As filed with the Securities and Exchange Commission on August 1, 2025.

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Amendment No. 1 to

FORM 20-F

☒ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

☐ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 001-42757

BRBI BR Partners S.A.

(Exact Name of Registrant as Specified in Its Charter)

3,732, Floor 28, CEP 04538-132
Avenida Brigadeiro Faria Lima
São Paulo, Brazil
(Address of Principal Executive Offices)

José Flávio Ferreira Ramos, Chief Financial Officer

3,732, Floor 28, CEP 04538-132
Avenida Brigadeiro Faria Lima
São Paulo, Brazil
Telephone: +55 (11) 3704-1000
Email: Ri@brpartners.com.br

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Copies to:
Donald Baker, Esq.
John Guzman, Esq.
White & Case LLP
1221 Avenue of the Americas
New York, NY 10020
Telephone: +1 (212) 819-8200

Securities registered or to be registered pursuant to section 12(b) of the Act:

Securities registered or to be registered pursuant to Section 12(g) of the Act: None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.

Not applicable

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities

Act.    Yes  ☐    No  ☒

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.    Yes  ☐    No  ☐

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☐    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  ☐    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer  ☐    Accelerated filer  ☐    Non-accelerated filer  ☐  Emerging growth company  ☒

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act.  ☐

† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive- based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow. ☐  Item ‎17 ☐  Item ‎18

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☐

(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. ☐ Yes ☐ No

TABLE OF CONTENTS

INTRODUCTION

Except where the context otherwise requires, in this registration statement references to: (1) “BR Partners,” “BR Partners group,” “we,” “us,” “our” and the “Company” are to BRBI BR Partners S.A., a corporation (sociedade anônima) incorporated under the laws of Brazil, and its direct and indirect subsidiaries; (2) our “units,” “common shares” and “preferred shares” are to the units, common shares and preferred shares, respectively, of BRBI BR Partners S.A.; (3) our “controlling shareholder” are to BR Partners Holdco Participações S.A a corporation (sociedade anônima) incorporated under the laws of Brazil, or BR Holdco; (4) the “underlying securities” are to the units, common shares and preferred shares underlying the ADSs; (5) the “ADS deposit agreement” are to the deposit agreement entered into in respect of our ADSs and (6) our “unit deposit agreement” are to the deposit agreement entered into in respect of our units.

We have prepared this registration statement to register the units, each represented by American Depositary Shares (“ADSs”), under the United States Securities Exchange Act of 1934, as amended (the “Exchange Act”) for trading on the Nasdaq Stock Market LLC, or the Nasdaq.

PRESENTATION OF FINANCIAL AND OTHER INFORMATION

Financial Information

We maintain our books and records in reais, which is our functional currency (the currency of the primary economic environment in which we operate) as well as our reporting currency. We prepare our unaudited condensed consolidated interim financial statements in accordance with IAS 34–Interim Financial Reporting as issued by the International Accounting Standards Board, or IASB. We prepare our audited consolidated financial statements in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board, or IFRS Accounting Standards.

Financial Statements

The financial information contained in this registration statement has been derived from (1) our unaudited condensed consolidated interim financial statements as of March 31, 2025 and for the three-month periods ended March 31, 2025 and 2024, and the notes thereto, included elsewhere in this registration statement, or our Unaudited Condensed Consolidated Interim Financial Statements, and (2) our audited consolidated financial statements as of December 31, 2024 and 2023 and for each year in the three-year period ended December 31, 2024, and the notes thereto, included elsewhere in this registration statement, or our Audited Consolidated Financial Statements. We refer to our Unaudited Condensed Consolidated Interim Financial Statements and our Audited Consolidated Financial Statements jointly as our Consolidated Financial Statements.

Market and Other Information

This registration statement contains information, including statistical and other information relating to the industry in which we operate, obtained from reports prepared by independent consultants, governmental agencies and general publications, including reports and general publications of the Brazilian Central Bank, the Brazilian Institute of Geography and Statistics (Instituto Brasileiro de Geografia e Estatística), or the IBGE, Bloomberg L.P., or Bloomberg, Fundação Getúlio Vargas, or FGV, Dealogic Ltd., or Dealogic, Mergermarket Limited, or Mergermarket, Thomson Reuters Corp., or Thomson, the Brazilian Association of Financial and Capital Markets Entities (Associação Brasileira das Entidades dos Mercados Financeiro e de Capitais), or ANBIMA, Uqbar Educação e Informação Financeira Avançada Ltda., or Uqbar, and the Brazilian Private Equity & Venture Capital Association (Associação Brasileira de Private Equity e Venture Capital), or ABVCAP, among others.

We believe that these sources of information are reasonably reliable, and we have no reason to believe that any of this information is inaccurate in any material respect, however, we have not independently verified this information.

Rounding Adjustments

Certain percentages and other amounts included in this registration statement have been rounded for ease of presentation. Accordingly, figures shown as totals in certain tables may not be an arithmetical aggregation of the figures that precede them. Any discrepancies between totals and sums are due to rounding.

Compound Annual Growth Rate

We have included elsewhere in this registration statement the compound annual growth rate, or CAGR, for certain metrics, including our profit for the period, mergers and acquisitions, or M&A, transaction volume, and capital markets transaction volume. Our historical growth rates do not guarantee future results, levels of activity, performance or achievements. We calculate CAGR as the final balance of a certain metric (e.g., total revenue) at the end of an applicable period of time divided by the initial balance at the beginning of the applicable period of time, raised to the power of one divided by the applicable period of time, minus one.

CAUTIONARY STATEMENT WITH RESPECT TO FORWARD-LOOKING STATEMENTS

This registration statement includes forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, principally in “Item 3. Key Information—D. Risk Factors,” “Item 4. Information on the Company—B. Business Overview” and “Item 5. Operating and Financial Review and Prospects.” Forward looking terms such as “may,” “will,” “could,” “should,” “would,” “plan,” “potential,” “intend,” “anticipate,” “project,” “target,” “believe,” “estimate” or “expect” and other words, terms and phrases of similar nature are often intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Forward-looking statements are statements which are not historical fact and involve estimates, expectations, projections, goals, forecasts, assumptions, risks and uncertainties. Such forward-looking statements may include, but are not limited to, statements related to:

The list above is not intended to be exhaustive, and there may be other key risks that are not listed above that are not presently known to us or that we currently deem immaterial. Should one or more of these or other risks or uncertainties materialize, or should any of the underlying assumptions prove incorrect, actual results may vary in material respects from those expressed or implied by the forward-looking statements made by us contained in this registration statement. As a result of the foregoing, readers should not place undue reliance on the forward-looking statements contained in this registration statement. The forward-looking statements contained in this registration statement are expressly qualified in their entirety by the foregoing cautionary statements. All such forward-looking statements are based upon information available as of the date of this registration statement or other specified date and speak only as of such date. We disclaim any intention or obligation to update or revise any forward-looking statements in this registration statement as a result of new information or future events, except as may be required under applicable securities law.

Forward-looking statements in this registration statement are based on current expectations and assumptions made by our management. Although our management believes that the expectations and assumptions on which such forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements. We can give no assurance that they will prove to be correct. Additionally, forward-looking statements are subject to various risks and uncertainties which could cause actual results and experience to differ materially from the anticipated results or expectations expressed in this registration statement. Important factors that could cause actual results to differ materially from those indicated by such forward-looking statements, or that could contribute to such differences, include, without limitation, the risks and uncertainties set forth under the section “Item 3. Key Information – D. Risk Factors.”

Item 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

For information regarding our directors and senior management, see “Item 6. Directors, Senior Management and Employees—A. Directors and Senior Management.”

Our U.S. legal counsel is White & Case LLP, located at 1221 Avenue of the Americas, New York, New York 10020. Our Brazilian legal counsel is Lefosse Advogados, located at Rua Tabapuã, 1227, 14th floor, 04533-014, Itaim Bibi, São Paulo, SP, Brazil.

KPMG Auditores Independentes Ltda. (“KPMG”), an independent registered public accounting firm, has acted as our auditor for the three-month period ended March 31, 2025 and the three-year period ended December 31, 2024. The address for KPMG is Rua Verbo Divino, 1400, 8th floor, 04719-002, São Paulo, SP, Brazil.

Item 2. OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.

Item 3. KEY INFORMATION

The following table sets forth our consolidated capitalization and indebtedness as of March 31, 2025 on an actual historical basis. Investors should read the information in this table together with our Consolidated Financial Statements appearing elsewhere in this registration statement, as well as the sections of this registration statement captioned “Presentation of Financial and Other Information” and “Item 5. Operating and Financial Review and Prospects.”

Not applicable.

You should carefully consider the risks described below, together with all of the other information included in this registration statement, in evaluating us, the ADSs and the underlying securities. The following risk factors could adversely affect our business, financial condition, results of operations and the trading price of the ADSs and the underlying securities.

Risks Relating to Us

Global economic slowdowns arising from, among other factors, interest rates, credit availability, inflation rates, economic and political uncertainty, changes in laws, tariffs, trade barriers and global conflicts, may adversely affect the performance of our business operations.

Our business operations are materially affected by global financial markets and economic conditions or events, such as interest rates, credit availability, inflation rates, economic and political uncertainty, changes in laws, tariffs, trade barriers and global conflicts, such as the current trade conflicts between the United States and its global trading partners, including China, commodity prices, and national and international political events. Future market conditions may be less favorable compared to current and historical market conditions. In the event of a global economic slowdown, our clients may elect to no longer purchase our products and services or may no longer have the financial ability to pay for products and services they have acquired, which may adversely affect our business and financial condition.

In investment banking operations, significant market volatility can considerably impact the decision-making processes of companies contemplating M&A transactions and reduce the total number and volume of securities offerings, M&A transactions, advisory fees, subscription fees, and other financial services. Accordingly, any such volatility may decrease demand for, and revenue generated from, investment banking advisory services. For example, in 2021, the average interest rate in Brazil was 4.6%, and according to Thomson Reuters, the number of M&A transactions in Brazil peaked at 1,299 transactions. However, with the deterioration of the economy, the average interest rate in 2023 in Brazil increased to 13.3%, while the number of closed M&A transactions decreased to 843 during this period. In our capital markets operations, high interest rates and macroeconomic deterioration can increase risks associated with the corporate debt market, including increased default rates and more frequent renegotiations of debt contracts, such as renegotiations arising from force majeure claims. These risks may reduce investor demand for debt issuances and delay issuances of debt securities. In 2022, the average SELIC rate was 12.6%, and the total volume of debt issuances reached R$458.5 billion, according to ANBIMA. The subsequent increase in the average interest rate led to a 12% decrease in the volume of debt issuances in Brazil.

Moreover, our treasury sales & structuring operations may be materially adversely affected by fluctuations in financial markets and economic conditions. During periods of market volatility, companies typically contract hedging instruments. However, if the economic deterioration exceeds expectations, companies may face operational difficulties or be unable to meet their debt service obligations and other expenses, including amounts payable to us. This scenario can lead to downgrades in the credit ratings of our clients, driven by credit deterioration and defaults across various sectors. Any such downgrades, credit deterioration or defaults may result in significant increases in margin calls under derivative agreements and elevate the cost and/or reduce the effectiveness of hedging instruments.

In addition, adverse fluctuations in financial markets and economic conditions can adversely affect the trading, volatility and liquidity of securities, thereby adversely affecting our wealth management and investment operations. Unfavorable market conditions may limit opportunities to exit private investments in illiquid assets within our investment operations. Increased market volatility can reduce returns on assets managed by our wealth management operations, potentially decreasing our wealth under advisory (WuA) due to a decline in our clients’ appetite for risk, which, in turn, can affect the fees we charge (typically based on portfolio value) and adversely affect our financial results.

In 2025, the new U.S. presidential administration has imposed and increased tariffs and other trade barriers on U.S. trading partners, including on imports from China. Changes to U.S. international trade and investment policies, particularly with important trading partners, have negatively impacted financial markets and the business environment. Continued or escalating tensions may result in further actions taken by the U.S. or other countries, including China, that could disrupt international trade and investment and adversely affect financial markets. Those actions could include, among others, the implementation of or increase in sanctions, tariffs or foreign exchange measures, the large-scale sale of U.S. Treasury securities or other restrictions on cross-border trade, investment, or transfer of information or technology. Any such developments could materially adversely affect our or our clients’ businesses, investor sentiment and capital markets and M&A activity levels, which could in turn, materially adversely affect our financial condition, liquidity and results of operations.

Our ability to retain our key professionals is critical to our success. Our ability to grow and to compete effectively may depend on our ability to attract new professionals.

Our professionals are critical for the development of our business and our success, and our ability to compete effectively is dependent upon the efforts of our key management and employees. Accordingly, our growth and future success depend, to a large extent, on our ability to retain and motivate our management and employees and to strategically hire, retain and motivate new professionals. We may not succeed in our efforts to hire, retain and motivate professionals. Our ability to attract, retain and motivate qualified professionals is dependent on our ability to offer attractive incentives and opportunities.

The incentives we provide may not enable us to attract, retain and motivate effectively professionals, particularly where our performance levels are less than those of our competitors. Our business, results of operations and financial condition may be materially adversely affected to the extent we are unable to retain or attract qualified professionals.

Our wealth management operations may be adversely affected by the low performance of wealth management products we offer.

Below-expected investment returns of assets under the management of our wealth management operations may affect our ability to maintain active clients and attract new wealth management clients. Our revenue generation and growth in this area may be affected by the departure of clients and any difficulty we experience in attracting new clients.

The return on assets of our investment operations may decline.

Declines in the fair value of assets held within our investment operations adversely affects the financial performance of these operations. Moreover, the negative performance of our investment operations also has an adverse effect on our ability to attract new investors or to raise additional funds from existing investors. These factors, in turn, have an adverse effect on the management and performance fees we receive, which depend on the value of our assets under management.

Several factors (such as general price decreases in the broader securities markets or in the market sectors in which our assets under management are concentrated) may also reduce the amount of capital we invest in illiquid assets and our assets under management, and, as a result, adversely affect our revenue. We cannot predict whether market volatility will result in substantial and long-term declines in the broader securities markets or in the market sectors in which our assets under management are concentrated. These risks may adversely affect our financial condition and results of operations.

The revenue we generate from the management of funds in our investment operations within our investments and wealth management business line may decline as a result of market downturns.

Within our investments and wealth management business line, we raise the funds we invest in our investment operations from our clients and also invest our own capital, which exposes us to the risks and returns of our investments. Our ability to execute new investments is subject to several uncertainties, such as adverse market or economic conditions, our ability to raise funds from third parties, competition from other investors and our ability to identify and negotiate investment opportunities with investment targets.

Market downturns may in the future lead to a reduction in the volume of investments we make on behalf of our clients and, consequently, in the revenue we generate from the related fund management services we provide. Moreover, a market downturn may adversely affect fundraising for new investments or capital increases as a result of the migration of clients to more traditional asset classes that are subject to less risk or have higher liquidity. Because the management fees charged by our subsidiaries that are qualified to manage third-party funds are typically based on our clients’ capital, the materialization of any of these risks may reduce our revenue, adversely affecting our financial condition. We may be unable to successfully invest client funds or maintain the earnings they generate from such investments.

The management and performance fees we generate from the investment funds we manage depend on the ability of such investment funds to evaluate and make optimal investment decisions.

There is minimal public information available regarding privately held companies and the investment funds we manage must obtain adequate information to assess potential returns on their investments in these companies. If the investment funds we manage are unable to obtain all of the material information they require, they may be unable to make well-informed investment decisions, which may result in the loss of their capital and reduce the management and performance fees we earn from the investment funds we manage.

Moreover, a substantial period is required to identify, negotiate and benefit from attractive investment opportunities, as well as to structure the funds to make such investments. These factors may adversely affect the return on the investments made by the investment funds we manage as well as on the revenue we generate from management and performance fees.

In addition, through our investment operations, the investment funds we manage acquire interests in small and mid-size companies as part of our business strategy. The investment funds we manage may encounter difficulties in identifying attractive targets or be unable to purchase the desired business or assets under acceptable economic conditions. They may also be unable to make certain investments if their efforts in attracting investors to the intended investment are not successful. Moreover, the investment funds we manage invest in Brazil-based companies that are subject to adverse changes in economic conditions in Brazil, including increases in taxes, significant economic downturns or deterioration in the financial condition of these companies and their respective industries.

Our operations may be adversely affected to the extent that private equity funds we manage sell their investments at lower-than-anticipated prices.

We manage private equity funds within our investment operations. Fluctuations in financial markets, which are beyond our control, can materially affect market liquidity and demand for private equity investments, which may, in turn, adversely affect the profitability of these private equity funds upon the sale of their investments, potentially resulting in these funds selling such investments at lower-than-anticipated prices, which could adversely affect our operations as a result of any decrease in our fund management fees. Furthermore, our profitability may be constrained by fixed costs if restrictive market conditions persist for an extended period.

The ability of these private equity funds to sell their investments may be impaired by the sale of similar assets by other investment firms in the market at the same time. As a result, the private equity funds we manage may be unable to realize gains on their investments and we may be unable to receive management and/or performance fees in relation to these funds, which may adversely affect us. Moreover, any gains on our investments may be insufficient to offset any investment losses we incur.

The investees of the investment funds we manage are exposed to operating and financial risks, which may adversely affect the return on their investments, and consequently the management and performance fees earned by our investment operations.

The performance of our investment operations is directly tied to the fund management and performance fees we receive from the investment funds these operations manage. The assets in which those funds invest are generally exposed to risks beyond our control, inherent to their operations and the businesses and industries in which these assets operate. These risks may adversely affect the investment funds we manage and, consequently, our overall results.

Operational risks include potential decreases in the investees' revenue or increases in their costs and expenses due to market conditions or competition.

Legal risks arise from inadequate or deficient agreements executed by investees, sanctions from non-compliance with legal obligations, and indemnification paid to third parties due to damages caused by the investee. Additionally, natural disasters or criminal acts (such as fires and theft) pose significant risks.

Financial risks arise from the possibility that the investee suffers losses due to difficulties in obtaining financing or refinancing existing credit lines, interest rate variations, credit risk, exchange rate fluctuations and other factors that may impact our investees’ results and their access to capital.

The materialization of any of these risks in relation to the investees of the investment funds we manage may materially adversely affect our business and results of operations.

Our insurance policies and/or coverages may be insufficient to protect us against substantial losses.

There can be no assurance that our insurance coverage will be available or sufficient to cover any damages arising from losses related to risks inherent to our operations, including engineering risks and fires, among other risks. Moreover, our insurance policies do not cover certain risks, including those related to cybersecurity, war, acts of God, force majeure or business interruptions, and we may be required to pay fines and other penalties in the event we default on obligations that are not covered by our insurance policies. In the event of an operational incident or strike by our employees, any resulting business interruption may adversely affect our financial condition and business.

In addition, there can be no assurance that we will be able to maintain or renew our insurance policies. Even if we are able to renew our insurance policies, we may be unable to renew them under the same conditions, at reasonable commercial rates or on acceptable terms, including in relation to the scope of coverage, which may adversely affect our business, results of operations and financial condition.

We are exposed to risks associated with non-compliance with the General Personal Data Protection Law and may be adversely affected by the imposition of fines and other types of sanctions.

We are subject to the Brazilian General Personal Data Protection Law (Lei Geral de Proteção de Dados Pessoais), or the LGPD. The LGPD regulates the treatment of personal data in Brazil through a regulatory system that impacts all economic sectors and establishes the rights of personal data holders, the circumstances in which the processing of personal data is permitted, requirements relating to security incidents, leaks and data transfers, the transferring and sharing of personal data and administrative sanctions that may be applied by the National Data Protection Authority (Autoridade Nacional de Proteção de Dados), or the ANPD, in the event of non-compliance. The ANPD is the governmental agency responsible for establishing guidelines and ensuring compliance with data protection standards in Brazil.

Non-compliance with any provision of the LGPD carries certain risks, particularly in cases of security incidents resulting in unauthorized access to personal data, including: individual or class lawsuits seeking compensation for damages arising from violations of the LGPD or other data protection legislation; as well as penalties under the Brazilian Consumer Protection Code (Código de Defesa do Consumidor) and the Brazilian Civil Framework of the Internet (Marco Civil da Internet).

Moreover, in the event we fail to comply with the LGPD, we may be subject to sanctions established by the LGPD, which may include:

In addition, we may be held individually or jointly and severally liable for individual or collective material and punitive damages resulting from non-compliance with our obligations under the LGPD. Any administrative sanctions imposed on us or judicial decisions rendered against us may have a material adverse effect on our financial condition and our reputation in the market.

Also, information security incidents may result in the unlawful disclosure of information regarding us, as well as information regarding our clients, employees and third parties. Information security incidents may result in downtime of our servers or operations, or the unintended disclosure of commercial data and/or other sensitive information, which could adversely affect our financial results and reputation.

In light of the foregoing, any breach of security or any failure involving misuse, loss or other unauthorized disclosure of personal data, as well as noncompliance with the applicable data protection rules could adversely affect our reputation, exposing us to legal risk and negative publicity, interruptions to our operations and business harm.

We may not pay dividends to our shareholders.

Pursuant to our bylaws, we are required to distribute 25% of our annual adjusted net profit as mandatory minimum dividends in accordance with Law No. 6,404 dated December 15, 1976, as amended by Brazilian Law No. 11,638/07 and Brazilian Law No. 11,941/09, as amended, or the Brazilian Corporations Law.

Because we are a holding company, our results are directly dependent on the operations, activities and results of our subsidiaries, which are subject to certain specific business risks. Our ability to comply with our financial obligations and pay dividends to our shareholders is therefore dependent on the distribution of profits we receive from our subsidiaries. There can be no assurance that such funds will be distributed to us or that they will be sufficient to enable us to comply with our financial obligations and to pay dividends to our shareholders.

However, we may be unable to distribute dividends or be required to distribute dividends in an amount less than the mandatory dividend in the event, among other scenarios:

Moreover, in accordance with the regulatory powers granted under Brazilian legislation and banking regulations, the Brazilian Central Bank and the Brazilian National Monetary Council (Conselho Monetário Nacional), or the CMN, may reduce dividend distributions or determine that they may not be paid by a certain financial institution in order to mitigate risks relating to the Brazilian financial system or to a particular financial institution.

In addition, Brazilian laws governing the exemption of income tax on distributions of dividends and interest on shareholders’ equity may change in the future, and the receipt or distribution of dividends may become subject to taxation. Furthermore, distributions of interest on shareholders’ equity may increase, adversely impacting the net amount received by our shareholders on such distributions.

We currently anticipate that the only scenario in which we may not distribute the minimum 25% required dividend payment is in the event we do not record positive net income.

Finally, the income tax exemption on the distribution of dividends and the taxation currently levied on the payment of interest on equity is currently being deliberated in the Brazilian congress in connection with Bill No. 3,061, which seeks to implement the taxation of income distributed through profits and dividends paid or credited by legal entities to their partners and shareholders. As such, both dividends received and distributed may be taxed and/or, in the case of interest on shareholders’ equity, be subject to increased taxation in the future, adversely affecting the net amount to be received by our shareholders.

Failures in, non-compliance with or interruptions relating to our information management systems may materially adversely affect our operations.

We are dependent on the efficient and uninterrupted operation of our information management systems. Our information management systems may be subject to damage or interruptions resulting from several factors beyond our control, including human failures or actions, fires, natural disasters, power shortages, failures in telecommunication systems, infection by malwares and other viruses, and failures in security related to our information technology systems, among other factors.

In the event (1) of a systems failure, (2) our information is leaked, or (3) our systems become subject to fraud, we may be subject to business interruptions or may fail to properly identify the risks to which we are exposed, which may materially adversely affect our business, financial condition and results of operations.

Specifically, in the event information systems are breached and information is leaked, we may be subject to lawsuits resulting from fraud or crimes related to the unauthorized use of disclosed data, administrative fines and other penalties, including, but not limited to, those provided for in the LGPD. We may also lose clients and suffer harm to our reputation, which may adversely affect our results of operations.

Moreover, the safety of our IT systems may be corrupted by experienced programmers or hackers that may not only impair the regular functioning of our systems but may also illegally obtain confidential information relating to us, our clients or our payment sources. In addition, we may be unable to improve our operating and financial systems on a timely basis in order to ensure our growth. The materialization of any of the aforementioned risks may materially adversely affect our business and our image.

We may suffer significant losses in our trading and investment operations due to market fluctuations and volatility.

We hold trading and investment positions in fixed-income assets and act as a counterparty for clients in relation to foreign exchange, interest rates and commodity derivatives contracts, resulting in our direct exposure to the underlying risks in these financial instruments. An economic recession may result in losses arising from a decrease in the value of our positions. Likewise, in the event of an economic recovery, we may be exposed to significant losses in short positions we hold.

Many of our hedging strategies are based on pattern and correlation trading. If the relative value of the two assets changes in one direction or in a manner we have not anticipated or for which we have not entered into a hedging arrangement, we may suffer losses in connection with these positions. Unexpected market risks may affect our hedging strategies in the future and prove inefficient. Additionally, we hold substantial trading and investment positions that may be adversely affected by the volatility of the financial markets (i.e., the degree to which prices fluctuate over a certain period of time in a particular market).

The management of market risk is the ongoing process of identifying, measuring, mitigating, monitoring and reporting exposure to foreign exchange, interest rates, equities and commodities. These measures seek to monitor our exposure within limits established by Company policies and regulations. For purposes of our analysis, we adopt standard market metrics such as Value at Risk (VaR), sensitivity analysis and stress testing. These measures may prove inefficient in preventing significant losses.

Clients that have previously contracted the advisory services we offer through the investment banking operations of our investment banking and capital markets business line may elect not to contract our services in the future.

Clients of our investment banking operations generally contract our advisory services on a non-exclusive basis for short-term transactions typically related to specific investment banking projects rather than entering into exclusive long-term agreements, such as agreements for the sale of all or a significant portion of a client’s business.

The agreements we enter into through our investment banking operations do not necessarily result in future engagements and our investment banking operations must constantly seek out new engagements, particularly following the unsuccessful completion or the termination of an existing engagement. As a result, periods of increased investment banking activity are not necessarily indicative of the levels of investment banking activity we will generate in the immediately subsequent period or future periods. When an engagement is terminated, whether due to the cancellation of the transaction, as a result of market conditions or for other reasons, our investment banking operations may receive only limited fees or no fees at all and may be unable to recover the costs incurred prior to the termination of the engagement, materially adversely affecting our financial condition.

We are subject to liquidity risks that may affect our transactions and results of operations.

Maintaining adequate liquidity is critical to our business, allowing us to meet our client and clearinghouse obligations and avoid cash shortages that impede our ability to honor our commitments as they become due.

If for any reason a liquidity and/or cash flow deficiency results in a mismatch between our assets and liabilities (taking into consideration the different settlement periods of our clients’ transactions), we may be unable to comply with the financial obligations we owe our clients and clearinghouses.

There can be no assurance that our banking operations, which we undertake through our subsidiary, BR Partners Banco de Investimento S.A., or BR Partners Banco, will not experience significant withdrawals in the future or a significant mismatch in its assets and liabilities. Moreover, if we experience significant withdrawals, we may experience difficulties in obtaining the required funds to permit such withdrawals, which may result in defaults that damage our and our senior management’s reputation.

Damage to our and our senior management’s reputation may lead to a loss of client confidence and trigger a significant increase in the volume of client withdrawals, potentially contributing to an even greater mismatch between our assets and liabilities, and, consequently, an increase in our defaults.

A downgrade in our credit ratings may adversely affect our liquidity and competitiveness, as well as increase our funding costs.

Our funding costs and access to debt and the capital markets depend significantly on our credit ratings. In particular, BR Partners Banco’s credit capacity is evaluated by private credit rating agencies that may downgrade or suspend ratings given to us or place us under credit review at any time, which may adversely affect us. Ratings are also important to our ability to compete in certain markets and conduct long-term transactions, including over-the-counter derivatives transactions. The downgrading of our credit ratings may increase our funding costs and limit our access to the capital markets, which may reduce our revenue and negatively affect our liquidity.

There can be no assurance that credit rating agencies will not downgrade our credit ratings. Any actual or perceived changes in our circumstances may result in significant downgrades in our credit ratings, which may adversely affect our revenue and liquidity. As of the date of this registration statement, BR Partners Banco, one of our subsidiaries, is rated AA(bra) by Fitch Ratings and brAA by S&P Global, based on domestic risk assessment criteria in Brazil.

Our market, credit and operational risk management policies, procedures and methods may not be fully effective in managing our risk.

In connection with our market and credit risk management techniques and strategies, we use Value at Risk (VaR) and other statistical modeling tools, which may not be fully effective in managing our risk exposure to all of our markets or against all types of risk, including risks that we fail to identify or anticipate. We have designed certain of the qualitative risk management tools and metrics we use to take into account historical market behavior. We apply statistical and other tools to these observations to quantify our risk exposure. Our qualitative tools and metrics may fail to predict future risk exposure. Our risk exposures may, for example, arise from factors that were not correctly anticipated or assessed by our statistical models, which may affect our ability to manage our risk exposure and, in turn, result in losses that significantly exceed those predicted by historical measurements.

Moreover, our quantitative modeling does not take into account all risks. A more qualitative approach to managing such risks may prove insufficient, exposing us to significant unanticipated losses. If existing or potential clients come to believe that our risk management is inadequate, they may choose to engage our competitors, which may materially adversely affect our reputation, revenue and results of operations.

Other risk management methods are dependent on the assessment of market information, clients or other information that may be available to the public or that is otherwise accessible to us. This information may be imprecise or incomplete, we may not have authorized access to this information, and we may be unable to adequately assess the information.

The information we receive regarding counterparties’ trading risk may not be complete. In addition, our secured loans transactions may be subject to the risk of insufficient collateral, which may result in sudden declines in fair value measurements of the underlying collateral.

We are subject to operating risks inherent to our business, including risks related to our operating systems.

We are significantly dependent on our ability to efficiently and accurately process and monitor a large volume of transactions on a daily basis, many of which are highly complex and take place in multiple markets and in a variety of currencies. These transactions, as well as the IT services we provide to our clients, must frequently comply with both our and our clients’ guidelines regarding legal, tax and regulatory standards. Our operating, legal, tax and regulatory risk management operations require policies and procedures to adequately record and confirm a significant number of transactions and events, which may not be entirely effective.

Our ability to conduct our business may be adversely affected due to difficulties we encounter in relation to our business infrastructure and the markets in which we operate, including:

If our infrastructure services are not adequate or are disabled, we may be subject to financial losses, business interruptions, client liability, regulatory intervention or damage to our reputation. Losses may also result from inadequate personnel, inadequate or defective internal control systems and processes, information system failures or other events that interrupt our ordinary commercial operations, such as terrorist attacks, natural disasters or sabotage. Moreover, control structures and procedures designed to mitigate operational risk may be inadequate, and the expenses we incur to prevent, treat or mitigate the above-mentioned risks may be significant.

Consolidation in the financial industry, whether among market participants or financial intermediaries, increases the risk of operating failures given that consolidation requires the integration of often incompatible and complex systems in a short period of time. Moreover, the interconnectivity of multiple financial institutions such as agents, stock exchanges and central clearinghouses increases the risk that an operational failure in one institution will result in an operating failure throughout the financial system, which may adversely affect us and our subsidiaries, particularly BR Partners Banco.

We are subject to significant inherent legal and regulatory risks.

The financial services sector is subject to extensive regulation, both in Brazil and abroad. Moreover, the Brazilian financial and capital markets are subject to heightened and permanent regulatory controls imposed by Brazilian government agencies, including the CMN, the Brazilian Central Bank and the Brazilian Securities Commission (Comissão de Valores Mobiliários), or the CVM. These controls directly affect our business and may affect our operations and product lines. In particular, BR Partners Banco is subject to extensive regulation by governmental and self-regulatory authorities in order to ensure the integrity of the Brazilian financial markets and protect investors, increasing our compliance costs.

