About

The Brazilian sovereign wealth fund – "Fundo Soberano do Brasil- FSB" was created by the Law 11,887/2008 and has the objective of promoting investments in Brazil and abroad, generating public savings, mitigating the effects of economic cycles, and fostering strategic projects at home and abroad. The Deliberative Council of the FSB - CDFSB, which is composed by the Minister of Finance, the Minister of Planning, Budget and Management, and the Chairman of the Central Bank of Brazil – BCB, is responsible for approving the general guidelines and goals of FSB's investments, while the Brazilian National Treasury is responsible for operating the FSB, as established by Decree 7,055/2009.

Historic Background

The Decree 7,055/2009 has brought the following rules for the FSB:

1) the benchmark for foreign investments is the six-month LIBOR;

2) the benchmark for domestic investments is the TJLP (a long run rate as determined by the National Monetary Council);

3) financial statements shall be published twice a year; and

4) financial assets are required to be rated as investment grade by at least two rating agencies.

On 12/30/2008, R$ 14,243,999,592.36 were allocated to the FSB through the issuance of 10,201,373 domestic bonds issued by the National Treasury of Brazil. On that date, FSB invested the full amount in the Fundo Fiscal de Investimento e Estabilização (Fiscal Fund for Investment and Stabilization) - FFIE, according to the Law 11,887/2008. That is a mutual fund, duly registered at the Securities and Exchange Commission of Brazil (Comissão de Valores Mobiliários - CVM) which has the FSB as its exclusive investor.