specific requirements of the requesting financial institution. This differentiated provision allows B3 to offer significant flexibility in its registration service for OTC derivatives contracts.

Structured Transaction Certificate (COE)

The Structured Transaction Certificate (COE) is an investment product that was inaugurated on the Brazilian market in 2014. It is an innovative and flexible instrument that combines elements of Fixed Income and Equity. It also has the differential of being structured based on risk/return scenarios in accordance with the investor’s profile. It is the Brazilian version of the Structured Notes that are so popular on the United States and Europe.

This instrument was created by the same Law 12.249/10 that established Financial Bills in Brazil, but with rules that were drawn up in the second half of 2013 by the National Monetary Council (CMN) of the Central Bank of Brazil. It is a fundraising alternative for the banks.

According to the applicable conditions, this instrument can be issued in two modalities: protected nominal value, whereby the value of expected minimum payments is at least equal to the initial investment; or with nominal value at risk, where there is there is the possibility of loss up to the value of the initial investment. In both cases the suitability rule shall be observed, meaning that the instrument must be appropriate for the investor’s profile.

Contact the OTC Derivative Products team by