Rules enacted by the Brazilian government and government intervention may adversely affect our operations and profitability, particularly the operations and profitability of BR Partners Banco. The enforcement and interpretation of existing laws may change, and new laws and regulations may be enacted. We may be negatively affected by changes in regulations and the interpretation of such regulations by courts and authorities, including those related to: (1) minimum capital requirements; (2) requirements for investment in fixed capital; (3) credit limits and other restrictions; (4) accounting requirements; and (5) extraordinary or temporary government interventions or liquidations.

We face legal and regulatory risks, which may materially damage our reputation or otherwise adversely affect us, including in relation to our business prospects.

We face significant legal risks in connection with our operations, and the amount of damages requested in lawsuits against financial intermediaries has increased. These risks include:

We, particularly through our subsidiary, BR Partners Banco, may in the future be subject to claims in complex or high-risk commercial transactions that:

In addition, we are increasingly exposed to claims in connection with investment recommendations that are alleged to be incompatible with a client’s investment objectives or claims that allege unauthorized or excessive trading. During an extended recession, these types of claims may increase, adversely affecting our financial condition and results of operations.

Particularly in volatile markets, the volume of liabilities and claims for damages in legal and regulatory proceedings against financial advisors within the scope of M&A transactions can be significant. Given that the regulatory environment continues to evolve (and in certain cases substantially), we may encounter difficulty in assessing future litigation and regulatory risks. Regulatory changes may impair our clients’ ability to estimate potential future losses. Our involvement in M&A transactions may be subject to risks arising from the significant legal liability of our clients and third parties, including our clients’ shareholders, arising from securities and other laws governing misrepresentations or misleading statements in securities offerings and other transactions. We are also subject to liability in connection with the advice we provide to parties in these transactions. Moreover, we generate a portion of our advisory fees from clients undergoing restructurings, and these clients are generally unable to pay costs and expenses arising from third-party complaints.

In addition, one of our subsidiaries, BR Partners Europe B.V., or BR Europe, is located in the Netherlands and is therefore subject to local legislation and regulations that govern various aspects of its operations, including operating, counterparty and market risk, regulatory capital and other aspects. Any failure to comply with these rules may result in fines, sanctions and penalties, including the revocation of licenses or liquidation. Moreover, there can be no assurance that these laws will not be amended, resulting in additional costs or restrictions on our operations that may materially adversely affect us.

The allocation and concentration of our capital may expose us to significant losses.

We currently allocate, and may continue to allocate, substantial capital to our business, including in connection with arbitrage, market making and underwriting, lending and other key transactions. These transactions frequently require us to assume significant positions in securities issued by companies located in a certain economic sector, region or country. Moreover, the current trend in the capital markets sector is towards more significant and frequent capital allocation in these activities. The significant and concentrated allocation of capital in these activities may adversely affect us.

Our ability to protect our intellectual property rights is limited.

Our ability to protect our intellectual property, including registered trademarks, copyrights, domain names and trade secrets is relevant to our success. We depend on laws, regulations and administrative mechanisms to protect our intellectual property that may be insufficient.

Moreover, contractual arrangements and other measures designed to protect intellectual property may not prevent third parties from infringing or appropriating our intellectual property or from independently developing equivalent or superior intellectual property. We may incur significant costs protecting our intellectual property rights and such efforts may prove unsuccessful. We may also be unable to (1) ensure that the measures adopted to protect our intellectual property rights will be sufficient or (2) discover or determine the extent of any unauthorized use of our intellectual property rights. Any failure to adequately protect or reinforce our intellectual property rights may materially adversely affect us.

In addition, we may be required to file lawsuits to secure the validity and scope of our intellectual property rights. The consequences of any allegations relating to intellectual property rights are uncertain and any complaint, irrespective of whether the allegation is adjudicated on the merits, may require time to settle, generate significant costs, require our management’s time, restrict our ability to effect sales or provide services, delay the development of our products or require us to pay compensation. Accordingly, copyright and trademark violations, including any litigation, as well as any failure to protect our intellectual property rights, may adversely affect our results of operations and financial condition.

Failure to adequately protect against cybersecurity risks may materially adversely affect us.

We may be subject to cybersecurity risk, including, but not limited to: the unauthorized access to our IT systems and platforms, incidents relating to ransomware, phishing and malware, such as computer viruses, in our systems, intentional or accidental contamination of our networks and systems by third parties with which we exchange data, unauthorized access to confidential client or proprietary data by persons inside or outside our economic group and cyberattacks that may cause a decline in the quality or the unavailability of our services, which may result in the loss of business.

We may be unable to successfully protect our IT systems and platforms against cybersecurity threats. In recent years, the computer systems of several companies and organizations have been subject to attack by not only cyber criminals, but also activists and governmental agencies. We may be the target of a variety of cyberattacks, including attacks that result in the denial of service, malware, other viruses and phishing. Cyberattacks may result in the loss of a significant volume of client data, other sensitive information and assets (including cash). Moreover, cyberattacks may destroy our IT systems. As attacks continue to evolve in scope and sophistication, we may incur significant costs attempting to modify or improve our protection against such attacks, to investigate or correct any vulnerability or resulting violation or to notify our clients of the occurrence of cyberattacks.

We are focusing our efforts on implementing more robust technologies and processes to address vulnerabilities against the following risks:

However, there can be no assurance that these cybersecurity measures will protect us against such risks, nor that we or the third parties on whom we rely will be able to anticipate, detect or implement effective preventative measures against frequently changing cyber threats.

If we fail to effectively manage cybersecurity risks by, for example, failing to update our systems and processes in response to new threats, our reputation may be harmed and our results of operations, financial condition and prospects may be adversely affected as a result of indemnification we pay to clients, fines or loss of assets. Moreover, we may also be subject to cyberattacks against critical infrastructures in Brazil. Our IT systems depend on critical infrastructure, and any cyberattack against such infrastructure may adversely affect our ability to serve our clients. We have limited ability to protect our IT systems against the adverse effects of cyberattacks.

Moreover, in accordance with CMN Resolution No. 4,893, dated February 26, 2021, or CMN Resolution 4,893/21, financial institutions, including our subsidiary, BR Partners Banco, must comply with several new cybersecurity requirements relating to data processing, data storage and cloud computing services. Failure to comply with these regulatory obligations may adversely affect us, including in relation to resulting remediation costs, increases in costs related to cybersecurity protection, litigation and other legal risks, or increase in insurance policy premiums.

In 2022, we faced a significant cyber-attack that affected our operations and impacted our internal systems. We took immediate measures to avoid service disruption and mitigate the damage, including implementing an incident response plan and communicating with the relevant authorities. As a result of the attack, we reviewed our cyber defenses, enhanced our security policies and implemented new technologies and processes to protect against future threats.

Unfavorable decisions in legal, arbitral, and administrative proceedings in which we or our management are or may be a party, could adversely affect our results of operations.

We are and may become parties to legal, arbitral and administrative proceedings relating to tax, criminal, civil, and labor matters, among others. There can be no assurance that:

Furthermore, we cannot predict whether expected and provisioned losses will be equal to, or higher or lower than, our actual liability in our legal and administrative proceedings.

There can be no guarantee that our former clients, employees or third-party service providers will not file civil suits or labor claims against us or that new legal or administrative proceedings will not be filed against us or our management, which proceedings may result in financial losses and harm to our reputation, adversely affecting our business, financial condition and results of operations. Unfavorable court decisions in connection with which we are subject to significantly higher losses than the amounts we have provisioned may adversely affect our business and results of operations.

Moreover, we incur costs in connection with legal, arbitral and administrative proceedings that may adversely affect our results of operations. Accordingly, a significant increase in the volume of our proceedings would also adversely affect our results of operations. In addition, our management will be required to spend significant time and effort to resolve such disputes, and unfavorable decisions rendered in such proceedings could adversely affect our business and prevent our management from effectively managing our business. For more information, see “‎Item 8. Financial Information—A. Consolidated Statements and other Financial Information—Legal and Administrative Proceedings.”

We may be unable to obtain or renew all of the operating licenses we require to conduct our business.

There can be no assurance that we will be able to maintain or renew in a timely manner the licenses and/or permits issued by municipal governments that we require for our operations.  Any failure to obtain or renew our licenses and permits may result in fines levied against us and the closure of our establishments, thereby interrupting our operations.  The closure of any of our establishments, even temporarily, may adversely affect our business and results of operations.

As a result of liens incurred on property we occupy in the ordinary course of our business, our lease agreement may be terminated and we may be required to vacate the property, which may adversely affect our business.

Certain property we lease is subject to liens that are registered with the applicable real estate authorities.  In the event of a failure to comply with obligations arising from guarantees secured by such property, our creditors may seek to foreclose on the guaranty, in which case the property may be sold at auction or be transferred to the creditor (a third-party with which we do not have a relationship) to satisfy the debt.

In order maintain the continuity of our operations on the property, we may be required to enter into negotiations regarding the terms and conditions of a new lease agreement or the existing agreement may be terminated, which could require us to vacate the property, materially adversely affecting our financial condition and results of operations.

The interests of our controlling shareholders may conflict with the interests of our other investors.

Our control group has the power to elect the majority of the members of our board of directors and to determine the outcome of resolutions that require shareholder approval, including transactions with related parties to which our control group is not a party, corporate restructurings, sales of assets, the entry into partnerships and the future payment of dividends, subject to mandatory dividend payments established by the Brazilian Corporations Law.

Moreover, certain decisions relating to our operations or financial structure may create conflicts of interest between our current control group and our other shareholders. Our current control group will continue to be able to determine, or exercise significant influence over, our decisions for as long as it continues to hold a significant interest in our capital stock.

We are highly dependent on our senior management and key professionals to develop and operate our business.

We are highly dependent on our senior management and key professionals for the development and execution of our business strategies and investments, including those related to the management and operation of our business. Our success significantly depends on the continuity of the services that our senior management and key professionals provide to us. Our senior management and key professionals may elect to terminate their employment with us, establish competing businesses or work for our competitors. Moreover, in the event any of our senior management and key professionals elect to establish a competing business or work for a competitor, our clients may choose to hire our former employees or such competitor for the services we provide them, adversely affecting our results of operations and financial condition.

We depend on information technology service providers to perform certain of our activities.

Our business and results of operations may be adversely affected if the provision of information technology services to us is interrupted, whether as a result of failures (including failures related to third-party consents or licenses for intellectual property used in the equipment or software they manufacture or use) or as a result of our service providers’ failure to comply with the duties owed to us.

Moreover, if we are unable to maintain or renew contracts with our current service providers, we may face difficulties integrating the systems of new service providers, which may result in operational failures. In addition, we may be unable to replace our current service providers or may experience failures during any migration to new service providers, which may also adversely affect our operations. We may also experience an interruption in the services provided to us by our suppliers.

Some of the third parties we depend on, in relation to the operation of our business, processes or otherwise have access to the personal data of our clients on our behalf. There can be no assurances that the privacy and security-related measures and safeguards we have put in place in relation to these third parties will be effective to protect us and/or the relevant personal data from the risks associated with the third-party processing, storage and transmission of such data. Any violation of data or security laws, or of our relevant measures and safeguards, by our third-party processors could have a material adverse effect on our business, result in applicable fines and penalties, damage our reputation and/or result in civil claims.

The materialization of any of the aforementioned risks may materially adversely affect us.

Our code of conduct and internal controls, as well as the agreements we enter into with suppliers, may fail to prevent acts of corruption, fraud or illicit conduct by our shareholders, management, employees, suppliers, representatives or other third parties acting on our behalf, in our interest or for our benefit, which may have a material adverse effect on our business, our financial condition and our reputation.

Our policies and internal procedures for preventing and combating corruption may not be sufficient to ensure that all of our management, employees, suppliers, representatives or other third parties acting on our behalf or for our benefit act at all times in strict compliance with our internal policies and with applicable national and international anti-corruption laws and regulations, and the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions.

Law No.12,846/13, or the Brazilian Anti-Corruption Law (Lei Anti-corrupção), represented a significant shift in the fight against corruption by establishing strict civil and administrative liability for acts committed against domestic and foreign governments and expanding domestic Brazilian anti-corruption laws to incorporate provisions of international laws and regulations, including the Foreign Corrupt Practices Act in the United States and the U.K. Bribery Act in the United Kingdom.

Accordingly, we may be subject to breaches of our code of conduct, the above-mentioned laws and any related legislation as a result of the misconduct and/or the fraudulent and dishonest behavior of our management, employees, suppliers, representatives or other third parties acting on our behalf or for our benefit.

Moreover, our policies, as well as our governance, risk management, compliance and internal control processes may not be sufficient to prevent or detect:

The occurrence of any such acts may adversely affect our reputation, business, financial condition and results of operations, as well as the trading price of our ADSs and the underlying securities. In addition, our reputation may suffer damage to the extent our direct or indirect shareholders, management, employees, suppliers, representatives or other third parties acting on our behalf or for our benefit are involved in any widely reported legal disputes and/or investigations.

We may also be subject to joint liability and may be required to pay fees and damages due to violations of anti-corruption laws committed by our affiliates. Any such liability may have a material adverse effect on our reputation, business, financial condition and results of operations, as well as the trading value of our ADSs and the underlying securities.

Consequently, if we are unable to effectively manage our governance, risk management and compliance functions, we may not be able to properly produce our financial statements, report our results accurately or prevent fraud or other improprieties. Internal control failures may have a material adverse effect on us.

Any acts of fraud or corruption or other illicit conduct would lead to negative perceptions of us and our related parties by clients, counterparties, shareholders, investors, regulators and society in general. Such conduct could include, among others, the failure to fulfill legal obligations, inappropriate business practices related to our clients or services, relationships with business partners who have questionable ethics, inappropriate conduct relating to our employees, conflicts of interest, unauthorized disclosure of confidential information, anticompetitive practices and the failure to adequately manage risks. Our reputation may also be indirectly affected by the actions of third parties, such as business partners and clients. Moreover, damage to our reputation, the imposition of sanctions and other legal restrictions may have adverse effects on our businesses, financial condition and results of operations, as well as the trading price of our ADS and the underlying securities.

The existence of any administrative or legal investigations, inquiries or proceedings related to any breach of anti-corruption laws in Brazil or abroad by us, or acts committed against public administration by our employees or third parties acting on our behalf (whether on an exclusive basis or otherwise) or for our benefit may result in, among other consequences:

The materialization of any of these risks may adversely affect our reputation, financial condition, results of operations and the trading price of our ADSs and the underlying securities.

We may be unable to develop existing or new relationships with strategic clients, which may adversely affect the fees we generate in our advisory business.

We may lose clients with whom we have a long-term relationship as a result of factors over which we may or may not have control, including:

As a provider of financial services, we rely to a large extent on our relationships with our clients, our reputation and our ability to provide high-quality services in order to attract and retain clients. Our reputation can be affected by events that may be difficult or impossible to control, may involve high costs or that we are unable to remediate.

For example, any alleged or actual failures by us or our employees to comply with any applicable laws, rules or regulations, errors in public reports, perceptions as to our environmental, social and governance practices and the potential disclosure of any of these events may adversely affect our reputation, our relationships with clients and our ability to negotiate strategic alliances, irrespective of whether the disclosure of these events is inaccurate, the material issues have been corrected or if no breach or irregularity occurred. The materialization of these risks may materially adversely affect our financial condition and results of operations.

A significant portion of our revenue may be derived from a limited number of client engagements.

We generally provide services to our clients pursuant to executed engagement letters and refer to the provision of services under any such engagement letter as a client engagement. The services provided under our engagement letters generally do not extend beyond the services specified by such letters, and we would therefore need to enter into separate engagement letters to provide similar or other services to a client. Given the aforementioned nature of our client engagements, we are required each year to attract new engagements with new or existing clients in order to generate revenue additional to the revenue generated under our past or existing engagement letters.

We may also experience a decline in the number of our client engagements as a result of macroeconomic and political factors that are beyond our control. Accordingly, we may generate a significant portion of our revenue from a limited or reduced number of engagements. For example, in the years ended December 31, 2024 and 2022, one client accounted for 14% and 19% of our total revenues, respectively. For more information, see “Item 4. Information on the Company—B. Business Overview—Material Clients.”

Our results of operations may be adversely affected to the extent we are unable to attract new engagements upon the completion of existing engagements or we experience a decline in the number of our engagements as a result of macroeconomic or political factors.

Legal restrictions applicable to us and our clients may reduce demand for our services.

New laws or regulations or changes in the enforcement of current laws and regulations applicable to our clients may materially adversely affect us. For example, any changes in the enforcement or breach of antitrust legislation implemented by Brazilian Law No. 12,529/2011 could affect the number and volume of M&A transactions for which we provide advisory services, restrict the operations of our clients and, as a result, reduce the services we provide to our clients, adversely affecting our financial condition and results of operations.

Our clients may experience difficulties in paying for the services we provide.

Our clients may be unable to pay or may refuse to pay the fees agreed upon for our services, including as a result of their eventual bankruptcy or insolvency. Our client portfolio includes companies that may face financial difficulties from time to time and their inability or refusal to pay for our services may adversely affect our collection of receivables. Some of our clients may file for bankruptcy, which could prevent us from collecting amounts due as originally agreed.

The bankruptcy of any of our clients that owe substantial amounts to us may materially adversely affect our business, financial condition and results of operations. Moreover, if several of our clients file for bankruptcy after paying our fees, Brazilian courts could determine that we were not entitled to such payments and require that any or all amounts we received be returned, which could adversely affect our business, financial condition and results of operations.

The financial services industry is highly competitive. As a result of competitive pressures, we may charge lower prices for our products and services, which would materially adversely affect our earnings.

The financial services industry is a highly competitive industry in which local and international financial institutions compete. We compete based on a variety of factors, including the performance of our transactions and products and services, as well as our innovation, reputation and pricing. We have encountered intense pricing competition in certain areas of our business in the past few years, including in relation to commissions on underwriting public offerings of securities. We may be subject to further pricing pressures in connection with these and other services we provide in the future, as many of our competitors may seek to gain market share by lowering the prices they charge. As a result of increased competition, there can be no assurance that we will succeed in achieving our goal of creating value for holders of our securities and sustaining our historical growth rate or profitability.

Depending on the sector, our competitors may be substantially larger and have financial, technical and marketing resources that are considerably greater than ours. We currently face significant competition in all of our business lines from other large Brazilian and international banks, both in the public and private sectors. Over the last few years, the presence of foreign banks in Brazil and certain other key markets in Latin America has grown and the competition in the banking sector and for specific products has increased. There can be no assurance that we will be able to grow or sustain our market share, which may adversely affect our results of operations and financial condition.

We may be unable to keep pace with rapid technological advances to provide new and innovative products and services.

Rapid, significant and disruptive technological advances, including artificial intelligence, continue to affect the financial services industry. Mobile devices and digital platforms are increasingly used for financial transactions. If we fail to provide a satisfactory experience through these channels, we may lose our clients. Innovative mobile devices and digital platforms use several techniques and settings that increase the challenges in providing competitive financial services digitally. Moreover, several other companies with significant resources and several innovative startups have introduced products and services focused on digital solutions. There can be no assurance that we will meet our clients’ expectations in regards to digital products and services or other digital offerings.

In addition, we cannot predict the impact of technological advances on our business. In addition to our own initiatives, we partially rely on third parties to develop and provide us access to new technologies. New services and technologies may arise in the financial services industry and, consequently, the technologies we currently use in our products and services may become obsolete. Developing and incorporating new technologies for use in our products and services may require substantial investments of capital and time and may ultimately prove unsuccessful.

Moreover, our ability to adopt new products and services and to develop new technologies could be impaired by industry standards, changes in laws and regulations, client resistance, third-party intellectual property rights or other factors. Our success partially depends on our ability to develop and incorporate new technologies, meet the challenges posed by a rapidly evolving market for electronically provided financial services and adapt to technological changes. If we are unable to develop new technologies and incorporate them in a timely or profitable manner, our business and results of operations may be adversely affected.

Extensive regulations may limit our operations and materially adversely affect us.

The financial services industry is subject to extensive regulations and to potential increased monitoring by applicable authorities in several jurisdictions, both in Brazil and abroad. Our subsidiaries BR Partners Banco and BR Partners Gestão de Recursos Ltda., or BR Partners Gestora, are subject to regulations enacted by Brazilian governmental agencies and self-regulatory entities. Such Extensive regulation has resulted in:

BR Partners Banco and BR Partners Gestora are subject to intervention by regulatory authorities, such as the Brazilian Central Bank and the CVM, and are also subject to inspection and auditing, to the imposition of new and more restrictive regulations and to legal and administrative proceedings that may result in substantial sanctions. Among other penalties, BR Partners Banco and BR Partners Gestora may be subject to fines and/or prohibited from engaging in certain business activities. Moreover, recent market contractions have led to several proposed regulations for the financial services industry. These regulations may further limit the operations of BR Partners Banco and BR Partners Gestora, while increasing compliance costs. The Brazilian financial market in particular is subject to extensive and continuing regulation by the Brazilian government, mainly by regulatory agencies such as the Brazilian Central Bank and the CVM.

We have no control over the regulatory framework that governs our operations. This framework includes regulations imposing minimum capital requirements, such as maintaining a certain level of capital to cover potential losses, internal procedures to ensure capital adequacy, such as stress testing and risk assessments, and fixed-income asset investment requirements. For example, Brazilian rules and regulatory capital requirements have been gradually implemented by the CMN and the Brazilian Central Bank. Specifically, CMN Resolution 4,955/21 established new rules for the calculation of reference equity. We are also subject to resolutions that establish new accounting concepts and criteria applicable to financial instruments that must be observed by financial institutions and other institutions authorized to operate by the Brazilian Central Bank.

Changes in tax and fiscal regimes may adversely affect us and the markets in which we operate.

The Brazilian government regularly enacts reforms governing tax regimes applicable to us and our clients. These reforms include modifications to applicable tax rates and, occasionally, the enactment of temporary taxes used for specific governmental purposes. The effects of these modifications and any other modifications resulting from the enactment of additional tax reforms cannot be quantified, and there can be no assurance that such reforms will not adversely affect the operations of our subsidiaries, particularly BR Partners Banco. Moreover, any modifications to tax laws may generate uncertainty in the financial system, increasing the cost of borrowings and contributing to a decrease in our credit portfolio.

Changes in tax policy, including the creation of new taxes, may occur frequently, and these changes may have an adverse effect on our financial condition and results of operations.

The Brazilian Congress may pass broad tax reforms designed to improve the efficiency of fund allocations in the local economy. Pursuant to the proposed taxation model, the approval of the tax reforms may involve a significant restructuring in Brazil’s taxation system, including through the creation of a value-added tax on goods and services to replace several taxes (social contribution, federal taxes related to industrialized products, taxes on financial transactions and the taxes applicable to the circulation of goods and services).

The effects of these amendments or any other additional reforms, if approved, are not quantifiable given that the proposed constitutional amendment provides the regulation of the newly created taxes as a subsequent phase of the reform that has not yet been presented. These changes may adversely affect our business. We cannot predict whether tax reforms will be implemented in the future, nor can we quantify the effects of such changes, if implemented, or any other changes that could result in additional tax reforms.

Bill No. 2,337/2021 proposed by the Brazilian government, may, if approved, result in the levying of income tax on dividends and suspend the deduction of interest on equity in the calculation of personal income tax. These measures may adversely affect the return on investments made by us as well as our distribution of profits to our shareholders.

Additionally, Law No. 14,596/2023 established new transfer pricing rules for transactions between Brazilian companies and related parties abroad. In particular, Law No. 14,596/2023 establishes a requirement to comply with arm’s length standards in transactions between such parties, which may affect transactions we carry out with BR Europe for tax purposes, thereby increasing our corporate income tax basis and social contribution on our net profit.

Changes in regulations regarding capital reserves and compulsory deposits may adversely affect us.

The Brazilian Central Bank has periodically modified the amount of reserves that Brazilian financial institutions are required to maintain. For example, in September 2008, the Brazilian Central Bank revoked and modified several compulsory deposit requirements to mitigate the impact of the global financial crisis and to foster a gradual global market recovery. The Brazilian Central Bank may increase reserve and compulsory deposit requirements in the future or impose new reserve and compulsory deposit requirements.

We could be materially adversely affected as a result of such changes given that the amounts we maintain as compulsory reserves and deposits typically do not bear interest at the same rate as other investments and deposits, because:

Reserve requirements have been used by the Brazilian Central Bank to control liquidity as part of its past monetary policy and we have no control over such determinations. Any increase in compulsory deposit requirements could reduce our ability to obtain funds and make investments, adversely affecting us.

Minimum capital adequacy requirements imposed on BR Partners Banco as a result of the implementation of the Basel III Accord may adversely affect BR Partners Banco and, consequently, our results of operations and financial condition.

On September 12, 2010, the Basel Committee on Banking Supervision’s oversight body, announced a significant strengthening of then-existing capital requirements. While also ratifying previous agreements, the Basel III Accord constituted a capital and liquidity reform package, which was ratified by the G-20 summit in Seoul in November 2010. The Basel III Accord seeks to improve the ability of financial institutions to withstand shocks within the financial system or other sectors of the Brazilian economy, maintaining overall financial stability and fostering sustainable economic growth. The Basel Committee’s reform package increased minimum capital requirements and may require banks to maintain reserve capital and countercyclical reserves to withstand periods of stress and control systemic risk.

The rules and regulatory capital requirements have been gradually implemented by the CMN and the Brazilian Central Bank. CMN Resolution No. 4,955 dated October 21, 2021, or CMN Resolution 4,955/21, established new rules for the calculation of reference equity. Among other measures and requirements, the resolution established that Brazilian financial institutions, among other institutions, are required to comply with the new minimum capital requirements. In addition, BR Partners Banco is subject to new regulations established by CMN Resolution 4,966/21 of the CMN and BCB Resolution 352/23 of the Brazilian Central Bank. These resolutions establish new accounting concepts and criteria applicable to financial instruments that must be observed by financial institutions and other institutions authorized to operate by the Brazilian Central Bank.

Moreover, as of January 1, 2016, financial institutions authorized to operate by the Brazilian Central Bank are required to disclose their Additional Principal Capital rate (Adicional de Capital Principal), or ACP. Pursuant to CMN Resolution No. 4,958 of October 21, 2021, or CMN Resolution 4,958/21, ACP is calculated using certain percentages that are determined by taking into consideration risk-weighted assets: Additional Conservation Principal Capital (Adicional de Conservação de Capital Principal) plus Additional Countercyclical Principal Capital (Adicional Contracíclico de Capital Principal) plus, for certain financial institutions, Systemic Principal Capital (Adicional de Importância Sistêmica de Capital Principal), as such terms are defined in CMN Resolution 4,958/21. Any breach of ACP limits, to the extent that any ACP insufficiency has been identified, will result in restrictions on: (1) the payment of variable compensation to members of the financial institution’s board of directors; (2) the distribution of dividends and interest on shareholders’ equity; (3) the payment of net surpluses and annual compensation to shareholders in credit cooperatives; (4) share repurchases of any amount; and (5) any capital decreases.

BR Partners Banco may be unable to meet minimum capital adequacy requirements imposed by the Brazilian Central Bank due to changes in capital adequacy rules or changes in the performance of the Brazilian economy, taken as a whole. BR Partners Banco could be required to limit credit transactions, sell assets and/or adopt other measures that might adversely affect BR Partners and our financial condition.

Changes in the laws of foreign countries in which we operate may materially adversely affect us.

Through our subsidiary BR Europe, which is headquartered in the Netherlands, we provide services to clients outside Brazil, particularly European clients seeking financial advice in connection with the acquisition, sale or restructuring of companies or related services in Latin America, mainly in Brazil. BR Europe is subject to the applicable laws of the Netherlands and applicable European Union directives. It is our understanding that BR Europe’s operations in the Netherlands are deemed “financial advisory services,” and that as such, BR Europe is exempt from the requirement to obtain authorizations to operate and from regulatory supervision. Dutch authorities, however, may have a different interpretation of BR Europe’s operations, which they may deem “financial services,” which requires authorization under the European Union’s Directive 2014/65/EU (MiFID II). Any changes to the Dutch authorities’ interpretation of applicable law would require us and BR Europe to obtain all required authorizations. There can be no guarantee that we would be able to obtain such authorizations or obtain them in a timely manner, which may adversely affect our business and results of operations.

Under Regulation (EU) 2016/679 of the European Parliament and the European Council, the European Union established a regulatory framework for the treatment of personal data known as the General Data Protection Regulation in connection with the provision of goods or services to EU residents. This regulation encompasses information ranging from an EU resident’s name and personal identification to information relating to the resident’s location, work, economic condition, health, personal interests and preferences as well as behavioral monitoring, even where such data and information is used outside the European Union. We must comply with the provisions of the General Data Protection Regulation to ensure that the personal data and information of EU residents that contract BR Europe’s services are preserved and securely processed by us and our subsidiaries located in Brazil that may need to access such personal data and information in connection with the services provided by BR Europe. If we, BR Europe and/or our other subsidiaries fail to comply with the provisions of the General Data Protection Regulation, BR Europe may be subject to fines.

We may experience losses and reputational damage relating to environmental, social and governance (ESG) matters due to our relationships with shareholders or clients.

We, particularly through BR Partners Banco, have a diversified client base and our clients’ business activities may be subject to social and environmental risks.

We may be found jointly and strictly liable for any environmental damage caused by clients for which we have provided financing in accordance with Brazilian environmental law pursuant to which all parties that directly or indirectly contribute to environmental damage may be held liable for remediation, irrespective of whether such parties acted willfully or negligently.

Financial institutions may be deemed indirectly liable for environmental damage caused by their clients. Consequently, it is important to conduct environmental risk assessments related to project financing. These assessments evaluate credit risks in the event that a client’s payment capacity declines due to penalties incurred, a decline in business, the depreciation of assets or a decrease in the value of the collateral provided.

Moreover, environmental, social and governance, or ESG, concerns have become pressing issues in the finance sphere. The European Commission has presented demanding legislative reforms relating to ESG. For instance, Regulation No. 2019/2088, which imposes transparency requirements, requires the publication of ESG information to investors, funds and asset managers. This regulation’s requirements entered into force on March 10, 2021. As a result, we began publishing annually a sustainability report containing ESG information.

A variety of social and environmental incidents may occur in varying degrees of severity that affect the business activities of our shareholders and clients, resulting in financial losses and/or in damage to their reputations that could impact their relationship with us and materially adversely affect our business, results of operations and reputation.

Climate change may have adverse effects on our business.

Our profitability may be adversely affected by climate change as a result of impacts on lending and financing operations. We have, or may have in the future, clients in the agribusiness sector, and these clients’ rural credit portfolio are substantially affected by climate variations. Potential harvest losses due to climate events increase risk not only to our rural credit portfolios but also to sectors in regions where the GDP substantially depends on the agribusiness sector. Clients in the energy sector may also be adversely affected by climate change risks.

Risks Relating to Brazil

We are vulnerable to disruptions and volatility in the global financial markets, as well as to government measures implemented to mitigate the effects of such disruptions and volatility.

We interact with a diverse group of counterparties, clients and other entities located in several jurisdictions. The market price of securities issued by Brazilian companies are affected in varying degrees by economic and market conditions in other countries, including the United States, other countries in Latin America and the emerging markets. Investor reactions to developments in these countries may adversely affect market prices for securities of Brazilian issuers, including securities issued by us.

Moreover, the financial condition of debtors of our subsidiaries, particularly BR Partners Banco, has been, in certain cases, adversely affected by the financial and economic crisis, which may lead to an increase in defaulted loans, compromise the performance of loans and other financial assets and result in a general decrease in demand for loans. We may be materially adversely affected to the extent a significant number of counterparties experience liquidity difficulties, or if the financial services industry at large is not able to fully recover from the effects of the financial crisis. Other disruptions to, and volatility in, the global financial markets could adversely affect us and the financial and economic environment. In addition, an extended economic slowdown could result in a general decrease in business activity and, consequently, in a decrease in the revenue we generate, which may adversely affect us.

Government efforts to curb inflation may adversely affect our business, operations and financial condition.

