Brazil's limited investment universe just got smaller. A few weeks ago the country's central bank issued Resolution 2720, which ostensibly promotes greater transparency in the market by forbidding pension funds from buying fixed-income paper issued by privately held companies.

Any company that is not registered with the Brazilian securities exchange commission, Comissao de Valores Mobiliarios, is considered private. As such, the maximum maturity for their paper is 180 days. Resolution 2720 requires that pension funds invest in notes with maturities longer than 180 days, which effectively bans them from purchasing private companies' notes.

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