FÁCIL: Opening New Paths for the Capital Market in Brazil

All around the world, regulators are redesigning capital market frameworks to attract small and medium enterprises (SMEs), recognizing that public markets offer unique advantages for growth-stage companies, including superior price discovery, enhanced liquidity, greater financial statement comparability, and direct access to institutional capital. And yet, for many smaller businesses, this participation remains costly and complex.

While alternative solutions such as crowdfunding are increasingly used, regulators must remain attentive to the access gaps that prevent smaller companies from entering the capital market. SMEs are not only the predominant form of enterprise globally, but also the primary source of employment in most countries, as recently pointed out by the OECD (Organization for Economic Cooperation and Development) [1]. Facilitating their path to public markets is both economically strategic and socially beneficial. Growth markets serve as transitional platforms for SMEs aiming to access traditional capital market segments.

A clear example of this regulatory shift can be found in the European Union’s SME Growth Market framework under MiFID II [2], which implements proportional requirements, such as semi-annual financial reporting and simplified prospectuses for offerings below €20 million. As emphasized by the OECD, this type of proportionality is essential: while all companies must uphold core responsibilities, regulations should reflect differences in enterprise size and risk profile.

Brazil is moving in the same direction, pursuing locally adapted solutions to address long-standing structural challenges. In September 2024, the Brazilian Securities and Exchange Commission (CVM [3]) launched Public Consultation SDM No. 01/24, proposing a new regulatory framework: FÁCIL – Facilitation of Access to Capital and Listing Incentives (in Portuguese, “FÁCIL” means “EASY” and the term is the acronym for “Facilitação do Acesso a Capital e Incentivos a Listagens”).

FÁCIL is designed to effectively reduce entry barriers and broaden capital market access for smaller issuers. The proposal builds on prior efforts, such as B3’s 2005 launch of “Bovespa Mais”, a listing segment aimed at supporting the transition of smaller companies to the public markets. While Bovespa Mais enabled companies to list with reduced fees and a seven-year IPO timeline, its limited adoption highlighted the need for deeper regulatory flexibility and targeted incentives.

With FÁCIL, the CVM is pursuing a pioneering and simplified regulatory approach, to be initially implemented on an experimental basis, aiming to meet the specific needs of what it defines as Smaller Companies (in Portuguese, Companhia de Menor Porte – CMP). The proposal offers a regulatory regime that combines cost reduction, regulatory relief, and proportional oversight, without compromising investor protection.

FÁCIL was designed to address the growing demand from the dynamic segment of CMPs, which are increasingly seeking opportunities to raise capital to finance their activities in the capital markets through both equity and debt instruments.

To be classified as a CMP under the proposal, companies must:

1. Present annual consolidated gross revenue of less than BRL 500 million (approximately €80 million), based on the financial statements of the most recent fiscal year;
2. Be listed on an organized securities market;
3. Be in the operational stage (i.e., not pre-operational); and
4. If already registered with the CVM, obtain prior shareholder approval via a general meeting.

This proposal addresses a clear regulatory and structural gap in Brazil’s capital market. On one end of the spectrum, investment crowdfunding supports “small issuers” with up to BRL 40 million in annual gross revenue and public offerings of up to BRL 15 million. On the other, traditional regulatory regimes under CVM Resolutions No. 160/22 and 80/22, while allowing unlimited offering sizes, involve higher costs and compliance requirements. These are generally used by larger companies, typically raising BRL 500 million or more.

A 2020 Deloitte and B3 study on IPO costs in Brazil revealed that regulatory compliance can represent up to 4.9% of the total amount raised. FÁCIL aims to bridge this funding gap by providing a more accessible framework for companies seeking to raise between BRL 15 million and BRL 500 million.

Financial statements submitted to the CVM in 2023 suggest that at least 206 companies already meet the CMP criteria. The Commission anticipates that this number will grow as companies recognize the reduced compliance burden and simpler path to capital market access under the FÁCIL framework.

Among its innovations, FÁCIL provides for automatic issuer registration. Once a CMP is approved by a self-regulatory organization, its registration is automatically granted by the CVM.

The framework also introduces disclosure flexibility: instead of quarterly financial reports, CMPs would submit semi-annual financial statements. The existing Reference Form (like the U.S. SEC’s Form 10-K) can be replaced with a simplified FÁCIL Form, optimizing both the frequency and scope of required disclosures.

FÁCIL establishes three offering modalities:

1. A traditional modality aligned with CVM Resolution No. 160/22, for capital raises above BRL 300 million, following full documentation requirements;
2. A simplified modality combining Resolutions 160/22 and 161/22, allowing up to BRL 300 million annually with reduced requirements. In this model, the prospectus is replaced by the FÁCIL Form, and the information sheet is waived. Bookrunners may include non-bank financial institutions and other market participants, provided they are registered with the CVM;
3. A direct offering modality, exclusive to CMPs, allowing issuers to raise capital directly through organized markets without CVM registration or bookrunner intermediation.

FÁCIL also provides flexibility for unregistered issuers within the CMP category conducting public offerings of debt-related securities to professional investors. These offerings, up to BRL 300 million, may be conducted without a bookrunner or audited financials, provided investors sign a formal acknowledgment of the associated conditions. The possibility for CMPs to issue debt without audited financials contributes to a broader effort to promote alternative funding models beyond traditional bank lending.

Consequently, and in support of measures implemented by the Ministry of Finance to enhance competitiveness in the provision of credit to companies, the CVM proposes, through FÁCIL, that public offerings of debt-related securities, specifically designed for professional investors and subject to a limit of BRL 300 million, may be conducted without the requirement to engage a bookrunner. Furthermore, these offerings may be exempt from the issuer’s obligations to audit or review accounting information, provided that the buyers sign a statement acknowledging their understanding of and consent to these exemptions. This makes access to corporate credit more aligned with the practical financing realities faced by SMEs within the Brazilian economy.

Regarding the cancellation of registration, FÁCIL proposes that CMPs may delist through a public tender offer (Oferta Pública de Aquisição – OPA) with approval from at least 50% of outstanding shares, replacing the current requirement of a two-thirds majority. This more proportional rule respects shareholder decision-making while enhancing the feasibility of delisting for smaller firms.

Throughout the regime, governance and transparency are preserved. FÁCIL embodies a careful balance: introducing regulatory flexibility while upholding investor protection, sound disclosure practices, and market integrity. The relationship between innovation and governance is at the heart of the FÁCIL framework. While easing access, the CVM emphasizes that the new environment will maintain high standards of safety and transparency.

As stated in the public consultation materials and CVM communications, FÁCIL is guided by a deep understanding of the nature and structure of CMPs. It aims to offer simpler, more accessible registration and disclosure requirements for these companies. In short, it is an initiative to reduce bureaucracy and promote market development — aligned with the CVM’s broader Open Capital Markets program, an institutional mission to democratize and strengthen Brazil’s capital market.

Among the main objectives of the proposal is the creation of new opportunities and the consequent expansion of market participants — whether issuers or investors — in an increasingly inclusive and plural environment. FÁCIL represents a forward-looking step in Brazil’s capital market development and underscores the country’s commitment to building a more inclusive, efficient, and globally integrated financial system.