Brazil has experienced extremely high rates of inflation in the past. Inflation and Brazil’s efforts to curb inflation, together with the speculation regarding measures the Brazilian government will adopt, have had a material adverse effect on the Brazilian economy, contributing to economic uncertainty in Brazil, heightened volatility in the Brazilian securities market and high historical rates that may restrict the availability of credit and reduce economic growth.

Brazil continues to be subject to the risk of increased inflation as a result of Brazilian government intervention, including through the reduction or increase in interest rates and intervention in the foreign exchange market. If Brazil were to again experience high inflation rates, we may not be able to adjust the prices we charge our clients to offset the effects of increased inflation on our cost structure, which may result in cost increases and a reduction in our operating margins.

If Brazil experiences substantial inflation or deflation in the future, our subsidiaries, particularly BR Partners Banco, may be unable to comply with their obligations. These pressures may also affect the ability of our subsidiaries to access foreign markets and may result in changes to government policies that impact the Brazilian economy and us.

The Brazilian government has exercised and continues to exercise significant influence over the Brazilian economy. This influence, as well as Brazilian political and economic conditions, may adversely affect our activities and the trading price of our ADSs and the underlying securities.

The Brazilian government frequently intervenes in the Brazilian economy and occasionally effects significant changes in policy, monetary, tax, credit and tariff rules and regulations. The Brazilian government’s measures to control inflation and other policies and regulations often include increases in interest rates, changes in fiscal policy, price controls, currency devaluations, capital controls, restrictions on imports and other measures.

We may be unable to predict any changes and reforms resulting from recent political and economic events and the increased pressure on the Brazilian government to effect changes in monetary, fiscal, credit and tariff policies and rules and their impact on our business, which may materially adversely affect us. Our business, financial condition, results of operations, prospects and the trading price of our ADSs and the underlying securities may be adversely affected by new policies or standards that involve or affect factors such as:

each of which have affected our operations in the three-month period ended March 31, 2025 and in the three-year period ended December 31, 2024 and may continue to do so in the future. For additional information, see “Item 5. Operating and Financial Review and Prospects—A. Operating Results—Macroeconomic Environment and Factors Affecting our Results of Operations.”

In light of the current political instability scenario, future economic policies are uncertain, and we cannot foresee which policies will be adopted by the Brazilian government and whether such policies will adversely affect the economy, our business or financial condition. The current political and economic instability has led to a negative perception of the Brazilian economy and increased volatility in the Brazilian securities market, which may also adversely affect our business and the trading price of our ADSs and the underlying securities.

We cannot guarantee that these events will not cause additional adverse effects to the Brazilian political and economic framework. In addition, we cannot guarantee that other political events will not lead to instability in the Brazilian economy, capital markets and the value of our securities.

Changes in interest rates may adversely affect us.

A significant portion of our business is conducted in Brazil, where Brazil’s Monetary Policy Committee (Comitê de Política Monetária), or the COPOM, establishes the basic interest rate, or SELIC rate, targets for the Brazilian banking system and modifies the SELIC rate in accordance with the COPOM’s monetary policies. The SELIC rate is the reference interest rate payable to holders of certain securities issued by the Brazilian government and traded in the Special Settlement and Custody System (Sistema Especial de Liquidação e Custódia). Over the past few years, the SELIC rate has fluctuated significantly, reflecting the volatility in the macroeconomic environment, including volatility in inflation rates.

Political instability in Brazil, combined with a sustained inflationary environment affected the SELIC rate. As of March 31, 2025 and December 31, 2024, 2023 and 2022, the SELIC rate was 14.25% per year, 12.25% per year, 11.75% per year and 13.75% per year, respectively.

Because a significant portion of our revenue, expenses and liabilities are directly tied to interest rates, our results of operations may be materially affected by fluctuations in interest rates and the Brazilian government’s monetary policies.

Our revenue comprises (1) revenues from rendering of services generated by our investment banking and capital markets, treasury sales & structuring and investments and wealth management business lines, including revenue we earn from advisory, debt structuring and wealth management services as well as the derivative products we offer and (2) interest revenues and gains on financial instruments generated by our treasury sales & structuring and capital remuneration business lines, each of which are affected by variations in interest rates. Lower interest rate environments generally benefit our revenues from rendering of services due to the lower cost of debt, which broadly favors M&A and debt capital markets activity, while interest revenues and gains on financial instruments may be adversely affected in such periods. In contrast, our interest revenues and gains on financial instruments generally benefit from higher interest rates during periods of monetary tightening, while revenues from rendering of services may be adversely affected in such periods. As such, our revenues from rendering of services and interest revenues and gains on financial instruments are disparately affected by interest rate fluctuations. The extent to which higher or lower interest rate environments affect our total revenues in any given period is ultimately dependent upon the combined effect of each of the factors that affect our revenue. For a discussion of the impact of interest rates and other factors that affected our results of operations in the three-month periods ended March 31, 2025 and 2024, see “Item 5. Operating and Financial Review and Prospects–A. Operating Results–Macroeconomic Environment and Factors Affecting Our Results of Operations.”

In relation to our expenses and liabilities, our cost of funding from financial liabilities is generally tied to floating rates, such as the SELIC rate, and are thereby affected by fluctuations in the SELIC rate. For example, total interest expenses and losses on financial instruments, which consist of the negative results of our funding expenses, derivatives and other financial liabilities, increased to R$382.0 million in the three-month period ended March 31, 2025, from R$226.8 million in the three-month period ended March 31, 2024, while the average SELIC rate increased over the same period. In the year ended December 31, 2024, our total interest expenses and losses on financial instruments increased to R$6,833.2 million from R$6,120.9 million in the year ended December 31, 2023, despite the decrease in the average SELIC rate, primarily due to an increase in derivative transactions in our treasury sales & structuring business line.

Economic and political crises in Brazil may adversely affect our business, results of operations and financial condition.

Brazil has experienced economic instability caused by a variety of political and economic events in recent years, resulting in a decline in GDP growth and adverse effects on supply and demand. As a result, uncertainty regarding the Brazilian government’s ability to approve required economic reforms to mitigate the deterioration of public accounts and the economy has led to a decline in market confidence in the Brazilian economy and in the Brazilian government. The performance of the Brazilian economy is subject to governmental policies, which, if not successfully implemented, may adversely affect our business and results of operations.

The recent political and economic instability in Brazil has led to a negative perception of the Brazilian economy and an increased volatility in the Brazilian securities market, which may also adversely affect us and the trading price of our ADSs and units. Any continuing economic instability and political uncertainty may adversely affect us and the trading price of our ADSs and units.

Exchange rate instability may materially adversely affect the Brazilian economy and us.

The real fluctuates against the U.S. dollar and other foreign currencies from time to time. In the past, the Brazilian government has adopted different exchange rate policies, including sudden devaluations, periodic small devaluations, foreign exchange controls, dual exchange rate markets and a floating exchange rate system. Since 1999, Brazil has adopted a floating exchange rate system under which the Brazilian Central Bank intervenes in the foreign exchange market through the purchase or sale of foreign currency. From time to time, the exchange rate between the real and the U.S. dollar and other currencies fluctuates significantly. There can be no assurance that the real will not experience a significant appreciation or depreciation against the U.S. dollar, which can have a material adverse effect on our results of operations.

The depreciation of the real against the U.S. dollar may cause inflationary pressures in Brazil and an increase in interest rates, which could negatively affect the growth of the Brazilian economy as a whole, materially adversely affecting us, particularly in relation to the credit we extend in foreign currency to certain of our clients.

Securities and derivative financial instruments are subject to fluctuations in market prices and liquidity, as a result of changes in economic conditions, and may materially adversely affect us.

Financial instruments and securities represent a significant portion of our total assets. Any realized or unrealized future gains or losses resulting from these investments or hedging strategies may materially affect our revenue. The accounting and recognition of gains and losses can vary considerably from period to period. For example, if we enter into derivative transactions to hedge against depreciation of the real (or any other currency) or interest rates, we may incur financial losses if the real (or any other currency) appreciates or if interest rates increase.

We cannot predict future gains or losses, and fluctuations in gains and losses from one period to another are not necessarily indicative of future gains or losses, particularly in Brazil. Gains or losses recorded by BR Partners Banco in respect to its investment portfolio may result in fluctuations in revenue and BR Partners Banco may not obtain returns on its consolidated investment portfolio or on a portion of the portfolio in the future.

Any decline in Brazil’s credit rating may adversely affect the price of our securities.

We may be adversely affected by investors’ perception of the risks related to the credit rating of Brazil’s sovereign debt. Rating agencies regularly evaluate Brazil and its sovereign ratings. Sovereign credit ratings are based on a number of factors, including macroeconomic trends, fiscal and budgetary conditions, debt calculation metrics and the prospect of changes in any of these factors.

Brazil’s sovereign credit rating is currently rated below investment grade by the three main rating agencies. Consequently, the price of bonds issued by Brazilian companies have been adversely affected. The continuation or worsening of the current Brazilian economic environment and continued political uncertainty, among other factors, could lead to further downgrades. Any further decline in Brazil’s sovereign credit ratings could increase investors’ perception of risk and, as a result, adversely affect the price of our securities, including the units.

Risks Relating to the Ownership of ADSs and the Underlying Securities

If you surrender your ADSs and withdraw units, you risk losing the ability to remit foreign currency abroad and certain Brazilian tax advantages.

As an ADS holder, you benefit from the electronic certificate of foreign capital registration obtained by the custodian for our units underlying the ADSs in Brazil, permitting the custodian to convert dividends and other distributions with respect to our units into non-Brazilian currency and remit the proceeds abroad. If you surrender your ADSs and withdraw units, you will be entitled to continue to rely on the custodian’s electronic certificate of foreign capital registration for only five business days from the date of withdrawal. There-after, upon the disposition of distributions relating to our units, unless you obtain your own electronic certificate of foreign capital registration, or you qualify under Brazilian foreign investment regulations that entitle certain foreign investors to buy and sell units on Brazilian stock exchanges without obtaining separate electronic certificates of foreign capital registration, you would not be able to remit abroad non-Brazilian currency. In addition, if you do not qualify under the foreign investment regulations, you will generally be subject to less favorable tax treatment of dividends and distributions on, and the proceeds from any sale of, our units.

Holders of ADSs may be subject to limitations on transfer of their ADSs if the depositary closes its books.

ADSs are transferable on the books of the depositary. However, the depositary may close its books at any time or from time to time when it deems expedient in connection with the performance of its duties. The depositary may close its books from time to time for a number of reasons, including in connection with corporate events such as a rights offering, during which time the depositary needs to maintain an exact number of ADS holders on its books for a specified period. The depositary may also close its books in certain circumstances, as provided in the ADS deposit agreement, and on weekends and public holidays. The depositary may refuse to deliver, transfer or register transfers of the ADSs generally when our share register or the books of the depositary are closed, or at any time if we or the depositary thinks it is advisable to do so because of any requirement of law or of any government or governmental body, or under any provision of the ADS deposit agreement, or for any other reason.

Holders of ADSs representing our units may not receive distributions on our units underlying our ADSs or any value for them if it is illegal or impractical to make them available to such holders.

The depositary for ADSs representing our units has agreed to pay to holders of such ADSs cash dividends or other distributions that it or the custodian receives on our units after deducting its fees and expenses. Holders of ADSs representing our units will receive these distributions in proportion to the number of our units underlying their ADSs. However, in accordance with the limitations set forth in the ADS deposit agreement, it may be unlawful or impractical for the depositary to make a distribution available to holders of ADSs representing our units. We have no obligation to take any other action to permit the distribution of ADSs representing our units, units themselves, rights or anything else to holders of ADSs representing our units. This means that holders of ADSs representing our units may not receive any distributions that we make on our units or any value from them if it is unlawful or impractical to make such distributions available to holders. These restrictions may negatively impact the trading value of ADSs representing our units.

Holders of ADSs may not have the same voting rights as the holders of our units and may not receive voting materials in time to be able to exercise their right to vote.

Holders of ADSs representing our units are not able to exercise voting rights attaching to the underlying units, common shares or preferred shares on an individual basis. Holders of ADSs representing our units have appointed the depositary or its nominee as their representative to exercise the voting rights attaching to the units underlying such ADSs. Holders of ADSs representing our units may not receive voting materials in time to instruct the depositary to vote. The depositary may not be liable for any failure to carry out any instructions to vote, for the manner in which any vote is cast or for the effect of any such vote. 

As a result, holders of ADSs representing our units may not be able to exercise voting rights and may lack recourse if such ADSs are not voted as requested. In addition, holders of ADSs representing our units will not be able to call a shareholders’ meeting. 

We and the depositary are entitled to amend the ADS deposit agreement and to change the rights of ADS holders under the terms of such agreement, and we may terminate the ADS deposit agreement, without the consent of the ADS holders. 

We and the depositary are entitled to amend the ADS deposit agreement and to change the rights of the ADS holders under the terms of such agreement, without the consent of the ADS holders. We and the depositary may agree to amend the ADS deposit agreement in any way we decide is necessary or advantageous to us. Amendments may reflect, among other things, operational changes in the ADS program, legal developments affecting ADSs or changes in the terms of our business relationship with the depositary. In the event that the terms of an amendment are disadvantageous to ADS holders, ADS holders will only receive 30 days’ advance notice of the amendment, and no consent of the ADS holders is required under the ADS deposit agreement. Furthermore, we may decide to terminate the ADS facility at any time for any reason. For example, terminations may occur when we decide to list the underlying securities on a non-U.S. securities exchange and determine not to continue to sponsor an ADS facility or when we become the subject of a takeover or a going-private transaction. If the ADS facility is to be terminated, ADS holders will receive at least 90 days’ prior notice, but no consent is required from them. In the event that we decide to make an amendment to the ADS deposit agreement that is disadvantageous to ADS holders or terminate the ADS deposit agreement, the ADS holders may choose to sell their ADSs or surrender their ADSs and become direct holders of our underlying units, but will have no right to any compensation whatsoever. 

ADS holders may not be entitled to a jury trial with respect to claims arising under the ADS deposit agreement, which could augur less favorable results to the plaintiff(s) in any such action. 

The ADS deposit agreement provides that holders and beneficial owners of ADSs irrevocably waive the right to a trial by jury in any legal proceeding arising out of or relating to the ADS deposit agreement or the ADSs, including claims under federal securities laws, against us or the depositary to the fullest extent permitted by applicable law. If this jury trial waiver provision is prohibited by applicable law, an action could nevertheless proceed under the terms of the ADS deposit agreement with a jury trial. To our knowledge, the enforceability of a jury trial waiver under the federal securities laws has not been finally adjudicated by a federal court. However, we believe that a jury trial waiver provision is generally enforceable under the laws of the State of New York, which govern the ADS deposit agreement, by a court of the State of New York or a federal court, which have non-exclusive jurisdiction over matters arising under the ADS deposit agreement, applying such law. In determining whether to enforce a jury trial waiver provision, New York courts and federal courts will consider whether the visibility of the jury trial waiver provision within the agreement is sufficiently prominent such that a party has knowingly waived any right to trial by jury. We believe that this is the case with respect to the ADS deposit agreement and the ADSs. In addition, New York courts will not enforce a jury trial waiver provision in order to bar a viable setoff or counterclaim sounding in fraud or one which is based upon a creditor’s negligence in failing to liquidate collateral upon a guarantor’s demand, or in the case of an intentional tort claim (as opposed to a contract dispute), none of which we believe are applicable in the case of the ADS deposit agreement or the ADSs. No condition, stipulation or provision of the ADS deposit agreement or ADSs serves as a waiver by any holder or beneficial owner of ADSs or by us or the depositary of compliance with any provision of the federal securities laws. If you or any other holder or beneficial owner of ADSs brings a claim against us or the depositary in connection with matters arising under the ADS deposit agreement or the ADSs, you or such other holder or beneficial owner may not be entitled to a jury trial with respect to such claims, which may have the effect of limiting and discouraging lawsuits against us and / or the depositary. If a lawsuit is brought against us and / or the depositary under the ADS deposit agreement, it may be heard only by a judge or justice of the applicable trial court, which would be conducted according to different civil procedures and may augur different results than a trial by jury would have had, including results that could be less favorable to the plaintiff(s) in any such action, depending on, among other things, the nature of the claims, the judge or justice hearing such claims, and the venue of the hearing. 

The ADS deposit agreement provides that certain claims brought by ADS holders under the ADS deposit agreement may only be instituted in the state and federal courts in the City of New York, which may discourage claims. 

The ADS deposit agreement provides that holders and beneficial owners of ADSs irrevocably agree that any legal suit, action or proceeding against or involving us or the depositary brought by ADS holders or beneficial owners arising out of or based upon the ADS deposit agreement, the ADSs, the ADRs or the transactions contemplated thereby or by virtue thereof, including, without limitation, claims under the Securities Act or the Exchange Act, may only be instituted in a state or federal court in the City of New York. 

While this exclusive forum provision does not restrict the ability of ADS holders to bring claims, including claims under U.S. federal securities laws, it may increase litigation costs or limit their ability to bring a claim in the judicial forum that they find favorable, which may discourage the filing of claims under the ADS deposit agreement against us or the depositary. 

To the extent that any such claims may be based upon federal law claims, Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder. Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. ADS Holders will not be deemed to have waived our compliance with the federal securities laws and the regulations thereunder. There is uncertainty as to whether a court would enforce the exclusive forum provision of the ADS deposit agreement. Considering this uncertainty, investors bringing a claim may face certain additional risks, including increased costs and uncertainty of litigation outcomes. If a court were to find this exclusive forum provision inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business and financial condition. 

We may amend the unit deposit agreement governing our units without the consent of the holders of our units.

In accordance with applicable Brazilian legislation, we may, together with the depositary institution contracted to provide services in respect of our units, amend the unit deposit agreement governing our units without the consent of unit holders. In this case, even if the amendment or change materially adversely affects the unit holders’ rights, the amendment will become binding on unit holders that continue to hold our units 30 days following the receipt by the depositary institution of written notice of the amendment, which unit holders may not challenge. The only remedy available to unit holders in this scenario is to cancel their units and hold the underlying common shares and preferred shares directly. The cancellation of units requires the payment of a cancellation fee and will be subject to the provisions of the unit deposit agreement. There can be no assurance that an active and liquid trading market for our common and preferred shares underlying our units exists, will develop and/or will continue to exist in the future.

The unit deposit agreement may be terminated.

Pursuant to the unit deposit agreement governing our units, we or the depositary institution contracted to provide services in respect of our units may unilaterally terminate the unit deposit agreements upon delivery of notice, which will become fully effective after: (1) 90 days from the delivery of such notice or (2) upon the appointment of a new depositary institution that accepts such appointment, whichever occurs first.

Moreover, our unit deposit agreement governing our units may be unilaterally terminated by any party under the following circumstances: (1) a default of any obligation; and (2) in the event any party to the unit deposit agreement (i) enters into bankruptcy, files for judicial reorganization or initiates extrajudicial reorganization proceedings, or petitions for bankruptcy, intervention or a liquidation process is filed against it; (ii) has its authorization to perform the contracted services revoked; and/or (iii) suspends its activities for any period of time equal to or greater than 30 days.

If the unit deposit agreement governing the units is terminated and a new depositary institution is not contracted within 90 days, the depositary institution may unilaterally interrupt the services it provides under the agreement, provided that it communicates such interruption to us and to our unit holders within 90 days after the expiration of the above-mentioned initial 90-day period. The only remedy available to unit holders in this scenario is to cancel our units and hold the underlying common shares and preferred shares directly.

The volatility and lack of liquidity of the Brazilian securities market may substantially limit the ability of investors to sell the units at their preferred price and time.

Investing in securities traded in emerging markets, such as Brazil, often involves greater risk when compared to other global markets that are subject to more stable political and economic conditions, and such investments are generally considered to be more speculative in nature. Investments in securities traded in emerging markets are also subject to certain economic and political risks, including, without limitation: (1) changes in the regulatory, fiscal, economic and political environment that may affect the ability of investors to obtain a return on their investment, in whole or in part; and (2) restrictions on foreign investment and the repatriation of invested capital.

The Brazilian securities market is substantially smaller, less liquid and more concentrated than the major securities markets, and may be more volatile than certain global markets, including the United States securities market.

We cannot guarantee that an active liquid market will develop for our units or that no restrictions will be imposed on the trading of the shares underlying our units, which may considerably limit the ability of holders of our units to sell them at a desired price or a desired time, which may adversely affect the trading price of our units.

In addition, the price of units is frequently subject to volatility. If an active and liquid trading market for the shares underlying our units is not developed and maintained, the trading price of the shares underlying our units could be adversely affected.

Developments and the perception of risk in other countries, particularly in the United States and emerging countries, may adversely affect the market price of Brazilian securities, including securities issued by us.

International investors generally regard Brazil as an emerging market. Historically, the occurrence of adverse events in developing economies has resulted in a perception of greater risk by investors around the world, including investors in the United States and European countries. Perceptions of emerging market countries significantly affect Brazil, the Brazilian capital markets and the availability of credit in Brazil, both from domestic and international capital sources.

Additionally, the Brazilian economy and the market value of securities issued by Brazilian companies are influenced, to varying degrees, by economic and market conditions in Brazil and other countries, including the United States, European countries and emerging economies. Although economic conditions in these countries may differ considerably from economic conditions in Brazil, investors’ reactions to developments in these other countries may have an adverse effect on the Brazilian economy and the market value of securities of Brazilian issuers. In the past, the development of adverse economic conditions in other countries have generally resulted in an outflow of investments and, consequently, in a decrease of external resources invested in Brazil.

Brazil is subject to political and economic events that include, for example, (1) financial crises and political instability in the United States; (2) regional conflicts, such as the conflict between Ukraine and Russia; (3) trade wars between the United States and China; and (4) crises in Europe and in other countries, which affect the global economy. Each of these factors have produced and may continue to produce a series of impacts that affect, directly or indirectly, the capital markets and the Brazilian economy.

These and other factors may adversely affect our financial condition and, consequently, the trading price of our ADSs and the underlying securities, which may result in losses to our investors.

Your right to participate in any future offerings may be limited, which may result in the dilution of your interest in our capital stock.

We may from time to time distribute rights to our shareholders, including rights to acquire our securities. However, we cannot make rights available to you in the United States unless we register both the rights and the securities to which the rights relate under the Securities Act or an exemption from the registration requirements is available. In particular, holders of our units, including our units underlying the ADSs, benefit from certain preemptive rights in connection with future issuances by us of our units or securities convertible into our shares. Holders of our units, including in the form of ADSs, will be unable to exercise the preemptive rights relating to our shares unless a registration statement under the Securities Act is effective with respect to those preemptive rights or an exemption from registration requirements under the Securities Act is otherwise available.

In addition, under the ADS deposit agreement, the depositary will not make rights available to you unless both the rights and the underlying securities to be distributed to ADS holders are either registered under the Securities Act or exempt from registration under the Securities Act. We are under no obligation to file a registration statement with respect to any such rights or securities or to endeavor to cause such a registration statement to be declared effective and we may not be able to establish a necessary exemption from registration under the Securities Act.

Accordingly, you may be unable to participate in our rights offerings or additional offerings of our securities in the future and may experience dilution in your holdings.

We are a foreign private issuer and, as a result, in accordance with the listing requirements of the Nasdaq we rely on certain home country governance practices from Brazil, rather than the corporate governance requirements of the Nasdaq.

We report under the Exchange Act as a non-U.S. company with foreign private issuer status. The Nasdaq Stock Market LLC Rules, or the Nasdaq rules, provide that foreign private issuers are permitted to follow home country practice in lieu of certain Nasdaq corporate governance standards. The standards applicable to us are considerably different than the standards applied to U.S. domestic issuers. For instance, we are not required to:

As a foreign private issuer, we may follow our home country practice in Brazil in lieu of the above requirements. Therefore, the approach to governance adopted by our board of directors may be different from that of a board of directors consisting of a majority of independent directors, and, as a result, our management oversight may be more limited than if we were subject to all of the Nasdaq corporate governance standards. Accordingly, you may not have the same protections afforded to shareholders of companies that are not foreign private issuers. See “Item 9. The Offer and Listing—C. Markets—Corporate Governance Practices and the Nível 2 Segment of the B3.”

We are a “controlled company” within the meaning of the Nasdaq rules. As a result, we qualify for exemptions from certain corporate governance requirements that would otherwise provide protection to shareholders of other companies.

Our controlling shareholder controls a majority of the voting power of our shares. As a result, we are a “controlled company” within the meaning of the corporate governance standards of the Nasdaq. Under these rules, a company of which more than 50% of the voting power is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements, including:

Currently, we do not plan to utilize the exemptions available for controlled companies, but are relying on the exemption available for foreign private issuers to follow our home country governance practices instead. If we cease to be a foreign private issuer or if we cannot rely on our home country governance practice exemption for any reason, we may decide to invoke the exemptions available for a controlled company as long as we remain a controlled company. As a result, shareholders will not have the same protection afforded to shareholders of companies that are subject to all of the Nasdaq corporate governance requirements.

We may lose our foreign private issuer status which would then require us to comply with the Exchange Act’s domestic reporting regime and cause us to incur significant legal, accounting and other expenses.

In order to maintain our current status as a foreign private issuer, either (a) more than 50% of our outstanding voting securities, including units underlying the ADSs, must be either directly or indirectly owned of record by non-residents of the United States or (b)(i) a majority of our executive officers or directors must not be U.S. citizens or residents, (ii) more than 50% of our assets cannot be located in the United States and (iii) our business must be administered principally outside the United States. If we lose this status, we would be required to comply with the Exchange Act reporting and other requirements applicable to U.S. domestic issuers, which are more detailed and extensive than the requirements for foreign private issuers. We may also be required to make changes in our corporate governance practices in accordance with various SEC and Nasdaq rules. The regulatory and compliance costs to us under U.S. securities laws if we are required to comply with the reporting requirements applicable to a U.S. domestic issuer may be significantly higher than the costs we will incur as a foreign private issuer.

The protections afforded to minority shareholders in Brazil are different from those in the United States and may be more difficult to enforce.

Under Brazilian law, the protections afforded to minority shareholders are different from those in the United States. In particular, the legal framework and case law pertaining to disputes between shareholders and us, our directors and officers or our shareholders is less developed in Brazil than it is in the United States and there are different procedural requirements for bringing shareholder lawsuits, such as shareholder derivative suits, which differ from those you may be familiar with under U.S. or other laws. There is also a substantially less active plaintiffs’ bar for the enforcement of shareholders’ rights in Brazil than there is in the United States. As a result, it may be more difficult for our minority shareholders to enforce their rights against us or our directors, officers or shareholders than it would be for shareholders of a U.S. domestic issuer.

Transformation into a public company in the United States is expected to increase our costs and disrupt the regular operations of our business.

Our transformation into a public company in the United States will have a significant effect on us. Our business historically has operated as a publicly-held company in Brazil, and we expect to incur significant additional legal, accounting, reporting and other expenses as a result of having ADSs publicly-traded in the United States.

We also anticipate that we will incur costs associated with corporate governance requirements, including requirements under the Sarbanes-Oxley Act, as well as rules implemented by the SEC and the Nasdaq. We expect these rules and regulations to increase our legal and financial compliance costs and make some management and corporate governance activities more time-consuming and costly, particularly after we are no longer an ‘‘emerging growth company.’’ These rules and regulations may make it more difficult and more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. This could have an adverse impact on our ability to recruit and bring on a qualified independent board. The additional demands associated with being a public company in the United States may disrupt regular operations of our business by diverting the attention of some of our senior management team away from revenue producing activities to management and administrative oversight, adversely affecting our ability to attract and complete business opportunities and increasing the difficulty in both retaining professionals and managing and growing our businesses. Any of these effects could harm our business, financial condition and results of operations.

As a foreign private issuer and an “emerging growth company” (as defined in the JOBS Act), we will have different disclosure and other requirements than U.S. domestic registrants and non-emerging growth companies.

As a foreign private issuer and emerging growth company, we may be subject to different disclosure and other requirements than domestic U.S. registrants and non-emerging growth companies. For example, as a foreign private issuer in the United States, we are not subject to the same disclosure requirements as a domestic U.S. registrant under the Exchange Act, including the requirements to prepare and issue quarterly reports on Form 10-Q or to file current reports on Form 8-K upon the occurrence of specified significant events, the proxy rules applicable to domestic U.S. registrants under Section 14 of the Exchange Act or the insider reporting and short-swing profit rules applicable to domestic U.S. registrants under Section 16 of the Exchange Act. In addition, we intend to rely on exemptions from certain U.S. rules which will permit us to follow Brazilian legal requirements rather than certain of the requirements that are applicable to U.S. domestic registrants.

Furthermore, foreign private issuers are required to file their annual report on Form 20-F within 120 days after the end of each fiscal year, while U.S. domestic issuers that are required to file their annual report on Form 10-K within 60, 75 or 90 days after the end of each fiscal year, depending on their filing status. Foreign private issuers are also exempt from Regulation Fair Disclosure, aimed at preventing issuers from making selective disclosures of material information, although we will be subject to Brazilian laws and regulations having substantially the same effect as Regulation Fair Disclosure. As a result of the above, even though we are required to file reports on Form 6-K disclosing the limited information which we have made or are required to make public pursuant to Brazilian law, or are required to distribute to shareholders generally, and that is material to us, you may not receive information of the same type or amount that is required to be disclosed to shareholders of a U.S. company.

The JOBS Act contains provisions that, among other things, relax certain reporting requirements for emerging growth companies. Under this act, as an emerging growth company, we will not be subject to the same disclosure and financial reporting requirements as non-emerging growth companies. For example, as an emerging growth company we are permitted to, and intend to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies. Also, we will not have to comply with future audit rules promulgated by the U.S. Public Company Accounting Oversight Board, or PCAOB, (unless the SEC determines otherwise) and our auditors will not need to attest to our internal controls under Section 404(b) of the Sarbanes-Oxley Act. We may follow these reporting exemptions until we are no longer an emerging growth company. As a result, our shareholders may not have access to certain information that they deem important. We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of this offering, (b) in which we have total annual revenue of at least U.S.$1.235 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our capital stock, including units underlying the ADSs, held by non-affiliates exceeds U.S.$700.0 million as of the prior June 30, and (2) the date on which we have issued more than U.S.$1.0 billion in non-convertible debt during the prior three-year period. Accordingly, the information about us available to you will not be the same as, and may be more limited than, the information available to shareholders of a non-emerging growth company.

We could be an “emerging growth company” for up to five years, although circumstances could cause us to lose that status earlier, including if the market value of our capital stock, including units underlying the ADSs, held by non-affiliates exceeds U.S.$700 million as of any June 30 (the end of our second fiscal quarter) before that time, in which case we would no longer be an “emerging growth company” as of the following December 31 (our fiscal year end). We cannot predict if investors will find the ADSs or units less attractive because we may rely on these exemptions. If some investors find the ADSs or units less attractive as a result, there may be a less active trading market for the ADSs or units and the price of the ADSs or our units may be more volatile.

There is a risk that the Company may be a passive foreign investment company for U.S. federal income tax purposes. Such classification could result in materially adverse U.S. federal income tax consequences for U.S. investors.

The Company will be a passive foreign investment company (“PFIC”) for U.S. federal income tax purposes for any taxable year in which (i) 75% or more of its gross income consists of “passive income” or (ii) 50% or more of the average quarterly value of its assets consists of assets that produce, or are held for the production of, passive income. For this purpose, “passive income” generally includes interest, dividends, royalties and gains from transactions in commodities, and rents. However, interest income derived from the active conduct of a banking, financing or similar business that meets certain requirements is not treated as “passive income.” There is a risk that the BR Partners group may not meet these requirements and therefore may be classified as a PFIC. The PFIC determination is a factual determination that must be made annually after the close of each taxable year. We have not conducted the analysis necessary to determine our PFIC status and do not intend to do so in the future. If the Company is a PFIC for any taxable year, U.S. investors may be subject to adverse U.S. federal income tax consequences, including increased tax liability on gains from dispositions of the units or the underlying common shares or preferred shares and certain excess distributions, and a requirement to file annual reports with the U.S. Internal Revenue Service. Prospective U.S. investors should consult their tax advisors regarding the Company’s PFIC status and the consequences to them if the Company were classified as a PFIC for any taxable year. For more information, see “Item 10. Additional Information—E. Taxation—Material U.S. Federal Income Tax Consequences.”

