New CVM Guidance Raises the Standard Required for the Backing of Credit Rights in Securitization Transactions
The Brazilian Securities and Exchange Commission (CVM), through its Superintendency of Accounting and Auditing Standards (SNC), issued on September 3, 2026 Circular Letter No. 1/2026/CVM/SNC/GNA (Letter), which consolidates guidance addressed to independent auditors registered with the agency and to their technical officers. The document stems from the supervision exercised over auditors and is intended to guide the application of professional auditing standards, but it was received with great attention by the other market participants active in securitization transactions and, in some cases, even with a certain degree of concern. This is because the understandings of CVM’s technical area set out in the new Letter appear to call into question transactions in which the existence of the credit rights is evidenced exclusively by ancillary documents (such as invoices), and they have an effect, albeit indirect, on those in which generic methodologies are adopted to define the backing samples to be verified.
The core of this understanding lies in item 2.3.1 of the annex to the Letter, which addresses Credit Rights Investment Funds (FIDC) and, “to the extent applicable,” the segregated estates of Real Estate Receivables Certificates (CRI) and Agribusiness Receivables Certificates (CRA). In that item, the SNC states that verifying the existence of the credit rights “cannot be limited to the analysis of merely formal or ancillary documents” and that the supporting documentation “must be capable of demonstrating, in a consistent manner, the origin, economic substance, enforceability and essential elements of the underlying obligation relationship giving rise to the credit.”
As an example of ancillary documents that are insufficient to evidence the existence of the credits, the Letter specifically mentioned sales invoices, which support various market transactions for the advance of receivables held by assignors that do not issue duplicatas (trade bills) and that maintain relatively informal contracting flows with their customers. According to item 2.3.1 of the annex to the Letter, a sales invoice, unaccompanied by documentation evidencing the actual constitution of the credit and the obligation of the debtor, “should not be considered, in isolation, sufficient evidence of the existence of the credit right.”
Although addressed to auditors, the Letter directly conditions the standard of conduct of asset managers and securitization companies, which are primarily responsible for structuring securitization transactions and for verifying the backing of the fund units (in the case of FIDC) or of the securities issued to the market. In practice, in light of the new guidance, if an asset manager or securitization company acquires credits supported only by ancillary documents, the auditor engaged to carry out the annual audit of the FIDC or of the relevant segregated estate will not be able to treat such documents, in isolation, as sufficient evidence of the existence of the credit and, under the terms of the Letter, must, with professional skepticism, “assess the consistency, completeness and sufficiency of the supporting documentation.” At the end of the audit procedures, if the auditor concludes that the credits do not exist, it may propose the write-off of the assets or the adjustment of provisions in the financial statements, issue a qualified or adverse opinion, and assess indications of fraud or regulatory noncompliance; if it is unable to obtain sufficient evidence to reach a conclusion, it may issue a qualified opinion, disclaim an opinion or, where a limitation imposed by management persists, withdraw from the engagement (item 2.2.9 of the annex to the Letter), all in accordance with the applicable auditing standards.
Accordingly, a problem with the backing documentation of the credit rights, arising at origination and overlooked in structuring the securitization transaction, may produce harmful effects only at year-end, upon the audit of the financial statements, when it can no longer be corrected without additional costs or disruption, which explains the market’s interest in the subject. In this regard, we also noted that the Letter treats backing documentation as documentation that enables verification of the “economic substance” of the legal transaction underlying each credit right, thereby apparently requiring more than the rule applicable to FIDC itself (CVM Resolution No. 175), which defined, in Article 2, item XVII of its Normative Annex II, the backing of credit rights as the “documentation necessary for the exercise of the prerogatives arising from the ownership of the assets, and capable of evidencing the origin, existence and enforceability of the credit right.” Indeed, we foresee possible discussions in the audit context on proper evidence of the economic substance of the credits – an accounting concept tied to the primacy of substance over form, which the Letter now transposes into a regulatory definition whose purpose, we believe, is to ensure that the fund is able to exercise the prerogatives arising from the ownership of the credits.
In addition, item 2.2.3 of the annex to the Letter also addresses sampling in the auditor’s work, requiring the sample to be representative of the population tested and the auditor to document the technical and statistical grounds for its sufficiency, since “the size and composition of the sample cannot be considered representative based solely on a generic statement of professional judgment.” Although this guidance should not be confused with the sample-based backing verification that Article 36, paragraphs 1 and 3, of Normative Annex II to CVM Resolution No. 175 allows the manager to perform, one affects the other, insofar as the manager’s verification is a control that the auditor must critically assess, and the auditor’s sample, formed independently, may reach credits whose documentation has not been verified, including in cases where the fund rules waive verification due to the low average value of the credits. As a result, it appears to us that weakly robust sampling models or broad waivers provided for in the fund rules tend to expand the auditor’s testing and expose the financial statements to qualified opinions, which makes it advisable for such parameters to be defined on a demonstrable statistical basis, and not merely on business criteria.
The effects of the new guidance on securitization transactions tend to be significant. Qualified opinions and disclaimers of opinion by auditors are usually among the evaluation events provided for in FIDC rules and securitization terms, affect the credit rating and may hinder the distribution of new series in transactions that allow it. In addition, adjustments and additional provisions reduce net assets and may breach subordination ratios, triggering evaluation events or early liquidation events.
Factoring FIDC with less robust documentation are directly affected by the guidance discussed in this article, since the cost of obtaining or making available supporting documentation for the backing of each credit may render part of the origination unfeasible or be passed on to the assignment price. As the guidance in the Letter, although interpreting rules that are mandatory for auditors, cannot create a new regulatory obligation, there is no transition period for portfolios acquired under the prior practice, which means legal structures must be adapted already in the current fiscal year. On the other hand, the guidelines to auditors should encourage new structures to migrate to credits represented by duplicatas, secured commercial notes and other origination models with the underlying legal transaction duly documented.
The most consistent response to the new Letter appears to require action by market participants, at least on an individual basis, to promote an early review, in dialogue with the auditor, of the backing documents and sampling parameters, reviewing fund rules, securitization terms and assignment agreements.
Our Capital Markets team remains available to provide further clarification on the subject.