New COE Functionalities

The market is now more flexible to innovate the COE as an investment product

Since the Structured Transaction Certificate (COE) was first launched in Brazil in 2014, we have maintained an ongoing dialogue with the market to identify and implement improvements that benefit the development of this type of investment in the country. As part of this movement, the COE has been enhanced with new functionalities that will bring more flexibility to clients who trade this type of product.

COE is the Brazilian version of structured notes, which are very popular in the United States and in Europe for combining fixed income and equity elements in selected profit and loss scenarios according to each investor’s profile. It is an alternative investment for banks to raise funds and, to the investor, it is an option to access new markets. Learn more about COE

The enhancement package went live on September 28 and brought several innovations to the product. “The goal is to make COE registration even more flexible to enable new payoffs and gain more agility in meeting different demands from issuers that seek to offer diversification to their clients, especially in the current low interest rate scenario,” says Carlos Alcântara, head of Bank Funding Banking, OTC Derivatives and DCM at B3.

What the new COE functionalities offer

  • Possibility to redeem COE unilaterally by the issuer;
  • Creation of a specific remunerator for cash flow, enabling more possibilities for intermediate remuneration (currently there is a single remunerator for maturity and cash flow);
  • Flexibility to add new remunerators and functionalities on demand;
  • New types of asset basket;
  • New types of fixing for cash flow and maturity;
  • New type of cash flow barrier check (“between”).

Know more

Further details about the main deliveries of the COE Project can be found on the B3 Clients portal.

The COE Operating Manual was also updated to reflect the product’s new functionalities.  

Any queries? Talk to us. Products – OTC Derivatives and COE at derivativos@b3.com.br