Investors may experience difficulty in effecting service of process or enforcing judgments on us, our directors and/or our officers within the United States in connection with this offering.

We are a corporation (sociedade anônima) incorporated under the laws of Brazil. All of our directors and officers reside outside the United States and a majority of our assets are located outside the United States. As a result, it may not be possible or it may be difficult for investors to effect service of process upon us or these other persons within the United States or to enforce judgments obtained in United States courts against us, our directors or our officers, including those predicated upon the civil liability provisions of the federal securities laws of the United States. Also, because judgments of U.S. courts for civil liabilities based upon the U.S. federal securities laws may only be enforced in Brazil if certain conditions are met, you may face greater difficulties in protecting your interests in the case of actions against us or our board of directors or executive officers than would shareholders of a U.S. corporation.

If securities or industry analysts do not publish research or reports about our business, or publish negative reports about our business, the market price and trading volume of our units, including in the form of ADSs, could decline.

The trading market for our units, including in the form of ADSs, depends in part on the research and reports that securities or industry analysts publish about us or our business. If one or more of the analysts who cover us downgrade our stock or publish inaccurate or unfavorable research about our business, our stock price would likely decline. If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, demand for our units, including in the form of ADSs, could decline, which might cause the market price and trading volume of our units, including in the form of ADSs, to decline.

Item 4. INFORMATION ON THE COMPANY

General Corporate Information

BRBI BR Partners S.A. is a corporation (sociedade anônima) incorporated under the laws of Brazil. BR Partners was incorporated on March 3, 2009.

BR Partners’ principal place of business is at Avenida Brigadeiro Faria Lima, 3,732, Floor 28, CEP 04538-132, São Paulo, Brazil. The telephone number at this address is +55 (11) 3704-1000. Our corporate website address is https://www.ri.brpartners.com.br. The information contained on, or that can be accessed through, our website is not a part of, and shall not be incorporated by reference into, this registration statement. We have included our website address as inactive textual reference only.

History

We were formed as a holding company in 2009 by Mr. Ricardo Lacerda and other senior officers with significant experience in the Brazilian and international financial markets. We initially focused on providing financial advisory services, particularly in connection with M&A transactions and capital raising, through the establishment of our investment banking business line.

Between December 2009 and December 2010, we raised approximately R$140 million of capital from businesspersons and investors (including the Feffer, Vasone, Zogbi, Verdi, Oliveira, Pinheiro, Seripieri, Alvez de Queiroz, and Limirio families and the company Negotio Magni) with experience in a variety of business sectors (including the pharmaceutical, technology, payment methods, food, pulp and paper, health and real estate sectors, among others), increasing the scope of our operations. These businesspersons and investors expanded our coverage and our network of contacts, facilitating unique access to opportunities and resources in an even more dynamic and competitive marketplace.

In June 2012, we obtained authorization by the Brazilian Central Bank to operate as a financial institution. Accordingly, in the beginning of 2013, we incorporated our subsidiary BR Partners Banco, which holds an active investment portfolio and is authorized to operate in the currency market.

In 2012, we also formed BR Partners Gestora and initiated our investment operations through which we hold equity interests in privately-held companies, leveraging our access to businesspersons in Brazil and our ability to raise capital from third parties through our extensive relationships with local investors. For example, through BR Partners Gestora, we are currently a significant investor in the local outlet shopping and pet store sectors in Brazil.

In the beginning of 2013, we identified an opportunity to establish operations dedicated to raising capital through the issuance of debt securities in connection with BR Partners Banco’s capital markets operations, structuring the issuance of debentures, real estate receivables (certificados de recebíveis imobiliários), or CRIs, agribusiness receivables certificates (certificados de recebíveis do agronegócio), or CRAs, credit rights investment funds (fundos de investimento em direitos creditórios), or FIDCs, and real estate funds (fundos de investimentos imobiliários), or FIIs. Accordingly, we established our capital markets operations. The establishment of these operations arose from the need to expand the range of services we provide to our existing clients and to take advantage simultaneously of the extensive relationships we have with high-income families. Through our capital markets operations, we sought to create an independent and conflict-free platform to offer optimal investment opportunities to investors and facilitate our ability to attract corporate clients. In order to align our interests with those of our clients while simultaneously fostering liquidity in the secondary trading market, BR Partners Banco has purchased between 5% to 20% of all offerings underwritten by our capital markets operations since these operations were established. However, since our initial public offering in Brazil, or IPO, we have increased the average volume of securities we purchase due to the increase in our capital stock. In addition to aligning our interests with that of our investors, our purchase of securities in offerings we underwrite improves our monitoring of our underwritten securities, increases investor confidence and fosters liquidity in the secondary trading market, increasing our ability to originate transactions in the primary market.

Also in 2013, BR Partners Banco established our treasury sales & structuring business line to assist corporate and institutional clients in managing their capital resources. Through our treasury sales & structuring platform, we make a significant range of products available to our clients, including currency, interest and commodity derivatives products as well as bank sureties. Our treasury sales & structuring business line is also responsible for our bank fundraising efforts with third parties.

From 2013 to 2016, our interconnected and synergetic operating structure enabled us to leverage opportunities to cross-sell high value-added products and services. These efforts facilitated our ability to grow our investment banking and capital markets, treasury sales & structuring, investments and wealth management and capital remuneration business lines, solidifying our position as one of the most active independent providers of financial advisory services in Brazil, as demonstrated by the Euromoney award for Best Bank for Advisory in Latin America, which we received in 2016 and 2020. In addition, in 2022, we received the Best Investment Bank in Mergers and Acquisitions – M&A – Brazil award at the Leaders League’s 3^rd Finance & Law Summit and Awards. In 2023, we were ranked by Euromoney Market Leaders as “Highly Regarded” in the Investment Banking and Diversity & Inclusion categories and as “Notable” in the Environmental, Social & Governance category. In 2024, M&A Advisor awarded us the Energy Deal of the Year.

Between 2018 and 2024, each of our business lines were profitable despite a challenging Brazilian macroeconomic scenario and attained even more visibility for our financial products and services. Our significant achievements during this period include:

In June 2021, Fitch upgraded our corporate credit rating from ‘A-(bra)’ to ‘A+(bra)’ with a stable outlook, citing our resilient business model. In November 2021, Moody’s initiated its corporate credit rating of our company, and we were rated ‘A+(bra)’, with a positive outlook. In 2023, Fitch and Moody’s upgraded our corporate credit rating to ‘AA-(bra)’, with a stable outlook. In June 2024, Fitch upgraded our corporate credit rating to ‘AA(bra)’, with a positive outlook.

On June 17, 2021, we initiated our IPO on the Brazilian stock exchange, and our units started trading on the Level 2 of the B3 on June 21, 2021. In January 2022, we initiated a follow-on offering of our units, in accordance with CVM Instruction No. 400 that closed on January 28, 2022. In September 2023, we conducted a follow-on secondary offering of 16,821,941 units.

With respect to our capital markets operations, our increased liquidity allowed us to (1) increase our ability to offer products such as debentures, infrastructure debentures, CRIs and CRAs (which are typically subject to “firm commitment” guarantees granted by participating underwriters); (2) increase our flexibility in acquiring a more significant percentage of the securities issuances we structure in circumstances where such an acquisition could generate financial gains; (3) issue bridge loans in response to client demand (including clients that are momentarily unable to access the capital markets); (4) acquire a larger portion of the securities issuances we structure in order to place these securities with our clients or trade them in the secondary market; and (5) increase our ability to generate more business for our business lines. Our increased liquidity also assisted our treasury sales & structuring business line, which was able to (1) increase our ability to approve and obtain greater operating limits and strengthen our positioning in the derivatives and treasury products market, including improving cross-selling within our capital markets operations; (2) optimize and scale our proprietary funding structure (including in relation to issuances of bank deposit certificates (certificados de depósito bancário), or CDBs, real estate credit notes (letras de crédito imobiliário), or LCIs, and agribusiness credit notes (letras de crédito do agronegócio), or LCAs); and (3) reduce our funding costs while maintaining our conservative risk management strategy. As a central component of our conservative risk management strategy, we seek to maintain BR Partners Banco’s Basel index above the 11% minimum requirement of the Brazilian Central Bank. For example, since our IPO in Brazil, BR Partner’s Banco’s Basel index has exceeded 17.4%, which is 6.4 percentage points above the required minimum.

Moreover, we have a customer-centric culture, recognized for offering services and products designed to meet our customers’ specific needs. Since our incorporation in 2009, we have advised over 390 clients in investment banking, capital markets, and treasury sales & structuring transactions and through wealth management services, which demonstrates our strong capabilities with respect to business and commercial relationships.

To strengthen our business portfolio and increase our opportunities for growth, in September 2023, we announced our new wealth management operations within our investments and wealth management business line. Our wealth management operations incorporate synergies across our other business lines, mainly by giving our wealthy clients access to structured products and services that we offer through our other business lines. As of March 31, 2025, we had R$5.1 billion of wealth under advisory (WuA), compared to R$2.7 billion as of March 31, 2024. As of December 31, 2024, we had R$4.7 billion of wealth under advisory, compared to R$2.3 billion as of December 31, 2023.

On March 21, 2025, we changed our name from BR Advisory Partners Participações S.A. to BRBI BR Partners S.A. We believe that this name change simplifies our corporate identity and strengthens our image and presence in the market in which we operate.

As of March 31, 2025, we employed 189 officers and other employees. As of December 31, 2024, we employed 184 officers and other employees. We perform annual evaluations of the development of each of our employees in each of our business lines and supporting/administrative departments in order to recognize the value and commitment of those that achieve optimal performance and align with our values.

Capital Expenditures and Investment Plan

The following table sets forth a breakdown of our capital expenditures by type of asset for the periods indicated. Our capital expenditures are geographically distributed exclusively in Brazil.

The following table sets forth a percentage breakdown of the capital expenditures disclosed above.

Digital Platform

Through our digital platform, we aim to create an interface that enhances communication with our current clients in our wealth management business line. This product was designed to meet our clients' demands for a comprehensive overview of their investment portfolios and to provide an additional channel for their interaction with us.

The digital platform is exclusively available to selected high-income investors and is not available to the general public. The platform is operational and offers its current users a comprehensive suite of services, allowing these clients to access bank statements, place investment orders, request withdrawals and make wire transfers to settle payments related to their investments.

Additionally, users can monitor the evolution and profitability of their investment portfolios. The platform also offers a structured grid of fixed income products, providing a range of investment options that clients can choose from, which we are responsible for executing.

Sources of Investments

The primary source of our investments in non-current assets is the cash we generate from our operations and fundraising activities. For additional information see, “Item 5.B Liquidity and Capital Resources—Sources of Funds.”

We believe that existing resources and operating income will be sufficient for our capital expenditures and investment plan and to meet our liquidity requirements. However, our capital expenditures and investment plan is subject to a number of contingencies, many of which are beyond our control, including the continued growth and stability of the economy of Brazil and our business and operations. We cannot assure you that we will successfully complete all or any portion of our capital expenditures and investment plan. In addition, we may participate in acquisitions or asset divestitures that are not accounted for in the capital expenditures and investment plan, and we may also modify these plans.

Public Information

The SEC maintains an internet site (www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, including us. See “Item 10. Additional Information—H. Documents on Display.”

Our website is https://www.ri.brpartners.com.br. Information contained on or obtainable through our website is not incorporated into, and does not constitute a part of, this registration statement.

Summary of our Operations

Since our founding, we have gained the trust of business leaders and investors who hold an equity interest in our capital, provide us with institutional support, expand our horizons and operations, intensify our product distribution capacity and strengthen our brand.

Our history defines and continues to guide our value proposition. We were founded in 2009 as a financial advisory boutique for mergers and acquisitions, to provide clients an independent alternative to large financial institutions during the global economic crisis.

Since January 1, 2012, when we obtained authorization from the Brazilian Central Bank to operate as a financial institution in Brazil, we have increased our operating platform through products and services relating to capital markets, credit, treasury, financial restructuring, fund management and investments. These new verticals created synergies within our existing operations as a result of the enhanced cross-selling of our services and products, reinforcing our value proposition throughout the lifetime of our relationship with our clients. For example, clients that rely on our M&A financial advisory services typically experience liquidity events in connection with which they may ultimately benefit from our other investment products and services.

In terms of the number and volume of M&A transactions for which we provide advisory services in Brazil, we were ranked fourth, second and fifth in 2022, 2023 and 2024, respectively, by Bloomberg.

We believe that as a result of these efforts, we have achieved consistent results. As of March 31, 2025, our total assets were R$15.5 billion and our shareholders’ equity was R$796 million. In the three-month period ended March 31, 2025, we generated total revenues of R$127.5 million and our profit for the period was R$43.1 million. In the three-month period ended March 31, 2024, we generated total revenues of R$137.6 million and our profit for the period was R$49.5 million.

As of December 31, 2024, our total assets were R$15.1 billion and our shareholders’ equity was R$804 million. In the year ended December 31, 2024, we generated total revenues of R$581.2 million and our profit for the year was R$193.7 million. As of December 31, 2023, our total assets were R$10.7 billion and our shareholders’ equity was R$820.8 million. In the year ended December 31, 2023, we generated total revenues of R$435.8 million and our profit for the year was R$155.1 million.

Our Business Lines

Our business is organized under one operating segment that comprises the following business lines: (1) investment banking and capital markets; (2) treasury sales & structuring; (3) investments and wealth management; and (4) capital remuneration, as further described below.

Investment Banking and Capital Markets

Total revenue from our investment banking and capital markets business line (1) for the three-month periods ended March 31, 2025 and 2024 were R$78.5 million and R$77.7 million, respectively, and (2) for the years ended December 31, 2024, 2023 and 2022 were R$352.8 million, R$240.7 million and R$245.3 million, respectively.

Investment Banking

We have provided investment banking services since our founding, having identified a need for independent and quality investment banking services.

Through our investment banking operations, we offer a range of financial and strategic advisory services to institutional clients, government agencies and individuals in connection with M&A transactions, the purchase and sale of equity securities, fundraising, strategic partnerships, corporate restructuring and M&A defensive tactics.

We are focused on assisting our clients with complex financial challenges, guiding senior executives, boards of directors and shareholders in strategic transactions of financial and transformational importance. We have experience in advising government-controlled companies on a diverse array of transactions, which we believe provides us a strategic advantage in light of the Brazilian government’s privatization agenda.

The scope of our investment banking operations includes: the preparation of presentations on financial valuations and decision making assistance; the gathering of economic and financial information and strategic positioning; financial modeling; business structuring; negotiations; and the provision of advisory services to the shareholders and the management of companies during each stage of the business maturation process.

Our investment banking division also provides restructuring advisory services, assisting our clients in debt renegotiations with financial institutions and holders of debt securities as well as in adapting their capital structures to client cash flows and business climates. We believe that independent advisory services are an essential characteristic of the restructuring advisory services we provide, enabling us to provide unbiased advice and substantially reducing the risk of conflicts of interest in negotiations with other counterparties.

We believe that the execution capability of our investment banking operations is evidenced by our M&A transaction rankings. Over our 15 years in operation, we believe that we have earned the respect and recognition of the market, competing head-to-head with all of the major financial institutions in Brazil.

Since January 1, 2009, under the stewardship of leaders with more than 30 years of accumulated experience, we have participated in transactions surpassing R$470 billion (in terms of deal volume).

In 2020, we led in Bloomberg’s, Mergermarket’s and Dealogic’s rankings in terms of number of transactions and deal volume in Brazil, and in 2021, we ranked second and fifth in terms of deal volume in the rankings published by Bloomberg and Thomson in Brazil, respectively. In 2022 and 2023, we were ranked fourth and second, respectively, in terms of deal volume in the M&A rankings published by Bloomberg. In 2024, M&A Advisor awarded us the Energy Deal of the Year.

We believe our reputation in the Brazilian market has allowed us to capture new clients each year with whom we strive to create long-lasting relationships to continue to provide investment banking services in future transactions. We believe that our client base consists of clients with whom we have developed long-term relationships and to whom we offer investment banking services on a recurrent basis.

We generate investment banking revenue based on advisory service fees that are calculated as a percentage of the completed transaction.

Since our IPO in 2021, we have participated in 84 transactions in a range of industries. We announced (1) one transaction in the three-month period ended March 31, 2025, and (2) 14 transactions in the year ended December 31, 2024, including the following transactions:

Strategic advisory in M&A transactions

Strategic advisory in capital market transactions to boards of directors and shareholders

Restructurings & Special Situations

Capital Markets

Through our capital markets operations, we offer our clients customized advisory services in connection with the raising of funds from investors through structured debt instruments.

We structure and distribute financial products developed to suit each client’s specific needs, whether in their capacity as borrower or investor, and we actively participate in the entire structuring process to guide our clients through market realities, often acquiring an interest in the offering to strengthen the alignment of our and our clients’ interests.

As evidenced by our leading position in rankings published by ANBIMA relating to the distribution of fixed income securities in Brazil, we believe we play an important role in facilitating direct client access to the Brazilian financial markets, providing advisory services in the distribution of financial products such as: CRIs, CRAs, FIIs, private equity funds (fundos de investimento em participações), or FIPs, promissory notes and debentures, among others. Moreover, we have experience in providing advisory services in connection with real estate equity transactions, such as sale and leaseback transactions, repossessions and built-to-suit transactions.

We believe that our origination, structuring and distribution capability is derived from our network of qualified professional investors that primarily include high net worth individuals, or HNWIs, high net worth families (i.e., family offices) and institutional investors.

We further believe that our successful track record in the Brazilian capital markets is evidenced by our leading position in ANBIMA’s CRI Brazilian rankings. We were ranked in top positions in the ANBIMA Brazil rankings over the last five years, including third place in 2022 in ANBIMA’s Brazilian rankings for CRI advisory services and second place in ANBIMA’s rankings for the origination of real estate funds (originação de fundos de investimentos mobiliários).

Since January 1, 2013, we have advised on, cumulatively, more than R$38 billion in capital markets transactions.

We generate revenue in our capital markets operations primarily through service fees, which generally consist of underwriting, structuring and distribution fees that are calculated as a percentage of the transaction’s volume.

We have advised on issuances of debentures, CRAs and bank credit notes (cédulas de crédito bancário), or CCBs, which we began to offer in 2020. Considering all of our product offerings (including CRIs, FIIs, debentures and CRAs), we participated in (1) 10 issuances in the three-month period ended March 31, 2025 (a 37.5% decrease, when compared to 16 issuances in the three-month period ended March 31, 2024) and (2) 57 issuances in the year ended December 31, 2024 (a 62.8% increase, when compared to 35 issuances in the year ended December 31, 2023). Since January 1, 2022, we have participated in a total aggregate of R$24 billion issuances across all of our product offerings.

The chart below sets forth our track record for issuances for which we served as a financial advisor in terms of deal volume and the number of deals for the periods indicated:

The chart below sets forth a comparison of the breakdown of our role as financial advisor of securities issuances for the years indicated:

Treasury Sales & Structuring

Total revenue from our treasury sales & structuring business line (1) for the three-month periods ended March 31, 2025 and 2024 were R$17.2 million and R$17.4 million, respectively, and (2) for the years ended December 31, 2024, 2023 and 2022 were R$88.3 million, R$65.1 million and R$62.6 million, respectively.

Our treasury sales & structuring business line advises on, structures and executes foreign exchange, derivatives and surety transactions for corporate and institutional clients. As a result of the extensive relationship network of the BR Partners group, we are also able to leverage our operations by offering made-to-measure solutions in a variety of markets for clients across a variety of sectors.

We have consistently generated revenue through our treasury sales & structuring operations, particularly when compared to our financial position. We believe that our success derives from: (1) the quality and experience of our dedicated executives, (2) our agility in analyzing and approving new limits for new or repeat treasury sales & structuring clients, (3) our cross-selling capability developed in conjunction with our capital markets operations, and (4) our clients’ perception of our independence in providing treasury sales & structuring advisory services.

We also raise funds from clients and third parties through treasury products, such as CDBs, LCIs, LCAs, and treasury bills (letras financeiras), or LFs, as further discussed below.

CDBs (bank deposit certificates) are used by banks in Brazil to raise funds directly from investors to finance their credit operations. By issuing a CDB, BR Partners Banco, for example, borrows money from investors and commits to pay the money with interest. CDBs are a flexible funding instrument that can be tailored to different terms, rates (fixed, floating, or inflation-linked), and liquidity profiles. Also, CDBs are insured by the Brazilian Credit Guarantee Fund (Fundo Garantidor de Créditos), or FGC.

LCIs (real estate credit bills) allow banks to raise funds specifically to finance real estate credit operations, such as mortgages. When issuing an LCI, the issuer must link the raised funds to real estate-backed loans existing on their balance sheet. Considering the income tax exemption on earnings, LCIs are a cost-effective funding source for BR Partners Banco, offering potentially lower interest rates while still being attractive to investors. LCIs are also FGC-insured.

LCAs (agribusiness credit bills) are similar to LCIs and are issued to fund a bank’s credit operations in the agribusiness sector. LCAs are commonly used to recycle capital and support agricultural financing. The income tax exemption for individual investors lowers the bank’s cost of funding, while FGC coverage provides additional security for the investor.

LFs (treasury bills) are issued by banks primarily to strengthen their long-term funding structure and meet regulatory capital requirements. Unlike other instruments, LFs require a minimum 2-year maturity and may not be redeemed prior to their stated maturity. As such, they may be an optimal tool for liquidity and asset-liability management. LFs are not insured by the FGC, and as a result, are commonly targeted by institutional or high-net-worth investors who demand higher yields in return for the increased risk and lower liquidity.

Our treasury sales & structuring business line is also responsible for treasury management, asset and liability management, or ALM, and providing access to different local and international primary trading markets.

The revenue we generate through our treasury sales & structuring business line does not derive from proprietary positions, but rather from (1) in the case of our foreign exchange and derivatives operations, a spread calculated as the difference between the amount that we charge clients and our trades in the market, and (2) the revenue we generate from commissions we charge on the sureties we provide.

Since January 1, 2022, we have negotiated an aggregate of more than R$162 billion in transactions in this business line. The volume of our treasury sales & structuring transactions (1) decreased by 59% to R$8.9 billion in the three-month period ended March 31, 2025 when compared to the three-month period ended March 31, 2024, and (2) increased by 234% to R$74.4 billion in the year ended December 31, 2024 when compared to the year ended December 31, 2022.

Investments and Wealth Management

Total revenue from our investments and wealth management business line (1) for the three-month periods ended March 31, 2025 and 2024 were R$3.4 million and R$2.1 million, respectively, and (2) for the years ended December 31, 2024, 2023 and 2022 were R$12.0 million, R$6.0 million and R$5.5 million, respectively.

Our investments and wealth management business line comprises our investment and wealth management operations.

Investments

Through our investment operations, we are primarily engaged in acquiring and holding minority equity interests in small and middle-market privately held companies acquired through investment vehicles that operate under specific investment strategies, enabling investors to invest capital exclusively under the investment strategies that they believe offer them the most optimal value.

Approximately 90% of the FIPs under our management were raised from third parties, enabling us to offer our clients a differentiated product that we believe is rarely available to Brazilian investors. In exchange, investors in our private equity funds agree to maintain the capital they invest for periods of up to 10 years, permitting us to maintain and advance our investment strategies.

Our investment operations structure private equity funds to invest in and develop new business platforms by investing our own and third-party capital as we identify new opportunities in a particular sector. Our consolidated investment platform allows us to build scalable investment strategies that require lower initial capital commitments as we increase our asset base and our exposure to a particular sector through new opportunities and gain familiarity with the sector.

Through BR Partners Gestora, we benefit from significant experience and a competitive advantage in our investment operations. In particular, we benefit from investors that continually commit capital to our funds, an extensive network of relationships with, and rapid access to, entrepreneurs, a sufficient flow of investment opportunities that enable us to leverage these operations and access to proprietary deals that are outside of the radar of our main competitors.

We strive to invest in assets that produce recurring income, but that also have income growth potential in periods of economic recovery. For example, through investment funds administered by BR Partners Gestora, we have become a financial investor in the Brazilian outlet malls sector, generating recurring revenue through administration fees. Furthermore, in November 2021, we launched a fund with a minority stake to invest up to R$100 million in PetCamp, the largest pet retail chain in the interior of Brazil.

In our investment operations, we primarily generate revenue through (1) management fees that are calculated as a percentage of total capital under management (allocated or committed), which we charge clients that invest in the funds we manage, (2) performance fees that are calculated as a percentage of the returns on investments that exceed previously agreed thresholds, (3) fees imposed on new investments, which are typically charged at the time the investment is made, and (4) returns on proprietary investments linked to the remuneration of the capital we invest in funds managed by our investment operations.

Wealth Management

Through our new wealth management operations, which we initiated in September 2023, we manage the assets of wealthy families and individuals. Our wealth management team is composed of experienced employees with market expertise. The main objective of our advisory services in our wealth management operations is to preserve or maximize the generation of wealth for our clients, with a selection and risk management profile consistent with the interests of each client.

Since our founding, we have expanded our business lines through a modular approach, taking advantage of opportune moments to invest in new areas of growth while prioritizing activities that complement our relationships with clients and creating synergies among our business lines. In addition, we believe that one of our key competitive advantages is the proximity, openness and trust of large Brazilian companies and high net worth families, which we believe is demonstrated by our track-record advising these clients in a variety of areas. As such, we believe that we are well positioned to expand our clients’ relationship with us as they direct a portion of their capital resources to our wealth management operations.

Our wealth management operations benefit from an open multi-product platform, digital support and an international presence. We initiated our wealth management operations with the hiring of three senior executives. As of March 31, 2025, we had R$5.1 billion in wealth under advisory. As of December 31, 2024, we had R$4.7 billion in wealth under advisory.

We operate our wealth management operations as a fee-based advisory service for our clients' global assets, without holding custody of these assets. This approach allows our wealth management team to manage portfolios regardless of where the clients' assets are held, enabling our team to provide advisory services with a global perspective on clients' goals. Moreover, as a result of this strategy, our wealth management team is not limited in the types of investment products they can recommend to best meet our clients’ needs. Consequently, we have achieved a multi-product platform with an international presence. As a result of our recent digital platform investments, the digital support we provide enhances client relationships by allowing our clients to consolidate their portfolios and facilitating digital interactions. For more information on our digital platform, see “—A. History and Development of the Company—Capital Expenditures and Investment Plan—Digital Platform.”

We believe that our wealth management operations have substantive synergies with our investment banking business line. Since our founding in 2009, we have advised on more than R$140.0 billion in asset sales to individuals or companies. To leverage the synergies between our wealth management operations and investment banking business line, our wealth management operations seek to manage the wealth generated by the clients we advise through our investment banking business line, and to solidify our relationship with high-net-worth individuals who also occupy decision-making roles with potential clients.

Capital Remuneration

Total revenue from our capital remuneration business line (1) for the three-month periods ended March 31, 2025 and 2024 were R$28.4 million and R$40.4 million, respectively, and (2) for the years ended December 31, 2024, 2023 and 2022 were R$128.1 million, R$124.1 million and R$100.1 million, respectively.

Through our capital remuneration business line, we generate returns through investments in liquid assets consisting of publicly-traded securities and through the reappraisal of assets managed by our investment operations. Our invested securities are generally linked to the interbank deposit certificate (certificado de depósito interbancário), or CDI, rate, which is an average of interbank overnight rates in Brazil.

Our Operations

Investment Banking

As demonstrated by our third-party M&A rankings, we have achieved a prominent position in the M&A advisory services market in Brazil. Through our investment banking operations, we provide a wide range of sophisticated M&A and other financial advisory services and solutions to a diverse group of clients in Brazil, including a wide array of Brazilian and foreign publicly and privately held companies, financial institutions, funds and individuals.

The main products and services we provide through our investment banking operations are as follows:

Through our investment banking operations, we are focused on providing financial advisory services to solve complex and strategic matters faced by our clients’ businesses. We typically advise our clients’ main decision-makers, senior management, boards, committees and shareholders in transactions of significant importance.

Through our investment banking operations, we seek to build and maintain long-term relationships with our clients that are aligned with their interests in order to position ourselves as their trusted advisor throughout their business cycle. We emphasize the involvement of senior members of our investment banking team with our clients during all phases of transaction analysis and execution.

From January 2010 to March 31, 2025, our investment banking operations provided advisory services on 238 transactions having an aggregate transaction volume of approximately R$474 billion, taking into consideration the financial volume of public transactions and excluding transactions in which the amount was not disclosed.

The well-established leadership position and trust we have built through the M&A advisory services we provide have enabled us to assist our clients during their most challenging financial moments, assist them in renegotiating their debt and other financial instruments, reorganize their capital structures and negotiate the approval of court-supervised reorganization plans within the context of judicial or extra-judicial corporate restructurings.

Moreover, our investment banking operations have developed strong relationships with clients from different sectors of the Brazilian economy, having participated in financial transactions that are not significantly concentrated in any specific industry since our incorporation. The graph below shows the distribution of all of our investment banking transactions by economic sector in the year ended December 31, 2024. Only the energy, financial services and retail industries accounted for more than 10% of our investment banking advisory transactions. In the three-month period ended March 31, 2025, we announced one M&A transaction in the consumer sector.

Capital Markets

Through BR Partners Banco and BR Partners Mercado de Capitais Ltda., or BR Capital Markets, our debt capital markets operations originate, structure and participate in the distribution of fixed-income debt securities and other debt instruments for companies in Brazil. Through our equity capital markets operations, we also structure and distribute real estate investment fund securities, expanding the products we offer. When serving our clients, our capital markets operations are focused on the private placement of a variety of securities, with a particular emphasis on transactions that have high added value.

The primary securities for which we provide advisory services through our capital markets operations are:

In addition to the structuring and distribution of securities, we also co-invest in our capital markets transactions. As a result, our and our institutional clients’ interests are aligned in connection with our distribution of fixed-income securities, demonstrating our commitment to bearing risk together with such clients.

The chart below sets forth the volume of securities issuances on which we advised and which we structured in the periods indicated:

The chart below sets forth the evolution in the volume of private securities retained as credit instruments on which we advised and which we structured in the periods indicated:

Treasury Sales & Structuring

Through BR Partners Banco, our treasury sales & structuring business line prospects, structures and executes risk management transactions for our corporate and institutional clients in the interest, currency and commodity derivatives markets. Through our treasury sales & structuring business line, we also execute currency exchange transactions, provide bank sureties and sell our fundraising products.

We believe the market differentials of our treasury sales & structuring business line include:

Through our treasury sales & structuring business line, we offer the following products:

Our treasury sales & structuring clients include:

Our treasury sales & structuring business line:

Investments

Through our investment operations, we manage and invest our and third-party capital in relatively illiquid funds based on investment parameters established by BR Partners Gestora, a fund manager we control. Through our investment operations, we generate revenue from recurring investment management fees, performance fees (which are paid upon redemption of the investment) and capital gains earned over the lifetime of the investment.

Through BR Partners Gestora, the investment funds we manage primarily acquire minority interests in privately held small and medium-sized companies through privately negotiated transactions and investment vehicles that are tailored to specific strategies, allowing investors to allocate capital exclusively to the investment strategies they believe generate the most value. Over 80% of the capital invested in our investment funds under management were obtained from third parties, enabling us to offer our clients a unique product not generally available to Brazilian investors. In exchange, investors in our private equity funds agree to maintain the capital they invest for periods of up to 10 years, enabling us to maintain and solidify our investment strategies.

Through our investment operations, the funds we manage generally invest in:

Moreover, we invest our own capital in the investment funds we manage, together with third-party capital to ensure the alignment of our and our clients’ interests.

We offer our clients the opportunity to invest in investment funds and multi-market investment funds (fundos de investimento multimercados). Our portfolios generally comprise fixed-income and illiquid assets. Our primary investors include HNWIs, high-income families and corporations. We pool our investors’ capital directly and do not rely on third-party pooling services.

