Brazil Broker XP Halts New Buys of Six Bond ETFs Over a Tax Doubt

Brazil · Investing

XP, one of Brazil’s best-known brokerages, has stopped clients buying six exchange-traded bond funds run by rivals. The reason is a tax question the Federal Revenue Service has not yet settled.

XP Investimentos, a São Paulo brokerage and investment platform, has stopped clients buying six bond ETFs run by rival asset managers. The XP ETF suspension, announced to clients on Monday 21 September 2026, turns on an unsettled tax question.

The pause covers new purchases and transfers into the funds through XP and its sister platforms Rico and Clear. The funds keep trading normally on the B3, São Paulo’s stock exchange.

At stake is whether investors pay 15% or 25% income tax on their gains. That gap can decide whether the funds beat a plain bank deposit.

Which funds are affected

Four of the six are managed by the investment bank BTG Pactual. They are AMAB11, DEBB11, LFIN11 and MARG11, according to Valor Investe, the personal-finance site of the business daily Valor Econômico.

The other two are GICP11, from Genial Investimentos, and NLFA11, from the digital bank Nubank. All six are exchange-traded funds, or ETFs, that track indices of corporate and bank debt.

XP said the funds invest mainly in private credit whose interest follows the CDI plus an extra spread. Its notice cited the lack of “a definitive understanding on the subject” so far.

The pause would last “until there is greater regulatory and tax clarity,” according to the notice quoted by Valor Investe. XP set no end date.

What the CDI is

The CDI is the key benchmark of Brazilian fixed income. It is the average rate at which banks lend to each other overnight.

It moves almost in step with the Selic, the central bank’s policy rate. The Banco Central do Brasil cut the Selic to 13.75% a year on 16 September 2026.

Most Brazilian savings products are quoted as a percentage of the CDI. A bank bond paying “110% of CDI” earns 10% more than that overnight rate.

Because the CDI resets every day, securities tied to it behave like very short-term money. That feature sits at the heart of the tax dispute.

The 15% or 25% question

Fixed-income ETFs have their own tax table under Law 13,043 of 2014. Gains are taxed at 25%, 20% or 15%, depending on the portfolio’s “average repricing period”.

A fund whose portfolio has an average repricing period of 180 days or less pays 25%. Above 720 days, the rate is 15%.

A Finance Ministry ordinance says a floating-rate bond’s term equals the repricing period of its reference rate, Seu Dinheiro reported. For the CDI, that could mean one day.

That would push the six funds into the 25% bracket, even when the bonds they hold mature years from now. That risk is what led XP to pause purchases.

Anbima, the association of Brazil’s banks and asset managers, backs the lower rate. Its working group says 15% should apply when the underlying bonds carry repricing periods above 720 days.

“The proposal does not seek to create tax benefits,” Anbima said, according to Valor Investe. It said it wants ETFs taxed like the assets they hold, and has put that view to the government.

An old fight over Treasury funds

The dispute has happened before. In July 2023, XP halted trading in LFTS11, a Treasury bond ETF run by the manager Investo, over the same doubt.

In February 2024, the National Treasury concluded that such funds reprice every day. The Federal Revenue Service followed, and the rate on those funds rose to 25%, InvestNews reported.

Managers adapted by adding a slice of long inflation-linked bonds, lifting portfolios above the 720-day line. The question now is whether the same one-day logic reaches CDI-linked private credit.

InvestNews asked the Federal Revenue Service for comment on Monday and had not received a reply. InvestNews is owned by the Nubank group, which manages NLFA11.

What it means for investors

The XP ETF suspension changes nothing for current holders, the brokerage said, and they can still sell on the exchange. Brokers withhold the tax when clients sell at a profit, which is why XP carries the risk of charging the wrong rate.

The difference is large. InvestNews calculated that a bond fund earning 110% of the CDI nets only 82.5% of the CDI after a 25% tax.

A bank deposit certificate paying the same 110% nets about 85.2% even at its highest 22.5% rate. That rate falls to 15% for deposits held beyond two years.

ETFs of bank bonds, called letras financeiras, give small savers access to paper that usually demands R$50,000 (about US$9,800) or more. Figures use a rate of 5.11 to the US dollar, the central bank’s PTAX reference for 21 September 2026.

Some bank bonds are sold only to qualified investors, those holding at least R$1 million (about US$196,000). A tax change would narrow the edge the ETFs offer.

Industry split

Some managers say 15% is already practised and that XP created needless noise, Valor Investe reported. Others say the rules are unclear and XP is right to wait.

Bruno Stein, the partner in charge of ETFs at Galapagos Capital, a rival manager, backed XP in an Instagram video. “The brokerage has every right to decide this way, since it is responsible for collecting the income tax,” he said.

BTG Pactual, Genial, Nubank and XP did not comment to Valor Investe. Rival platforms, including those of BTG Pactual, Nubank and Inter, had announced no similar step, InvestNews reported.

Nobody has accused the fund managers of wrongdoing. The outcome now depends on the Federal Revenue Service, which has not said when it will rule.

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Did XP stop trading in the six ETFs?

No. XP paused only new purchases and transfers into the funds through its own platforms, XP, Rico and Clear. The funds still trade on the B3 exchange in São Paulo. Clients who already own shares keep them and can sell, the brokerage said.

Which ETFs did XP pause?

AMAB11, DEBB11, LFIN11 and MARG11, managed by BTG Pactual; GICP11, managed by Genial Investimentos; and NLFA11, managed by Nubank. All invest mainly in corporate and bank debt paying the CDI rate plus a spread, according to XP.

What is the CDI?

The CDI is the average overnight rate at which Brazilian banks lend to each other. It tracks the central bank’s Selic policy rate, which was cut to 13.75% a year on 16 September 2026. Most Brazilian fixed-income products quote their returns as a percentage of the CDI.

Has the tax law changed?

No new law or ruling has been published. The dispute is over how to apply Law 13,043 of 2014, which taxes fixed-income ETF gains at 15%, 20% or 25%. The rate depends on the portfolio’s average repricing period, and the Federal Revenue Service has not said how CDI-linked bonds should be counted.

Sources: Valor Investe on the XP suspension and Anbima’s position, InvestNews on the tax dispute and investor impact, Seu Dinheiro on the repricing rule, Law 13,043 of 2014, article 2, Money Times on the 2023 LFTS11 halt, Banco Central do Brasil, Copom minutes of September 2026

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