Our investment professionals prospect and develop investment opportunities in a variety of subsectors in the Brazilian market, including real estate projects, infrastructure projects and “equity growth” opportunities. We are active in all stages of the investment process, including the origination and prospection of investment opportunities, structuring of the investment vehicle, the pooling of third-party capital, the structuring of investment targets, the implementation of projects, operational and financial monitoring and divestment. Our investment professionals seek to offer our clients attractive returns tailored to their risk appetite, including through our investment portfolio focused on the outlet shopping sector.

In 2021, we raised a minority fund to invest up to R$100 million in PetCamp, the largest retail pet-store outside of metropolitan areas in Brazil, with 32 stores.

Our investment methodology centers on local market knowledge and takes into consideration the particular investment characteristics of emerging markets, including lack of liquidity, growth, specific sector dynamics, financial disintermediation, consolidation, privatization, risks related to other assets in the economy (beta) and increased corporate governance.

Although our investments involve potential risks and are generally illiquid, they may provide substantial returns over invested capital, generate attractive management and performance commissions and generate capital gains over the lifetime of the investment. The table below sets forth the growth in the shareholders’ equity of BR Partners Outlet Premium Fundo de Investimento em Participações – Multiestratégia, or FIP Outlet, an investment fund managed by us that invests in shopping centers and the growth of FIP BR Partners Pet, or FIP Pet, which invests in PetCamp:

The investment funds we manage may invest in illiquid investments or financial instruments for which there is little, if any, market activity. Through our investment operations, the investment funds we manage may determine the value of such investments and financial instruments based on the fair value of such investments. The fair value of such investments and financial instruments is generally determined using valuation methodologies.

The determination of fair value using these methodologies takes into consideration a range of factors including, but not limited to, the price at which the investment was acquired, the nature of the investment, local market conditions, trading values on public exchanges for comparable securities, current and projected operating performance and financing transactions subsequent to the acquisition of the investment. These valuation methodologies may involve a significant degree of judgment by fund administrators.

Because there is significant uncertainty in the valuation of, or in the stability of the value of, illiquid investments, the fair values of such investments as reflected in an investment fund’s net asset value do not necessarily reflect the prices that would actually be obtained by the investment funds we manage when such investments are realized. Realizations at values significantly lower than the values at which investments have been reflected in prior fund net asset values would result in reduced gains or losses for the applicable fund and, consequently, a potential reduction in the management and performance fees we receive.

Wealth Management

In September 2023, we announced the commencement of our wealth management operations, a new milestone towards our development and growth, and primarily, the preservation and reinforcement of our most important attribute: our role as a client-centric advisor, combining a client-focused culture with financial independence across our various business lines.

Beyond the expansion of our operations, our wealth management operations generate a higher proportion of recurring revenue, given that the services we render are charged in accordance with a pre-arranged fee based on the total amount of the client’s assets we manage. As such, the predictability of our wealth management operations revenue is relatively more stable when compared to our other operations.

Through our wealth management operations, we are responsible for managing the wealth of high net worth families and individuals. Our wealth management services are comprehensive and diverse to cater to the specific needs of each client, with the aim of managing and perpetuating their wealth.

Our wealth management operations are managed by a team with extensive experience in the market, capable of delivering a wide range of services to manage and perpetuate the wealth of our clients and their families. We believe that our senior team benefits from an entrepreneurial spirit and significant experience in the market.

The main services we provide through our wealth management operations are:

We believe that our wealth management operations have substantive synergies with our investment banking operations. Since our founding in 2009, we have advised on over R$143 billion worth of asset sales to individuals or companies. Through our new wealth management operations, we seek to manage the wealth generated by the clients we advise through our investment banking business line. Our wealth management team includes professionals dedicated to prospecting for new clients to increase their net new money, or NNM, in a market that totaled R$498.5 billion as of December 2024, according to ANBIMA. Moreover, our wealth management operations are a strategic pillar for the origination of new business for our other activities, given that our wealth management team has access to new high net worth families and companies with potential for cross-selling opportunities in investment banking, capital markets and treasury sales & structuring transactions.

As of December 31, 2023, just four months after the initiation of our wealth management operations, our wealth under advisory totaled R$2.3 billion. As of December 31, 2024, our wealth under advisory totaled R$4.7 billion. As of March 31, 2024 and 2025, our wealth under advisory totaled R$2.7 billion and R$5.1 billion, respectively.

Capital Remuneration

Through our capital remuneration business line, we generate returns through (1) the investment of our equity in sovereign bonds, (2) the accrual of our private securities portfolio net of our funding costs, as originated by our capital markets team, which also includes third-party funding, and (3) the revaluation of our proprietary participation in our investment operations, which also includes third-party funding. We use these returns to fund certain transactions in our other business lines.

This business line also generates returns from the portfolio of private securities originated from our capital markets operations.

Interest Rates (SELIC Rate)

Generally, high interest rates are favorable for our capital remuneration business line. Although our capital remuneration operations are material to our business and revenue, we believe we possess a diversified strategy in relation to our sources of revenue. Through this strategy, we operate business lines that in contrast to our capital remuneration operations perform better in lower interest rate environments. For instance, lower interest rate environments make our capital markets debt issuance offerings more attractive for companies seeking to raise capital. In 2024, according to ANBIMA data, the volume of debt issuances totaled R$627 billion, representing an increase of 75.5% compared to R$355 billion in 2023.

Source: Brazilian Central Bank data provided from January 2019 through May 2025.

BR Partners Banco’s Basel Ratio

Our subsidiary, BR Partners Banco, is subject to the regulation and supervision of the Brazilian Central Bank, including in relation to capital and equity requirements.

Basel Ratio

The Basel Ratio is calculated as reference equity divided by risk weighted assets (assets that expose us to financial risk). The Basel Ratio is monitored by the Brazilian Central Bank and has a standard meaning for all financial institutions in Brazil. The Basel Ratio measures the degree of a financial institution’s financial leverage and financial institutions in Brazil must ensure that their Basel Ratio exceeds the minimum threshold established by the Brazilian Central Bank.

The table below sets forth a reconciliation of BR Partners Banco’s Basel Ratio, prepared in accordance with generally accepted accounting principles adopted in Brazil applicable to institutions authorized to operate by the Brazilian Central Bank:

BR Partners Banco is subject to new regulations established by CMN Resolution 4,966/21 of the CMN and BCB Resolution 352/23 of the Brazilian Central Bank. These resolutions establish new accounting concepts and criteria applicable to financial instruments that must be observed by financial institutions and other institutions authorized to operate by the Brazilian Central Bank.

Material Clients

For the purposes of the following discussion, we define a “material client” as a client from which we generated 10% or more of our total revenues during the applicable period.

The table below sets forth the total number of material clients and the percentage of aggregate total revenues we generated from material clients for the periods indicated:

Suppliers

In connection with our investment banking, capital markets and treasury sales & structuring operations, we may hire third-party service providers, particularly legal and business advisors, to provide us with certain services. We consider these services to be only complementary, and not essential, to our operations, and any such third-party service providers are not subject to government controls or regulations. We are not dependent on any particular third-party service providers and, if necessary, may replace any of our third-party service providers with service providers of similar qualifications. Furthermore, as we are not dependent on any particular third-party service providers, we believe that any pricing volatility related to third-party service providers would not materially adversely affect us given our ability to replace them at any given time. Our other operations do not require third-party suppliers.

Geographic Distribution of Operations

In the three-month period ended March 31, 2025, we generated 99.4%, or R$126.7 million, of our total revenues in Brazil and 0.6%, or R$0.8 million, of our total revenues in the United States of America.

In the year ended December 31, 2024, we generated 99.7%, or R$580 million, of our total revenues in Brazil and 0.3%, or R$1.6 million, of our total revenues in the United States of America.

In the year ended December 31, 2023, we generated 100%, or R$435.8 million, of our total revenues in Brazil.

In the year ended December 31, 2022, we generated 100%, or R$413.5 million, of our total revenues in Brazil.

Seasonality

Investment Banking

Our investment banking operations are not subject to seasonality. The revenue we generate through our investment banking operations is substantially dependent on the settlement of the transactions for which we provide advisory services. The effective settlement of each transaction is subject to each transaction’s particular conditions, including authorizations from governmental and competition authorities, corporate reorganizations, creditor approvals and compliance with certain operational and/or market requirements, among others.

Capital Markets

Our capital markets operations are not subject to seasonality.

Treasury Sales & Structuring

As a result of the counter-party risk to which banks are exposed in treasury sales & structuring transactions, treasury sales & structuring revenue generally tends to improve during periods of increased asset volatility or credit scarcity. On the other hand, during periods of decreased asset volatility and increased liquidity, increased revenue may be generated through structured transactions and as a result of the cross-selling of M&A and capital markets products and services.

Investments

Seasonality within our investment operations is not significant. The revenue we generate in connection with the performance fees we charge on third-party invested capital is non-recurring and may therefore positively impact our results in any given period. We record any such performance fees when effectively realized either (1) at the time the investment is redeemed or (2) at the end of the applicable measurement period.

Capital Remuneration

Our capital remuneration operations are not subject to seasonality.

Marketing

As of the date of this registration statement, we do not have a structured marketing department. Our marketing efforts are limited to social media marketing services provided by a third-party marketing agency and a seasonal recruiting program developed and administered by our human resources department.

Intellectual Property

In Brazil, ownership of trademarks is evidenced only through validly approved registration with the Brazilian National Institute of Industrial Property (Instituto Nacional da Propriedade Industrial), or the INPI, the agency responsible for registering trademarks and patents in Brazil. After registration, the owner is assured exclusive use of the trademark throughout Brazil for a period of ten years, renewable for successive periods, provided that the renewal request is made in the last year of the registration term, or in the six months following the end of the registration term. During the registration process, the entity or individual filing for trademark registration merely has an expectation of the right to use the trademarks applied for to identify its products or services specifically in the requested class.

The registration of trademarks is terminated upon: (i) expiration of the term; (ii) waiver by the titleholder; (iii) lack of use of the trademark; or (iv) non-compliance with the provisions of article 217 of Law No. 9,279/96, any conditions imposed by the INPI pursuant to Law No. 9,279/96 or other related legislation. The maintenance of trademark registrations requires the periodic payment of fees to the applicable regulatory body. There can be no assurance that third parties will not claim that we are violating their intellectual property rights nor that any such claim will not prevail in court.

Our Trademarks

As of the date of this registration statement, we hold two registrations with the INPI for the trademark “BR PARTNERS”.

We are unable to quantify the impact of the loss of any of our trademarks. Any loss of any of our registered trademarks would result in the termination of our exclusive right to use such trademark and we may encounter difficulties in preventing third parties from using identical or similar trademarks, including in connection with competing products or services. While we believe that we will not lose any of our rights over our existing trademarks, there is a remote possibility that we may lose such rights over certain brands we deem strategic to our operations, which may result in a substantial loss in relation to our assets. We may also be subject to criminal or civil lawsuits in connection with any violation or improper use by us of the trademarks of third parties.

Our Domain Names

As of the date of this registration statement, we own certain domain names, such as www.brap.com.br, www.bancobrpartners.com.br and www.brpartners.net.br.

We may lose our rights to our domain names in the event of: (1) our failure to pay periodic maintenance fees due in respect of our domain names; (2) a determination by the applicable authorities that we provided improper, false, invalid or outdated information in connection with the registration of our domain names; (3) our failure to present required documentation to applicable authorities in a timely manner; (4) an application for registration of a trademark or trademark application related to our domain names made by a third-party, subject to certain other conditions; (5) a court order; or (6) our express request.

We do not believe that we would be materially adversely affected in the event we lose our domain names, given that none of these domain names serve as our primary internet site. In the event we lose our rights to these domain names, we must cease to use these domain names and third parties may subsequently register them. In the event we lose our www.brap.com.br domain name, our operations may be materially adversely affected as a result of a decrease in our available service channels in addition to any negative impact on our image and reputation.

Social and Environmental Policies

On July 20, 2020, our board of executive officers determined that our social-environmental risk management policies will conform to the policies, controls and practices established in BR Partners Banco’s Social and Environmental Liability Policy and its Social-Environmental Liability Policy Manual.

Moreover, the Banking Self-Regulation Rule No. 014/2014, enacted by the Brazilian Banking Federation (Federação Brasileira de Banco – FEBRABAN), or SARB Ruling, establishes the self-regulation program for the development and implementation of socio-environmental liability policies, determining the fundamental guidelines and procedures for the incorporation of social and environmental risk assessment and management practices in the companies’ businesses.

We developed the Social-Environmental Liability Policy and Social-Environmental Liability Policy Manual taking into consideration what we believe are best market practices, the provisions of CMN Resolution 4,945, dated September 15, 2021, and the Brazilian Banking Federation’s SARB Ruling in order to ensure our operations comply with applicable rules and regulations and to ensure the continuous improvement and sustainability of our operations.

Although we believe that our current internal social-environmental liability policies are sufficient to ensure that our operations comply with applicable rules and environmental regulations, we are currently developing and preparing a sustainability report with the goal of decreasing the environmental impact of our operations.

Our social-environmental initiatives include:

Industry Overview

Investment Banking

The M&A and financial advisory sector provides a variety of services related to mergers, acquisitions, divestments, the preparation of appraisal reports and fairness opinions, restructurings, privatizations and corporate restructurings. These services are typically provided by wholesale banks, investment banks, M&A boutiques, financial advisory and consulting companies, law firms and independent professionals.

Brazil is currently the leading country in Latin America for M&A transactions. Despite recent periods of deceleration and political turmoil, Brazil has intrinsic advantages and solid macroeconomic and demographic foundations, such as substantial natural resources and a population of over 200 million inhabitants, representing one of the 10 largest economies in the world and the highest GDP of its region. The graphic below sets forth the evolution in the volume and number of M&A transactions in the Brazilian market for the period indicated, based on data gathered by Thomson:

Volume and Number of M&A Transactions in the Brazilian Market (in billions of R$)

Source: Thomson Reuters

In 2021, Brazil experienced an increase of nearly 90% in transaction volumes driven by low SELIC rates and a favorable Brazilian government agenda. In 2022, however, transaction volumes decreased approximately 45%, primarily due to an increase in macroeconomic uncertainty arising from factors such as the Ukraine war, an increase in national interest rates and political instability in an election year.

In 2023, as a result of efforts to control inflation and the continued decrease in interest rates, M&A transactions in Brazil showed signs of resurgence only in the fourth quarter of the year. Overall, however, the year was marked by a challenging scenario of uncertainties and difficulties primarily due to high average interest rates throughout the year, which severely restricted strategic transactions. An increase in transactions in the capital markets (primarily IPO’s and secondary offerings) can be seen as a proxy for an increase in M&A transaction volumes. In 2024, higher interest rates materially adversely affected the IPO market and the market for secondary offerings.

The graph below sets forth the evolution in the volume and number of IPO’s/secondary offerings and M&A transaction volumes for the period indicated:

Source: ANBIMA

In addition, with respect to the SELIC rate (Brazil’s basic interest rate), Brazil experienced a period of monetary tightening between 2022 and 2023, in which the average annual SELIC rate increased from 12.6% to 13.3%. In the M&A industry, this high interest rate has directly impacted the decision-making process between buyers and sellers of assets.

Between 2022 and 2023, the volume of announced transactions decreased 52% according to Thomson Reuters. High interest rates may increase the indebtedness of certain debtors, which may, as a result, cause them to experience financial difficulties. Such difficulties generally increase demand for financial restructuring services.

Since September 2023, with the stabilization of inflation, the process of monetary loosening has begun, facilitating a recovery in the Brazilian capital markets, as well as favoring investment banking activities. However, the SELIC rate increased by the end of 2024, which may lead to a more challenging monetary environment in 2025.

In periods of uncertainty, high volatility and a prolonged adverse economic environment, the demand for advisory services in connection with corporate reorganizations or restructurings increases considerably, encompassing a variety of sectors of the economy. These services are complex, typically involving corporate, operating and financial considerations. They also require negotiations with large financial institutions and institutional investors. In this context, independent advice is essential to ensure the advisor’s impartiality and substantially reduce the risk of conflicts of interest. As a result, the ability to offer advisory services in connection with M&A transactions, financing considerations and restructuring matters provides the advisor with additional protection in periods of lower economic activity.

Financial restructuring advisory services include debt restructuring, refinancing, capital structure balancing, judicial reorganization assistance and debt profile analysis, among other services to assist companies that are undergoing restructurings, whether as a result of a crisis or to optimize their financial structure. Given the degree of complexity involved, financial restructuring advisory services require highly qualified professionals that possess multidisciplinary knowledge, primarily in relation to corporate finance and legal matters.

In addition, during periods of economic slowdown, it is expected that the need for financial restructuring services will increase significantly given an increase in the number of companies facing decreasing cash flow and, as a result, seeking alternatives to honor their short-term obligations and survive the downturn.

According to Serasa Experian, the number of large companies (classified by Serasa Experian as companies with an annual income greater than R$50 million) that sought judicial bankruptcy protection in Brazil increased 1% in 2022. This figure, however, reflects the fact that the new cycle of monetary tightening policies had not significantly affected the balance sheet of large companies at the beginning of the year and consequently did not significantly impact the number of companies seeking protection for the year on an accumulated basis. Taking into consideration the year ended December 31, 2023, the number of large companies seeking bankruptcy protection increased by 48% when compared to the year ended December 31, 2022, according to Serasa Experian. In the year ended December 31, 2024, the total number of large companies seeking bankruptcy protection increased by 34% when compared to the year ended December 31, 2023, to 181 companies, according to Serasa Experian.

The graph below sets forth the number of bankruptcy protection filings by large companies in Brazil for the years indicated:

Source: Serasa Experian

Capital Markets

The debt and equity capital markets have evolved over the past few years in Brazil as a result of historically low basic interest rates. Reduced interest rates allow issuers to raise funds at attractive costs and encourage investors to seek alternatives to government-issued securities or to securities indexed to the interbank deposit certificate. Interest rates, however, increased significantly by 8.75 percentage points in 2022, which resulted in the adoption of a more conservative financing strategy by several companies and, consequently, reduced activity levels in the capital markets. In addition, uncertainties regarding the Brazilian tax structure and the macroeconomic environment were equally responsible for unfavorable conditions in the capital markets.

The debt capital markets experienced a significant setback at the beginning of 2023, following unexpected credit crisis and the rapid deterioration in the quality of the debt securities of large companies, which increased investor risk perception, reduced the volume of debt securities issued in the primary local debt market and resulted in readjustments to the cost of debt in the corporate sector.

Despite these factors, the debt capital markets were positively affected by the Brazilian Central Bank’s decision to decrease the SELIC rate by 2% to 11.75% by the end of 2023. The beginning of a cycle of monetary loosening has been “priced” by the broader market, as reflected by an improvement in the conditions for the issuance of debt securities in the primary market during the second half of 2023.

In 2024, interest rates increased by 1 percentage point to 12.25% by the end of the 2024. Following monetary easing conducted by the Brazilian Central Bank in the beginning of 2024, the Brazilian Central Bank initiated a new policy of monetary tightening in November 2024 due to higher inflation expectations and fiscal concerns.

Within the capital markets sector, certain securitization products have performed particularly well in the Brazilian market, including: (1) CRIs, (2) CRAs, and (3) FIDCs, and the more traditional capital markets products (4) FIIs, (5) debentures, (6) Treasury Sales & Structuring, (7) Investments, (8) Wealth Management and (9) Capital Remuneration.

Real Estate Receivables Certificates (CRI)

CRIs are certificates issued by insurance companies and were created by Law No. 9.514/97. The issuance of CRIs is also regulated by CVM Resolution No. 60 date December 23, 2021, or CMN Resolution 60/21, as amended), which replaced CVM Instruction No. 414, dated December 30, 2004, as amended. CRIs must be backed by residential, corporate or hybrid real estate receivables, in connection with which purchase and sale agreements, purchase and sale commitments, real estate loans and lease agreements are most typically entered into.

CRIs provide an alternative for companies in Brazil that seek to raise funds. This product offers important advantages for issuers (allowing them to raise additional funds in the long term, in local currency, at competitive rates and through a diversified base of creditors) as well as for investors (allowing them to diversify their portfolio with shared risk products that benefit from real estate collateral).

In 2023, CRI issuances in Brazil totaled R$47.8 billion, according to ANBIMA. Despite increased interest rates, the demand for fixed income products remained stable when compared to 2022, reflecting the maturation of the CRI market.

In 2024, CRI issuances in Brazil totaled R$59.9 billion, according to ANBIMA. The demand for fixed income products increased during the year primarily due to a lower average interest rate when compared to 2023.

The graph below sets forth the evolution in the volume of CRI issuances in Brazil for the years indicated:

Source: ANBIMA

Agribusiness Receivables Certificates (CRA)

A CRA is a certificate issued by securitization companies and was instituted by Law No. 11,076/97. The issuance of CRAs is regulated by CVM Resolution 60/21. Having the same basic structure as CRIs, the purpose of CRAs is to advance funds arising from the sale of agricultural products in order to provide financing across the industry’s value chain. CRA issuances are backed by receivables arising from transactions between rural producers and third parties, including financings related to the production, commercialization, processing or industrialization of agricultural products or inputs, machines and inputs used in agricultural production.

In 2023 and 2022, the volume of CRAs issued in Brazil remained stable at R$43.1 billion and R$42.2 billion, respectively, according to ANBIMA. In 2024, the volume of CRAs issued in Brazil remained relatively stable compared to 2023, decreasing 5% primarily due to factors affecting the agribusiness industry during the year.

The following graph sets forth the evolution of the volume of CRAs issued in Brazil for the years indicated:

Source: ANBIMA.

Credit Rights Investment Funds (FIDC)

FIDCs are pooled investment vehicles for the acquisition of rights and securities representing credit rights. An FIDC may be open or closed, depending on the criteria for the redemption of its equity interests, which may be senior, mezzanine or subordinate in nature for purposes of amortization and redemption. Moreover, FIDCs may be classified as standard or non-standard.

In 2019, the FIDC market benefited from the evolution of the credit environment in Brazil, according to information provided by ANBIMA. The reduction in government and direct credit and the expansion of private credit and free capital in the context of decreasing interest rates has incentivized growth in the FIDC market. More specifically, the increase in the expansion of the Brazilian capital markets and the search for better returns from fixed-income products have favored FIDCs, which are currently one of the main securitization vehicles in Brazil.

In 2023, a total of R$43.7 billion in FIDC securities were issued in Brazil, reflecting a decrease of 10.3% when compared to a total of R$48.7 billion in FIDC securities issued in Brazil in 2022. This decrease was mainly due to the slowdown in the Brazilian capital markets, particularly in the first two months of 2023, as a result of certain developments in the credit markets that reduced investor confidence and increased the difficulty companies faced in issuing securities with a higher risk profile.

In 2024, a total of R$81.9 billion in FIDC securities were issued in Brazil, reflecting an increase of 87.3% when compared to a total of R$43.7 billion in FIDC securities issued in Brazil in 2023. This increase was mainly due to (1) high investor demand for FIDC securities, as a result of an increase in interest rates during the period that led to increased demand for fixed-income products, and (2) increased interest among issuers for this type of funding.

The graph below sets forth the evolution in the volume of FIDC issuances in Brazil for the years indicated:

Source: ANBIMA.

Real Estate Investment Funds (FII)

FIIs were established pursuant to Law No. 8,668/93, are regulated by CVM Instruction No. 472, dated October 31, 2008, as amended, and are typically structured as closed condominiums that prohibit the redemption of quotas. FIIs are issued to fund real estate investments, including completed real estate projects, real estate projects under development and issuances of LCIs and CRIs.

FIIs primarily invest in office buildings, shopping centers and logistics warehouses as well as educational, residential and hospital properties.

FIIs have increased in popularity in Brazil mainly due to the growing demand from individuals attracted by their differentiated tax treatment and portfolio diversification.

The improvement in the real estate sector resulted in an increase in FII transactions in 2019 in Brazil, which was also observed in 2020 and 2021. In 2022, however, issuances by FIIs decreased significantly in Brazil. According to data from ANBIMA, the volume of FII issuances more than tripled, from R$12.5 billion in 2018 to R$41.2 billion in 2019, reaching a total of R$44.9 billion in 2020 and R$52.3 billion in 2021. The factors that adversely affected the broader capital markets, however, also adversely affected issuances by FIIs, which decreased 53% to 24.7 billion in 2022. In 2023, the volume of FII issuances totaled R$30.2 billion, representing an increase of 21.9% when compared to 2022. In 2024, the volume of FII issuances totaled R$44.3 billion, representing an increase of 46.1% when compared to 2023. This variation was primarily attributable to an improved macroeconomic environment during the year.

The graph below sets forth the evolution in the volume of FII issuances in Brazil for the years indicated:

Source: ANBIMA.

Debentures

Public issuances of debentures are also regulated by CVM Resolution 80/22 or CVM Resolution 160/23, as amended. Debentures are issued exclusively by corporations and constitute credit securities against the issuing company in connection with credit, capital markets and M&A transactions.

Law No. 12,431/11, enacted in 2011, regulates incentivized debentures, which were designed to finance infrastructure projects that constitute a priority for the Brazilian government, including infrastructure projects related to logistics, energy, sanitation and telecommunications, among others, subject to prior approval by the competent Ministry. In order to encourage investment in infrastructure and promote long-term funding by Brazilian companies, incentivized debentures offer differentiated tax treatment to investors (including foreign investors), subject to certain conditions, such as an average term of over four years, a fixed fee linked to the reference rate (taxa referencial) index in Brazil and a minimum term of 180 days for the payment of periodic remuneration, among others.

According to data from ANBIMA, in 2020, the annual volume of debentures issuances in Brazil decreased by 34% over 2019 to R$122.1 billion. The year 2021 was a record year for announced transactions, which totaled R$250.5 billion. In 2022, the debentures market remained active as the volume of issuances increased 8% to R$270.5 billion, marking another record. In 2023, the market for primary debentures issuances was adversely impacted during the beginning of the year and, despite still performing positively compared to recent years, decreased by 12.6% when compared to 2022. In 2024, the market for primary debenture issuances increased by 100.2% when compared to 2023. This variation was primarily attributable to a decrease in the average SELIC rate during the year.

Debentures Issuances in Brazil

The graph below sets forth the evolution in the volume of debentures issuances in Brazil for the years indicated:

Source: ANBIMA

Treasury Sales & Structuring

Treasury sales & structuring is a wide and diversified business line that encompasses a variety of services provided to domestic and international institutional, corporate and individual clients that can be characterized as having a conservative or aggressive investment profile. This business line allows clients to perform risk management and develop investment strategies related to their business, including speculative investments.

Basic sales and trading products include fundraising products, such as CDBs, LCIs, LCAs and time deposit with special guarantees (depósito a prazo com garantia especial), or DPGEs, currency exchange products, market formation services, brokerage and settlement services, derivatives transactions (including foreign exchange, non-deliverable forwards, or NDFs, and swaps), hedging transactions, interest rate products and stocks and indexed stock products. In Brazil, stocks, futures and other derivatives are mainly traded on the B3.

Brazilian law establishes three securities markets: the stock exchange market, the organized over-the-counter market and the unorganized over-the-counter market. The stock exchange market must comply with the most stringent rules, requiring that issuers establish investor relations departments, comply with minimum corporate governance standards and publish periodic reports. In the stock exchange derivatives market, for example, parties enter into standard contracts in an organized and/or online trading system, facilitating the disclosure of offer and demand prices.

The organized over-the-counter market is less stringent and requires that transactions be registered only at the end of trading. In this market, customized contracts are not traded on a physical trading floor and there is more flexibility for the registration of transactions. The over-the-counter market permits the execution of transactions that are not registered on the stock exchange market, but that depends on the organization and management of institutions that participate in this market. In contrast to the stock exchange market, the over-the-counter market facilitates direct negotiations between the parties through a broad range of contracts with specific characteristics in terms of volume, underlying assets, maturity date and settlement criteria. The organized and un-organized over-the-counter markets are supervised by entities authorized by the CVM.

Investments

Through the management of their own and/or third-party funds, companies that invest in illiquid investments generally invest in privately held companies to obtain a financial return upon divestment in three to ten years, when the equity value of the investee is expected to have increased. Given the extended term of the investment and the restrictions on third-party investment withdrawals, these investments are typically considered illiquid or classified as a private equity investment.

An illiquid investment fund typically has a limited partner (i.e., an external investor) and is managed by a general partner (i.e., the illiquid investment company). The fund obtains investment commitments from qualified investors, including financial institutions, pension funds and individuals with high purchasing power to invest a certain amount of capital in specific assets. These investors become limited partners in the partnership with the fund, while the general partner identifies attractive investment opportunities and requires that the limited partners invest the committed capital. General partners typically make investment decisions and are also responsible for managing the investment portfolio.

The investment cycle typically consists of the following stages: (1) fundraising; (2) origination and structuring of investment opportunities; (3) negotiation and structuring of investments; (4) monitoring and evaluation of portfolio companies; and (5) divestment.

These investments are typically structured to acquire a majority controlling or minority interest in the investee. In the case of a majority controlling interest, the parties typically enter into an agreement that provides voting rights corresponding in the aggregate to more than half of the total voting capital of the investee. In the case of a minority interest, the acquirer generally owns less than half of the investee’s total share capital. In both cases, in order to retain control, this power must be effectively used to direct operations of the company and guide the functioning of its corporate bodies.

Illiquid investment funds may receive compensation through the payment of a management fee and a performance fee. The management fee corresponds to the amount that the investor pays to the manager for the allocation of funds contributed to different assets and serves to compensate the fund for its services. The performance fee, in turn, is the fee charged on the portion of the fund’s yield that exceeds the variation of a previously determined performance index or benchmark and serves to compensate the fund for optimal performance in the event the benchmark is exceeded.

Illiquid investment funds are typically active in the operations of the investee and involved in the investee’s management, optimizing the investee’s operations and financial management and developing corporate governance practices in order to increase the investee’s future value.

Wealth Management

Wealth management companies seek to execute their clients’ investment strategy in an integrated manner and are typically responsible for managing all of their clients’ assets, including financial, real estate, pension and inherited assets. Remuneration is based on a pre-arranged fixed annual fee that takes into consideration the total amount of assets managed on behalf of the client.

Capital Remuneration

In connection with capital remuneration, shareholders’ equity is invested in securities that yield interest at the CDI rate and is therefore directly linked to the basic interest rate in Brazil (i.e., the SELIC). In addition, within this business line, investment assets are typically re-evaluated.

Regulatory Overview

Principal Regulatory Agencies of the Brazilian Financial System

As a holding company, we do not require any government authorization for our activities, but other companies in our economic group require certain governmental authorizations for their activities. BR Partners Banco requires the authorization of the Brazilian Central Bank to operate as a financial institution and authorization from the CVM to operate as a fund manager while BR Partners Gestora requires authorization from the CVM.

BR Partners Banco has received authorization from the Brazilian Central Bank to develop its activities in 2012 and started its operations in the first half of 2013. Moreover, BR Partners Banco was authorized by the CVM to operate as a fund manager on March 10, 2017.

Moreover, our subsidiary, BR Partners Gestora, is also subject to regulation by the CVM and received its authorization to operate on December 20, 2010, having commenced its management activities immediately after the receipt of this authorization. Such companies are subject to regulation and supervision by the Brazilian Central Bank and by the CVM, as applicable, and also to the supervision of certain entities responsible for the self-regulation of their respective sectors.

BR Partners Assessoria Financeira Ltda., or BR Assessoria, BR Partners Assessoria de Mercado de Capitais e Dívidas Ltda., BR Partners Participações Financeiras Ltda. and BR Europe are not subject to any specific required governmental authorization to perform their activities.

The basic institutional structure of the financial system in Brazil was established by Law 4,595/64, as amended, or the Banking Reform Law. The Brazilian national financial system (Sistema Financeiro Nacional), or SFN, comprises the following regulatory and inspection bodies, among others:

The CMN and the Brazilian Central Bank are in charge of regulating the financial markets, as provided by the Banking Reform Law; and the CVM is in charge of regulating the capital markets, as provided by Law No. 6,385, of December 7, 1976.

Below is a summary of the main functions and powers of the most significant of these regulatory bodies.

CMN

The CMN is the highest body of the SFN, responsible for the overall supervision of the monetary, credit, budgetary, fiscal, domestic and external governmental debt policies of Brazil, as set forth in the Banking Reform Law. Specifically, the main responsibilities of the CMN provided by the Banking Reform Law are the following:

The CMN is currently comprised of the Ministry of Finance, the Ministry of Planning and Budget and the chairman of the Brazilian Central Bank, as established by Law No. 9,069, of June 29, 1995, as amended.

Brazilian Central Bank

The Brazilian Central Bank was established by the Banking Reform Law and is the primary enforcer of CMN instructions. Specifically, the main goals of the Brazilian Central Bank are the following:

Pursuant to the Banking Reform Law and Law No. 4,728, of July 14, 1965, the Brazilian Central Bank’s main responsibilities include, but are not limited to, the following:

The chairperson of the Brazilian Central Bank is appointed by the President of Brazil and ratified by the Brazilian Senate, pursuant to the Brazilian Federal Constitution, and remains in office for a term of four years. Such chairperson may be reappointed by the President of Brazil.

CVM

Under Law No. 6,385 of December 7, 1976, as amended, or the Brazilian Securities Law, the CVM is an independent government agency in charge of implementing the CMN’s policies regarding Brazilian capital markets and regulating, developing, controlling and supervising the securities market. The main responsibilities of the CVM are the following:

Since January 1, 2001, the CVM has had jurisdiction to regulate and oversee the financial and investment funds that were originally regulated and supervised by the Brazilian Central Bank. Pursuant to Law No. 10,198, of February 14, 2001, as amended, and Law No. 10,303, of October 31, 2001, the regulation and supervision of both financial mutual funds and variable income funds and transactions involving derivatives were transferred to the CVM. On July 5, 2002, the CVM and the Brazilian Central Bank entered into a memorandum of understanding under which they agreed on the general terms and conditions for the transfer of such duties to the CVM. In accordance with Law No. 6,385, of December 7, 1976, as amended, (also known as the Brazilian Securities Exchange Law), the CVM is managed by one president and four directors appointed by the President of Brazil (and approved by the Senate). The individuals appointed to the CVM must be of good standing and recognized as experts in the field of capital markets. CVM directors are appointed for a single five-year term and one-fifth of the members must be renewed every year.

Banking Regulation

Principal Limitations and Restrictions on Financial Institutions

The activities of financial institutions are subject to certain limitations and restrictions. In general, such limitations and restrictions relate to the offering of credit, risk concentration, investments, conditional operations, foreign currency loans and negotiations, microcredit finance and payroll deduction credit.

The main restrictions on banking activities established by the Banking Reform Law and additional regulations are as follows:

Capital Adequacy and Leverage

Our subsidiary BR Partners Banco must comply with capital requirements established by the Brazilian Central Bank and the CMN that follow principles recommended by the Basel Committee. The recommendations from the Basel Committee seek to reconcile the prudential regulation adopted by its members, for purposes of improving competition among internationally active banks. In addition to such recommendations, the Basel Committee publishes certain core principles for effective banking supervision (Basel core principles), a standard used worldwide for assessment of the effective banking supervision of a certain country.

The Brazilian Central Bank seeks to ensure that the adherence of the Brazilian financial regulations to the recommendations of the Basel Committee takes into consideration the structural conditions of the Brazilian economy. As a result, Brazilian financial institutions are required to comply with certain minimum capital requirements related to credit, market and operational risks.

In June 2004, the Basel Committee approved a framework for risk-based capital adequacy, commonly referred to as the Basel II Accord. The Basel II Accord sets out the details for adopting more risk-sensitive minimum capital requirements for financial institutions. As part of the implementation of the Basel II Accord, the Brazilian Central Bank proposed new regulations on minimum capital requirements.

The Basel II Accord implementation schedule in Brazil was made official by the Brazilian Central Bank on December 9, 2004, through Brazilian Central Bank Communication No. 12,746, which was subsequently amended on September 27, 2007, by Brazilian Central Bank Communication No. 16,137. Such an implementation schedule provided for different stages, starting with the use of a standard approach regarding capital requirements, as determined by the Brazilian Central Bank, and ending with the use of more advanced models.

On September 12, 2010, the Group of Governors and Heads of Supervision (the oversight body of the Basel Committee) announced a substantial strengthening of existing capital requirements and fully endorsed previous agreements on the overall design of the capital and liquidity reform package, the Basel III Accord, which was endorsed at the Seoul G20 Leaders summit in November 2010.

The Basel III Accord recommendations aim to improve the ability of financial institutions to withstand shocks to the financial system or other sectors of the economy, reducing risks of a disseminated financial crisis in the economy, as well as any resulting systemic effect in the financial system.

In March 2013, the CMN and the Brazilian Central Bank issued a new regulatory framework for the implementation of the Basel III Accord in Brazil. Accordingly, CMN Resolution 4,955/21 and CMN Resolution 4,958/21, both dated as of October 21, 2021, as amended, determined, among other things, that Brazilian financial institutions must comply with new minimum capital requirements and established new rules for the calculation of the Reference Equity. The Reference Equity is used to determine the capital adequacy of Brazilian financial institutions and is represented by the sum of the Tier 1 capital and Tier 2 capital.

Tier 1 and Tier 2 capital are calculated as follows under the Basel III Accord and the provisions of CMN Resolution 4,955/21, as amended:

Tier 1 Capital. Tier 1 capital corresponds to the sum of Common Equity Tier 1 Capital (Capital Principal) and Additional Tier 1 Capital (Capital Complementar), pursuant to CMN Resolution 4,955/21, as amended.

The Common Equity Tier 1 Capital (Capital Principal) corresponds to the sum of: (a) capital stock; (b) capital revaluation and profit reserves; (c) unrealized gains resulting from equity valuation adjustments, except for those mentioned in item (g) below; (d) surplus or retained earnings; (e) creditor profit or loss account balances; (f) deposits in escrow accounts to address noncompliance with minimum capital requirements and to cover capital shortages; (g) balance of positive adjustment in the market value of derivative financial instruments used for cash flow hedge; and (h) balance of the positive adjustment in the market value of derivative financial instruments accounted as liabilities resulting from changes in the financial institution’s own credit risk, net of any taxes, minus: (a) unrealized losses from equity valuation adjustments, except for those provided for in item (e) below; (b) treasury stocks eligible for Common Equity Tier 1 Capital (Capital Principal), directly or indirectly acquired; (c) retained losses; (d) debtors profit or loss account balances; (e) balance of negative adjustment at market value of derivative financial instruments used for cash flow hedge; (f) balance of the negative adjustment in the market value of derivative financial instruments accounted as liabilities resulting from changes in the financial institution’s own credit risk, net of any taxes; and (g) certain prudential adjustments corresponding to: (i) goodwill paid in the acquisition of investments based on the expectation of future profits, net of deferred tax liabilities; (ii) intangible assets; (iii) actuarial assets related to defined benefit pension funds, net of deferred tax liabilities related to it, to which the financial institution does not have full access; (iv) investments in (1) an entity similar to a non-consolidated financial institution, insurer, reinsurer, capitalization company and open pension plan; or (2) an institution with the Brazilian Central Bank’s authorization to operate, or in an institution located abroad which carries out activities similar to those of a financial institution in Brazil, and does not compose the conglomerate; (v) interest of non-controlling parties in the capital of (1) a subsidiary which is an institution with operations authorized by the Brazilian Central Bank; and (2) a subsidiary abroad performing activities similar to those of a financial institution in Brazil; (vi) tax credits resulting from temporary differences that depend on the generation of future taxable profits or revenues for their realization; (vii) tax credits resulting from tax losses and a negative base of Social Contribution on Net Profits and those originated from such contribution related to calculation periods ended until December 31, 1998; (viii) investment in premises, controlled financial institutions abroad or non-financial entity that is part of the conglomerate, in relation to which the Brazilian Central Bank does not have access to sufficient information, data and documents for purposes of consolidated global supervision; (ix) the negative difference between the amount provisioned and the expected loss from exposures covered by internal systems of credit risk classification (IRB approach); (x) interest of non-controlling parties in the capital of (1) a subsidiary in the country which is not an institution with operations authorized by the Brazilian Central Bank; and (2) a subsidiary abroad not performing activities similar to those of a financial institution in Brazil; and (xi) the negative difference between the amount provisioned and the adjustments made in connection with market-value assessment of financial instruments.

Pursuant to CMN Resolution 4,958/21, as amended, the Brazilian Central Bank is allowed to require financial institutions to present an additional rate of Common Equity Tier 1 Capital (Capital Principal) over their risk-weighted assets, or RWA. Such increase in the limits of Common Equity Tier 1 Capital (Capital Principal) is denominated Additional Principal Capital (Adicional de Capital Principal) and, according to CMN Resolution 4,958/21, corresponds to the following amounts: ACP conservação, or Conservation Additional Principal Capital, ACPcontracíclico, or Countercyclical Additional Principal Capital, and the ACPsistêmico, or Systemic Additional Principal Capital (higher loss absorbency requirement for domestic systemically important banks). The Conservation Additional Principal Capital is currently 2.5%.

According to CMN Resolution 4,958/21 (which replaced CMN Resolution No. 4,443, dated October 29, 2015), the Countercyclical Additional Principal Capital is limited to 2.5% of the RWA, while the Systemic Additional Principal Capital is limited to 2.0% of the RWA.

Non-compliance with Additional Principal Capital limits restricts: (i) the payment of variable compensation to officers and administrators of the respective financial institution; (ii) the payment of dividends and interest on shareholders’ equity; (iii) the payment of net surplus and annual compensation to shareholders of credit cooperatives; (iv) the repurchase of shares, in any amount; and (v) any possible capital decrease.

Additional Tier 1 Capital (Capital Complementar) corresponds to the sum of all amounts under instruments that adhere to all the following conditions: (i) being in registered form, when issued in Brazil and, when issued abroad, whenever local legislation so permits; (ii) being paid in cash; (iii) having a perpetual nature; (iv) having their payment subordinated to the payment of other liabilities of the respective issuer, except for the payment of the elements that make up the Common Equity Tier 1 Capital (Capital Principal), in case of dissolution of the issuing institution; (v) providing that the payment of compensation shall only be made with funds resulting from profits and profit reserves subject to distribution in the last period of determination; (vi) providing for the suspension of payment of compensation that exceeds the funds available for this purpose; (vii) providing for the suspension of payment of compensation on a pro rata basis to the restriction imposed by the Brazilian Central Bank to the distribution of dividends or other results regarding stocks, quotas or quotas-partes, eligible as Common Equity Tier 1 Capital (Capital Principal); (viii) providing for the suspension of payment of compensation in case the issuing institution presents insufficient compliance with the Additional Principal Capital (Adicional de Capital Principal) (in this case the suspension will be on a pro rata basis) or payment results in noncompliance with the minimum requirements of Common Equity Tier 1 Capital (Capital Principal), Tier 1 Capital and Reference Equity; (ix) having their redemption or repurchase subject to the Brazilian Central Bank’s approval; (x) being only redeemable upon the issuer’s initiative; (xi) not being subject of any guarantee, insurance or other similar mechanism; (xii) not presenting any provision that directly or indirectly modifies the amount originally raised except for the cases of repurchase and redemption provided therein; (xiii) not providing for changes to the terms or payment conditions agreed; (xiv) not having their purchase directly or indirectly financed by the issuing institution; (xv) providing for a permanent write-off in a minimum amount corresponding to the difference calculated in the Tier 1 capital or the conversion of the same amount in shares of the institution eligible as Common Equity Tier 1 Capital (Capital Principal) in the event of (a) disclosure by the issuing institution, in the form established by the Brazilian Central Bank, that its Common Equity Tier 1 Capital (Capital Principal) is lower than 5.125% of its RWA, (b) execution of a commitment of contribution to the issuing institution if the exception provided for in the caput of article 28 of the Supplementary Law No. 101, of May 4, 2000 occurs, (c) upon the imposition of intervention or RAET (special temporary administrative regime or intervention) by the Brazilian Central Bank on the issuing institution, or (d) upon the Brazilian Central Bank’s decision on write-off or conversion in accordance with requirements and specific regulation from the CMN; (xvi) providing that the occurrence of the situations in items (v), (vi), (vii), (viii), (xv) and (xviii) shall not be deemed as an event of default; (xvii) providing that compensation unpaid due to the provision of item (v) and the compensation related to the suspension period described in items (vi), (vii) and (viii) shall be deemed extinguished; and (xviii) providing that write-off or conversion of the debt will not occur in case of ongoing review or republication of documents used for purposes of calculation of the ratio between Common Equity Tier 1 Capital (Capital Principal) and RWA.

According to CMN Resolution 4,955/21, as amended, Supplementary Capital is calculated by (i) the sum of the amounts corresponding to instruments that meet the requisites above; and (ii) the deduction of the amounts corresponding to (a) investments in instruments eligible as Reference Equity issued by an institution authorized to operate by the Brazilian Central Bank or by an institution located abroad that performs activities equivalent to those of a financial institution in Brazil, which does not compose the conglomerate; and (b) shares of own issuance and other securities that comply with the abovementioned requirements, authorized to compose the Supplementary Capital, redeemed or repurchased directly or indirectly, including through (I) investment fund quotas, in proportion to the participation of such instruments in the fund portfolio; (II) an entity similar to a controlled financial institution or controlled non-financial institution; or (III) transactions with derivatives, including index derivatives.

Tier 2 Capital

Tier 2 capital instruments must comply with the following conditions: (i) being in registered form, when issued in Brazil and, when issued abroad, whenever local legislation so permits; (ii) being paid in cash; (iii) being for a minimum period of five years between the date of issuance and maturity date, and no repayment is permitted; (iv) having their payment subordinated to the payment of other liabilities of the respective issuer, except for the payment of the elements that make up the Common Equity Tier 1 Capital (Capital Principal) and the Additional Tier 1 Capital (Capital Complementar), in the event of dissolution of the issuing institution; (v) having their early redemption or repurchase subject to the Brazilian Central Bank’s approval; (vi) being only redeemable upon the issuer’s initiative; (vii) not being subject to any guarantee, insurance or other similar mechanism; (viii) not presenting any provision that modifies deadlines or payment conditions agreed upon within the issue and the maturity of the instrument, including in accordance with the credit quality of the issuing institution; (ix) not having their purchase directly or indirectly financed by the issuing institution; (x) providing for a write-off or conversion of the same amount in shares of the institution eligible as Common Equity Tier 1 Capital (Capital Principal) in the event of (1) disclosure by the issuing institution, in the form established by the Brazilian Central Bank, that its Common Equity Tier 1 Capital (Capital Principal) is lower than 4.5% of its RWA, (2) execution of a commitment of contribution to the issuing institution, if the exception provided for in the caput of article 28 of the Supplementary Law No. 101, of May 4, 2000 occurs, (3) upon the imposition of intervention or RAET (special temporary administration regime) by the Brazilian Central Bank on the issuing institution; or (4) upon the Brazilian Central Bank’s decision on write-off or conversion in accordance with requirements and specific regulation from the CMN; (xi) providing that the occurrence of the situations in items (x) and (xii) shall not be deemed as an event of default; and (xii) providing that write-off or conversion of the debt will not occur in case of ongoing review or republication of documents used for purposes of calculation of the ratio between Common Equity Tier 1 Capital (Capital Principal) and RWA.

According to CMN Resolution 4,955/21, as amended, Tier 2 capital is calculated by (i) the sum of the amounts corresponding to (a) the instruments that meet the requirements above; and (b) the balance between the accrued amount and the expected loss in exposures comprised in credit risk rating internal systems (IRB approaches); and (ii) the deduction of the amounts corresponding to (a) investments in instruments eligible as Reference Equity issued by an institution authorized to operate by the Brazilian Central Bank or by an institution located abroad that performs activities equivalent to those of a financial institution located in Brazil, that are not part of the conglomerate; and (b) shares of own issuance and other securities that comply with the abovementioned requirements, authorized to compose the Tier II capital, acquired directly or indirectly, including through (I) investment fund quotas, proportionally to the participation of such instruments in the fund portfolio; (II) an entity similar to a controlled financial institution or controlled non-financial institution; or (III) transactions with derivatives, including index derivatives.

In addition to the requirements related to minimum capital, financial institutions must also keep their Reference Equity level compatible with the risks to which their assets and liabilities are subject. Financial institutions may only distribute dividends subject to certain regulatory capital requirements, including those mentioned above.

In addition, BR Partners Banco is subject to new regulations established by CMN Resolution 4,966/21 of the CMN and BCB Resolution 352/23 of the Brazilian Central Bank. These resolutions establish new accounting concepts and criteria applicable to financial instruments that must be observed by financial institutions and other institutions authorized to operate by the Brazilian Central Bank. As a result of the new Brazilian Central Bank standards, which became effective on January 1, 2025, we anticipate an estimated reduction in our reference equity of approximately R$4 million and an estimated reduction in our Basel ratio of approximately 0.07 percentage points.

Regulation of Risk and Capital Management Structure

On February 23, 2017, the CMN enacted Resolution No. 4,557, or CMN Resolution 4,557/17, which unifies and expands the Brazilian regulation on risk and capital management for Brazilian financial institutions and other institutions authorized to operate by the Brazilian Central Bank. This rule is also an effort to incorporate into Brazilian regulation certain new recommendations from the Basel Committee on Banking Supervision, providing that risk management must be conducted through an integrated effort by the relevant entity (i.e., risks should not only be analyzed individually, but financial institutions and other institutions authorized to operate by the Brazilian Central Bank must also control and mitigate the adverse effects caused by the interaction between different risks). It also expands the rules and requirements related to risk management governance and the attributions and duties of individuals responsible for risk management.

The rule establishes different structures for risk and capital management that are applicable for different risk profiles, based on the risk profiles established by applicable regulation, which means that a financial institution of smaller systemic importance can have a simplified structure of management, while institutions of larger complexity must follow stricter protocols.

Reserve and Other Requirements

Currently, the Brazilian Central Bank imposes a series of requirements on financial institutions regarding compulsory reserves. Financial institutions must deposit reserves with the Brazilian Central Bank. The Brazilian Central Bank uses reserve requirements as a mechanism to control the liquidity of the Brazilian financial system. Some of the most relevant types of reserves required under Brazilian law include the following:

Demand Deposits. Pursuant to Brazilian Central Bank Resolution No. 189, of February 23, 2022, banks and other financial institutions are generally required to maintain a mandatory reserve of 21% on the calculation basis of the compulsory reserve on demand funds, corresponding to the arithmetic average of the amounts subject to the reserve identified in a certain calculation period, after a deduction of R$500.0 million. If the applicable reserve requirement for a financial institution is equal to or below R$0.5 million, the financial institution will be exempt from collection, however, it must provide information to the Brazilian Central Bank regarding demand deposits held by it by no later than the business day after the date in which such obligation is enforceable. Compliance with the abovementioned rule is verified based on the positions calculated on each business day in which a transaction occurs, which begins on Monday of the second week following the end of the calculation period and ends on Friday of the following week. The average of the positions of the financial institution during the transactional period must correspond to 100% of the obligation calculated for the respective period. In addition, the entity’s position must total at least 65% at the time of calculation of the balances.

Savings Accounts. Brazilian Central Bank Resolution No. 188 of February 23, 2022, or Brazilian Central Bank Resolution 188/22, as amended, established the compulsory reserve on savings deposit funds. The required compulsory reserve for each savings modality is calculated by applying the rate of 20% on the calculation base, which corresponds to the arithmetic average of the sum of the balances recorded as savings deposits and saver associated funds, on the business days within the calculation period. The calculation period comprises the business days of a week, starting on Monday and ending on Friday. Such reserve must be made exclusively in kind, through an institution that holds a bank reserves account or settlement account, which will lead the respective credit transfer corresponding to each savings deposit modality, provided that the balance on the daily closing of the reserve account corresponding to each savings modality must be equal to 100% of the requirement, calculated pursuant to Brazilian Central Bank Resolution 188/22.

Time Deposits. In accordance with Brazilian Central Bank Resolution No. 145, dated September 24, 2021, required compulsory reserve is calculated by applying a 20% rate on time deposits, corresponding to the arithmetic average of the amounts subject to reserve calculated on the business days of the calculation period after a deduction of R$30.0 million.

Such reserve, after calculated pursuant to the above, will be deducted of the following amounts: (i) R$3.6 billion, for financial institutions with a Tier I component of the Reference Equity below R$3.0 billion; (ii) R$2.4 billion, for financial institutions with a Tier I component of the Reference Equity equal or higher than R$3.0 billion and below R$10.0 billion; (iii) R$1.2 billion, for financial institutions with a Tier I component of the Reference Equity equal to or higher than R$10.0 billion and below R$15.0 billion; and (iv) zero, for financial institutions with a Tier I component of the Reference Equity equal to or higher than R$15.0 billion. If the applicable reserve requirement of a financial institution is below R$0.5 million, such financial institution will be exempt from the reserve requirements set forth by Brazilian Central Bank Resolution No 145, although it must provide information to the Brazilian Central Bank on time deposits it holds during the calculation period. Amounts subject to this reserve requirement shall be deposited in cash in a specific account and part of such deposits will bear interest at a SELIC-based rate. At the end of each day, deposited amounts shall be equivalent to 100% of the applicable reserve requirement.

Asset Composition Requirements

Total funds invested by financial institutions in permanent assets may not exceed 50.0% of the adjusted shareholders’ equity of the institutions, as provided by CMN Resolution 4,957/21, and CMN Resolution 4,958/21, as amended.

Financial institutions must also comply, according to CMN Resolution No. 4,677, dated July 31, 2018, with the maximum concentrated exposure limit and maximum exposure limit per client of (i) 25% of Tier I Reference Equity for institutions classified in Segment 1, Segment 2, Segment 3 and Segment 4; and (ii) 25% of the Simplified Reference Equity, for institutions classified in Segment 5. Also, institutions deemed as systemically worldwide relevant by the Financial Stability Council (Conselho de Estabilidade Financeira) shall not exceed the amount of 15.0% of its Tier I capital in regard to exposures with another institution deemed a systemically worldwide relevant institution.

Repurchase Transactions

Repurchase transactions (operações compromissadas) are sale and repurchase agreements involving the sale of securities. Pursuant to CMN Resolution 3,339/06 and CMN Resolution 4,995/22, repurchase transactions carried out in Brazil are subject to the following operating capital limitations: (i) a financial institution may only carry out repurchase transactions for an amount up to 30 times its Reference Equity, whether individually or cumulatively, for transactions with (a) Brazilian Treasury or Brazilian Central Bank bonds, credits securitized by the Brazilian Treasury and Agricultural Debt Securities issued by INCRA; (b) bonds and securities issued by the states, the Federal District or municipalities, as well as other governmental bodies and entities; and (c) private negotiable instruments, limited to five times the calculation basis; and (ii) 45% of the Reference Equity for credit transactions with governmental bodies and entities.

Transactions with Affiliates

Brazilian Law No. 7,492 of June 16, 1986, which regulates crimes against the Brazilian financial system, defines as a crime the extension of credit by a financial institution to any of its controlling companies and/or managers outside the parameters established by article 34 of the Banking Reform Law and Brazilian Central Bank regulations. Violations of Law No. 7,492 are punishable by two to twelve years’ imprisonment and a fine. In June 30, 1993, the Brazilian Central Bank issued Resolution No. 1,996, which requires any such transaction to be reported to the Public Prosecutor’s office, and was subsequently revoked by CMN Resolution 4,962, dated October 21, 2021.

Foreign Currency Loans

Financial institutions are allowed to raise funds abroad directly or through the issuance of bonds, provided that they follow the usual procedures of the international market. According to the type of loan and the related terms, loans must be performed and registered in the Brazilian Central Bank’s foreign capital information systems pursuant to Law 14,286/21, CMN Resolution 13/24, Brazilian Central Bank Resolution 278/22, and Brazilian Central Bank Resolution No. 279 of December 31, 2022, among others.

In case of transfers in the country, the conditions of foreign loans (principal, interest and other charges) must be observed, and a financial intermediation fee may be charged. The foreign exchange variation from the foreign loan must be transferred to the borrower in the applicable country.

The Brazilian Central Bank may set limitations on the term, interest rate and general conditions of foreign currency loans.

Regulatory Requirements Related to Financial Instruments

The Brazilian Central Bank, through CMN Resolution 4,966/21, establishes the accounting concepts and criteria applicable to financial instruments for financial institutions and other entities authorized by the Brazilian Central Bank. This resolution introduces several key changes, including the classification, measurement, recognition, and derecognition of financial instruments. It also mandates the constitution of provisions for expected credit losses associated with financial instruments, such as financial assets, financial guarantees, and credit commitments.

CMN Resolution 4,966/21 aligns Brazilian financial institutions with international best practices under IFRS 9 by requiring the adoption of the expected loss model for credit impairment. This model improves risk management and transparency in financial reporting by estimating potential credit losses over the entire lifespan of financial instruments. Additionally, the resolution covers the designation and recognition of hedge accounting relationships and the disclosure of information about financial instruments.

Financial Institutions must classify, measure, and report financial instruments, including:

The allocation must be reviewed: I - monthly, in the event of a delay in the payment of principal or charges; II - every 6 (six) months for instruments from the same counterparty whose amount exceeds 5% (five percent) of the institution’s shareholders equity; III - once every 12 (twelve) months for other instruments not covered by item II; IV - whenever new facts indicate a significant change in credit quality, including those resulting from changes in market conditions or the economic scenario; and V - when the instrument is renegotiated.

Internal Compliance Procedures

On August 28, 2017, the CMN enacted Resolution No. 4,595, providing that Brazilian financial institutions and other institutions authorized to operate by the Brazilian Central Bank shall implement and maintain a compliance policy compatible with the nature, size, complexity, structure, risk profile and business model of the institution. Such compliance policy is intended to ensure effective compliance risk management by the institution and may be established at the consolidated enterprise level (conglomerado prudencial).

Among other minimum requirements, the compliance policy must establish the scope and purpose of the compliance function in the institution, the position of the specific unit responsible for the compliance function in the organizational structure of the institution, the allocation of sufficient, adequately trained and experienced staff in the compliance function and the segregation of roles among the staff involved in the compliance function to avoid conflicts of interest.

The compliance policy must be approved by the board of directors and the regulation also assigns to the board the responsibility to ensure: (i) it is adequately managed throughout the institution, (ii) its effectiveness and continuous application, (iii) its communication to all employees and relevant services providers, and (iv) the dissemination of integrity and ethical standards as part of the institution’s culture. The financial institution’s board of directors is also responsible for ensuring the application of correctional measures in case of compliance breaches and providing the necessary means for the activities related to the compliance functions to be adequately conducted.

Brazilian Payment System

The rules for the settlement of payments in Brazil are based on the guidelines adopted by the Bank for International Settlements. The Brazilian Payment and Settlement System (Sistema de Pagamentos Brasileiro), or SBP, comprises the entities, systems and procedures related to the processing and settlement of funds transfer operations, transactions with foreign currency or financial assets and securities, collectively referred to as Financial Market Infrastructure operators. Beginning in October 2013, with the enactment of Law No. 12,865, the arrangements and payment institutions also became part of the SPB.

The SPB has a high degree of automation, with the increasing use of electronic media for funds transfer and settlement of obligations, to replace paper-based instruments. Up until the mid-1990s, changes in the SPB were driven by the need to deal with high inflation rates and, therefore, the technological progress achieved was mainly aimed at increasing the processing speed of financial transactions.

In the remodel conducted by the Brazilian Central Bank until 2002, the focus was redirected to risk management. The entry into operation of the Reserve Transfer System, or STR, in April 2002, as established by Brazilian Central Bank Circular No. 3,100 of March 28, 2002 (revoked by Brazilian Central Bank Resolution No. 105 of June 9, 2021), marks the beginning of a new phase of the SPB. The STR, managed and operated by the Brazilian Central Bank, is a real-time gross settlement system for funds transfers in Brazil. The STR is the core system of the SPB, as it settles transactions in the monetary, foreign exchange and capital markets between financial institutions that hold accounts at the Brazilian Central Bank. The funds transfers are settled by the STR in the accounts held at the Brazilian Central Bank. Also, in addition to these financial flows, the net positions of the clearing and settlement systems are settled through the STR. STR’s direct participants can issue funds transfer orders on their own behalf or on behalf of a third party. The receiver can be other STR direct participants or their clients. Funds transfers are final, which means that they are irrevocable and unconditional. Therefore, it is only possible to undo a transaction through another transaction in the opposite direction. Moreover, in order to guarantee the stability of the system, STR funds transfers are conditioned to the existence of sufficient balance in the account held by the transferring participant.

The Brazilian Central Bank, institutions authorized by the Brazilian Central Bank to operate, the Financial Market Infrastructure operators, such as the B3, and the Brazilian Treasury Office are participants of the STR.

With this system, Brazil became part of the group of countries in which transfers of interbank funds can be settled in real time, irrevocably and unconditionally. In order to ensure liquidity, and hence improved functioning, of the payment system in the real-time settlement environment, two aspects are especially important:

Financial institutions, as well as other institutions regulated by the Brazilian Central Bank, are also required under such rules to create a risk management framework and a capital management structure, in accordance with certain procedures established by the Brazilian Central Bank, such as CMN Resolution 4,557/17. The risk management framework should include:

Insolvency Laws Applicable to Financial Institutions in Brazil

Financial institutions are subject to the proceedings established by Law No. 6,024, enacted on March 13, 1974, as amended, and Decree-Law No. 2,321, enacted on February 25, 1987, as amended by Decree-Law No. 2,327 enacted on April 24, 1987, which establish the applicable provisions in the event of intervention, temporary administration or extra-judicial liquidation by the Brazilian Central Bank, as well as to bankruptcy proceedings.

Intervention and extra-judicial liquidation occurs when a financial institution is in a precarious financial condition or upon the occurrence of certain events that may impact the creditors’ financial condition. Such measures are imposed by the Brazilian Central Bank in order to avoid the bankruptcy of the entity.

Intervention

Pursuant to Law No. 6,024/74, as amended, the Brazilian Central Bank has the power to appoint an intervener to intervene in the operations of, or to liquidate, as further described below, any financial institution other than public financial institutions controlled by the Brazilian government. An intervention may be ordered at the discretion of the Brazilian Central Bank if any of the following is detected:

As of the date on which it is ordered, the intervention will: (i) suspend the enforceability of payable obligations; (ii) suspend the maturity of any previously contracted obligations; and (iii) freeze deposits existing on the date on which the intervention is ordered.

The intervention ceases: (a) if interested parties undertake to continue the economic activities of the financial institution, by presenting the necessary guarantees, as determined by the Brazilian Central Bank, (b) when the situation of the financial institution is normalized, as determined by the Brazilian Central Bank, or (c) when extra-judicial liquidation or bankruptcy of the entity is ordered.

Intervention may also be ordered upon the request of a financial institution’s management, provided that such power is granted by the institution’s bylaws. Any such intervention period should not exceed six months, which may be extended only once for up to six additional months by the Brazilian Central Bank. The intervention proceedings are terminated if the Brazilian Central Bank establishes that the irregularities that have triggered an intervention have been eliminated. Otherwise, the Brazilian Central Bank may extra-judicially liquidate the financial institution or authorize the intervener to file for voluntary bankruptcy under Law No. 11,101 of February 9, 2015, or the Brazilian Bankruptcy Law, among other situations, if the assets of the intervened institution are insufficient to satisfy at least 50.0% of the amount of its outstanding unsecured debts, when extrajudicial liquidation is deemed inconvenient, or when the complexity of the institution’s business or the seriousness of the facts justify such a measure.

Extra-judicial Liquidation

Extra-judicial liquidation is an administrative proceeding ordered by the Brazilian Central Bank (to financial institutions other than those controlled by the Brazilian government) and conducted by a liquidator appointed by the Brazilian Central Bank. This extraordinary measure aims at terminating the activities of a troubled financial institution, liquidating its assets and paying its liabilities, as in a judicially decreed bankruptcy.

The Brazilian Central Bank will order the extra-judicial liquidation of a financial institution if:

Extra-judicial liquidation may also be ordered upon the request of a financial institution’s management, if its respective bylaws entitle it to this jurisdiction, or on a proposal from the intervener, with an indication of the reasons for the request.

The decree of extra-judicial liquidation will produce the following effects: (i) suspension of lawsuits or foreclosure on rights and interests relating to the entity being liquidated, and the blocking of other actions or executions from being brought during the liquidation, (ii) acceleration of the obligations of the entity being liquidated, (iii) interruption of the statute of limitations with regard to the obligations assumed by the institution, (iv) failure to comply with the penal clauses provided in unilateral agreements that became due by virtue of the extra-judicial liquidation, (v) ratable deduction of interest, against the estate, until the date when the debts are paid in full, (vi) interruption of the prescription related to the obligations for which the institution is liable; and (vii) the blocking of claims for monetary correction of any passive currencies or pecuniary penalties for infringement of criminal or administrative laws.

Extra-judicial liquidation procedures may be terminated (a) if the financial institution is declared bankrupt or (b) by decision of the Brazilian Central Bank in the following events: (i) full payment of the unsecured creditors, (ii) change of corporate purpose of the institution to an economic activity that is not part of the SFN, (iii) transfer of the controlling interest of the financial institution, (iv) conversion into ordinary liquidation; (v) exhaustion of the assets owned by the financial institution, upon its full realization and distribution of the proceeds among the creditors, even if full payment of the credits did not occur, or (vi) the remaining asset is acknowledged by the Brazilian Central Bank as illiquid or of difficult realization.

Repayment of Creditors in a Liquidation or Bankruptcy

In the event of extra-judicial liquidation or bankruptcy of a financial institution, creditors are paid pursuant to a system of priorities. Pre-petition claims are paid on a pro-rata basis in the following order:

First-priority and post-petition claims, as defined under the Brazilian Bankruptcy Law, are paid before pre-petition claims, in the above-mentioned order.

In November 1995, the CNM issued CMN Resolution No. 2,197, of August 31, 1995, as amended, which created the Credit Guarantee Fund, or FGC, to guarantee the payment of funds deposited with financial institutions in the event of intervention, administrative liquidation, bankruptcy or another state of insolvency. The members of the FGC are financial institutions that receive demand, time and savings deposits, as well as savings and loan associations. The FGC is mainly funded by mandatory contributions from Brazilian financial institutions that work with client deposits.

Pursuant to CMN Resolution No. 4,688, dated September 25, 2018, as amended, the FGC is a safe deposit insurance system that guarantees a maximum amount of R$250,000 of deposit and certain credit instruments held by a client against a financial institution (or against member financial institutions of the same financial group) and a maximum amount of R$1.0 million by a creditor against the set of all consolidated financial institutions at each period of four years. The liability of the participating institutions is limited to the amount of their contributions to the FGC, with the exception that in limited circumstances if FGC payments are insufficient to cover insured losses, the participating institutions may be asked for extraordinary contributions and advances. The payment of unsecured credit and client deposits not payable under the FGC is subject to the prior payment of all secured credits and other credits to which specific laws may grant special privileges.

Cancellation of Banking License

Law No. 13,506, dated November 13, 2017, together with specific regulations adopted by Brazilian Central Bank Resolution No. 131, dated August 20, 2021, as amended, provides infractions, penalties, coercive measures and alternative dispute resolution methods applicable to financial institutions, other institutions authorized by the Brazilian Central Bank and institutions that are part of the Brazilian Payment Systems, and establishes the procedure to be observed in sanctioning administrative proceedings within the scope of the Brazilian Central Bank, including cancellation of authorization to operate.

Pursuant to CMN Resolution 4,970/21, the Brazilian Central Bank may also cancel the financial institution’s authorization to operate if one or more of the following situations occur: (i) failure to carry out the activities authorized by the Brazilian Central Bank, (ii) the institution is not located at the address that was provided to the Brazilian Central Bank, (iii) failure to provide the financial statements, information and other forms required by the regulations to the Brazilian Central Bank for over four months without acceptable justification, and/or (v) failure to observe the agreed business plan during its term of effectiveness without a justification that is acceptable to the Brazilian Central Bank. The cancellation of a banking license may only occur upon completion of the appropriate administrative proceedings by the Brazilian Central Bank.

Anti-Money Laundering Regulations

Law No. 9,613 of March 3, 1998, as amended, and Law No. 13,506 of November 13, 2017, play a major role for those engaged in banking and financial activities in Brazil. Such laws set forth the definition and the penalties to be incurred by persons involved in activities that comprise the “laundering” or concealing of property, rights and assets, as well as a prohibition on using the financial system for these illicit acts.

On March 3, 1998, the Brazilian government created the Council of Control of Financial Activities (Conselho de Controle de Atividades Financeiras), or COAF, which operates under the Ministry of Finance. The purpose of the COAF is to regulate and impose administrative penalties in respect of any suspicious or unlawful activities related to money laundering in Brazil. The COAF is comprised of a president and twelve members of the council, with a sound reputation and recognized knowledge on prevention of money laundering, selected among members of the following agencies and entities: (i) the Brazilian Central Bank; (ii) the CVM; (iii) the Ministry of Foreign Affairs; (iv) the SUSEP; (v) the Federal Revenue Service (Secretaria da Receita Federal); (vi) the Office of the Attorney-General of the Brazilian Treasury; (vii) the Brazilian Federal Police Department; (viii) Ministry of Transparency and Federal General Controller (Controladoria Geral da União); (ix) Ministry of Justice and Public Security; (x) Office of the General Counsel for the Brazilian Government; (xi) the Brazilian Intelligence Agency; and (xii) the National Superintendency of Private Pension (Superintendência Nacional de Previdência Complementar).

In 2012, through the issuance of new regulatory acts, the Brazilian Central Bank changed the rules applicable to procedures that must be adopted by financial institutions in the prevention of and fight against money laundering and the financing of terrorism, in response to recommendations by the International Financial Action Taskforce. The main regulations include: (i) Brazilian Central Bank Circular No. 3,583, of March 12, 2012, subsequently revoked by Brazilian Central Bank Circular No. 3,978, of January 23, 2020, or Brazilian Central Bank Circular 3,978/20 as amended; (ii) Brazilian Central Bank Resolution No. 277 of December 31, 2022, which regulates Law No. 14,286 of December 29, 2021, in connection with the foreign exchange market, among other provisions, and Brazilian Central Bank Resolution No. 282 of December 31, 2022; and (iii) Brazilian Central Bank Circular Letter No. 3,542, of March 12, 2012, which extends the list of examples of transactions and situations that could characterize the occurrence of money laundering, with a tendency to improve communication between the financial institutions and the COAF, subsequently revoked by Brazilian Central Bank Circular Letter No. 4,001, of January 29, 2020, which came into effect on October 1, 2020.

Bank Secrecy in Brazil

Brazilian financial institutions are also subject to strict bank confidentiality regulations and must maintain the confidential nature of their assets and liability transactions and of the services provided to their clients. The only circumstances in which information about clients, services or operations of Brazilian financial institutions or credit card companies can be disclosed to third parties are as follows: (ii) express consent of the interested parties; (ii) exchange of information between financial institutions for registration purposes; (iii) the supply to credit reference agencies of information based on data from the records of issuers of bank checks drawn on accounts without sufficient funds and defaulting debtor; (iv) the supply of information in connection with Section 2 of article 11 of Law No. 9,311, dated October 24, 1996; (v) the supply of information pursuant to the terms and conditions set forth in articles 2 to 7, and 9 of Supplementary Law No. 105, dated January 10, 2001; (vi) the supply of financial data and information on payments related to credit transactions and defaulted payment obligations of individuals or legal entities to database managers, for the formation of a credit history, in accordance with applicable legislation; and (vii) supply of information in connection with the occurrence of criminal acts, in which case the financial institutions and credit card companies may provide competent authorities with information relating to such criminal acts when necessary for the investigation of such acts. Complementary Law No. 105/01 also allows the Brazilian Central Bank or the CVM to exchange information with foreign governmental authorities, provided that a specific treaty in that respect may have been previously executed.

Cybersecurity Regulation

CMN Resolution No. 4,658, dated April 26, 2018, enacted and subsequently replaced by CMN Resolution No. 4,893 of February 26, 2021, or CMN Resolution 4,893/21 regulates cybersecurity policies and requirements for the engagement in data processing and storage and cloud computing services that must be observed by financial institutions and other institutions authorized to operate by the Brazilian Central Bank.

CMN Resolution 4,893/21 establishes specific requirements to be considered in the adoption of the cybersecurity policy, including: (i) the institution’s size, risk profile and business model; (ii) the nature of the operation and the complexity of the institution’s products, services, activities and processes; and (iii) the sensitivity of the data and information under the institution’s control.

Moreover, CMN Resolution 4,893/21 also establishes that financial institutions must adopt an action plan and a response mechanism to security incidents, which shall include: (i) actions to be developed by the institution with the purpose of adapting its organizational and operational structures to the principles and guidelines set forth by the cybersecurity policy; (ii) routines, procedures, controls and technologies to be employed in the prevention and response to incidents, in accordance with certain cybersecurity policy guidelines; and (iii) the department in charge of recording and controlling relevant incidents.

The cybersecurity policy and the incident response and action plan should have been approved by May 6, 2019, and must be fully complied with by the respective financial institution by December 31, 2021. Moreover, financial institutions and other institutions authorized by the Brazilian Central Bank to operate must annually document and review their cybersecurity policy and incident response and action plan, and prepare a report related to the implementation of the response and action plan as of December 31, each year. The annual report must include at least: (i) the plan’s effectiveness and implementation, (ii) the summary of the results obtained in the implementation of routines, procedures, controls and technologies to be employed in the prevention and as a response to incidents, (iii) the relevant cyber environment-related incidents that occurred during the period; and (iv) the results of the recording continuity tests, taking into consideration the unavailability scenarios resulting from incidents.

In order to engage in relevant data processing and storage and cloud computing services, financial institutions and other institutions authorized by the Brazilian Central Bank must adopt procedures contemplating: (i) the adoption of corporate governance and management practices compatible with the level of relevance of the service and the risks to which they are exposed; and (ii) the verification of the capacity of the potential service provider to ensure: (a) compliance with applicable legislation and regulation; (b) access by the institution to all data and information to be processed or stored; (c) confidentiality, integrity, availability and recovery of all data and information processed or stored by the service provider; (d) compliance with certificates required by the institution for the provision of the service to be engaged; (e) access by the institution to reports prepared by an independent specialized audit company engaged by the service provider, with respect to the procedures and controls used in the provision of the services to be engaged; (f) supply of appropriate information and management resources to the monitoring of the services to be provided; (g) identification and segregation of the institution’s clients’ data through physical or logical controls; and (h) the quality of the access controls for the protection of the institution’s clients’ data and information.

In order to engage data processing and storage and cloud computing services to be provided abroad, among other requirements, the financial institutions and other institutions authorized by the Brazilian Central Bank must meet the criteria set forth by CMN Resolution 4,893/21, such as, for instance: (i) existence of an exchange information agreement between the Brazilian Central Bank and the authorities supervising the countries where the services will be provided; (ii) ensure that the provision of the services will neither cause losses to its regular operation nor to the Brazilian Central Bank’s activity; (iii) define, prior to the engagement, the countries and regions of each country where the service may be provided and data may be stored, processed and managed; and (iv) foresee alternatives to the continuity of the businesses, in the event of impossibility to maintain the services provision agreement or in the event of its termination.

Moreover, to comply with items (i) and (ii) above, financial institutions must ensure that the applicable legislation and regulation in the countries and regions where the services may be provided neither restrict nor prevent access to data and information by the contracting institutions and by the Brazilian Central Bank. In the event of the inexistence of an agreement pursuant to item (i) above, the contracting institution must request the Brazilian Central Bank’s authorization to: (a) engage the service, within the minimum term of 60 days prior to the engagement, considering the need for specific information, as defined in CMN Resolution 4,893/21; and (b) the contractual amendments that imply changing the referred specific information, within the minimum term of 60 days prior to the contractual amendment. The institution must maintain and be capable of making available to the Brazilian Central Bank all applicable documentation, including the cybersecurity policy, the response and action plan and the five-year annual report.

Data Protection Regulation

In August 2018, Law No. 13,709/18, or the General Personal Data Protection Law, was enacted, which (1) regulates the general treatment of personal data, and no longer only in specific sectors, (2) introduces a new framework regarding personal data treatment, which contemplates all sectors of the economy and includes companies that deal with a large volume of personal data.

The goal of the General Personal Data Protection Law is to protect the fundamental rights of freedom, increasing the control of individuals over their data and bringing greater responsibilities to organizations that treat such personal data, through the introduction of new compliance obligations.

The General Personal Data Protection Law came into effect on September 18, 2020, except for articles 52, 53 and 54 of the General Personal Data Protection Law, which establish certain administrative sanctions that came into effect on August 1, 2021, pursuant to Law 14.010/20.

As an example, the General Personal Data Protection Law sets forth a series of principles that must be observed in the treatment of personal data, such as: purpose, need, free access, data quality, transparency, security, prevention, non-discrimination and responsibility, among others.

Moreover, the General Personal Data Protection Law provides for (1) several different cases in which the treatment of personal data is authorized; (2) a range of rights reserved to personal data owners; (3) administrative sanctions for non-compliance with its provisions; and (4) authorizes the creation of the ANPD, the authority that ensures compliance with personal data protection rules in Brazil.

The General Personal Data Protection Law scope of application covers all personal data treatment activities, including in an online environment and extends to individuals and public and private entities, regardless of the country where they are headquartered or where the information is located, provided that (1) personal information is treated in Brazil; (2) information treatment activity is intended to offer or provide goods or service or to process information from individuals located in Brazil; or (3) the information owners are located in Brazil at the time that their personal information is collected.

After its enactment, the General Personal Data Protection Law was amended by Law 13,853/2019, which, among other provisions, created the ANPD, an authority that has certain powers and responsibilities similar to those of the European data protection authorities, being responsible for: (1) investigation, including the power to request information from personal data controllers and operators; (2) enforcement, in cases of violation of the law, by means of an administrative proceeding; and (3) education, with the responsibility of disseminating information and fostering knowledge regarding the General Personal Data Protection Law and safety measures, including by issuing resolutions on the manner in which the General Personal Data Protection Law must be interpreted, promoting standards for services and products that facilitate data control and preparing studies regarding national and international practices for protection of personal data and privacy, among others.

Furthermore, after the administrative sanctions of the General Personal Data Protection Law entered into effect in August 2021, and considering the high volume of personal data treated by us, we could be subject to sanctions if we fail to comply with the General Personal Data Protection Law and other applicable laws. In the event of violations to the General Personal Data Protection Law, we will be subject, in addition to civil liability, to the following penalties: (1) a warning, with indication of a specified term for the adoption of corrective measures; (2) a fine equivalent to 2% of our revenue or our group’s revenue, up to R$50 million per violation; (3) a publication of the violation; (4) the temporary blocking of personal data corresponding to the violation; (4) the elimination of personal data corresponding to the violation; (6) partial suspension of operation of the corresponding database for up to six months, extendable for the same period, until the normalization of the processing activity by the controller, in the event of recurrence; (7) the suspension of performance of personal data processing activities in connection with the violation, for the maximum period of six months, extendable for an equal period in the event of recurrence; and (8) a full or partial prohibition of data processing-related activities, in the event of recurrence.

Even after the law became fully effective, and the enactment of CD/ANPD Resolution No. 4 of 2023 (which finalized the regulations related to application of penalties and their effects), there are still many aspects of the law that are subject to further regulation. This further regulation may directly impact our privacy-related governance and impact the risks to which our activities may be subject. Of particular importance are: (i) the use of legitimate interest as a legal basis for personal data treatment; (ii) the exercising of rights by data owners; (iii) preparation and safekeeping of personal data treatment transactions; and (iv) events involving international transfer of personal data. The ANPD has presented a schedule for implementation of regulation in 2023 and 2024, in order to define the majority of the pending regulation.

Following the effectiveness of the General Personal Data Protection Law, we will have to adapt our operations and business model to comply with the limits established by such law.

Fintech Regulation

On April 26, 2018, the CMN approved Resolutions No. 4,656 and 4,657, which regulate the operation of financial technology companies in the credit market (“fintechs”). Pursuant to this new regulatory framework, such startups were allowed to grant credit without the intermediation of a bank. The new rules established by the CMN Resolutions immediately applied to such entities and allowed interested companies to start the authorization process. These entities are currently regulated by CMN Resolution No. 5,050 of November 22, 2022.

Therefore, according to the approved resolutions, fintechs could be structured as: (1) direct credit companies, which will develop their operations with their own funds through an electronic platform; or (2) interpersonal loan companies, focused on financial intermediation (peer-to-peer). On October 29, 2018, the Brazilian federal government enacted Decree No. 9,544 authorizing foreign investment of up to 100% of the capital stock of direct credit companies or loan companies.

Open Finance

Open finance refers to the concept of standardized sharing of data and services provided by financial institutions through the opening and integration of their online platforms to other information system infrastructures via Application Programming Interface, or API. Previously known as “open banking”, this project was subsequently denominated “open finance” after the enactment of Joint Resolution No. 4 of March 24, 2022, or CMN/Brazilian Central Bank Joint Resolution 1/20, with the purpose to increase its scope, including not only information related to traditional financial products and services (such as accounts and credit transactions), but also data on foreign exchange products and services, acquiring services, investments, insurance and pension plans. In Brazil, open finance is primarily regulated by CMN/Brazilian Central Bank Joint Resolution 1/20, Brazilian Central Bank Circular No. 4,015, dated May 4, 2020, and Brazilian Central Bank Resolution No. 400, of July 4, 2024.

Open finance enables financial institutions to dedicate themselves to their main core activities, such as the development of new financial products and related activities and incentivize other participants to enter into the market to offer technological solutions focused on client experience.

According to CMN/Brazilian Central Bank Joint Resolution 1/20, with respect to the sharing of data in connection with assistance, products and services, client’s and representative’s registration and client’s transactions, financial institutions (when not classified under segments 1(S1) and 2(S2)) and payment institutions, among other institutions authorized to operate by the Brazilian Central Bank, may voluntarily participate in the open finance system, while major banks classified under segments 1(S1) and 2(S2) have the obligation to participate.

With respect to the sharing of a payment transaction commencement service, the following institutions will have the obligation to participate in the open finance system: (1) institutions holding an account; and (2) institutions commencing a payment transaction. In the event of sharing of a credit proposal submission service, financial institutions and payment institutions, among other institutions authorized by the Brazilian Central Bank, which have executed a corresponding agreement in Brazil to provide assistance activities in connection with the receipt and forwarding of credit and leasing transaction proposals through an electronic platform, provided by the financial institution, as well as the provision of other services to assist with the transaction, as established by applicable banking regulations. Participation of the institutions must follow the principle of reciprocity, which means that the institutions receiving information must also share it.

In addition to the regulation published by the CMN and the Brazilian Central Bank, open finance will also have a self-regulation arrangement, which will primarily address the operation of open finance, including standardization of both technology and communication and security protocols, as well as conflict resolution and compensation between participants.

The initial arrangement related to the process of implementation of open finance in Brazil is governed by Brazilian Central Bank Resolution No. 400. The Brazilian Central Bank opted for an initial three-party structure, comprising three different levels: (1) strategic, integrated by a decision-making council; (2) administrative, integrated by a secretariat; and (3) technical, comprising technical groups.

Politically Exposed Individuals in Brazil

Pursuant to Brazilian Central Bank Circular 3,978/20, as amended, politically exposed individuals are: (1) holders of elected office positions on the executive and legislative branches of the Brazilian government; (2) holders of positions in the executive and legislative branches of the Brazilian government, such as: (a) minister or equivalent; (b) special nature or equivalent; (c) president, vice-president and officer (or equivalent) of public agencies; and (d) Superior Group of Direction and Advisory, or DAS, level 6, or equivalent; (3) members of the National Council of Justice, the Federal Supreme Court, the Superior Courts, the Federal Regional Courts, the Regional Labor Courts, the Regional Electoral Courts, the Higher Council of Labor Courts, and the Federal Justice Council; (4) members of the National Council of the Prosecution Office, the Attorney-General, the Vice Attorney-General, the Attorney-General of the Ministry of Labor, the Attorney-General of the Military Courts, the Deputy Attorney-Generals of the Republic and the Attorney-Generals of the States and of the Federal District; (5) members of the Audit Court and the Attorney-General and the Deputy Attorney-Generals of the Prosecution Office for the Audit Court; (6) presidents and national treasurers, or equivalent, of political parties; (7) Governors and State and Federal District Secretaries, the State and District Representatives, the presidents, or equivalent, of the indirect state and district public administration entities and the presidents of the Courts of Justice, Military Courts, Courts of Audit or equivalent of the States and the Federal District; and (8) the Mayors, the Councilmen, the Municipal Secretaries, the presidents, or equivalent, of the indirect municipal public administration entities and the Presidents of the Courts of Audit or equivalent of the Municipalities. Foreign individuals are also considered politically exposed when they are: (1) heads of state or government; (2) high-rank politicians; (3) individuals occupying high-rank government positions; (4) high-rank general officers and members of the judiciary; (5) high-rank executives of public companies; or (6) directors of political parties. High-rank directors of public or private international law entities are also considered politically exposed individuals. Brazilian Central Bank Circular 3,978/20 also requires that qualification procedures include verification of the client’s capacity as a politically exposed individual, as well as verification of the capacity as representative, relative, or close worker of these individuals, as defined.

Pursuant to Brazilian Central Bank Circular 3,978/20, as amended, internal procedures developed and implemented by financial institutions and other institutions authorized by the Brazilian Central Bank must ensure that the systems used in the monitoring and selection of suspicious operations and situations include detailed information, including with respect to the identification and qualification of the individuals involved.

Therefore, pursuant to Brazilian Central Bank Circular 3,978/20, financial institutions and other institutions authorized by the Brazilian Central Bank will be required to take certain actions to establish commercial relations with clients who could be characterized as politically exposed individuals.

Brazilian Central Bank Circular 3,978/20, also requires that the condition of politically exposed individuals must be considered during five years following the date on which the individual was removed from any of the positions described above.

Moreover, Brazilian Central Bank Circular 3,978/20 provides that for those clients that qualify as politically exposed individuals or for a representative, relative or close employee of such individuals, institutions authorized by the Brazilian Central Bank shall: (1) adopt internal procedures and controls compatible with this qualification; (2) consider this qualification in the client classification under risk categories, pursuant to Brazilian Central Bank Circular 3,978/20; and (3) assess the interest in the establishment or maintenance of a relationship with the client.

Audit Requirements

BR Partners Banco is required under the rules set forth by the Brazilian Central Bank to prepare financial statements in accordance with the rules and accounting guidelines from the Brazilian Central Bank (which are also part of Bacen GAAP). As a financial institution, BR Partners Banco is required by the Brazilian Central Bank to (i) present annual and semi-annual audited financial statements; and (ii) file quarterly financial information with the CVM, with a specific review report prepared by independent auditors.

Under CMN Resolution No. 4,818, dated May 29, 2020, BR Partners Banco is required to present, as of 2022, in addition to the statutory annual financial statements prepared under the accounting guidelines from the Brazilian Central Bank, annual consolidated financial statements prepared in accordance with IFRS Accounting Standards, translated into Portuguese by a Brazilian entity duly accredited by the IASC Foundation, and accompanied by an independent audit report.

Internal Auditors

On December 23, 2020, the CMN issued Resolution No. 4,879, as amended, which establishes the rules applicable for internal audits at institutions authorized to operate by the Brazilian Central Bank. It determines that financial institutions and other institutions authorized to operate by the Brazilian Central Bank must implement and maintain internal audit functions compatible with the nature, size, complexity, structure, risk profile and business model of the respective institution. Such activity must be undertaken by a specific unit in the institution or an institution that is part of the same financial conglomerate, directly subordinated to the board of directors, or by a duly licensed independent auditor (provided that such auditor is not in charge of the institution’s financial statements or any other activity that may imply a conflict of interest).

Independent Auditors in Brazil

CMN Resolution No. 4,910 of May 27, 2021, or CMN Resolution 4,910/21, which regulates the rendering of independent auditors’ services to financial institutions and other institutions authorized to operate in Brazil by the Brazilian Central Bank, as well as to clearinghouses and clearing and custody services providers. According to CMN Resolution 4,910/21, financial institutions (except for microcredit loan companies) must be audited by independent auditors. Financial institutions may only engage independent auditors that are duly registered with the CVM and certified by the Brazilian Central Bank through a certification process. In September 2008, the Brazilian Central Bank amended previous rules it had established regarding the independence of auditors, its current rules require a rotation for a period of at least five consecutive years for the partner, manager, supervisor or any other members of the independent audit team who have had a managerial level role in the auditing work of a financial institution, in which case a period of three years must be observed before the professional can be reallocated to the audit team.

Independent auditors and the fiscal council, when installed, must formally notify the Brazilian Central Bank of the existence or evidence of error or fraud within three business days of the identification of such, pursuant to CMN Resolution 4,910/21, including: (1) non-compliance with rules and regulations that place the continuity of the audited entity at risk; (2) fraud of any amount perpetrated by the management of the institution; (3) material fraud perpetrated by the institution’s employees or third parties; and (4) material errors in the accounting records of the audited entity.

Ombudsman Office

According to CMN Resolution No. 4,860, published on October 23, 2020, as amended, financial institutions that have as clients, individuals or legal entities classified as micro and small-sized companies, pursuant to Supplementary Law No. 123, of December 14, 2006, must establish an ombudsman department, whose mission is to ensure strict compliance by financial institutions with the legal and regulatory regimes relating to consumer rights, and to mediate any conflicts among financial institutions and their clients and users of their products and services. The structure of a financial institution’s ombudsman department must be compatible with the nature and complexity of its products, services, activities, processes and systems of each institution. Moreover, to avoid a conflict of interest, its organizational structure must be distinct from any area of the financial institution’s organization, such as the services and products trading, risk management and internal audit areas.

The following are the ombudsman department’s responsibilities: (1) receiving, recording, instructing, analyzing and giving formal and adequate treatment to demands from clients and users of products and services of institutions, (2) providing clarifications regarding the status of a claim and information as to when a response is expected to be given, (3) sending a final answer by the date on which a response is required, and (4) keeping the board of directors or, if one does not exist, the financial institution’s board of executive officers, informed about the problems and shortcomings detected in the performance of their duties and about the result of measures adopted by the managers to solve such problems.

The constitutional documents of financial institutions must expressly state, among other provisions: (i) the purpose, duties and activities of the ombudsman department, (ii) the criteria for selection and dismissal of the ombudsman, (iii) the duration of the ombudsman’s term of office (in months), and (iv) the formal commitment of the institution to (a) create adequate conditions to enable the ombudsman department to perform its duties and also to ensure that the ombudsman can operate in a transparent, independent and impartial way, and (b) ensure that the ombudsman department has access to information necessary to enable it to respond adequately to any claims received, with full administrative support and the ability to request information and documents as may be necessary to perform its duties.

Financial institutions must report and maintain updated information regarding the officer who is responsible for the ombudsman department. This responsible officer must prepare a report every six months, as required by the Brazilian Central Bank. In addition, Brazilian law allows for the creation of a single ombudsman department structure for a group of related companies, such that a single ombudsman department can have responsibility for all financial institutions that are part of the same group, provided that the Brazilian Central Bank’s requirements are satisfied.

Foreign Investment in Financial Institutions

According to article 52 of the Brazilian Transitional Constitutional Provisions Act, until the conditions for the participation of foreign investors in the SFN are defined, the participation of individuals or legal entities resident or domiciled abroad in the capital of financial institutions headquartered in Brazil is forbidden.

The prohibition referred to in such provision does not apply to authorizations resulting from international agreements, reciprocity, or in the interest of the Brazilian Government. Within the scope of this exception and through Decree No. 10,029/2019, the Brazilian president transferred to the Brazilian Central Bank his authority to recognize such interest of the Brazilian Government (in this case, by presidential decree). The Brazilian Central Bank issued Circular No. 3,977/2020 which, among other provisions, recognized as being of the interest of the Brazilian Government the participation of individuals or legal entities resident or domiciled abroad in financial institutions headquartered in Brazil.

Consequently, Brazilian Central Bank Circular No. 3,977/2020 considered the interest of non-residents in the capital of financial institutions equivalent to those of residents, and, as a result, both new investments and increases in the equity interest of non-residents in financial institutions no longer require a specific authorization through a presidential decree, except for all other authorizations required for the organization, operation, change of control, admission of qualified interest and all other processes which depend on authorization from the Brazilian Central Bank.

Moreover, foreign investors may acquire shares without voting rights issued by Brazilian financial institutions that are traded on the stock exchange, without any specific authorization.

Securities Portfolios Management Regulation

The management of securities portfolios is regulated by the Brazilian Central Bank and the CVM. Pursuant to Law No. 10,198, dated February 14, 2001, and Law No. 10,303, dated October 31, 2001, the regulation and supervision of both fixed and variable-income funds were transferred to the CVM. On July 5, 2002, the CVM and the Brazilian Central Bank executed a memorandum of understanding in which they agreed to transfer such activities to the CVM. Moreover, the management of resources is currently self-regulated by ANBIMA, which issues rules and policies, particularly related to marketing and publicity.

In accordance with CVM Resolution No. 21 of February 25, 2021, or CVM Resolution 21/21, as amended, certain individuals and legal entities authorized by the CVM may act as managers of securities portfolios (both as fiduciary managers and as asset managers). Moreover, individuals and legal entities authorized by the CVM to act as managers of securities portfolios are required to fill out and update, on a yearly basis, their Formulário de Referência, as well as to regularly provide information to clients.

CVM Resolution 21/21 also requires that asset managers appoint: (1) a statutory officer responsible for managing assets (authorized as individual manager); (ii) a statutory officer responsible for compliance with rules, policies, procedures and internal controls, as well as with CVM Resolution 21/21; (3) a statutory officer in charge of risk management, which can be the same officer responsible for compliance with rules; and (4) a statutory officer responsible for distributing investment fund quotas (as applicable).

Furthermore, pursuant to CVM Resolution 21/21, asset managers must: (1) constitute and maintain human and IT resources which are appropriate to their size and field of activity; (2) maintain a page on the worldwide web; (3) adopt operational procedures to segregate asset management from other activities, with the purpose of: (a) ensuring the physical segregation of facilities between the department responsible for managing securities portfolios and the departments in charge of intermediation and distribution of securities, (b) ensuring proper use of facilities, equipment and information common to more than one division of the company, (c) preserving confidential information and enabling the identification of individuals who have access to them, and (d) restricting access to files and enabling the identification of individuals who have access to confidential information; and (4) maintaining, for at least five years, or a longer term as expressly determined by the CVM, all documents and information required by CVM Resolution 21/21, as well as all internal and external correspondence, work, reports and opinion papers related to the performance of their duties.

In addition to the above-mentioned requirements, asset managers must also: (1) maintain written instructions detailing the rules and procedures adopted with respect to: (a) segregation of activities, with the purpose of demonstrating full separation of the departments or present their segregation rules, describing at least those related to facilities, equipment and information, pursuant to CVM Resolution 21/21; and (b) confidentiality, describing the confidentiality and conduct rules adopted with details regarding the applicable requirements, at least for their members, managers and employees; (2) maintain a page on the worldwide web containing the following updated information: (a) reference form; (b) code of ethics; (c) rules, procedures and descriptions of internal controls; (d) risk management policy; (e) policy related to the negotiation of securities by managers, employees and by the company itself; (f) manual of asset pricing applicable to its asset portfolio; and (g) policy related to the division of orders between the securities portfolios; (3) prepare rules, procedures and internal controls that are effective and consistent with the nature, complexity and risk of the transactions performed, in compliance with CVM Resolution 21/21; and (4) establish mechanisms to: (a) ensure control of all confidential information to which their managers and employees have access, (b) ensure the existence of regular security testing for their information systems, particularly for those maintained in electronic means, and (c) implement and maintain a training program for managers, employees and workers who have access to confidential information, participate in the decision-making process regarding investments or participate in a process to distribute investment fund quotas, as applicable.

The Brazilian Central Bank, except under specific circumstances, prohibits financial institutions acting as administrators or managers from investing in funds managed by them. On December 17, 2014, the CVM issued CVM Instruction No. 555, as amended, which further consolidated the rules applicable to investment funds (except for structured investment funds, which are regulated by certain specific rules).

Effects of foreign regulation on our activities

Pursuant to Decree No. 8,506, dated August 24, 2015, the Brazilian government and the United States Government entered into an agreement to improve international tax compliance and for the implementation of the Foreign Account Tax Compliance Act, or FATCA, in order to identify to American tax authorities all U.S. Persons with funds available in financial institutions headquartered in Brazil, as well as to identify to the Brazilian tax authorities all Brazilian tax residents with funds available in financial institutions headquartered in the United States.

Our subsidiary, BR Europe, located in the Netherlands, accesses foreign clients, mainly European clients interested in the services provided by our investment banking business line in Latin America, particularly in Brazil. BR Europe is subject to the laws of the Netherlands and the European Union directives applicable to it. Nevertheless, with respect to BR Europe activities in the Netherlands, no specific regulatory authorization for its operation or regulatory supervision is required.

Regulation UE 2016/679 of the European Parliament and Council, dated April 27, 2016, established a set of rules regarding the treatment of data of individuals, known as the GDPR. This regulation encompasses items ranging from the name and personal identification to data on location, employment, economic situation, health, interests and personal preferences of residents in the European Union, related to the offer of goods and services to such residents or even their behavioral monitoring, even if this data and information are processed or used outside the European Union. We comply with the provisions of the GDPR when applicable, guaranteeing to residents of the European Union that hire BR Europe’s services the preservation and safety of their personal data and information, including by our entities located in Brazil, which need to have access to this personal data and information for the provision of BR Europe’s services. Failure by BR Europe or by us to comply with the provisions of the GDPR could subject us to the payment of fines.

For more information on the risks related to amendments to the local legislation of the foreign countries where we operate, see “‎Item 3. Key Information—D. Risk Factors—Risks Relating to Us—We face legal and regulatory risks, which may materially damage our reputation or otherwise adversely affect us, including in relation to our business prospects.”

We are organized as a holding company that operates through direct and indirect subsidiaries, each of which is located in Brazil. The following chart sets forth our corporate structure as of the date of this registration statement:

As of the date of this registration statement, our economic group comprises eight direct or indirect subsidiaries, of which six are operational. As of the date of this registration statement, our subsidiaries are:

The table below sets forth information relating to our material property, plant and equipment, which primarily comprises our headquarters, as of the date of this registration statement:

In addition, as of the date of this registration statement, we own certain fixed assets, primarily comprising right-of-use assets, furniture and equipment.

For further information, see “—A. Capital Expenditures and Investment Plan.”

ITEM 4A. UNRESOLVED STAFF COMMENTS

Not applicable.

Item 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

You should read this discussion in conjunction with our (1) Unaudited Condensed Consolidated Interim Financial Statements prepared in accordance with IAS 34–Interim Financial Reporting as issued by the IASB and (2) Audited Consolidated Financial Statements prepared in accordance with IFRS Accounting Standards. 

Overview

We are an independent Brazilian investment bank managed by executive partners that has maintained its position as one of the leaders in the provision of financial advisory and capital markets services in Brazil. Since January 1, 2017, we have been ranked by Bloomberg as one of the top five advisors in M&A transactions in Brazil. In terms of the number and volume of M&A transactions for which we provide advisory services in Brazil, we were ranked second, fourth and second in 2021, 2022 and 2023, respectively, by Bloomberg. Moreover, we were ranked fifth by number of deals in 2024 by Bloomberg. Through an integrated financial advisory platform, we offer complex financial products and services to a diversified base of regional and global clients that primarily comprise large companies, institutional investors and HNWIs.

We provide advisory services to our clients in connection with their critical strategic and financial decisions. We have a client-centric business model and operate under a structure that employed (1) 189 individuals as of March 31, 2025 and (2) 183 individuals as of December 31, 2024. Moreover, we adopt an analytical approach when servicing our clients, combined with our knowledge of financial products and the financial services industry.

As of the date of this registration statement, we generate revenue through our four key business lines: (1) investment banking and capital markets, (2) treasury sales & structuring, (3) investments and wealth management, which comprises our investments and wealth management operations, having initiated our wealth management operations in September 2023 and (4) capital remuneration.

Macroeconomic Environment and Factors Affecting Our Results of Operations

Brazilian Macroeconomic Environment

We are incorporated and operate primarily in Brazil. Accordingly, our results of operations, cash flow and financial condition (as well as those of our clients) are impacted by the Brazilian macroeconomic environment, including real GDP growth.

The following table sets forth data relating to GDP, inflation, interest rates and exchange rates as of the dates and for the periods indicated.

Sources: FGV, IBGE, Brazilian Central Bank, Economática, Ipeadata and Valor Econômico.

Inflation and Interest Rates

In the three-month period ended March 31, 2025 and in the years ended December 31, 2024, 2023 and 2022, our results of operations and the prices we charge our clients were not significantly affected by inflation.

In the three-month period ended March 31, 2025, higher SELIC rates resulted in high demand for restructuring advisory services. However, higher interest rates adversely affected the number and volume of M&A transactions during the same period.

In 2024, lower interest rates and an expectation of a decrease in inflation led to an increase in M&A, which positively affected demand for debt issuances through our capital markets operations and total revenues generated by our investment banking and capital markets business line. Despite lower average SELIC rates in 2024, SELIC rates in 2024 remained relatively high compared to historical levels, leading to an increase in restructuring advisory services and positively affecting revenue generated by our investment banking operations. With respect to our liabilities, we have relatively high liquidity and low leverage, with the majority of our liabilities incurred in relation to our shareholders. Accordingly, abrupt variations in interest and foreign exchange rates may have a very limited effect on our financial results.

In 2023, the annual average SELIC rate was 13.3%, compared to 12.6% in 2022. This increase in the average interest rates negatively affected the number and volume of our capital markets issuances. Later in 2023, subsequent decreases in interest rates to 11.75% as of December 31, 2023 incentivized companies that incurred indebtedness at high rates to seek new financing solutions with lower rates, positively affecting our capital markets operations.

In 2022, the SELIC rate increased to 13.75%, which resulted in an increase in capital gains in our capital remuneration business line. In addition, despite the high cost of debt, the increase in the SELIC rate also resulted in an increase in investor demand for fixed income products, which directly affected our capital markets operations. Another important consequence of the increase in interest rates has been the weakening of the financial condition of certain Brazilian companies, enabling us to promote our special situations & restructuring operations, which are engaged to restructure companies that are facing financial difficulties.

Moreover, variations in interest rates positively affect the results of our treasury sales & structuring business line given the increase in business we generate from clients seeking to mitigate the risk of asset and liability mismatches through currency derivatives and hedging transactions.

Foreign Currency

With respect to foreign currency fluctuations, in the ordinary course of our operations, we extend credit in foreign currency to certain of our clients. We do not engage in hedging transactions to mitigate the effects of fluctuations in such foreign currencies.

For additional information regarding the governmental, economic, fiscal, monetary or political policies that have affected and may affect our results of operations, see “Item 3. Key Information—Risks Relating to Brazil.”

Number and Volume of Transactions

With respect to our client revenue-generating business lines, our results of operations are influenced by the number and volume of transactions on which we advise, as well as the volume of our assets under management and wealth under advisory. It is important to note, however, that the number and volume of transactions that we publish, particularly in our investment banking operations, are not always reliable indicators of our performance as not all transactions can be publicly disclosed due to non-disclosure agreements with clients, and a transaction’s volume may not correlate with the revenue generated, depending on the type of advisory service provided in the transaction. The fees we charge are highly tailored to each transaction and the subject of significant negotiation. While we generally generate more revenue from larger volume transactions, this is not always the case. For example, the fees we charge in relation to the provision of an independent fairness opinion as part of our board advisory services (which may represent a significant portion of the total volume of investment banking transactions in any given period) are not typically correlated with the volume of the particular M&A transaction. In contrast, we may generate substantial fee revenue in a lower volume M&A transaction as a sell-side advisor as a result of a negotiated success fee. Accordingly, there is often no direct correlation between the volume of transactions on which we advise and the fee revenue we generate.

As a result of our efforts to facilitate direct client access to the Brazilian financial markets, we have successfully increased the volume and/or the number of transactions for which we provided capital markets, treasury sales and structuring and wealth management services, as indicated in the table below. Despite the fact that the number and volume of our disclosed investment banking transactions decreased in 2024 compared to 2023 as shown in the table below, revenues from rendering of services generated by our investment banking transactions increased during the same period primarily as a result of increased revenue from our restructuring advisory services in 2024 due to higher demand for restructuring services resulting from higher interest rates over the past few years. For example, we served as a financial advisor to Malwee in connection with a debt restructuring and served as the exclusive financial advisor to Light in connection with the approval of its judicial reorganization plan.

The number and volume of the transactions on which we advise are primarily driven by macroeconomic and political factors that influence investor and general business sentiment, as well as the increasing sophistication of the Brazilian financial markets. For example, the total number of exclusive asset managers of fixed-income products reached 237 in 2024, with total assets under management of R$3.6 trillion, a growth of 18% when compared to R$3.0 trillion in 2023 and an increase of 30% when compared to R$2.7 trillion in 2022, according to ANBIMA. During 2024, the inflow of investors for fixed income instruments contributed to a record demand for debt products, which enabled companies to meet their funding needs via local capital markets. Accordingly, local debt capital markets reached R$700 billion in issuances in 2024, according to ANBIMA. This increase benefited the growth in the total volume of our capital markets transactions as shown in the table below and created opportunities for structuring swap transactions within our treasury sales & structuring business line. Macroeconomic and political factors are, in turn, dependent on a variety of unpredictable factors that are beyond our control. As such, we are unable to predict whether the recent increases in the number and volume of our transactions represent sustainable trends. See “Item 3. Key Information—D. Risk Factors—Risks Relating to Us—A significant portion of our revenue may be derived from a limited number of client engagements.” Additionally, our total wealth under advisory, a key metric of our recently established wealth management operations (established in September 2023), increased as a result of growing client awareness and interest in this offering. As we further bring awareness to our wealth management services and invest in our wealth management platform, we further expect the increase in our wealth under advisory to continue in the near term. Over the longer term, we anticipate that the growth in our wealth under advisory will stabilize as our wealth management operations mature.

With respect to the three-month periods ended March 31, 2025 and 2024, the significant market uncertainty caused by a shift in the economic policy of the new presidential administration in the United States (including the announcement of tariffs and the retaliatory responses to such tariffs), resulted in a decline in the number and volume of transactions in our investment banking, capital markets and treasury sales & structuring operations in the three-month period ended March 31, 2025 compared to the corresponding period in 2024, as set forth in the table below, with the exception of the volume of our capital markets transactions, which increased 85.7%, primarily as a result of the ongoing favorable economic environment for debt issuances in the Brazilian debt capital markets. Our wealth under advisory, a key metric of our wealth management operations, continued its upward trajectory in the three-month period ended March 31, 2025, following the initiation of our wealth management operations in September 2023.

The following table sets forth our total revenue by business line for the periods indicated:

For a reconciliation of our total revenue by business line to our total revenues, see note 12 to our Unaudited Condensed Consolidated Interim Financial Statements and note 13 to our Audited Consolidated Financial Statements.

Current Conditions and Trends in our Industry

The following is a discussion of the current conditions and trends affecting our business lines. As set forth below, important trends, uncertainties and events that affect us and our ability to sell our advisory services include trends relating macroeconomic and political events in Brazil and abroad that impact the financial and capital markets (the primary markets in which we operate) as well as investor and general business sentiment. These trends, uncertainties and events (which are dynamic, fluctuate over the short-, medium and long-term and are often difficult to predict) include fluctuations in interest rates and inflation, the results of elections and government policies in Brazil and abroad, global conflicts and expected growth rates, among others.

Investment Banking – Investment Banking and Capital Markets

Our investment banking and capital markets business line in the three-month period ended March 31, 2025, when compared to the three-month period ended March 31, 2024, continued to be affected by relatively high interest rates, which lowered demand for M&A transactions but maintained high demand for restructuring services. Our revenue was also positively impacted by continued high demand for debt issuances.

Our investment banking and capital markets business line in 2024, when compared to 2023, benefited from a higher demand for restructuring services as a result of relatively high interest rates over the past few years. Our investment banking and capital markets business line also benefitted from the increasing sophistication of the Brazilian financial markets and the continued development of local debt capital markets, which reached a total of R$700 billion in debt issuances in 2024.

Our investment banking and capital markets business line was impacted by a more challenging business environment at the beginning of 2023 when compared to 2022, primarily due to the emergence of large Brazilian companies in distress, culminating in corporate restructurings, which adversely affected market sentiment and subsequently market conditions. This adverse impact was partially offset by a slight increase in the number and volume of investment bank transactions in connection with the increase in our restructuring engagements. Beginning in the second half of the year, we observed a sustained improvement in the Brazilian macroeconomic environment in 2023 when compared to 2022, as reflected by a decrease in the SELIC rate to 11.8% as of December 31, 2023, from 13.8% as of December 31, 2022, a decrease in the inflation rate as measured by IPCA to 4.6% in the year ended December 31, 2023, from 5.8% in the year ended December 31, 2022, and a strengthening of the Brazilian Real to an exchange rate of R$4.841 per U.S. Dollar as of December 31, 2023, from an exchange rate of R$5.218 per U.S. Dollar as of December 31, 2022, with a notable recovery in M&A activity and in the debt capital markets.

Treasury Sales & Structuring

Our treasury sales & structuring business line revenue in the three-month period ended March 31, 2025, when compared to the three-month period ended March 31, 2024, was impacted by high market volatility during the period. However, revenue generated by our treasury sales & structuring business line remained relatively stable when compared to the three-month period ended March 31, 2024.

Our treasury sales & structuring business line in 2024, when compared to 2023, was impacted by the primary debt market that reached a record volume of R$700 billion in issuances during the year, providing opportunities for structuring swap transactions.

Our treasury sales & structuring business line in 2023, when compared to 2022, was impacted by a recovery in the local primary debt market at the end of the year, providing opportunities for structuring swap transactions, as well as by an increase in recurring transactions and increased activity in the agricultural commodities market.

Investments and Wealth Management

Our investments and wealth management business line in the three-month period ended March 31, 2025, when compared to the three-month period ended March 31, 2024, was positively impacted by the continued development of our wealth management operations. Our wealth under advisory increased 88%, to R$5.1 billion as of March 31, 2025, from R$2.7 billion as of March 31, 2024.

Our investments and wealth management business line in 2024, when compared to 2023, was positively impacted by the further development of our wealth management operations. Our wealth under advisory totaled R$4.7 billion as of December 31, 2024, reflecting an inflow of cash of R$2.3 billion in the year ended December 31, 2024 when compared to the year ended December 31, 2023.

Our investments and wealth management business line in 2023, when compared to 2022, was positively impacted by the commencement of our wealth management operations. We launched our wealth management operations in September 2023. Within the first 2 months of operations, our wealth management platform reached R$2.4 billion in wealth under advisory.

Capital Remuneration

Our capital remuneration business line in the three-month period ended March 31, 2025, when compared to the three-month period ended March 31, 2024, was impacted by a 3.3% decrease in shareholders’ equity to R$796.1 million as of March 31, 2025, from R$826.4 million as of March 31, 2024. Revenue from our capital remuneration business line was also impacted by a lower spread on our private securities portfolio, resulting from higher average SELIC rates.

Our capital remuneration business line in 2024, when compared to 2023, was impacted by a lower average SELIC rate during the period. Nevertheless, the revenue generated from our capital remuneration operations increased primarily due to our higher average equity of R$812.7 million in 2024, an increase of 0.02% compared to our average equity in 2023, and the growth of our private securities portfolio, which increased 47.4% in 2024 compared to 2023.

Our capital remuneration business line is directly impacted by the average SELIC rate, to which the fees we charge in this business line are linked. In 2023, the average SELIC rate was 13.3%, compared to 12.6% in 2022. We also increased our asset portfolio, which mainly comprised CRIs and Debentures originated by our capital markets operations, finishing 2023 with a portfolio of R$2.1 billion in private securities and bridge loans.

Operating Segments

Our business is organized within a single reporting segment. In order to provide a better understanding of our operations, however, we divide our operations into the following business lines: (1) investment banking and capital markets, (2) treasury sales & structuring, (3) investments and wealth management and (4) capital remuneration.

Principal Components of Our Results of Operations

The following is a brief description of the revenues and expenses that are included in the line items of our Consolidated Financial Statements.

Revenue Components

Our management evaluates the revenue components of our results of operations on both an income statement line item basis and a business line basis. An evaluation of the revenue components on a business line basis allows our management to effectively analyze each of our business lines, as well as our individual service offerings within such business lines, and monitor the overall development of each business line.

Interest Revenues and Gains on Financial Instruments

Interest revenues and gains on financial instruments consist of the positive results generated by our bridge loans, public and private securities, derivatives, commissions on guarantees and foreign exchange transactions. Interest revenues and gains on financial instruments are generated primarily by our treasury sales & structuring and capital remuneration business lines.

Interest Expenses and Losses on Financial Instruments

Interest expenses and losses on financial instruments consist of the negative results generated by our funding expenses, derivatives and other financial liabilities. We primarily incur funding expenses in connection with client deposits and funds from securities issued. Interest expenses and losses on financial instruments are incurred primarily by our treasury sales & structuring and capital remuneration business lines.

In the three-month periods ended March 31, 2025 and 2024, our funding expenses incurred in connection with client deposits totaled R$82.1 million and R$63.3 million, respectively, and our funding expenses incurred in connection with funds from securities issued totaled R$64.2 million and R$18.1 million, respectively. In the years ended December 31, 2024, 2023 and 2022, our funding expenses incurred in connection with client deposits totaled R$254.9 million, R$185.5 million and R$116.7 million, respectively, and our funding expenses incurred in connection with funds from securities issued totaled R$117.8 million, R$64.8 million and R$23.3 million, respectively. Funding expenses are recognized on an as incurred basis, based on the applicable contractual interest rates.

Net interest revenue (expense) and gains (losses) on financial instruments

Net interest revenue (expense) and gains (losses) on financial instruments are calculated as the difference between the line items “interest revenues and gains on financial instruments” and “interest expenses and losses on financial instruments”. Net interest revenue (expense) and gains (losses) on financial instruments are generated/incurred primarily by our treasury sales & structuring and capital remuneration business lines.

Revenues from Rendering of Services

Revenues from rendering of services comprise revenue from our investment banking, capital markets, treasury sales and structuring, investments and wealth management operations.

Total Revenues

Total revenues are calculated as the sum of the line items “net interest revenue (expense) and gains (losses) on financial instruments” and “revenues from rendering of services”.

Other Components

In contrast to the revenue components of our results of operations, our management evaluates the other components of our results of operations, which are shared across our business lines, on an aggregate basis. We believe that evaluating these components on an aggregate basis provides for streamlined and efficient management analysis and conforms to our strategic objective to optimize for overall financial performance, such as by controlling certain expenses on a Company-wide basis.

Personnel Expenses

Personnel expenses comprise salaries, payroll taxes, benefits and bonuses.

Administrative Expenses

Administrative expenses comprise expenses with outsourced services, data processing, financial system services, amortization and depreciation, travel, communication, promotion and public relations, certain real estate charges (condóminio) and other administrative expenses.

Tax Expenses

Tax expenses comprise social integration program contributions, or PIS, contributions for social security financing, or COFINS, and taxes on services, or ISS.

Reversal /(Provision) due to Expected Credit Losses

Reversal /(provision) due to expected credit losses comprises the amounts of expected losses associated with the credit risk of financial assets classified as amortized cost.

Other Revenues

Other revenues comprises income from security deposits, income from judicial deposits and results from the sale of fixed assets.

Other Expenses

Other expenses comprise marketing, travel, maintenance, insurance and security expenses, as well as provisions for labor claims and other taxes.

Results of Operations for the Three-month Periods Ended March 31, 2025 and 2024

Total Revenue by Business Line

Our management evaluates our revenue generation by business line in order to better manage each business lines’ performance.

To facilitate an understanding of our results of operations, the table and discussion below sets forth a breakdown of our total revenue by business line for the three-month periods ended March 31, 2025 and 2024:

Investment Banking and Capital Markets

Total revenue in our investment banking and capital markets business line increased 1.0% to R$78.5 million in the three-month period ended March 31, 2025 from R$77.7 million in the corresponding period in 2024 primarily as a result of (1) the continued high demand for debt issuances and (2) the increased demand for our restructuring services as a result of the effect of continued high interest rates on Brazilian companies, each of which offset the decline in the number and volume of our investment banking transactions and in the number of our capital markets transactions.

Treasury Sales & Structuring

Total revenue in our treasury sales & structuring business line decreased 1.1% to R$17.2 million in the three-month period ended March 31, 2025 from R$17.4 million in the corresponding period in 2024, primarily as a result of a decline in the number of derivative transactions on which we advised, mainly foreign exchange transactions, and a decrease in our treasury sales & structuring business line’s volume of transactions to R$8.9 billion in the three-month period ended March 31, 2025, from R$21.8 billion in the corresponding period in 2024.

Investments and Wealth Management

Total revenue in our investments and wealth management business line increased 61.9% to R$3.4 million in the three-month period ended March 31, 2025 from R$2.1 million in the corresponding period in 2024, primarily as a result of the increase in the wealth under advisory of this business line to R$5.1 billion as of March 31, 2025 from R$2.7 billion as of March 31, 2024.

Capital Remuneration

Total revenue in our capital remuneration business line decreased 29.7% to R$28.4 million in the three-month period ended March 31, 2025 from R$40.4 million in the corresponding period in 2024, primarily as a result of an increase in our funding expenses of R$155.2 million. The increase in our funding expenses primarily resulted from the issuance of funds from securities.

Consolidated Statement of Profit or Loss Data

The table below sets forth our consolidated statement of profit or loss data for the three-month periods ended March 31, 2025 and 2024.

Total interest revenues

Total interest revenues increased by 73.9%, or R$234.8 million, to R$552.5 million in the three-month period ended March 31, 2025, from R$317.7 million in the three-month period ended March 31, 2024. This increase was primarily due to an increase in the average volume of our private securities portfolio and in the volume of government bonds due to swap transactions in our treasury sales & structuring business line.

Total interest expenses

Total interest expenses increased by 98.4%, or R$240.3 million, to R$484.5 million in the three-month period ended March 31, 2025, from R$244.2 million in the three-month period ended March 31, 2024. This increase was due to an increase in financial assets at fair value through profit or loss of R$87 million, to R$103.7 million in the three-month period ended March 31, 2025, from R$16.7 million in the three-month period ended March 31, 2024. The increase in financial assets at fair value through profit or loss was primarily due to an increase in the average volume of our private securities portfolio. Additionally, in the three-month period ended March 31, 2025, our funding expenses increased by R$155.2 million, primarily due to the issuance of funds from securities.

Net gains (losses) from operations in foreign currency

Net gains (losses) from operations in foreign currency decreased by 96.6%, or R$33.9 million, to R$1.2 million in the three-month period ended March 31, 2025, from R$35.1 million in the three-month period ended March 31, 2024. This decrease was due to a decrease in the volume of foreign exchange transactions.

Gains (losses), net of financial assets and liabilities at fair value through profit or loss - derivatives

Gains (losses), net of financial assets and liabilities at fair value through profit or loss totaled a net loss of R$23.6 million for the three-month period ended March 31, 2025, compared to a net loss of R$50.8 million for the three-month period ended March 31, 2024. This decrease in net loss was mainly due to (1) an increase in derivative transactions (swap, options, non-deliverable forwards and futures), primarily in connection with the expansion of our commodity operations, and (2) the appreciation in the fair value of transactions as a result of favorable market conditions, in the three-month ended March 31, 2025 compared to the three-month ended March 31, 2024.

Net interest revenue (expense) and gains (losses) on financial instruments

As a result of the foregoing, our net interest revenue (expense) and gains (losses) on financial instruments decreased by 21.1%, or R$12.2 million, to revenue of R$45.6 million in the three-month period ended March 31, 2025, from revenue of R$57.8 million in the three-month period ended March 31, 2024.

Total service revenues

Total service revenues increased by 2.6%, or R$79.8 million, to R$81.9 million in the three-month period ended March 31, 2025, from R$79.8 million in the three-month period ended March 31, 2024. This increase was due to (1) the continued high demand for debt issuances, (2) the increased demand for our restructuring services as a result of the effect of continued high interest rates on Brazilian companies, each of which offset the decline in the number and volume of our investment banking transactions and in the number of our capital markets transactions and (3) the increased revenue from our wealth management operations, which recorded wealth under advisory of R$5.1 billion as of March 31, 2025 from R$2.7 billion as of March 31, 2024.

Total revenues

As a result of the foregoing, our total revenues decreased by 7.3%, or R$10.1 million, to R$127.5 million for the three-month period ended March 31, 2025, from R$137.6 million for the three-month period ended March 31, 2024.

Personnel expenses

Total personnel expenses decreased by 10.5%, or R$4 million, to R$34.1 million in the three-month period ended March 31, 2025, from R$38.1 million in the three-month period ended March 31, 2024. This decrease was due to a reduction in bonus provisions and related expenses (such as PIS and COFINS contributions) in the three-month period ended March 31, 2025, compared to the three-month period ended March 31, 2024. We distribute compensatory bonuses to our employees once a year and record these bonus expenses as a provision during the year, based upon an analysis of the overall macroeconomic environment due to its impact on our performance. Taking into consideration the global and Brazilian macroeconomic environment in the three-month period ended March 31, 2025, our management anticipates that our profitability may decrease and therefore has reduced total bonus provisions for the period. For additional information, see “—A. Operating Results—Macroeconomic Environment and Factors Affecting our Results of Operations.”

Administrative expenses

In the ordinary course of our business, we incur a variety of administrative expenses, including outsourced service expenses, financial system service expenses, data processing expenses, rent expenses, advertising and publicity expenses and travel expenses, among others. Administrative expenses increased by 29.0%, or R$6.2 million, to R$27.6 million in the three-month period ended March 31, 2025, from R$21.4 million in the three-month period ended March 31, 2024. This increase was due to an increase in (1) outsourced service expenses and (2) financial system service expenses and data processing expenses, which jointly accounted for R$2.4 million, or 38.7%, of the foregoing variation in our administrative expenses, as explained below.

Outsourced service expenses (which relate to referral fee services paid to third-party commercial service providers) increased by 15.3%, or R$1.8 million, to R$13.9 million in the three-month period ended March 31, 2025, from R$12.0 million in the three-month period ended March 31, 2024, primarily due to an increase in the volume of the debt securities we distributed in the three-month period ended March 31, 2025 compared to the corresponding period of the prior year. Outsourced service expenses are typically associated with our advisory services and the distribution of debt products. Our outsourced service expenses are determined through bilateral negotiations with third-party commercial service providers and securities distributors and are recorded on an as incurred basis. These expenses are highly negotiated and may vary significantly from one transaction to another. Such fees are typically paid only upon the successful completion of the contemplated transaction. For example, we may share part of the revenue generated from an M&A advisory engagement as a referral fee with a referring third-party, where the amount of the referral fee is typically determined by several factors, including, among others, (1) the size and profitability of the engagement, (2) the kind of advisory service (i.e. M&A, debt structuring, debt distribution through third-party platforms), and (3) bilateral negotiations with the referring third-party.

Other expenses increased by 86.7%, or R$2.4 million, to R$5.2 million in the three-month period ended March 31, 2025, from R$2.8 million in the three-month period ended March 31, 2024. Other expenses include expenses incurred in relation to marketing, travel, maintenance, insurance and security, as well as other taxes. This increase was primarily due to an increase in taxes and fees we incurred in connection with foreign exchange transactions, as well as an increase in expenses incurred in relation to marketing and travel.

Amortization and depreciation expenses increased by 43.0%, or R$0.7 million, to R$2.5 million in the three-month period ended March 31, 2025, from R$1.7 million in the three-month period ended March 31, 2024. This increase was primarily due to the amortization of our digital platform and right-of-use assets.

Tax expenses

Tax expenses increased by 0.9%, or R$0.1 million, to R$10.7 million in the three-month period ended March 31, 2025, from R$10.6 million in the three-month period ended March 31, 2024. This increase was due to the increase in revenues from rendering services.

Reversal/(provision) due to expected credit losses

Reversal/(provision) due to expected credit losses totaled a net provision of R$0.5 million for the three-month period ended March 31, 2025, compared to a net reversal of R$1.4 million for the three-month period ended March 31, 2024. This variation was due to the recording of a provision for expected credit losses in connection with new bridge loan operations in the three-month period ended March 31, 2025.

Operating expenses

As a result of the foregoing, our operating expenses increased by 6.9%, or R$4.7 million, to R$73.2 million for the three-month period ended March 31, 2025, from R$68.5 million for the three-month period ended March 31, 2024.

Profit before income tax

As a result of the foregoing, our profit before income tax decreased by 21.4%, or R$14.8 million, to R$54.3 million for the three-month period ended March 31, 2025, from R$69.1 million for the three-month period ended March 31, 2024.

Income taxes

Income taxes decreased by 42.9%, or R$8.5 million, to R$11.1 million in the three-month period ended March 31, 2025, from R$19.6 million in the three-month period ended March 31, 2024. This decrease was due to our reduced profit before income tax in the three-month period ended March 31, 2025, compared to the three-month period ended March 31, 2024.

Profit for the period

As a result of the foregoing, our profit for the period decreased by 12.9%, or R$6.3 million, to R$43.1 million for the three-month period ended March 31, 2025, from R$49.5 million for the three-month period ended March 31, 2024.

Results of Operations for the Years Ended December 31, 2024 and 2023

Total Revenue by Business Line

Our management evaluates our revenue generation by business line in order to better manage each business lines’ performance.

To facilitate an understanding of our results of operations, the table and discussion below sets forth a breakdown of our total revenue by business line for the years ended December 31, 2024 and 2023:

Investment Banking and Capital Markets

Total revenue in our investment banking and capital markets business line increased 46.6% to R$352.8 million in the year ended December 31, 2024 from R$240.7 million in the year ended December 31, 2023 primarily as a result of (1) an increase in the number and volume of our capital markets transactions as a result of the increasing sophistication of the Brazilian financial markets and the continued development of the local debt capital markets, which recorded a total of R$700 billion in debt issuances in 2024, according to ANBIMA, and (2) an increase in demand for our restructuring services, which offset the decline in the number and volume of our investment banking transactions.

Treasury Sales & Structuring

Total revenue in our treasury sales & structuring business line increased 35.6% to R$88.3 million in the year ended December 31, 2024 from R$65.1 million in the year ended December 31, 2023 primarily as a result of an increase in foreign exchange transactions and the expansion of our commodity operations (which are conducted in foreign currency) in the year ended December 31, 2024 compared to the year ended December 31, 2023, and an increase in the number of derivative transactions during the period (swaps, options, non-deliverable forwards and futures).

Investments and Wealth Management

Total revenue in our investments and wealth management business line increased 100% to R$12.0 million in the year ended December 31, 2024 from R$6.0 million in the year ended December 31, 2023 primarily as a result of the increase in our wealth under advisory to R$4.7 billion as of December 31, 2024 from R$2.3 billion as of December 31, 2023.

Capital Remuneration

Total revenue in our capital remuneration business line increased 3.2% to R$128.1 million in the year ended December 31, 2024 from R$124.1 million in the year ended December 31, 2023 primarily as a result of an increase in the average volume of our private securities portfolio (CRIs, CRAs, debentures, investment fund quotas and commercial notes).

Consolidated Statement of Profit or Loss Data

The table below sets forth our statements of profit or loss data for the years indicated: