A. History and Development of the Company
Corporate Information
Our legal and commercial name is XP Inc., a financial holding company incorporated under the laws of the Cayman Islands as an exempted company with indefinite duration and limited liability on August 29, 2019, that through our affiliates, provides financial solutions by universalizing access to top-quality financial services through a strategy that explores the synergy between retail investment, retail cross-sell, and wholesale banking.
Our registered office is c/o Maples Corporate Services Limited, P.O. Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands and our principal office is located at 20, Genesis Close, Grand Cayman, George Town, Cayman Islands, KY-1-1208, and our telephone number at this address is +55 11 3075 0429. We have appointed XP Investments US, LLC, with offices at 55 West 46th Street, 30th Floor, New York, NY 10036, as our agent for service of process with respect to any action brought against us in the United States under the federal securities laws of the United States or of any state in the United States.
Investors should contact us for any inquiries through the address and telephone number of our principal executive office. Our principal website is www.xpinc.com. The information contained in, or accessible through, our website is not incorporated into this annual report. In addition, the SEC maintains a website at https://www.sec.gov, from which you can electronically access this annual report, and other information regarding issuers that file electronically with the SEC.
Share Capital
As of December 31, 2025, we had a total of 518,744,049 common shares issued, 103,375,726 of these shares are Class B common shares beneficially owned by XP Control, and 415,368,323 of these shares are Class A common shares owned by investors.
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Capital Expenditures and Divestitures
Our principal capital expenditures and divestitures since the beginning of our last three financial years relate primarily to investments in technology and operational infrastructure supporting our platform and operating capabilities, as well as selective acquisitions and minority investments intended to expand capabilities and distribution. The amounts invested, and the related cash flow impacts, are presented in “Item 5. Operating and Financial Review and Prospects—Liquidity and Capital Resources” and in our consolidated financial statements (including the consolidated statement of cash flows and relevant notes) included elsewhere in this annual report.
Information regarding principal capital expenditures and divestitures currently in progress, including the geographic distribution of these investments (home and abroad) and the method of financing (internal or external), is included in “Item 5. Operating and Financial Review and Prospects—Liquidity and Capital Resources” and in our consolidated financial statements included elsewhere in this annual report.
Acquisitions and New Lines of Business
Banco Modal S.A. acquisition by Banco XP S.A.
On January 6, 2022, we entered into a binding agreement to acquire Banco Modal S.A., or “Modal,” with Banco XP through certain corporate acts pursuant to which Banco XP would deliver up to 19.5 million newly issued XP Inc. Class A common shares in the form of XP BDRs to shareholders of Modal.
The transaction was approved by CADE in July 2022 and by the Central Bank in June 2023. We closed the transaction on July 1, 2023, the date on which we obtained control of Modal in exchange for the delivery of 18.7 million XP BDRs to the shareholders of Modal. This amount reflects the initial amount of 19.5 million XP BDRs adjusted for the interest on equity amount of R$82.1 million, distributed by Banco Modal between January 6, 2022 and the closing date of the transaction. On September 1, 2025, after concluding all business integration, the Brazilian Central Bank approved the merger of Banco Modal to Banco XP, through the incorporation of Banco Modal’s assets and liabilities by Banco XP. As a result, Banco Modal was dissolved. This transaction has no significant impact on our financial position or results of operations.
Acquisition of Minority Stakes in Asset Managers
In line with our strategy of acquiring minority stakes in asset managers, since 2020 we have invested in relevant asset managers, such as Vista Capital Holding S.A., or “Vista Capital,” Giant Steps Empreendimentos S.A., or “Giant Steps,” Capitânia Holding S.A. or “Capitânia”, Jive Investments Consultoria S.A., or “Jive,” AZ Quest Holding S.A or “AZ Quest”, Newave Holding S.A. or “Newave”, Novus, Encore and Augme. These are all independent investment managers in Brazil, each with different strategies such as credit recovery, real estate, energy sector and distressed strategies. In 2025, we signed a convertible loan agreement with JGP Crédito and increased our stake in Jive. These transactions reinforce our strategy to develop the most complete ecosystem of managers and distributors in Brazil. Additionally, we believe the development of independent asset managers contributes to an increase in secondary market liquidity, helping to democratize access to investment products to more Brazilians.
Acquisition of Minority Stakes in IFA Firms
During the year ended December 31, 2023 and 2024, we have entered into agreements through our subsidiary, XP Controle 5 Participações Ltda, with the largest independent financial adviser firms of our network (Monte Bravo, FMX Capital, Blue3, Manchester, Nomos, SVN and Ável, or our “IFA Firms”) and their respective principal shareholders, pursuant to which we have been acquiring minority interests in a holding company that will consolidate the business generated by the main shareholders of the IFA Firms in the financial market, including through the IFA Firms. During the year ended December 31, 2025, we have entered into agreements through our subsidiary, XP Controle 5 Participações Ltd, with Kona, Critéria, Center and Inove. As of December 31, 2025, we owned minority interests in the holding companies of Monte Bravo, Blue3, Ável, FMX, SVN, Manchester, Nomos, Kona, Critéria, Center and Inove. We intend to continue to acquire interests in the holding companies of the IFA Firms subject to the satisfaction of customary conditions precedent.
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B. Business Overview
Our Mission
Our mission is to transform the financial markets in order to improve people’s lives in Brazil, which is the eleventh largest economy in the world with over 213 million people in 2025 and a GDP of R$12.7 trillion (approximately US$2.3 trillion) in 2025, according to the IBGE. We believe the financial services industry in Brazil is inefficient and expensive by international standards and provides poor client experiences. Brazil’s investments industry is highly concentrated and we estimate our Individual’s Client Assets as of December 31, 2025 to account for nearly 12% of a market totaling R$ 8.6 trillion, according to internal research and public data from Anbima.
We believe this concentration has enabled the incumbent players to secure a large profit pool and restrict the market in Brazil by: (1) providing a more narrow selection of financial products than typically found in larger markets, such as the United States and Europe; (2) promoting inefficient financial products, such as savings accounts called poupança, which provide investors with relatively low returns, at times below the inflation rate, and come with highly restrictive and punitive redemption options; (3) charging relatively high fees with low yields since the clients are captive and the products made available are often limited only to those issued by each bank; and (4) providing poor customer service due to a low prioritization of the client experience, limited market competition, and a lack of alternative choices available to consumers.
Our vision is to become leaders in the Brazilian investment market and to provide the best complementary financial services, such as asset management and wholesale banking, to our clients. We are dedicated to disrupting this market and improving people’s lives by providing them with access to more financial products and services through multiple channels, at lower fees, with a strong emphasis on financial education and high-quality services delivered through a highly differentiated client-centric approach and innovative technology solutions. More recently, we have been evolving beyond the market in order to differentiate ourselves with higher quality end-to-end services, by providing superior functionality, smarter curated advice, better software and Apps, and high-quality support.
Introduction to XP
XP is a leading, technology-driven platform and a trusted provider of low-fee financial products and services in Brazil. We have developed a mission-driven culture and a business model that we believe provide us with strong competitive advantages in our market. We use these to disintermediate the legacy models of traditional financial institutions by educating new classes of investors, democratizing access to a wider range of financial services, developing new financial products and technology applications to empower our clients and providing what we believe is the highest-quality customer service and client experience in the industry in Brazil. We believe we have established ourselves as the leading alternative to the traditional banks, with a large and fast-growing ecosystem of retail investors, institutions, and corporate issuers, built over many years that reached approximately 4.7 million active clients. Based on data from the sources indicated below, we believe we are the:
•#1 Ranked Financial Investment Brand in Brazil – with an NPS of 65 as of December 2025;
•#1 Independent Financial Investment Platform in Brazil – with Client Assets of R$1.5 trillion as of December 31, 2025;
•#1 Independent Digital Platform for Investors in Brazil – with three digital portals: XP, Rico™ and Clear™, serving clients directly, XP Inc. has the largest number of followers on Instagram among investment firms in Brazil;
•#1 Financial Investment Network in Brazil – with a range of proprietary XP Advisory Services and IFAs, which altogether corresponds to approximately 18,000 advisors as of December 31, 2025, our network onboard new clients onto the XP Platform;
•#1 Financial Media Portal in Latin America – with approximately 8.0 million monthly unique visitors to our Infomoney™ website as of December 31, 2025; and
•#1 Financial Services Event in Latin America – with over 50,000 in-person attendees at our annual EXPERT conference held both in-person and virtually in August 2025, we believe it ranks as the largest investment services event in Latin America and one of the largest in the world based on an internal analysis of third-party data.
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Our Founding and Evolution
We were founded in 2001 as a small, independent financial advisor partnership dedicated to improving the lives of people in our country. In order to build our business from the ground up, while competing against the traditional banks, we dedicated ourselves to the search for new ways to compete and to leverage next-generation technologies that enable us to differentiate ourselves and provide the operating efficiencies to scale. Over the years, we have been able to consistently innovate, develop our technology solutions and evolve our proprietary business model in several integrated phases that have complemented each other and compounded our capabilities. We believe this evolution has enabled us to instill trust in the XP brand and begin a revolution in the way financial services are sold in Brazil. These integrated evolutionary phases include:
•Providing Financial Education and Empowerment – We began our evolution by providing financial education courses to empower new classes of first-time and early-stage investors teaching them how to invest and how to access new types of financial products and services that they may not previously have had access to through traditional financial institutions. These educational courses began to build trust in XP and became an effective client acquisition model by converting students into empowered clients.
•Democratizing Access to Financial Products and Services – We developed an open product platform which provided our clients with a much wider selection of financial products than the traditional banks provide to their customers. This platform included a more diverse selection of financial investment products, such as equity and fixed income securities, mutual and hedge funds, structured products, life insurance, retirement plans and real estate trusts, and a wider choice of issuers that include XP, our product partners and our competitors. The breadth of our open platform was a significant market innovation, that enhanced our brand further, and provided clients with new opportunities for risk taking and investment returns. We believe it remains substantially differentiated when compared to the relatively closed platforms of the traditional banks or to similar open platforms from new players.
•Scaling of Our Ecosystem of Users, Distribution and Media Content – We expanded our ecosystem of users, distribution channels, and proprietary digital content and marketing. As our retail customer base and Client Assets volumes grew, we attracted new issuers of financial products, corporate clients and institutional traders into our fast-growing ecosystem of clients. We complemented our distribution by scaling our network of IFAs located across Brazil who solicit new clients, provide them access to our wide selection of financial products and technology applications, and help us onboard them as XP clients. These IFAs are our strategic business partners who share our entrepreneurial spirit and mission to democratize financial services in Brazil and benefit from the competitive advantages provided by our platform and technology. To support this expansion while building trusted relationships in the market, we expanded our proprietary marketing initiatives and digital media content. We continued to build our educational course offerings, created what we believe is the largest investment conference in the world, developed the largest financial information online portal in Latin America and developed a range of social media and digital influencer programs to promote our services and brand.
•Diversification and Enhancement of Our Direct Digital Channels and Brands – We expanded our distribution significantly by leveraging our growing ecosystem to (1) grow and enhance XP Direct, our primary digital portal for investors and our internal team of financial advisors; (2) develop new digital channels, such as Rico, our digital portal brand for self-directed investors, and Clear, our digital portal and online trading platform brand for retail active traders; and (3) develop our Direct Channel, with internal advisors that have been growing strongly in the recent years. We also enhanced these direct portals further by leveraging our technology platform, fast-growing data lake, and artificial intelligence capabilities to provide more sophisticated functionality and offer more advanced data analytics tools through more intuitive and convenient user interfaces, or “UX.”
•Empowerment of the Client Journey – We leveraged the significant technology DNA in our company, comprising our innovation and development teams and agile software development methods to develop a suite of new products, services and technology applications that engage and serve our clients across their financial journeys. We launched an advanced suite of cloud-based and mobile technology applications, with sleek advanced UX and easy user experience, that complement our advisory services and provide powerful functionality across the user journey, enabling our clients and partners to better manage their various accounts, trading activities, analytics and data queries. We have also begun to expand our solutions into adjacent and complementary financial services that our clients use. Main product developments include: (1) retirement plans platform launched in 2019; (2) collateralized credit in 2020; (3) Visa Infinite credit cards in 2021; and (4) digital account, international investments platform and life insurance in 2022.
•Empowerment of XP Advisors to Provide Enhanced Quality & Experience – By providing our advisors with our cutting-edge proprietary software in order to personalize client’s asset allocation and risk management, we are able to continue to differentiate ourselves with higher quality end-to-end services, and smarter curated advice.
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The chart below illustrates the growth of our total client assets as our business evolved over time.
Total Client Assets Under Custody (in Reais millions)
The XP Business Model
Our business model has been developed over the course of our evolution and enables us to go to market in a different way from the legacy models of the large traditional financial institutions. We believe our model provides us with a unique value proposition for our clients and partners, and it has begun to change the way investment services are accessed and sold in Brazil. Our differentiated approach incorporates a unique combination of proprietary capabilities, services and technologies to deliver a highly customized and integrated client experience, with significant operating efficiency advantages that have enabled us to scale and grow profitably. As illustrated in the following image, our differentiation pillars in the market are based on four principles:
These principles are linked to the key components of our business model: (1) a mission-driven culture; (2) a self-reinforcing ecosystem; (3) a superior products and services platform; and (4) a differentiated, advanced technology platform.
•A Mission-Driven Culture – Our culture remains central to XP and we remain vigilant in preserving and nurturing it, so that it can continue to guide our firm by promoting: (1) a strong collaborative environment within our company; (2) a clear focus on our mission to improve people’s lives by empowering them as investors; (3) a zero-fee pricing philosophy wherever possible; (4) a strong, long-term client-centric focus which we prioritize ahead of maximizing short-term gains; and (5) an energetic entrepreneurial spirit with a commitment to innovation and the pursuit of improvement.
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•A Self-Reinforcing Ecosystem – We believe we have developed a valuable ecosystem of clients, distribution channels and media content that are a powerful lead-generation engine, reinforcing each other and helping promote XP’s products and services as they grow. These include:
▪User Base of Clients – This includes our (1) approximately 4.8 million retail clients who buy and sell the financial products on our platform as of December 31, 2025, benefiting from our ecosystem because they can access a much broader portfolio of financial products, from hundreds of different providers, and get help finding the product that is right for them, all in a user-friendly way, with exceptionally low fees; and (2) over 800 commercial clients as of December 31, 2025, such as institutions and corporate issuers, fund managers, private banks, corporate treasuries and insurance companies, who provide additional liquidity and unique financial products for our platform. These issuers benefit from our ecosystem because they are provided with dedicated strategic advisory services that enable them to access a much broader pool of capital, from our retail investors, at an overall lower cost.
▪Omni-Channel Distribution Network – This enables us to reach clients and deliver our products and services through a range of proprietary brands and channels, that includes (1) XP Direct, our fast-growing full-service offering for mass-affluent clients; (2) RicoTM, our online-only solution for self-directed investors; and (3) ClearTM, our digital portal and electronic trading platform for retail active traders. We also reach clients through our proprietary, and efficient distribution network of IFA partners. Our IFA partners benefit from our suite of financial products, education tools, and the IFA-specific applications that we developed to help them build and grow their businesses, and we benefit from their abilities to reach and cultivate new clients. Altogether, our distribution network encompasses approximately 18,000 thousand advisors, forming the largest financial advisor network in the country.
▪Complementary Capabilities – In order to extend our services and reach, we have built over the last few years complementary business lines such as asset management and wholesale banking, which we believe can benefit from and reinforce our powerful ecosystem.
•A Superior Product and Services Platform – We primarily provide our clients with two types of offerings, our financial advisory services and our open financial product platform. We have developed both of these solutions to provide our clients with significant differentiation and a superior value proposition versus the legacy offerings of traditional banks. Additionally, in order to improve our client’s experience with our platform and, consequentially, capture additional funds, we have launched over the past 5 years different lines of products, such as: retirement plans, collateralized credit, cards, international investments, life insurance, foreign exchange (FX), and digital account, among others. These and other solutions include:
▪Suite of XP Advisory Services – Comprised of services such as; (1) XP Investimentos, for our retail clients in Brazil; (2) XP Private, for our high-net-worth clients; (3) XP Investments, for our international clients; and (4) XP Issuer Services, for our corporate and institutional clients.
▪Open Product Platform – This is our open product platform that provides our clients access to investment products, without the protectionist barriers, conflicts and closed-loop restrictions of traditional banks. These include investment products from XP, our partners and our competitors, such as equity and fixed income securities, mutual and hedge funds, structured products, life insurance, retirement plans, real-estate investment funds, or “REITs” and others.
▪VIP Customer Service – This is our premier customer service program and support organization, designed to provide our clients and partners with the highest-quality client service. We train our customer service personnel to (1) understand the daily activities and processes across the client journey in order to help resolve customer issues more effectively; (2) prioritize positive client experiences and long-term relationships above short-term performance results; and (3) leverage and promote our advanced technologies to serve our clients more efficiently.
▪Collateralized Credit Products – We have offered our XP-brand clients access to low-fee collateralized credit lines to improve their experience within the XP ecosystem since 2020. Most of our credit portfolio is collateralized with investments held in XP, both from companies and individuals. Our loan book, excluding credit cards, increased 1.2% , reaching R$25.2 billion in December 31, 2025.
▪Credit and Debit Cards – Our credit card is the first of its kind to offer an investment-back award, or “investback,” of 1% of all purchases, free of any charges for clients in the XP brand with over R$50,000 in investments. In December 2021, we lowered that threshold for clients that have at least R$5,000 invested with us, further improving our client’s experience within the XP ecosystem. In October 2022, we further expanded the eligible client base for both credit and debit cards with the official launch in the Rico brand. In December 31, 2025, we had a total of approximately 1.5 million active cards, both credit and debit, and a total payments volume, or TPV, of R$52.2 billion in 2025.
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•A Differentiated, Advanced Technology Platform – We have developed a powerful, integrated suite of proprietary technology assets, technology applications, and technology development resources that enable us to differentiate us in the market, manage all of our solutions, conduct all of our activities and operate with low-cost advantages and efficiencies. These include:
▪XP Genius – This is our powerful, integrated, cloud-based technology platform built with a modular architecture that efficiently leverages a range of microservices to help: (1) connect our various portals, systems, technologies and environments; (2) power our solutions and applications across our organization; (3) manage our large, valuable and rapidly growing pools of proprietary data; (4) conduct our big data analytics and artificial intelligence initiatives; (5) provide us with proprietary information and market insights; and (6) extend our reach and capabilities into new areas.
▪XP Innovation Teams – These dedicated technology resources develop and support our solutions by using agile software development methods and leveraging our significant technology and data assets. These include XP Tribes, comprising two to three managers each, that help guide and support our development priorities across numerous projects, and XP Squads, comprising autonomous integrated teams of eight to ten people, including a product owner and business expert, a UX specialist, a technology leader and several developers, that collaborate to create new technologies and solutions or improve our current offerings. These teams focus on the complete customer experience, conducting client interviews, prototyping, behavior analysis and user tests. One of the most visible external examples of our technology capabilities is the suite of technology applications that we provide to our clients and partners. The technology evolution of XP Inc. was followed by a deeper and broader corporate transformation process, which involved the creation of business units and integrated our front-office to the company’s foundations – back-office, middle-office and innovation teams. We believe that among the main benefits of the transformation are a leaner and more efficient corporate organization that allows us to optimize decision making and execution of our projects.
▪XP Technology Apps – This is an advanced suite of cloud-based and mobile technology applications, that complement our advisory services and provide powerful functionality across the user journey, enabling our clients and partners to better manage their various accounts, trading activities and data queries. Our apps are integrated with our powerful databases and analytics tools and are designed to be powerful, yet simple, attractive, and easy to use, with sleek user interfaces, or “UX,” that are comparable to some of the top consumer technology products in the world.
Our Operations
We operate an asset-light, scalable business model that emphasizes operational efficiency and profitability. We leverage our business model to serve a diverse group of retail, corporate and institutional clients in local and international markets, with offices in Brazil, New York and Miami. We currently serve approximately 4.8 million active retail clients who have an investment account with us. Approximately 25% of our clients are served by one of our IFA partners whereas approximately 75% of our clients are served through direct channels, either utilizing an account through one of our websites, or served by an investment adviser through XP Direct. As of December 31, 2025, our average Retail Client Assets per client account was approximately R$263 thousand.
We generate our revenues primarily by (1) providing our existing clients with a growing range of financial products and services in which to invest their existing Client Assets already on our platform; (2) attracting additional money onto our platform from existing investors to grow total Client Assets; and (3) attracting new clients and money inflows onto our platform across a variety of channels to increase total Client Assets. As shown in the following chart, we generate a significant amount of our revenues from existing clients and Client Assets, which is recurring and predictable in nature.
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Depending on the mix of products and services, we generate numerous forms of income from Client Assets, including advisory fees, commissions, distribution fees from product offerings, asset management fees, among others. Following the launch of some of the aforementioned new products, we were able to add new forms of income into our ecosystem, such as credit card interchange fees, and income from interest on loans. As a result of our enhanced business model and market position, our revenue tends to be more diversified now than it was a few years ago, with non-investments retail business lines representing close to 26.5% of total revenues in 2025, making our business less cyclical. We have established a track record of delivering strong financial performance, even during difficult macroeconomic conditions in Brazil. For example, while Brazil GDP growth fluctuated significantly over the past decade, with Brazil going through cycles, our core investment KPIs kept growing consistently, with Client Assets reaching R$1.5 trillion in December 31, 2025.Our technology-driven business model is asset-light and highly scalable. This enables us to generate scale efficiencies from increases in Client Assets. We conduct the majority of our business online and through mobile applications and emphasize operational efficiency and profitability throughout our operations. These operating efficiencies enable us to generate strong cash flow in various market conditions, allowing us to continue investing in the growth of our business. Additionally, our strong balance sheet serves as a substantial competitive advantage in relation to other independent financial services providers in Brazil, enabling us to underwrite, develop and distribute new financial products and services, and capture inorganic opportunities, such as our acquisitions of equity in DM10 in November 2020, Antecipa in September 2020, WHG in September 2020, in some asset managements throughout 2021 and 2023, such as Giant Steps, Jive, Capitânia, Vista Capital, AZ Quest, Newave and Habitat Capital; Trybe, BTR Benefícios e Seguros, some research companies such as Suno. In addition between the second half of 2021 and 2022, we entered into investment agreements with, among other entities, IFAs, and in the end of 2023 and during 2024 we have concluded the acquisition of minority stake in some IFAs, such as Manchester, Blue 3, Ável, Monte Bravo, FAMI and SVN. We may carry out additional stake acquisitions or investments from time to time.
Our Market
Brazil is a large and attractive market for financial services and financial technology solutions. The country has the seventh largest population and the tenth largest economy in the world with over 213 million people and a GDP of nearly US$2.3 trillion in 2025. Brazil’s GDP growth fluctuated significantly over the past decade, with Brazil going through different recessions, political turmoil and the COVID-19 outbreak, our core investment KPIs kept growing consistently, with Client Assets reaching R$1.5 trillion in December 31, 2025. For more information on our outstanding agreements, see “Item 5. Operating and Financial Review and Prospects—A. Operating Results”.
Key Market Challenges
We believe the Brazil financial services industry faces several important market challenges that create market inefficiencies and opportunities for disruption, including:
•Highly Concentrated Market – In Brazil, the financial services market continues to be controlled by a few traditional financial institutions. We estimate our Individual Client Assets as of December 31, 2025 to account for nearly 12% of a market totaling R$8.6 trillion, based on Anbima our internal analysis. According to the latest information from the Central Bank and Fenaprevi for 2025, these same five banks collectively accounted for: (1) 63% of the R$6.5 trillion in all deposits; (2) 97% of the R$1,320 billion in mortgages; (3) 54% of the R$735 billion in credit card outstanding balances for individuals; (4) 85% of the R$1.5 trillion in open retirement plans; (5) 69% of the R$4.7 trillion in total individual loans ; and (6) 58% of the R$3.2 trillion in corporate credit balances. We believe this concentration has created material market inefficiencies which provide significant opportunities for disruption, disintermediation, and new business models.
•Bureaucratic, Asset-Heavy Infrastructures – The legacy models of the traditional banks are based on asset-heavy infrastructures such as large networks of physical bank branches, large bureaucratic organizations with hundreds of thousands of personnel and processes, and older, segregated technology platforms. We believe these cumbersome infrastructures encourage the traditional banks to focus more on (1) managing the internal burdens of their operations; (2) pushing their in-house products over alternatives from third-party providers; and (3) preserving the status quo.
•Narrow Selection of Financial Products – The concentration of traditional financial institutions in Brazil provide their customers with more limited access to financial products than typically found in larger and more developed markets, such as the United States and Europe. These banks have closed-loop product platforms which significantly restricts the selection of investment products made available to their customers typically to those that were created in-house by each bank or have significant embedded costs to drive promotion. We believe these practices tend to drive high fees and/or low cost of funding for the traditional banks, but severely limit choice for investors.
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•Promotion of Inefficient Financial Products – In Brazil, the traditional banks continue to promote inefficient financial products, such as self-issued time deposits, or “CDBs,” and savings accounts called poupança, since their primary business is related to grow the loan book, therefore they provide a large number of the mass population of investors with very low returns and punitive redemption options, often at an attractive margin to the bank. Poupança accounts account for 11.2% of the volume invested by all individual investors in Brazil, according to Anbima data as of December 31, 2025, despite paying relatively low interest rates, often lower than the SELIC rate in Brazil, and occasionally even lower than the inflation rate, as shown in the graph below. We believe the continued promotion of these products is not in the best interests of investors, but they continue to generate high fees for the traditional banks.
•High Costs and Spreads – We believe overall fees and spreads for financial products in Brazil are too high and are driven by (1) the closed platforms of the incumbent banks who often limit their customer’s selection of financial products to those created and controlled by each bank; (2) the promotion of inefficient financial products that pay very low yields, such as poupança; and (3) the high, asset-heavy infrastructure costs of the incumbent banks.
•Poor Customer Service – We believe the incumbent banks and other service providers generally provide poor customer service in Brazil based on market surveys, given the lack of market competition and alternative choices available to their clients. We believe these factors drive the prioritization of near-term results over long-term client relationships and discourage the banks from (1) focusing on their client’s day-to-day needs; (2) serving the entire customer experience; and (3) looking for new ways to add value.
•Underpenetrated Debt Capital and Other Financial Markets – We believe the debt capital markets in Brazil are significantly underpenetrated for the issuance of fixed income products and corporate bonds, particularly when compared to larger markets such as the United States and Europe. The incumbent banks control the majority of the debt market and typically steers clients to bank issued term loans or limited fixed income products that are sold to their asset management businesses, which we believe limits the amount of available credit in the market and fosters an environment for higher costs due to limited competition. Similarly, other lending products, commonly found in larger markets, such as home equity loans, are very limited in Brazil.
Key Market Trends
•Favorable and Highly Aligned Regulatory Initiatives – The Central Bank is actively promoting what it calls financial democratization policies that seek to provide easier access to financial markets, and better and more transparent financial services. We believe these regulatory initiatives provide a favorable regulatory environment that are closely aligned and complement our mission to improve people’s lives by transforming the financial markets in Brazil. The Central Bank, has implemented an active regulatory agenda, called BC# which is focused on addressing structural issues of the National Financial System by fostering technological innovation. The Central Bank has defined five dimensions for its agenda, including:
▪Inclusion – which it defines as to ensure “non-discriminatory access to the market for all those wishing to participate: small and large businesses entrepreneurs, investors and borrowers, both domestic and foreign clients.” Initiatives in this dimension involve: (1) fostering the expansion of credit cooperatives; (2) simplifying and modernizing foreign exchange and international trade regulation (convertibility of the real); (3) local capital market development; and (4) enlarging access to microcredit;
▪Competitiveness – which it defines as “to promote adequate pricing by favoring competitive access to markets.” Initiatives in this dimension involve: (1) innovation and preparing the financial system for a technological and inclusive future (e.g., instant payments, open banking, and cyber risk management); (2) improving the management of international reserves; and (3) increasing market efficiency (e.g., market infrastructure and reserve requirements).
▪Transparency – which it defines as to improve “the price formation process and the quality of information originated from markets and the Central Bank. It focuses on broadening communication, as well as evaluating its results and symmetry of information.” Initiatives in this dimension involve (1) improving conditions for rural and mortgage loans; (2) strengthening the Central Bank’s relationship with the Brazilian Congress and foreign investors; and (3) enhancing transparency and communication of the Central Bank’s actions, including monetary policy decisions.
▪Education – which it defines as to promote “citizens awareness so that everyone can participate in the financial markets and strength their habit of saving.” Initiatives in this dimension involve providing scalable financial education solutions to school students, indebted individuals and low-income citizens.
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•Sustainability: which it defines as “the allocation of resources directed towards the development of a more sustainable, dynamic and modern economy”. Initiatives in this dimension involve improvement of regulation on socio-environmental risks, improvement of the stress test for climate risks and nomination of the Central Bank representatives to join the Network from Greening the Financial System (NGFS).
•Cybersecurity and Fraud Prevention - The Central Bank is seeking to develop new ways of preventing money transfer fraud and irregularities, including through Joint Resolution No. 6, which establishes criteria for selecting and sharing data records related to indications of fraud.
•Increasing Demand for Financial Education and Information – With the volatility in interest rates in recent years, we believe there are a growing number of people interested in learning (1) the basics of financial freedom and empowerment; (2) how to access the financial markets more effectively; and (3) more sophisticated financial management strategies. We have seen the number of financial education students increase significantly in the market and believe the demand for financial media content has grown materially in the last few years across a number of channels.
•Increasing Demand for Financial Products – As more customers claim their financial freedom from the traditional banks, and yields on other bank products remain stagnant, we believe the market will see a steady increase in the demand for more types of financial products and more choices of issuers across different asset classes and risk appetites. We believe there will also continue to be an increasing interest from institutions and corporates for more product issuing opportunities and product structuring services. We believe this is a long-term trend as the Brazilian market expands to close the product selection gap with other large markets, such as the United States and Europe.
•Increasing Demand for Technology to Manage Financial Services – Similar to other trends in commerce, customers in Brazil are increasingly looking to conduct their financial journeys through digital channels, via online portals, cloud-based platforms and mobile technology applications, instead of in bank branches. In addition, as customers engagement increases, they are also demanding access to more sophisticated analytical tools and technology applications, such as comparison engines, risk management tools, and electronic trading platforms, through digital channels that can enable these features at low costs and high efficiency. In addition to BC#, the Central Bank is planning to launch a new digital currency and blockchain platform, Drex.
•Increasing Demand for Better UX Experiences – As customers engage in more digital channels, they are increasingly demanding sleeker, more powerful and more convenient UX, similar to the consumer technology products and software applications that they interact with in other areas of their daily lives. We believe these digital customers will increasingly demand technology applications that provide intuitive, easy-to-use, yet powerful features that can integrate and utilize all of their data, and empower them to do more across their client journeys, versus just siloed applications with one or two functions.
•Increasing Number of Independent Financial Advisors – The career market for registered IFAs is growing rapidly in Brazil as the traditional banks continue to close branches and reduce costs from their large legacy operations. Many top financial services professionals who previously worked in these banks are looking to become IFAs. The total number of IFAs in Brazil has grown from over 5 thousand in 2015 to more than 20 thousand by 2025, according to the Brazilian National Association of Brokers and Dealers of Securities, Foreign Exchange and Commodities (Associação Nacional das Corretoras e Distribuidoras de Títulos e Valores Mobiliários, Câmbio e Mercadorias), or “ANCORD.”
•Increasing Demand for Turn-Key Solutions and Applications for IFAs – Many of these IFAs are looking for new platforms, that provide the product suites, business management tools and technology applications that they can use to start their businesses, attract new customers and manage their operations more effectively.
•Disintermediation of Investments, Credit and Market Equitization – Greater access to information and technology is making Brazilians increasingly aware and inclined to look for alternatives outside the traditional retail banks for investment products and services. Brazil is in the early stages of this process and we estimate our Client Assets as of December 31, 2025 to account for nearly 12% of a market totaling R$ 8.6 trillion. In addition, equities as an asset class is still incredibly underpenetrated among retail investors, with only approximately 0.7% of Brazilians having an active brokerage account. Further evidence of this trend is the spike seen in the number of individual investors in the B3. This figure increased almost 283% from 1.4 million individual investors in December 2019 to 5.5 million individual investors in December 2025.
In 2024, the CVM published a two-year risk based approach plan through which it would define priority regulatory risks and a new form of regulatory analysis: a thematic supervision that may be exemplified by: (i) AML procedures; (ii) operational structure requirements for asset management that do not comply with regulations; (iii) diligence failures in the liquidity management process in open-ended funds; and (iv) irregular and/or indiscriminate leverage strategies in investment funds.
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Addressable Market Opportunities
We believe our XP Model will benefit from these key market trends and the favorable macroeconomic environment in Brazil, and has positioned us to continue to penetrate, grow and expand our large addressable market opportunity in Brazil. According to internal estimates, as of December 31, 2025, our Client Assets only account for 12% of a R$ 8.6 trillion market. Given our leadership, scale, brand and competitive advantages provided by our XP Model, we believe we will benefit from and continue to be a catalyst for:
•Continued Growth of the Investment Assets Addressable Market – According to our estimates, the total addressable market of investment assets in Brazil is expected to reach R$9.8 trillion in 2026.
•Continued Expansion of Our Addressable Market into New Areas – We have made significant progress in disrupting the investment services of traditional banks, which can be among the hardest to penetrate, due to the difficulty in gaining customer trust, and have one of the highest switching costs in the financial services industry, due to the expense and tax impact of moving accounts. According to our estimates for 2025, we believe the total addressable market size, including adjacent markets that could be complementary to XP, such as insurance, credit and debit cards and other loans was larger than R$600 billion in gross revenues before funding costs.
Our Competitive Strengths
Over the last 20 years, we have developed a differentiated set of capabilities and attributes in our business that we believe provide us with meaningful strategic advantages and have helped us to disintermediate the legacy models of traditional financial institutions. We believe these competitive strengths form the foundations of our business and drive value creation for our shareholders.
Investment platform
Our open product platform, which we believe is a pioneer in the market and is the most complete among Brazilian players, combines: (i) a wide network of third party partners such as independent asset managers, medium-sized banks and insurance companies; (ii) a comprehensive range of proprietary products that includes our Asset, our funds administration business and our global investment platform; and (iii) capital markets access powered by our Investment Banking business, which originates IPOs and debt issuances.
Distribution network
We are the main benchmark in financial advisory services in Brazil according to Folha de São Paulo and we helped develop this sector in Brazil. Our distribution network has a wide range of professionals, from independent financial advisors (IFA) to internal advisors and wealth managers. We also offer a complete ecosystem for professionals, including systems and tools such as CRM and strategic business support for third parties.
Trusted Brand
We are established as a trusted brand in the financial services in Brazil. This trust has been built through transparency. client-centric innovation, and dedication to providing comprehensive financial education to our clients, enhancing customer engagement and satisfaction. Our reputation as a trusted brand not only attracts new customers but also engenders loyalty among existing clients, thereby supporting sustainable growth. Our status as a trusted entity distinguishes us from competition, providing a significant competitive edge that is essential for maintaining and expanding our market share.
Ability to execute and innovate
Our culture allows us to quickly execute challenging projects and to constantly innovate. For example, in just a few years we were able to build an advisory distribution network, a Retail Liquidity Provider (RLP) service, an Investment Banking business, one of the fastest growing pension insurers in Brazil, a premium credit card and a global investment platform.
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Mission-Driven Culture
Our culture remains central to XP and we believe it is the core strength of our company, enabling us to attract talent, unify our people, maintain the mindset to innovate and disrupt, guide our go-to-market-approach, develop powerful relationships with our clients and establish our identity in the marketplace. We remain vigilant in preserving and nurturing it, so that it can continue to guide our firm. We believe the key strengths of our culture are:
•a Collaborative Partnership Model – that fosters a collaborative environment within our company and an ownership mentality across our organization, which have enabled employees at all levels to remain focused and well aligned despite our rapid growth and expansion;
•a Client-Centric Focus – that prioritizes transparency in our services, high-quality customer service and positive client experiences above short-term performance results, which helps us build a loyal customer base and long-term relationships that can be seen in our client cohorts and retention data; and
•an Entrepreneurial Spirit – that keeps us focused on the pursuit of innovation across our firm to improve our operations and our client experiences. This fosters an energetic, meritocratic environment that attracts the most innovative financial and technological talent in the country to work or partner with us, which has helped us remain creative and avoid complacency.
Efficient and Self-Reinforcing Business Model
Our model incorporates a unique combination of proprietary capabilities, services and technologies to deliver a highly differentiated and integrated client experience, that have enabled us to differentiate from our competitors. In addition, the XP Model has resulted in several strategic and operating advantages, including:
•Highly Efficient Financial Model – We believe our technology-driven business model provides us with significant scale and operating efficiencies, including:
▪Asset-Light, Low-Cost Structure – Our technology-driven business model is asset-light and highly scalable. We conduct the majority of our business online and through mobile applications and emphasize operational efficiency and profitability throughout our operations. Strong Free Cash Flow Generation – Our business model operating efficiencies enables us to generate strong cash flow in various market conditions, and enables us to continue investing in the growth of our existing business;
•Network Effects – As we grow our business, we believe our model demonstrates distinct self-reinforcing network effects that help compound our growth; and
•Powerful Combination of Attributes – The success of XP is due to the combination of capabilities, trusted brand, size and scalability of the XP Model that have been developed and nurtured over time.
Our Growth Strategies
Despite our success to date, we believe our business is still in the early days of driving the disintermediation of traditional financial institutions in Brazil and offering better alternatives to their legacy models and practices. We believe there is a large addressable market opportunity remaining in our core business and significant market share to win since, as of December 31, 2025, our Client Assets (assets under custody) accounts for only 12% of a R$ 8.6 trillion market, according to our internal estimates. We intend to leverage our competitive strengths and continue to enhance the strategic advantages we have created through the XP Model in order to continue to grow and expand our business.
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We have four strategic pillars that we believe will guide us to our long term vision. These pillars are known by every employee and they guide our business decisions such as choosing priority projects and the allocation of resources in the budget. Our strategic pillars are the following:
•Leadership in Investments - Our first pillar aims to protect and expand our core business. We will continue to seek a greater share of the total Client Assets and trading volumes from our clients, who often keep assets in different accounts and may use the services of several firms. We also intend to continue to grow our base of active retail clients, which reached approximately 4.8 million as of December 31, 2025, an increase of 2% year over year, as well as our base of institutional trading partners and corporate issuers who provide additional liquidity and products to our platform. We intend to do so by:
▪Improving segmented value proposition – We aim to grow our client base and our share of wallet in different customer segments. It is key to customize our value proposition to individual investors from Retail to Private segments and to companies from SMEs to Corporate segments;
▪Expanding Our Omni-Channel Distribution Network – We intend to lead the evolution of the investments advisory profession in Brazil. We want to position XP Inc. as the premier HUB for all types of financial advisory entrepreneurs, including: Independent Financial Advisors (IFA), Internal advisors in the XP’s brands, Wealth Managers and Financial Consultants. We also want to offer white label solutions for partners, with a Broker as a service business.
▪Growing Our Investment Platform Offering – While we believe our open product platform is key competitive advantage versus the limited, closed-loop platforms of the traditional financial institutions, we believe there is a significant opportunity to continue to build on this strength and provide our clients with greater selection and investment opportunities by (1) developing new investment products; and (2) incorporating new investment products from our partners and competitors.
▪Providing the best financial planning solution for our clients – We aim to offer the best portfolio allocation solutions, customized by client profile and objective.
•Retail cross-sell: Based on customer needs, we expanded our portfolio to serve the customer's complete financial life, seeking to break once and for all the link between investors and large banks. We believe this strategy diversifies our revenue sources and reinforces our core business since it creates a positive feedback loop where the adoption of cross-sell products increases client’s share of wallet. Our cross-sell products include our credit card, digital account, FX solutions, insurance and more.
•Corporate & SMB – We intend to offer better business solutions by leveraging existing relationships to gain penetration with products like FX, derivatives, loans, and insurance, among others. We can also rely on our consolidated Investment Banking and Global Markets business to complement our Ecosystem.
Our quality initiative and objective are the foundation of our three pillars of growth, based on delivering a higher quality experience end-to-end. We are focusing on offering superior functionalities, services, support, software and apps. Our goal is to achieve leadership in the Brazilian investment market and provide the best complementary financial services. We believe in incremental opportunities to disintermediate traditional financial institutions' legacy models in other financial sectors beyond investments. These sectors tend to be easier to penetrate and have much lower switching costs versus the investment services industry. We estimate that the total addressable market size was larger than R$600 billion in gross revenues in 2025, including adjacent markets complementary to XP's core market, such as insurance, credit and debit cards, and other loans.
Our Environmental, Social and Governance Commitment
Overview and Business Relevance
We view environmental, social and governance (“ESG”) matters primarily through the lens of (i) governance and risk management, (ii) trust and quality of client outcomes, and (iii) the long-term resilience of our platform and ecosystem. Since 2020, we have continued to evolve our ESG agenda by integrating relevant ESG considerations into internal operations, risk management processes and business practices, with particular focus on matters we consider material to our activities, including social, environmental and climate-related risks in our operations and credit and capital markets activities, as well as people, culture and inclusion.
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Our ESG agenda intersects with our strategy and operating model in multiple ways, including: (1) strengthening governance and oversight of key risks; (2) supporting the development and distribution of investment solutions that incorporate ESG-related considerations where relevant; and (3) enhancing the sustainability and resilience of our operations and supply chain. We have also joined the Climate Commitment, an initiative by Instituto Ekos Brasil that connects companies interested in offsetting their Greenhouse Gas Emissions and projects dedicated to generating social and environmental benefits. With respect to Diversity and Inclusion we have partnerships with Racial Equity Movement (MOVER), Pact for the Promotion of Racial Equity and Inclusion Business Network, and Pact for Inclusion of People with Disabilities (Rede Reis).
Voluntary Commitments and External Frameworks
We participate in certain voluntary initiatives and frameworks that we use to inform aspects of our ESG governance, risk management and disclosure practices. These include being a signatory to the Principles for Responsible Investment (“PRI”) and the UN Global Compact, and participating in initiatives related to climate disclosure and financed emissions methodologies, including the Carbon Disclosure Project (“CDP”) and the Partnership for Carbon Accounting Financials (“PCAF”). We also participate in local initiatives and partnerships focused on social themes, including diversity, inclusion and accessibility.
Participation in these initiatives does not, by itself, determine the scope of our ESG practices or disclosures. The relevance of any framework depends on our business model, regulatory context and the materiality of specific ESG-related risks and opportunities.
ESG Governance and Risk Management (PRSAC and Oversight)
We maintain a governance structure intended to support oversight and execution of ESG-related priorities and the implementation and monitoring of our Social, Environmental and Climate Responsibility Policy (Política de Responsabilidade Social, Ambiental e Climática, or “PRSAC”). Our executive leadership is responsible for supervising ESG strategy and the implementation of PRSAC-related processes and controls. We also designate an executive officer responsible for supporting PRSAC implementation, monitoring and reporting, and assisting executive leadership and, where applicable, the Board of Directors.
Our social, environmental and climate risk management framework is organized around five pillars:
1.Governance and regulatory – development and maintenance of governance processes, policies, standards, procedures and metrics, including alignment with applicable regulatory requirements relating to ESG and climate-related matters.
2.Methodologies and analysis – development and refinement of internal methodologies used to assess ESG and social, environmental and climate risks, including tools such as internal rating methodologies, climate sensitivity assessments, financed emissions methodologies and, where applicable, carbon footprint methodologies for certain portfolios or products.
3.Management and reporting – monitoring and reporting of selected ESG and social, environmental and climate risk indicators, including internal reporting to relevant governance forums and committees, and management of social, environmental and climate-related events or losses where applicable.
4.ESG products – development and monitoring processes for certain products that incorporate ESG-related characteristics or labeling, including governance intended to support product integrity and appropriate disclosure.
5.Institutional sustainability and education – training and awareness initiatives designed to strengthen internal capabilities on social, environmental and climate risks, including human rights and diversity-related topics.
We also consider recommendations from the Task Force on Climate-Related Financial Disclosures (“TCFD”) as an input to our climate governance and disclosure practices. In 2022 and 2023, we developed and implemented methodologies for measuring and managing climate risk and, in 2024, we continued to evolve our climate agenda, including through climate stress tests and scenario analyses and, to reinforce this commitment, in 2025, we have established climate transition targets.
Integration Across Business Processes
To support integration of ESG and social, environmental and climate risk considerations into business practices, we apply ESG related assessments and controls across selected processes and activities, which may include, depending on the business line and risk profile:
–onboarding and due diligence processes (individual and corporate, as applicable);
–supplier onboarding and monitoring (including supplier homologation);
–selected treasury and foreign exchange-related activities;
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–corporate credit and rural credit processes ;
–capital markets-related activities (including DCM and ECM processes, as applicable);
–asset management and product governance processes; and
–evaluation of selected new products and business initiatives.
In addition, we maintain technical ESG subject-matter capabilities embedded within certain internal areas and controlled companies (sometimes referred to internally as an “ESG chapter”) to support implementation, monitoring and continuous improvement across business units.
Climate Risk, Financed Emissions and Environmental Management
We monitor climate-related topics through both institutional and portfolio-related lenses. For example:
–We analyze climate risk exposure and climate sensitivity of our credit portfolio using sector and proportionality-based approaches, including tools developed by the Brazilian Federation of Banks (“FEBRABAN”), which combine variables such as sector classification, credit rating, portfolio representation and weighted average tenor to identify climate-sensitive exposure.
–Since 2019, we have calculated, monitored and published an annual greenhouse gas (“GHG”) emissions inventory, including Scope 1, Scope 2 and Scope 3 emissions. We have refined the scope and methodologies used to calculate emissions over time, including in 2023 and 2024 through expanded scope coverage and third-party verification processes. In 2025 we continued to evolve our methodologies, and we have established emissions targets.
–We seek to offset portions of our institutional carbon footprint through the acquisition of carbon credits from selected projects (including conservation and energy-related projects). The scope and methodology for offsetting may vary depending on market conditions, project availability and internal governance criteria.
We consider social, environmental and climate risk management to be relevant to the resilience of our platform and, in certain contexts, material to our business. However, climate-related risks and opportunities may evolve over time depending on regulatory developments, market dynamics and methodological changes in the measurement of financed emissions and climate sensitivity. We expect to continue evolving our methodologies, controls and disclosures as regulatory expectations, market practices and risk profiles develop over time.
Sustainable Investment Solutions and ESG-Related Products
We offer access to investment solutions that incorporate ESG-related considerations in their strategy, labeling or investment process. These solutions may include third-party and proprietary products across different asset classes, such as equity, fixed income, hedge fund, index, private equity and pension funds, and may include local and global strategies. Definitions of “ESG,” “sustainable” and “ESG-labeled” products vary across market participants and frameworks, and product characteristics depend on the relevant offering documents and investment mandates.
We also support ESG-related market content and research coverage. For example, in 2025 our research team published 94 ESG- focused reports (including thematic reports and updates), and ESG-related analysis coverage expanded to 106 companies under coverage. During 2025, the team also held over 180 ESG-related meetings with institutional investors and promoted events related to ESG topics.
In addition, we have launched ESG ETFs on B3 and introduced sustainable securities in the fixed income market, considering both local and international debt markets. In 2025 we also launched sustainable investment funds managed by our asset management business.
Diversity, Inclusion and People
We seek to foster an inclusive and respectful working environment and monitor selected people metrics, including gender, ethnicity and disability representation, supported by internal initiatives and affinity groups. Our diversity initiatives also include participation in external networks and programs related to diversity, inclusion and accessibility.
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We track and report selected diversity metrics internally and, where applicable, externally. For example, the representation of women in our total workforce increased from 26.5% in 2020 to 34.0% in 2025, and the representation of women in leadership increased from 12.0% to 26.7% over the same period. Representation of black individuals increased from 17.6% in 2020 to 20.5% in 2025, and representation of black leaders increased from 2.0% in 2021 to 13.8% in 2025. Representation of people with disabilities in 2025 was 2.42% and we aim to achieve more than 5% by 2030. These metrics are based on internal data and are subject to the limitations of self-identification and data collection methodologies.
Financial and Technology Education
Financial and technology education are part of our broader efforts to support long-term client outcomes and financial inclusion. We engage in partnerships and initiatives aimed at financial education and provide free technology education programs intended to promote accessibility and inclusion. The scope and impact of these initiatives depend on program design, participant engagement and the broader market environment.
For additional information regarding risk factors that may relate to ESG, climate, social or governance matters, see “Item 3. Key Information—D. Risk Factors.”
Our Products and Services
We sell a wide range of products and services in various combinations to our clients. We have developed these solutions to provide our clients with significant differentiation and a superior value proposition versus the legacy offerings of traditional banks.
Open Product Platform
We offer our client and partners the XP Platform, which is an open product platform that provides our clients with the broadest access to investment products in the market, ranging from our own XP-branded products to those of our partners and our competitors. We believe the open nature of our product platform is highly differentiated in the market and a key driver of the early success of XP. Traditional financial institutions in Brazil tend to favor a closed-loop models which significantly restricts the selection of investment products made available to their customers to those that were created in-house or have significant embedded costs to drive promotion. For example, these products include:
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Name Type Description Clients
Brokerage Securities Investment Products Hundreds of equity securities and futures, such as: •Equities, iShares, or “ETFs” and BDRs;•Dollar, Ibovespa and rate futures; and•Commodities, such as feeder cattle, coffee, soy; corn, ethanol, oil and gold. •Retail •Institutional
Fixed Income Securities Investment Products Over 275 fixed income securities, including: Bank Deposits: LCI, LCA, CDB, and LC; Corporate Bonds: Debentures, CRI, CRA, LF and FIDC; Sovereign Bonds: NTN-B, NTN-F, LTN, LFTs; and Interest Rate Swaps •Retail •Institutional
Mutual, Hedge and Private Equity Funds Investment Products •Over 200 XP Asset Management Funds;•Over 500 third-party funds curated by XP from over 160 asset managers; and•Over 100 international funds. •Retail •Institutional
Structured Products Investment Products Derivatives and synthetic instruments including:•Derivatives – Structures set up with options, using the margin as security. Can be done with Index, Dollar, Shares, Interest, feeder cattle and corn commodities; and•COE (“Structured Operations Certificate”) – Instruments combining fixed and variable income elements, with returns linked to assets indices such as exchange, inflation, shares and international assets. These products appear as one single (synthetic) asset for the client, facilitating monitoring of performance and single taxation, and can have lower costs compared with investing in assets/derivatives separately. •Retail •Institutional
Credit Cards Credit Products We offer to our clients in both XP and Rico a Visa Infinite Credit Card free of charges and with a pioneer “Investback” program - a cash-back program that automatically invests at least 1% of every paid invoice in a liquid fixed-income fund on behalf of the customer as a reward. •Retail
Loan operations/Collateralized Credit Products Credit Products Our platform offers hassle-free, low-interest personal loans secured on the customer’s invested assets, which allows for rates below market averages. 90-day NPL is almost zero due to the structured nature of the credit. •Retail
Retirement Plans and Life Insurance Investment Products XP branded solutions and distribution of over 296 funds from 109 leading independent insurers and asset managers, including:•Pension and social security funds; and•Life insurance products of the main independent providers, with similar characteristics to those offered in more developed markets. •Retail•Institutional
Wealth Management Services Investment Products A suite of asset organization, succession planning and other services. •Retail
Other Investment Products Investment Products •Real Estate funds of corporate assets logistics, retail and receivables; and•Equity and debt capital markets solutions. •Retail•Institutional
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Our Marketing, Sales and Distribution
We market our brands and value-proposition through our proprietary media and we sell our products and services through our omni-channel distribution network and online portals, which are part of our self-reinforcing ecosystem that promotes XP’s products and services. We believe the primarily digital, technology-enabled nature of our media and our distribution is a significant differentiator for our business and a key competitive advantage.
Proprietary Media and Digital Content
Our media and digital content are an ecosystem of portals and initiatives that aim to democratize access to financial content in Brazil. It is composed of five key initiatives: Infomoney, XP Educação, EXPERT Platform, EXPERT Event and XP Influencers. As we empower Brazilians on how to take investment decisions more independently, we help attract, retain and monetize our clients. We attract clients by providing multiple, ongoing touch points, which we believe help build brand awareness, trust and a greater familiarity and comfort level with investing. These initiatives provide us with a strong organic flow of prospective clients and a highly efficient source of customer acquisition. With millions of users navigating through our platforms monthly, we leverage big data analytical tools and artificial intelligence technology to help create an increasingly personalized experience that helps retain clients. Our content also helps our clients navigate and evolve through their journey as investors, which we believe helps them optimize their asset allocations over time.
•Infomoney – acquired in 2011, Infomoney is the largest investment-related website in Latin America, with approximately 8 million monthly unique visitors as of December 31, 2025.
•XP Educação – a key part of our mission since our founding, XP Educação is a leading financial education portal in Brazil. XP Educação provides seminars, classes and learning tools to help investors, entrepreneurs and executives to evolve through their respective journeys and according to their specific needs.
•EXPERT Platform – our proprietary investment phygital content platform, comprising a research group of specialists serving retail clients in Portuguese and institutional clients in English. This group produces a wide range of content, which includes insights into fixed income, equities, funds, REITs, asset allocation, economics and politics, among others, covering from the basics to a more advanced content.
•EXPERT Event – our annual conference for clients, IFAs and partners has become the largest investment event in Latin America. In 2025, the EXPERT event had over 50.000 attendees, including approximately 230 sponsors, over 350 speakers, and over 120 hours of content. EXPERT 2025 included many of world-renowned speakers, including the actor and former governor of California Arnold Schwarzenegger and the former Vice-President of the United States Al Gore.
Omni-Channel Distribution Network
We onboard and serve our clients though our omni-channel distribution network, which enables us to deliver our products and services through a range of proprietary channels designed to provide different levels of service and functionality. These include:
•XP Direct – Our full-service website and internal advisory teams focused on mass-affluent clients, which provides access to all of our products and more sophisticated functionality.
•Rico – Our online-only solution for self-directed investors, which provides powerful, yet convenient and easy-to-use investment services, decision-making tools and custom-designed educational software applications. These are delivered through a simple, attractive and intuitive online portal that is supported by a dedicated marketing and digital media program. Online stock trades at Rico are not subject to brokerage fees.
•Clear – A part of XP since 2014, Clear was first to offer zero brokerage fees in Brazil. Clear’s goal is to provide its clients, both professional and novice investors, with the best investment experience at a low cost. One of Clear’s main highlights is an intuitive and simple Home Broker application that allows the user to invest in various asset classes in the equities and futures market such as options, stocks, ETFs and futures contracts, among others. Clear is a 100% digital service, with innovative collateral management tools and proprietary front ends designed for retail active traders, and is integrated with the best trading platforms available in the market.
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•IFA Network – Our proprietary distribution network of IFA partners solicit new clients and help us onboard them as XP clients. We believe our IFA partners choose to work with XP for a number of reasons, including: (1) our deep understanding and appreciation of the IFA business model and our promotion of IFA careers given our origins as an IFA; (2) our dedicated suite of technology tools designed to help IFAs manage their businesses more effectively; (3) our trusted brand and reach across Brazil; and (4) our proprietary market information, which can help IFAs reach and sell their services to customers more effectively.
•Wealth Services – Our Wealth Services channel (Consultores, Gestores and Multi-Family Offices) encompasses CVM-registered investment consultants (consultores de valores mobiliários), which are referred to in this form as Registered Investment Advisors - RIA, portfolio managers (gestores), and multi-family offices (MFOs). CVM-registered investment consultants are independent professionals registered with the CVM pursuant to CVM Resolution No. 19/2021, who provide personalized investment advice on a fiduciary basis and are compensated exclusively through fees charged directly to clients, independent of product distribution. Portfolio managers and MFOs are also licensed by the CVM and utilize our platform to deliver comprehensive investment solutions to their clients.
Our Technology
Our technology is a significant competitive advantage for XP. We have developed a powerful, integrated suite of data-driven technology systems, applications, and development resources that enable us to differentiate XP in the market, manage all of our solutions, conduct all of our activities and operate with low-cost advantages and efficiencies. We are leveraging the significant technology DNA in our company, our innovation and development teams, and agile software development methods to develop a suite of new products, services and technology applications that engage and serve our clients across their financial journeys.
XP Genius Platform
Our core technology is XP Genius, which is an integrated, cloud-based technology platform with a modular architecture that is highly scalable and secure, and hosted in two fully redundant hot site data centers that operate with real time data synchronization. XP Genius enables us to:
•connect our various systems, micro-services, technologies and environments, enabling us to expand our capabilities modularly, while maintaining an efficient architecture and software code base;
•power our solutions and applications across our organization with integrated data harmonized code;
•manage our large, valuable and rapidly growing central database of proprietary data with the ability to access information in our data lake in real time;
•conduct our big data analytics and artificial intelligence initiatives, such as our online customer behavior monitoring and our machine learning techniques to identify deviations in customer information; and
•provide us with proprietary information and market insights from across our integrated ecosystem.
XP Innovation Development Teams
We have also built a dedicated innovation development program, called XP Innovation. These dedicated technology resources develop and support our solutions by using agile software development methods and leveraging our significant technology and data assets. These include XP Tribes, comprising two to three managers each, that help guide and support our development priorities across numerous projects, and XP Squads, comprising autonomous integrated teams of eight to ten people, including a product owner and business expert, a UX specialist, a technology leader and several developers, that collaborate to create new technologies and solutions or improve our current offerings. These teams focus on the complete customer experience, conducting client interviews, prototyping, behavior analysis and user tests. One of the most visible external examples of our technology capabilities is the suite of technology applications that we provide to our clients and partners. Our technology evolution was followed by a deeper and broader corporate transformation process, which involved the creation of business units and integrated our front-office to our foundations – back-office, middle-office and innovation teams. We believe that the main benefits of the transformation are a leaner and more efficient corporate organization that allows us to optimize decision making and execution of our projects.
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XP Technology Apps
We complement and enrich our XP Advisory services and XP Platform of products by developing and offering a differentiated suite of proprietary XP Apps, including cloud-based and mobile technology applications and tools, that are designed to be powerful, yet simple, attractive, and easy to use, with sleek user interfaces, or UX, that are comparable to the look and convenience of some of the top consumer technology products in the world. We combine some of the powerful technical capabilities of XP Genius, with the large amount of proprietary data that flows through our systems, and the agile software development methods of our technology innovation XP Tribes and XP Squads to generate functionality and market insights that are value-added for our clients. As a result, XP Apps enable users to incorporate a range of activities across their customer experience journeys, such as managing their accounts, executing trades, performing custom analytics and creating custom reports.
Bull - Pro
Bull is our free, cloud-based trading platform designed for retail and institutional traders, that includes powerful data visualization, custom simulations, analytics, and advance graphics tools that can be used from any internet connected device, such as a desktop, tablet, mobile phone and smart watch. The user can analyze the main flows of the market, time and schedule trades, and conduct various forms of charting and volume and pricing analysis. In addition, the user has access to several trading tools such as Chart Trading and DOM, that can be used to run various market and performance simulations and execute trading quickly and efficiently.
Rede
Rede is an IFA management solution application developed for a desktop environment, that was designed to help an IFA run its business. It provides a comprehensive suite of CRM, account management and investing tools that enable IFAs to: (1) access their customer’s information; (2) manage their customer relationships; (3) monitor their clients’ financial activity; (4) develop the best investment strategies for their clients based on key performance metrics; and (5) communicate with clients across a range of platforms.
HUB App
HUB is an IFA management solution application, similar to Hub, but designed to help an IFA run its business on-the-go through a mobile application. HUB also provides a comprehensive suite of tools for IFAs that enable them to: (1) access client information in real time; (2) manage their CRM application and organize their schedules and meetings on the go; (3) monitor client activity, net funding and upcoming maturities; (4) quickly define and chart investment strategies remotely; and (5) communicate with clients across a range of platforms and third-party applications.
XP App
Enhances our advisory services and product platform through a suite of proprietary apps. These cloud-based and mobile applications combine powerful technology from XP Genius with vast proprietary data and agile development methods from XP Tribes and XP Squads. This integration produces market insights and functionality that add value for our clients. XP Apps allow users to manage accounts, execute trades, perform analytics, and create custom reports, encapsulating all financial activities in one app, from cash flow management to the procurement of credit products and insurance, all easily accessed and backed by our investment platform.
Nasdaq Services Agreements
On September 16, 2021, we entered into a master services agreement with Nasdaq Technology AB, or “Nasdaq AB,” for (i) our trading services, or the “Trading Platform Agreement;” and (ii) our market surveillance services, or the “Market Surveillance Agreement” (and together with the Trading Platform Agreement, the “Nasdaq Agreements”). We don’t expect to incur capital expenditures in connection with the Nasdaq Agreements other than standard onboarding fees.
Pursuant to the Trading Platform Agreement, Nasdaq AB has undertaken to develop a digital environment to allow us to connect our application programming interfaces with Nasdaq’s system, enabling the trading of digital assets on our platform. Pursuant to the Trading Platform Agreement, we have agreed to pay to Nasdaq AB an onboarding fee, a monthly service fee payable annually as from the date the platform goes live, and a variable fee based on the daily trading volume of all digital assets, as from the beginning of the third year of the Trading Platform Agreement. The monthly fee contemplates a minimum number of transactions per second and the parties can agree to increase capacity for an additional variable monthly fee based on transaction volume.
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Moreover, pursuant to the Nasdaq Agreements, Nasdaq AB has agreed to certain information security obligations and service level requirements as provided for in the Nasdaq Agreements. The parties have also agreed to indemnify each other upon the occurrence of certain events, subject to certain limitations on liability. The Nasdaq Agreements have an initial term of five years: (i) the Market Surveillance Agreement is renewable for one additional year; and (ii) the Trading Platform Agreement is automatically renewed for successive three-year terms unless either party provides at least six months prior written notice of non-renewal. The Nasdaq Agreements may be terminated by either party upon the occurrence of certain customary termination events and/or material breaches, including a failure to pay amounts due and bankruptcy proceedings.
Our Support Functions
In order to provide, fulfill and support our products, services and platforms, we have built a robust yet efficient operations organization that leverages our technology to onboard our clients, provide high-quality customer support and conduct our fraud prevention and risk management. These support functions include:
Our Customer Onboarding
Our client onboarding process is primarily a digital experience and highly efficient. Prospective clients must register on a web based platform and enter their basic identification information, such as a name, date of birth and government ID number, as well as their residential address and financial data, such as monthly income and total assets. This process is highly efficient and compliant with Brazilian banking regulation and international anti-money laundering and know-your-customer best practices. All information registered by our prospective clients is verified and validated through third-party data services that integrate automatically with our systems through our API applications. On average, this validation procedure takes less than two minutes to be completed and for prospective clients to be informed whether their application was successful or not.
Once a client account is opened, the client is able to login to the platform and respond to the suitability questionnaire. Based on their answers, clients will be informed about their investment profile classification and the products suitable to their profiles. Once the suitability process is completed, clients are able to browse the website, get information of all types of investments available, transfer money to their XP accounts and proceed with investments.
Our Customer Support
Our customer support organization serves our clients across multiple brands and channels providing support online or by phone through our efficient automated technology tools, client relationship personnel and help desk personnel. Our customer support organization professionals are highly trained and have the appropriate market certifications to interact with clients about our financial products and services. Our customer support personnel are also encouraged to continue to enhance their training and raise their qualification levels through in-house courses and additional financial certifications.
For customers of our XP-branded services, such as those that reach us through XP Direct or our IFA network, we provide dedicated support depending on the customer profile. For example, depending on the client profile, our first level of support may be a dedicated advisor, who maintains a close relationship with the client, understands their needs and offers solutions to any questions they have or issues they want to resolve. Our second level of support may be our centralized help desk personnel that are available to answer any operational and technical questions about a client’s account via telephone, chat and email. For customers of our Rico and Clear branded online services, our first level of support may be our automated technology tools, such as our self-help tools and chatbots. Our second level of support may be our specialized help desk personnel, who can be reached online, through email and dedicated communication tools, such as online chats and a dedicated WhatsApp application, as well as via telephone.
We closely measure our clients’ satisfaction and overall happiness with our services, across all of our brands, through quality indicators and surveys such as NPS and CSAT. These metrics are directly linked with our internal customer support personnel evaluation and compensation, which we believe reinforces our team alignment and commitment to proving high-quality customer service. We are also highly focused on delivering a highly positive overall client experience and intend to continue investing in this area. We have a specific team of professionals that are dedicated to coordinating client experience improvement projects across each point of customer contact throughout our company.
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Our Fraud Prevention and Risk Management
Our fraud prevention and risk management operations are primarily managed by three different groups that are staffed with dedicated employees to audit and mitigate our company risk exposure. This team is composed of highly qualified personnel that come from a variety of backgrounds in other areas, such as telecommunications, credit card issuing, merchant acquiring, banking and the stock market. They are completely independent from our business functions and report directly to our Chief Risk Officer. These groups include:
•Corporate Risk – this group is focused on identifying, classifying and mitigating operational, reputational, environmental and strategic risks, including any potential internal fraud;
•Financial Risk – this group is focused on monitoring our financial positions and managing our exposure to liquidity risk, market risk, and credit risk; and
•Fraud Prevention – this group is comprised of fraud experts, data scientist, database administrators, investigators and regulator staff, who focus on managing our antifraud strategy and ensuring the legitimacy of client transactions; their work entails: (1) detecting and preventing potential external fraud with different models of client authentication, such as user logins; (2) managing our transaction verification services; (3) monitoring financial advisors activities; (4) employee and partner fingerprinting; (5) managing our data tokenization and token management technology; and (6) managing our biometric facial recognition technology, among others.
Competition
The Brazilian financial services industry is highly competitive and fast-changing. The markets for our solutions continue to evolve and are competitive in the asset classes, products and geographies in which we operate. We face competition to acquire customers from a variety of traditional and nontraditional financial institutions. Our primary competitors are traditional financial institutions, including Itaú Unibanco, Bradesco, Caixa, Banco do Brasil and Santander. We also face competition across business units, particularly from other financial services companies such as BTG Pactual, Safra, Nubank and Inter, among others. Other potential competitors are other providers in some specific categories, such as asset management firms, insurance companies, investment banking firms, institutional brokerage firms, private banking and wealth management firms, digital banks and research reports providers.
The most significant competitive factors in this business line are prices as well as the quality, reliability, security and ease of our platform and solutions. We believe that our comprehensive products and services and geographic reach increasingly differentiate us from other market participants.
For information on risks relating to increased competition in our industry, see “Item 3. Key Information—D. Risk Factors—Risks Relating to Our Business and Industry—If We Cannot Make the Necessary Investments to Keep Pace with Rapid Developments and Change in Our Industry, the Use of Our Services Could Decline, Reducing Our Revenues,” and “Item 3. Key Information—D. Risk Factors—Risks Relating to Our Business and Industry—Substantial and Increasingly Intense Competition Within Our Industry May Harm Our Business.”
Seasonality
We have experienced in the past, and expect to continue to experience, seasonal fluctuations in our revenues. Historically, our revenues have been strongest during the second and the last quarter of each year as a result of performance fees of mutual funds from both our own asset management business as well as third-party funds distributed through our platform. Adverse events that occur during those periods could have a disproportionate effect on our results of operations for the entire fiscal year. In addition, we are also impacted by the number of business days in each quarter, which affects our trading and brokerage businesses. As a result of quarterly fluctuations caused by these and other factors, comparisons of our results of operations across different fiscal quarters may not be accurate indicators of our future performance.
Regulatory Overview
We are subject to government authorizations in the jurisdictions in which we operate and conduct our activities.
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Our Regulatory Position
Five of our subsidiaries, XP CCTVM S.A., Banco XP S.A., or “Banco XP,” XP DTVM Ltda and XP Serviços Financeiros DTVM Ltda. perform activities that are subject to regulation in Brazil by the Central Bank. As required by the applicable Brazilian regulation, they must possess authorizations from the Central Bank in order to operate, as follows:
•XP CCTVM is authorized by the Central Bank to (1) be constituted and operate as a securities broker; (2) carry out operations in the foreign exchange market; and (3) receive direct or indirect foreign investments of up to 100% of its capital stock.
•Banco XP is authorized by the Central Bank to operate as a multi-purpose bank. On October 10, 2019, the board of officers of the Central Bank granted Banco XP’s authorization to operate as a multi-purpose bank, with both commercial and investment bank activities, as well as to carry out transactions in the foreign exchange market. The authorization was published in the National Official Gazette (Diário Oficial da União) on October 11, 2019. On November 13, 2019, the Central Bank authorized direct or indirect foreign investments in Banco XP of up to 100% of its capital stock.
•XP DTVM is authorized by the Central Bank to, among other activities, carry out public offering and distribution of bonds and securities, provide securities portfolio management services and carry out operations in the foreign exchange market.
•Class B Bank Branch & Trust License – Since January 1st, 2023, Banco XP is licensed by CIMA to perform banking, investments, and trust activities.
Eight of our subsidiaries, XP CCTVM, XP DTVM, XP Serviços Financeiros DTVM, XP Gestão, XP Advisory, XP Vista, XP PE, XP Sports, and XP Allocation perform activities that are subject to regulation in Brazil by the CVM. As required by the applicable Brazilian regulation, they are authorized to operate by the CVM, as follows:
•XP CCTVM is authorized to provide securities broker dealer services, securities portfolio management services (exclusively to its own proprietary portfolio) and securities custody services;
•Each of XP DTVM, XP Gestão, XP Advisory, XP Vista, XP Allocation and XP PE are authorized to provide securities portfolio management services.
•XP Serviços Financeiros DTVM is authorized to provide depository services, distribution, portfolio management, administration, book-keeping and controlling of investment funds activities.
Two of our subsidiaries, XP Investments and XP Advisory US, Inc., or “XP Advisory US,” perform activities that require registration with and regulation by appropriate regulatory authorities in the United States, as follows:
•XP Investments is (1) registered as a securities broker-dealer with the SEC and in twenty-six U.S. states and territories; (2) registered with the U.S. Commodity Futures Trading Commission, or the “CFTC,” as an introducing broker; and (3) a member of the Financial Industry Regulatory Authority, or “FINRA,” and the National Futures Association, or the “NFA,” self-regulatory organizations overseen by the SEC and the CFTC, respectively; and
•XP Advisory US became registered as an investment adviser with the SEC on January 30, 2019. XP Advisory US was previously registered as an investment adviser in the state of Florida.
One of our subsidiaries, XP Private Holding UK Ltd., or “XP Private UK,” is a holding company, with no operations. On June 16, 2021, XP Private UK sold its subsidiary, XP Private (Europe) S.A. In December 2021, in virtue of the sale of XP Private (Europe) S.A., XP Private UK decided to write down its other subsidiary, Chameleon Bravery Unipessoal Lda (“XP Portugal”). Currently, XP Private UK does not hold equity in any entity.
Two of our subsidiaries, XP Corretora de Seguros Ltda., or “XP CS,” and XP VP, perform activities that are subject to regulation by SUSEP. As required by the applicable regulation, both have obtained authorizations to operate from SUSEP, as follows:
•XP CS, our insurance broker-dealer, is authorized to operate as an insurance brokerage; and
•XP VP, our insurance company, is authorized to operate life insurance and private retirement plans.
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Regulatory Environment in Brazil
Our main subsidiaries in Brazil are subject to extensive regulation, such as those applicable to banks (in the case of Banco XP), securities and foreign exchange brokers (in the case of XP CCTVM), securities portfolio managers (in the case of XP Gestão, XP Advisory, XP PE, XP Allocation Asset Management Ltda. and XP Vista), insurance companies and insurance brokers (in the case of XP VP and XP CS, respectively).
We offer various financial and capital markets services; in particular, we conduct activities related to banking, underwriting, brokerage services, portfolio management and insurance.
Legislation Applicable to Financial Institutions and Portfolio Managers in Brazil
The current Brazilian banking and financial institutional system was established by Law No. 4,595 of December 31, 1964, as amended, or the “Banking Law.”
The Banking Law laid out the structure of the national financial system, which is made up of the CMN, the Central Bank, Banco do Brasil S.A., the National Bank for Economic and Social Development – BNDES, or the “BNDES,” and other public or private financial institutions. While the following entities do not fall under the purview of the Banking Law, they play key roles in the financial system: the CVM, SUSEP, the National Superintendency of Retirement Plans (Superintendência Nacional de Previdência Complementar), or “PREVIC;” the CNSP, and the National Council for Retirement Plans (Conselho Nacional de Previdência Complementar), or “CNPC.”
Law No. 4,728 of July 14, 1965, as amended, or “Law No. 4,728/65,” regulates Brazilian capital markets through setting standards and various other mechanisms. Further, pursuant to Law No. 6,385 of December 7, 1976, as amended, or “Law No. 6,385/76,” the distribution and issuance of securities in the market, trading of securities and settlement and/or clearance of securities transactions all require prior authorization by the CVM. The banking and capital markets regulatory framework in Brazil is further supplemented by the regulation issued by CMN, CVM and the Central Bank, and self-regulation policies, such as those issued by various associations, over-the-counter organized markets and securities exchanges, that govern their members and participants, (for example, B3, ANBIMA, and the Brazilian Association of Investment Analysts, or “APIMEC”). The incorporation and operation of financial institutions in Brazil depend on prior authorization from the Central Bank (under Decree No. 10,029 of September 26, 2019, the Brazilian Executive Branch granted authority to the Central Bank to approve foreign investments in financial institutions. Such decree was further regulated by Circular No. 3,977 of January 22, 2020), and are also subject to oversight from the CVM when they participate in the Brazilian capital markets (such as XP CCTVM).
Financial institutions in Brazil can operate under various forms—such as commercial banks, investment banks, credit, financing and investment companies, cooperative banks, leasing companies, securities brokerage companies, securities distributor companies, real estate credit companies, mortgage companies, among others—all of which are regulated by different rules issued by the CMN, the Central Bank, and, if such financial institutions participate in capital markets activities, the CVM. In addition, like financial institutions, stock exchanges are also subject to CMN, the Central Bank, and the CVM approval and regulation as well in accordance with Law No. 4,728/65.
Pursuant to Banking Law, CMN Resolution No. 4,970 of November 25, 2021, as amended, or “CMN Resolution No. 4,970,” and CMN Resolution No. 5,008 of March 24, 2022, as amended, or “CMN Resolution No. 5,008,” financial institutions that are securities brokerage firms (such as XP CCTVM) must seek approval from the Central Bank, and, in certain cases, the CVM when appointing managers (including directors, officers and members of certain statutory boards, such as fiscal councils). According to Law No. 4,728/65, for securities brokerage firms (such as XP CCTVM), managers are subject to further restrictions and are prohibited from working for or fulfilling any administrative, advisory, tax or decision-making positions at entities listed on the Brazilian stock exchange. In addition, managers of XP CCTVM are prohibited from filling managerial functions in other brokerage firms authorized to carry out foreign exchange transactions pursuant to CMN Resolution No. 5,009 of March 24, 2022. However, Banco XP, our multi-purpose bank, is authorized to carry out foreign exchange transactions. For additional information, please see “—Multi-Purpose Banks.”
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According to CMN Resolution No. 5,043 of November 25, 2022, with the exception of (1) equity interests typically held in proprietary investment portfolios by investment banks, development banks, development agencies (agências de fomento) and multiservice banks (bancos múltiplos); and (2) temporary equity interests not categorized as permanent assets (ativos permanentes) and not subject to consolidation by the financial institution, financial institutions must receive prior authorization from the Central Bank to hold capital interest of other companies. In order to receive authorization, the financial institutions’ activities must justify the need to hold capital interest for other companies; however, should the financial institutions participate in underwriting activities falling under certain exceptions established by the CMN, they will not need to provide justification.
In addition, as a principle, according to the Banking Law, Brazilian financial institutions are banned from granting loans or cash advances to their managers (officers, directors, and members of advisory boards, as well as their relatives). Certain exceptions to such restrictions are set forth in CMN Resolution No. 4,693 of October 29, 2018.
Furthermore, XP CCTVM and XP VP are required to maintain certain levels of regulatory capital, as determined by the Central Bank and SUSEP, respectively. For further information, see note 35 to our audited consolidated financial statements included elsewhere in this annual report.
Securities Brokerage Firms
Securities trading in stock exchange markets shall be carried out exclusively by securities brokerage firms (such as XP CCTVM) and certain other authorized institutions. Brokerage firms are part of the national financial system and are subject to regulation by and the oversight of the CMN, the Central Bank and the CVM. Securities brokerage firms must be authorized by the Central Bank to trade on the stock exchange market. Among other roles, securities brokerage firms and certain other authorized institutions can act as underwriters in the public offering of financial instruments and may participate in the foreign exchange trades in any foreign exchange market, subject to certain limitations, as set forth in Central Bank regulations.
Brokerage firms are regulated by CMN Resolution No. 5,008, which allows brokerage firms to participate, among others, in the following activities: (1) trading in stock exchanges; (2) underwriting; (3) intermediating public offerings; (4) managing investment portfolios; and (5) intermediating foreign currency trades. In addition to CMN Resolution No. 5,008, brokerage firms are subject to regulations from the CVM.
Under the rules set forth by the Central Bank, brokerage firms (such as XP CCTVM) cannot execute transactions that may result in loans, facilities or cash advances to their clients, including through synthetic transactions (such as assignment of rights), with the exception of margin transactions and other limited transactions.
Moreover, brokerage firms can neither charge commissions in connection with trades during primary distribution, nor purchase real property, except for their own use or as payment under “bad debts” (in which case, the asset must be sold within a year).
Third-Party Funds Management
XP Gestão, XP Advisory, XP Vista, XP PE Gestão de Recursos Ltda. and XP Allocation Asset Management Ltda. are asset managers licensed to operate by, and subject to the rules and oversight of, the CVM, pursuant to Law No. 6,385/76 and CVM Resolution No. 21 of February 25, 2021, as amended, or “CVM Resolution No. 21.” XP LT is currently an inactive company and it´s not proving any services.
CVM Resolution No. 21 defines asset/portfolio management activities as professional activities directly or indirectly related to the operation, maintenance and management of securities portfolios, including the investment of funds in the securities market on behalf of clients.
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CVM Resolution No. 21 provides for two categories of asset managers: (i) trustee administrator and/or (ii) portfolio manager. XP Gestão, XP Advisory, XP Vista and XP PE Gestão de Recursos Ltda., XP Allocation Asset Management Ltda. and XP Sports Asset Management Ltda. are registered as portfolio managers. To be authorized by the CVM to engage in such activity, legal entities that operate as asset managers must (1) have a registered office in Brazil; (2) have securities portfolio management as a corporate purpose and be duly incorporated and registered with the National Register of Legal Entities – CNPJ; (3) have one or more officers duly certified as asset managers as approved by CVM to take on liability for securities portfolio management, pursuant to CVM Resolution No. 21; (4) appoint a compliance officer and a risk management officer; (5) be controlled by reputable shareholders (direct and indirect), who have not been convicted of certain crimes detailed in article 3, VI of CVM Resolution No. 21; (6) not be unable or suspended from occupying a position in financial institution or other entities authorized to operate by the CVM, the Central Bank, SUSEP or PREVIC, and not have been banned from asset management activities by judicial or administrative decisions; (7) put in place and maintain personnel and IT resources appropriate for the size and types of investment portfolio it manages; and (8) execute and provide the applicable forms to the CVM so as to prove its capacity to carry out such activities, pursuant to CVM Resolution No. 21. Under CVM Resolution No. 21, asset management must, among other requirements, conduct their activities in good faith, with transparency, diligence and loyalty with respect to their clients and perform their duties with the aim of achieving their investment objectives. This same regulation requires asset managers to maintain a website, with extensive current information, including, but not limited to, (1) an updated annual filing form (formulário de referência); (2) a code of ethics; (3) rules, procedures and a description of internal controls in order to comply with CVM Resolution No. 21; (4) a risk management policy; (5) a policy of purchase and sale of securities by managers, employees and the company; (6) a pricing manual for assets from the securities portfolios managed by such asset manager, even if the manual has been developed by a third party; and (7) a policy of apportionment and division of orders among the securities portfolios.
Moreover, under CVM Resolution No. 21, asset management firms are forbidden from (1) making public assurances of profitability levels based on the historical performance of portfolio and market indexes; (2) modifying the basic features of the services they provide without following the prior appropriate procedures under the asset management agreement and regulations; (3) making promises as to future results of the portfolio; (4) contracting or granting loans on behalf of their clients, subject to certain exceptions set out in regulation; (5) providing a surety, corporate guarantee, acceptance or becoming a joint obligor in any other form, with respect to the managed assets; (6) neglecting, under any circumstances, the rights and intentions of the client; (7) trading the securities from the portfolios they manage with the purpose of obtaining brokerage revenues or rebates for themselves or third parties; or (8) subject to certain exceptions set out in the regulation, acting as a counterparty, directly or indirectly, to clients.
IFAs
The activity of IFAs (assessor de investimentos) is regulated by CVM Resolution No. 178 of February 14, 2023, as amended, or “CVM Resolution No. 178,” and CVM Resolution No. 179 of February 14, 2023, as amended, or “CVM Resolution No. 179.” Pursuant to such rules, IFAs are individuals, acting as agents and representatives for an institution that integrates the securities distribution system, registered with the CVM to conduct client development and prospection, to receive and register orders and transmit such orders to the appropriate trading or registration systems, to provide information and recommendation on the products offered and on the services provided by the institution with whom they share a commercial relationship. Although they are individuals, CVM Resolution No. 178 allows IFAs to carry out their activities through corporate entities, which must also be registered with the CVM. IFAs are allowed to provide complementary services to clients, as long as they don’t conflict with their main services, being prohibited however, to provide portfolio management, securities consultancy and securities analysis services. The IFAs must be engaged by an institution integrating the securities distribution system and, according to CVM Resolution No. 178, IFAs will not be required to act on an exclusivity basis and may be engaged by multiple institutions, although exclusivity may still be agreed contractually among the parties. The IFAs are also required to ensure the confidentiality of information to which they have access.
In carrying out their services, the IFA must act with integrity, good faith and professional ethics, applying the care and diligence expected from a professional in its position, with respect to clients and its employer. Given IFAs can now have a commercial relationship with more than one financial intermediary, they must take additional care to observe the rules of each such financial intermediary.
The brokerage firms are responsible for verifying their respective IFAs and for overseeing their activities and compliance with the applicable law. They may even be held responsible for malpractice or misconduct by such agents acting in their capacities as such.
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Multi-Purpose Banks
According to CMN Resolution No. 2,099 of August 17, 1994, Brazilian multi-purpose banks (such as Banco XP) are subject to extensive and continuous regulatory scrutiny by Brazilian authorities. Multi-purpose banks conduct at least two types of banking activities, provided that at least one of such activities falls into either the category of commercial or investment banking. Banking regulation is enforced by the relevant government entities and regulators with the goal of controlling credit availability and reducing or increasing consumption.
Certain controls are temporary in nature and may vary from time to time in accordance with the relevant government’s or regulator’s credit policies, including:
•minimum capital requirements;
•compulsory reserve requirements;
•lending limits and other credit restrictions; and
•accounting and statistical requirements.
The following rules are applicable to multi-purpose banks, such as Banco XP:
•they shall ensure the adequacy of products and services for customers’ needs, interests and objectives, as well as the integrity, reliability, security and confidentiality of transactions, services and products;
•they may not own real estate other than the property they occupy, unless they take possession of real estate in satisfaction of a debt or when expressly authorized by the Central Bank, subject to certain CMN rules. Moreover, the total amount of fixed assets must be limited to 50.0% of the institution’s regulatory working capital;
•they shall comply with the principles of selectivity, guarantee, liquidity and risk diversification;
•financial institutions are prohibited from granting loans or advances without an appropriate agreement formalizing such debt;
•financial institutions may not grant loans to, or guarantee the transactions of, their affiliates, except in certain limited circumstances (see “—Other Rules —Transactions with Affiliates” below);
•the registered capital and total net assets of financial institutions must be compatible with the rules governing share capital and minimum capitalization enforced by the Central Bank for each type of financial institution; and
•financial institutions shall maintain internal policy and procedures governing their relationships with clients and users of their products and services.
In recent years, CMN has issued rules with the intention of modernizing financial services and retail banking. On September 26, 2019, CMN issued Resolution No. 4,753, as amended, or “CMN Resolution No. 4,753,” which, effective as of January 1, 2020, replaces and consolidates a series of sparse CMN Resolutions dealing with the opening of bank accounts. In addition, CMN Resolution 4,949 of September 30, 2021, effective as of March 1, 2022, sets forth procedures to be adopted by financial institutions with respect to client relationship.
Aiming to enable the use of more modern and efficient technology for the purpose of attracting new customers through electronic service channels, a process known as digital onboarding, CMN Resolution No. 4,753 removed from the regulatory framework several existing restrictions arising from the adoption of procedures relating to physical handling of documents, such as the requirement that the identification and location details of the client should be physically checked, as previously contained in Resolution No. 2,025, of 1993. The Central Bank acknowledged that there currently are more efficient and secure ways of verifying data by electronic means, which reduces administrative costs.
The integration of modern technology such as Application Programming Interfaces, or “APIs,” big data and blockchain/DLT, has incentivized the CMN and the Central Bank to develop new rules in connection with Agenda BC+. The regulatory framework tends to evolve accordingly. With this aim in mind, regulatory authorities are striving to create technological solutions that would plug the gaps from traditional inefficiencies in the banking system. The regulators have expressed significant interest in the benefits and efficiencies that such technology may bring to the banking industry and to its financial inclusion strategies.
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According to CMN Resolution No. 4,893 of February 26, 2021, financial institutions and other institutions authorized to operate by the Central Bank must implement cybersecurity policies in order to ensure the integrity of their data systems. Under such Resolution, which regulates cybersecurity policies and the requirements for contracting data processing, storage and cloud computing services, covered institutions are required to appoint an officer who will be responsible for implementing and overseeing cybersecurity policy, and to adopt procedures and controls to prevent and respond to cybersecurity incidents.
The Cybersecurity Regulation also requires relevant institutions to provide an annual report to the Central Bank disclosing any cybersecurity incidents as well as remediation efforts. In addition, communication to the Central Bank is required should any third-party service providers be hired for data processing, storage and cloud computing services. When services are rendered abroad, there are additional requirements for contracting, including the existence of a cooperation agreement between the Central Bank and the supervisory authority of the foreign country, or, absent such cooperation agreement, such contracting is subject to the prior approval of the Central Bank.
Last year, the SUSEP, the CVM and the Central Bank issued regulation approving a regulatory sandbox model in Brazil. The implementation of such a regulatory regime is expected to promote the development of more inclusive and higher quality products and services and to foster constant innovation in the financial, security and capital markets.
Securities Analysts
The activity of securities analysts (analista de valores mobiliários) is regulated by CVM Resolution No. 20, of February 25, 2021, and by CVM Circular Letter No. 2/2019/CVM/SIN, of March 1, 2019 and by CVM Circular Letter No. 13/2020/CVM/SIN of November 11, 2020. Pursuant to such rules, securities analysts are individuals or legal entities that, on a professional basis, prepare analyst reports for publication, disclosure or distribution to third parties, even if limited to certain clients. For purposes of CVM Resolution No. 20, “analyst reports” mean any texts, follow-up reports, studies or analyses regarding specific securities or issuers that may assist or influence investors in the investment decision process.
Securities analysts must be registered before a certifying entity duly authorized by CVM. Currently, the certification of securities analysts is carried out by APIMEC, which also serves as a self-regulatory entity for securities analysts.
In carrying out its services, securities analysts must act with integrity, good faith and professional ethics, and the analysts’ reports must be prepared by the analyst applying the care and diligence expected from a professional in its position.
As set forth in CVM Resolution No. 20, except in relation to the cases set forth therein, securities analysts (both individuals and legal entities) and other professionals that effectively participate in the preparation of the reports, are prohibited from the following activities:
•issuing analyst reports aiming to obtain, for itself or for third parties, unfair advantages;
•omitting information about conflicts of interest in analyst reports;
•trading, on behalf of themselves or of third parties, securities covered by the analysts’ reports or derivatives backed in such securities for a period of 30 days prior to and five days after the disclosure of the analyst report about such security or its issuer;
•trading, on behalf of themselves or of third parties, securities covered by the analyst reports or derivatives backed in such securities in the opposite direction of the recommendations or conclusions expressed in the analyst reports for (1) six months as of the disclosure of such report; or (2) until the disclosure of a new report about the same issuer or security, if such disclosure occurs within the six-month period mentioned above;
•participating, directly or indirectly (1) in any activity related to the public offering of securities, including sales efforts involving products or services related to the capital markets and efforts for prospecting new clients or jobs; (2) in the structuring of financial products and securities; and (3) in any activity related to M&A financial consulting; and
•disclosing the analyst reports or their content, even partially, to persons that are not part of the analyst team, in particular the issuer or the securities the subject of the analyst report before its publication, disclosure or distribution through the proper channels.
Securities analysts operating as legal entities are responsible for declaring in a clear and highlighted manner, whenever applicable, in all analysts’ reports that are published, disclosed or distributed, situations that may impact the report’s impartiality or that are or may be a conflict of interest.
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Among others, CVM Resolution No. 20 considers that a conflict of interest may exist whenever the securities analyst entity, its controlled entities, controlling shareholders or entities under common control: (1) have a relevant equity participation in the issuer covered by the analyst report, and vice versa; (2) have relevant financial and commercial interests over the issuer or the securities covered by the analyst report; (3) are involved in the acquisition, selling or intermediation of securities covered by the analyst report; and (4) are paid for other services rendered to the issuer covered by the report or its related parties.
Main Regulatory Entities
National Financial System
The main regulatory authorities in the Brazilian financial system are the CMN, the Central Bank and the CVM. In addition, most Brazilian investment banks, brokerage firms, securities distributors and asset managers are associated with and subject to the self-regulatory rules issued by ANBIMA.
In addition, trading segments managed by B3 are self-regulated and supervised by BSM—Supervisão de Mercados, or “BSM,” a nonprofit organization that forms part of the B3 group.
We present below a summary of the main duties and powers of each regulatory agent, ANBIMA and BSM.
CMN
CMN is the main monetary and financial policy authority in Brazil, responsible for creating financial, credit, budgetary and monetary rules.
According to Banking Law, the CMN’s main responsibilities are to oversee the regular organization, operation and inspection of entities that are subject to the Banking Law, as well as the enforcement of applicable penalties. In addition, Law No. 4,728/65 delegates to the CMN the power to set general rules for underwriting activities for resale, distribution or intermediation in the placement of securities, including rules governing the minimum regulatory capital of the companies that contemplate the underwriting for resale and distribution of instruments in the market and conditions for registration of the companies or individual firms which contemplate intermediation activities in the distribution of instruments in the market. The CMN has the power to regulate credit transactions involving Brazilian financial institutions and Brazilian currency, supervise the foreign exchange and gold reserves of Brazil, establish saving and investment policies in Brazil and regulate the Brazilian capital markets. The CMN also oversees the activities of the Central Bank, the CVM and SUSEP. Other CMN responsibilities include:
•coordinating monetary, credit, budget and public debt policies;
•establishing policies on foreign exchange and interest rates;
•seeking to ensure liquidity and solvency of financial institutions;
•overseeing activities related to the stock exchange markets;
•regulating the structure and operation of financial institutions;
•granting authority to the Central Bank to issue currency and establish reserve requirement levels; and
•establishing general guidelines for the banking and financial markets.
The Central Bank
The activities of financial institutions are subject to limitations and restrictions. The Central Bank is responsible for (1) implementing those CMN policies that are related to monetary, credit and foreign exchange control matters; (2) regulating Brazilian financial institutions in the public and private sectors; and (3) monitoring and regulating foreign investments in Brazil. The president of the Central Bank is appointed by the president of Brazil (subject to ratification by the Senate) for a four-year term.
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Banking Law delegated to the Central Bank the responsibility of permanently overseeing companies that directly or indirectly interfere in the financial and capital markets, controlling such companies’ operations in the foreign exchange market through operational proceedings and various modalities, and supervising the relative stability of foreign exchange rates and balance of payments. In addition, Law No. 4,728/65 states that the CMN and the Central Bank shall exercise their duties related to the financial and capital markets with the purpose of, among other things, facilitating the public’s access to information related to bonds or securities traded in the market and on the companies that issue them, protecting investors against illegal or fraudulent issuances of bonds or securities, preventing fraud and manipulation modalities intended to create artificial conditions of the demand, supply or pricing of bonds or securities distributed in the markets and ensuring the observance of equitable commercial practices by all of those professionals who participate in the intermediation of the distribution or trading of bonds or securities. The Central Bank has authority over brokerage firms, financial institutions, companies or individual firms performing underwriting for resale and distribution of bonds or securities, and maintains a record on, and inspects the transactions of, companies or individual firms that carry out intermediation activities in the distribution of bonds or securities, or which conduct, for any purposes, the prospecting of popular savings in the capital market.
Other important responsibilities of the Central Bank are as follows:
•controlling and approving the organization, operation, transfer of control and corporate reorganization of financial institutions and other institutions authorized to operate by the Central Bank;
•managing the daily flow of foreign capital and derivatives;
•establishing administrative rules and regulation for the registration of foreign investments;
•monitoring remittances of foreign currency;
•controlling the repatriation of funds (in case of a serious deficit in Brazil’s payment balance, the Central Bank may limit remittances of profits and prohibit remittances of capital for a limited period);
•receiving compulsory collections and voluntary deposits in cash from financial institutions;
•executing rediscount transactions and granting loans to banking financial institutions and other institutions authorized to operate by the Central Bank;
•intervening in the financial institutions or placing them under special administrative regimes, and determining their compulsory liquidation; and
•acting as depositary of the gold and foreign currency.
CVM
The CVM is a federal authority responsible for implementing the CMN’s policies related to the Brazilian capital market and for regulating, developing, controlling and inspecting the securities market.
The main responsibilities of the CVM are the following:
•regulating the Brazilian capital markets, in accordance with Brazilian corporation law and securities law;
•setting rules governing the operation of the securities market;
•defining the types of financial institutions that may carry out activities in the securities market, as well as the kinds of transactions that they may perform and services that they may provide in such market;
•controlling and supervising the Brazilian securities market through, among others:
▪the approval, suspension and delisting of publicly held companies;
▪the authorization of brokerage firms to operate in the securities market and public offering of securities;
▪the supervision of the activities of publicly held companies, stock exchange markets, commodities and future markets, financial investment funds and variable income funds;
▪the requirement of full disclosure of relevant events that affect the market, as well as the publication of annual and quarterly reports by publicly held companies;
▪the imposition of penalties; and
▪permanently supervising the activities and services of the securities market, as well as the dissemination of information related to the market and the amounts traded therein, to market participants.
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The CVM has jurisdiction to regulate and supervise financial investment funds and derivatives markets, a role previously fulfilled by the 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 of transactions involving derivatives were transferred to the CVM. In compliance with the Brazilian legislation, the CVM is managed by a president and four officers, all of whom are appointed by the president of the Republic (and approved by the Senate). The persons appointed to the CVM shall have strong reputations and be recognized as experts in the capital markets sector. CVM officers are appointed for a single term of office of five years, and one-fifth of the members shall be renewed on an annual basis.
All decisions issued by the CVM and by the Central Bank in administrative proceedings on the topics of the national financial system and the foreign exchange market are subject to appeal before the Appeals Council of the National Financial System, which is composed of members appointed by public authorities and members of the private sector.
The CVM is also responsible for determining and regulating the performance of IFAs. Due to the relevance of the IFAs and our subsidiaries, we highlight below the relevant regulatory frameworks such entities are subject to.
Retirement Plans and Insurance
SUSEP and CNSP
In Brazil, the regulation of insurance, coinsurance, retrocession, capitalization, supplementary retirement schemes and brokerage is carried out by CNSP and SUSEP.
SUSEP is an independent agency in charge of implementing and conducting the policies established by CNSP and the supervision of the insurance, coinsurance, retrocession, capitalization, supplementary retirement schemes and brokerage. SUSEP neither regulates nor supervises (1) the supplementary retirement entities that are regulated by the SPC; and (2) the operators of private healthcare assistance plans, which are regulated by ANS. With the enactment of Supplementary Law No. 126 on January 15, 2007, the CNSP and SUSEP are also responsible for the regulation of the Brazilian reinsurance market.
CNSP is made up of one representative of each one of the following bodies: Ministry of Social Security, the Central Bank, Ministry of Economy, Ministry of Justice, the CVM and the superintendent of SUSEP — Private Insurance Authority.
The supplementary insurance and retirement sectors in Brazil are subject to overlapping regulations. Decree-Law No. 73 of November 21, 1966, as amended, sought to centralize the legislation and inspection activities in the sector by creating the National Private Insurance System – SNSP, composed of: (1) CNSP; (2) SUSEP; (3) insurance companies duly authorized to operate in the private insurance market; (4) the reinsurance companies; and (5) duly qualified and/or registered insurance brokers. CNSP is linked to the Ministry of Economy and its main roles include establishing the guidelines and rules for the private insurance policy in Brazil; regulating the incorporation, organization, operations and inspection of insurers, reinsurers, supplementary open retirement funds and capitalization companies as well as establishing capital thresholds for such entities; establishing the general characteristics of insurance and reinsurance contracts; establishing general guidelines for insurance, reinsurance, supplementary open retirement funds, and capitalization operations; establishing general accounting and statistical rules as well as legal, technical and investment limits for the operations of insurers, reinsurers, supplementary open retirement funds and capitalization companies; and regulating insurance and reinsurance broker activities and profession.
SUSEP’s main roles include processing application requests of incorporation, organization and operations, and inspecting insurers, reinsurers, supplementary open retirement funds, and capitalization companies; issuing instructions and circular letters in connection with the regulation of insurance, reinsurance, supplementary open retirement funds and capitalization operations, in accordance with CNSP guidelines; setting forth the conditions of insurance plans to be used by the insurer market; approving limits for the operations of supervised companies; authorizing the use and release of assets and amounts given in guaranty for technical provisions and discretionary capital; inspecting and implementing the general accounting and statistical rules set forth by CNSP; inspecting the operations of supervised companies; and conducting the liquidation of supervised companies.
Self-Regulatory Entities
ANBIMA
ANBIMA is a private self-regulatory association of investment banks, asset managers, securities brokers and investment advisers, which, among other responsibilities, establishes rules as well as codes of best practices for the Brazilian capital market, including punitive measures in case of noncompliance with its rules.
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BSM
BSM supervises these markets and monitors operations, orders and trades executed in trading environments, supervises market participants and, if necessary, imposes penalties against those who infringe regulations.
Working in close collaboration with CVM and the Central Bank, BSM acts to ensure that institutions and their professionals comply with market regulations, by:
•conducting market surveillance — BSM monitors all orders and trades in B3’s markets in order to identify signs of irregularities;
•auditing — BSM audits all B3 participants to ensure their compliance with the regulations and to identify possible violations of market rules;
•imposing punitive processes and other enforcement actions — when violations of regulations occur, BSM adopts guidance, persuasion or disciplinary measures such as letters of recommendation, letters of censure or administrative sanctioning proceedings, in accordance with the severity of the violation that has been identified; in addition, BSM can, in connection with administrative sanctioning proceedings, apply penalties to or enter into Terms of Commitment (termo de compromisso) with the accused;
•providing compensation for loss — BSM analyzes and adjudicates complaints presented to the investor compensation mechanism (mecanismo de ressarcimento de prejuízos), or “MRP,” which awards damages of up to R$120,000 to investors harmed by a B3 participant’s inappropriate activity; and
•facilitating market development — BSM develops education initiatives, rule enhancements and institutional relationships with market participants, regulatory bodies and international organizations.
APIMEC
APIMEC is a private self-regulatory association authorized by CVM to perform the certification and self-regulation of securities analysts (both individuals and legal entities), establishing rules, procedures and best practices that must be followed by securities analysts, under penalty of punitive measures in case of noncompliance with its rules.
Other Rules
Adequacy of Capital and Limits of Exposure and Other Solvency Rules
The financial institutions are subject to an extensive set of rules issued by the CMN and the Central Bank related to capital amounts, exposure limits and other solvency rules that follow principles recommended by the Basel Committee, especially in view of the systemic risks associated with the relationship and activity of the financial institutions. As such, the CMN and the Central Bank sought to guarantee the solvency of the financial system and mitigate systemic risks.
With this aim, CMN Resolution No. 5,237 of September 1, 2025, as amended, or “CMN Resolution No. 5,237,” and CMN Resolution No. 5,008 established minimum capital and net equity requirements for various types of financial institutions. For example, the CMN set a minimum capital amount and net equity amount of R$1.5 million for brokerage firms providing firm guarantee of underwriting of securities, in the manner operated by XP CCTVM, and R$17.5 million for multi-purpose banks, such as Banco XP after all due approvals from the Central Bank.
In accordance with the Basel Committee principles, other relevant rules for financial institutions are CMN Resolution No. 4,955 of October 21, 2021, as amended, or “CMN Resolution No. 4,955,” and CMN Resolution No. 4,958, as amended, or “CMN Resolution No. 4,958,” which set out the methodology for calculating the reference capital and the ascertainment of the minimum requirements for the reference capital, the main capital and additional capital.
CMN Resolution No. 4,557 of February 23, 2017, as amended, or “CMN Resolution No. 4,557,” unifies and expands Brazilian regulation on risk and capital management for Brazilian financial institutions and other institutions authorized to operate by the Central Bank. The rule is also an effort to incorporate recommendations from the Basel Committee on Banking Supervision into Brazilian regulation. The rule states that risk management must be conducted through a unified effort by the relevant entity (i.e., not only must risks be analyzed on an individual basis, but financial institutions and other institutions authorized to operate by the Central Bank must also control and mitigate adverse effects caused by the interaction of different risks). It also strengthens the rules and requirements related to risk management governance and expanded on the competence requirements and duties of the risk management officer.
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The rule sets out different structures for risk and capital management, which are applicable for different risk profiles set out in the applicable regulation. Consequently, less sophisticated financial institutions can have a simpler risk management structure, while institutions with more complexity must follow stricter protocols.
Insurance companies are also subject to an extensive set of laws and regulations governing solvency, notably CNSP Resolution No. 432/2021, as amended, and Circular SUSEP No. 648/2021, as amended, which outline minimum regulatory capital parameters, prudential accounting adjustments, limitations on collateral assets supporting insurance reserves (ativos garantidores) and other related rules.
An insurance company’s minimum regulatory capital may vary from time to time in light of periodic risk-based calculations required by such regulations. Factors such as the risk profile of the insurance portfolio, credit risk of clients, general market-related risks and other indicators may result in the increase or decrease of regulatory capital over time, with corresponding effects of requiring additional capital or releasing capital, as the case may be. Insurance companies have limited control over the variation of such factors, and therefore may be required from time to time to make capital contributions exceeding their projections.
The aforementioned rules also contemplate the creation of various levels of internal and external controls overseeing solvency, such as auditing by independent actuaries, establishing internal audit committees for companies exceeding certain financial thresholds, limiting acceptable assets for purposes of covering insurance reserves and requiring monthly reporting to the insurance regulator, among other requirements.
Internal Compliance Procedures
All financial institutions shall maintain internal guidelines and procedures to control their financial, operational and managerial information systems and shall comply with all the applicable legislation. CMN Resolution No. 4,595 of August 28, 2017, states that Brazilian financial institutions and other institutions authorized to operate by the Central Bank shall implement and maintain a compliance policy compatible with the nature, size, complexity, structure, risk profile and business model of the institution.
According to CMN Resolution No. 4,968 of November 25, 2021, the executive officers of the financial institution are responsible for implementing an efficient structure of internal control, by defining responsibilities and control procedures and establishing corresponding objectives and procedures throughout all levels of the institution. The executive officers are also responsible for verifying compliance with all internal procedures. The internal audit department of a financial institution reports directly to the executive officers or directors of the institution, as applicable.
Laws on Insolvency of Financial Institutions in Brazil
Financial institutions are subject to the procedures set out by Law No. 6,024 of March 13, 1974, as amended, or “Law No. 6,024/74,” and Decree-Law No. 2,321 enacted on February 25, 1987, as amended, which set out the provisions applicable to intervention, temporary administration or extrajudicial liquidation by the Central Bank, as well as to bankruptcy proceedings.
Temporary Administration
As per the Decree-Law No. 2,321, the Central Bank may assume the temporary administration of a Brazilian financial institution in certain situations, determining the temporary special administration regime.
The Central Bank is the authority empowered to determine this sort of regime, which shall take place: (1) in case the financial institution (a) performs recurring practices against the economic and financial policies provided in federal law; (b) faces a shortage of assets; (c) fails to comply with the compulsory banking reserve rules; (d) has a reckless or fraudulent management; or (2) in case of the existence of any of the reasons for an intervention by the Central Bank, as provided for in Law No. 6,024/74.
The administration of the financial institution subject to this temporary administration will be carried out by a directive board named by the Central Bank, with ordinary management powers. The financial institution administrators and members of the board of auditors have their mandates immediately terminated. The directive board is expected to issue one or more reports to the Central Bank based on which the regulatory authority shall decide on the actions to be taken in relation to the financial institution.
The temporary administration regime ceases: (1) if the Federal Government takes control over the financial institution; (2) in case the financial institutions go through a corporate restructuring, merger, spin-off, amalgamation or transfer of its controlling interest; (3) in case of normalization of the situation of the finance institution, at Central Bank’s discretion; or (4) with the Central Bank decision for its extrajudicial liquidation.
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Intervention and Extrajudicial Liquidation
Intervention and extrajudicial liquidation occur when a financial institution is in a precarious financial condition or upon the occurrence of triggering events that may impact its creditors’ situation. Such measures are imposed by the Central Bank in order to avoid the entity’s bankruptcy.
Intervention
Law No. 6,024/74 granted the Central Bank the power to appoint a liquidator to intervene in the transactions or liquidate any financial institution other than public financial institutions controlled by the Federal Government. The intervention may be ordered at Central Bank’s discretion, if the following is verified:
•due to mismanagement, the financial institution has suffered losses exposing creditors to risk;
•the financial institution has consistently violated Brazilian banking laws or regulation; or
•such intervention constitutes a viable alternative to the liquidation of the financial institution.
Effective the date on which it is ordered, the intervention will automatically trigger the following: (1) suspension of the enforceability of payable obligations; (2) suspension of the maturity of previously contracted and imminently due obligations; and (3) the freezing of deposits already existing on the date of its determination. The intervention shall cease (a) if the interested parties, presenting the necessary guarantees, at the Central Bank’s discretion, undertake to continue the company’s economic activities; (b) at the Central Bank’s discretion, if the entity’s situation has been normalized; or (c) if extrajudicial liquidation or bankruptcy of the entity is ordered.
The intervention may also be ordered upon request of the management of the financial institution. Any intervention period may not exceed six months, and may be extended once, by up to six additional months, by the Central Bank. The intervention procedure shall terminate if the Central Bank determines that the factors that motivated the intervention have been eliminated or upon the presentation of adequate guarantees by interested parties. On the other hand, the Central Bank may order the extrajudicial liquidation of the institution or authorize the intervener to request the bankruptcy thereof. According to Law No. 6,024/74, the intervention may be converted in a bankruptcy proceeding, currently governed by Law No. 11,101 of February 9, 2005 (which is the Law governing the Bankruptcy and Receivership of Companies, referred hereinafter as the “LFRJE”), if, among others, the assets of the institution under intervention are not enough to cover at least 50% of the amount of its outstanding unsecured credit.
Extrajudicial Liquidation
In accordance with Law No. 6,024/74, extrajudicial liquidation is an administrative procedure ordered by the Central Bank (not applicable to the financial institutions controlled by the federal government) being enforced by a liquidator appointed by the Central Bank.
This measure aims to terminate the activities of a troubled financial institution, removing it from the Brazilian national financial system, liquidating its assets and paying its liabilities, as in an extrajudicially decreed bankruptcy.
The Central Bank will order the extrajudicial liquidation of the financial institution if:
•the economic or financial situation of the institution is at risk, particularly when the institution fails to comply with its obligations in a timely manner, or upon occurrence of an event that indicates a state of insolvency according to LFRJE’s rules;
•management seriously violates the banking laws, rules or regulation;
•the institution suffers a loss that subjects its unprivileged and unsecured creditors to severe risk; or
•upon revocation of the authorization to operate, the institution fails to initiate, within 90 days, its ordinary liquidation, or, if initiated, the Central Bank verifies that the pace of the liquidation may harm the institution’s creditor.
Extrajudicial liquidation may also be ordered upon the request of a financial institution’s management, if its bylaws entitle it to do so or upon request by the intervener, with an indication of the causes of the request.
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The decree of extrajudicial liquidation shall trigger the following: (1) suspend the actions or foreclose on rights and interests relating to the collection of the entity being liquidated, so that no other actions or executions may be brought during the liquidation; (2) accelerate the obligations of the entity being liquidated; (3) stall the statute of limitations with respect to the obligations assumed by the institution; (4) trigger the penal clauses provided in unilateral agreements that became due by virtue of the extrajudicial liquidation; (5) ratably deduct interest, against the estate, until the date when the debts are paid in full; and (6) preclude claims for monetary correction of any passive currencies or pecuniary penalties for infringement of criminal or administrative laws.
Extrajudicial liquidation procedures may be terminated (1) if the financial institution is declared bankrupt or (2) by decision of the Central Bank upon the following events: (a) full payment of the unsecured creditors; (b) change of corporate purpose of the institution to an economic activity that is not part of the CMN; (c) transfer of the controlling interest of the financial institution; (d) conversion into ordinary liquidation; (e) 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 (f) acknowledgement by the Central Bank that the remaining assets are illiquid or of difficult disposal.
Repayment of Creditors in an Extrajudicial Liquidation or Bankruptcy
In November 1995, the CMN created the Credits Guarantee Fund, or the “FGC,” according to CMN Resolution No. 2,197, of August 31, 1995, amended and superseded by CMN Resolution No. 4,222, of May 23, 2013, in order to guarantee the payment of funds deposited with financial institutions in the event of intervention, extrajudicial liquidation, bankruptcy or other states of insolvency. The FGC is mainly funded by mandatory contributions from all Brazilian financial institutions that work with customer deposits.
The FGC is a deposit insurance system that guarantees, pursuant to CMN Resolution No. 4,688 of September 25, 2018, as amended, a maximum amount of R$250,000 of deposit and certain credit instruments held by a customer against a financial institution (or against member financial institutions of the same financial group) and a maximum amount of R$1.0 million per creditor against the set of all consolidated financial institutions every 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 customer 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.
In addition, Law No. 9,069, enacted in 1995, sets forth that compulsory deposits maintained by financial institutions with the Central Bank are immune to actions by a bank’s general creditors for the repayment of debts.
Transactions with Affiliates
The Banking Law (paragraph 4, article 34), as amended by Law No. 13,506 of November 13, 2017, or “Law No. 13,506,” prohibits financial institutions from conducting credit transactions with related parties, except in certain specific circumstances as provided below. Pursuant to CMN Resolution No. 4,693 of October 29, 2018, the following persons are considered related parties of a financial institution for the purpose of such restriction:
•its controlling shareholders (individuals or legal entities), pursuant to Article 116 of Law No. 6,404/76;
•its officers and members of statutory or contractual bodies;
•spouses, partners and blood relatives up to the second degree of individuals specified in items (a) and (b);
•its individual shareholders with stakes equal to or greater than 15% in its capital, or Qualified Equity Interest; and
•its legal entities:
▪with Qualified Equity Interest in the financial institutions’ capital stock;
▪in which capital, directly or indirectly, the financial institution holds Qualified Equity Interest;
▪in which the financial institution holds effective operational control or relevance in the deliberations, regardless of the equity interest held; and
▪with a common officer or board member in relation to the financial institution.
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The following credit transactions with related parties are exempt from the prohibition referred to above: (1) transactions carried out under market-compatible conditions, without additional benefits or privileges when compared to transactions granted to other clients of the same profile of the respective institutions; (2) transactions with companies controlled by the Federal Government, in the case of federal public financial institutions; (3) credit transactions whose counterparty is a financial institution that is part of the same prudential conglomerate, provided that they contain a contractual subordination clause, subject to the provisions of item V of art. 10 of the Banking Law, in the case of banking financial institutions; (4) interbank deposits; (5) obligations assumed between related parties as a result of liability imposed on clearinghouse participants or providers of clearing and settlement services authorized by the Central Bank or by the CVM; and (6) other cases authorized by CMN Resolution No. 4,693.
According to CMN Resolution No. 4,693, as of April 1, 2019, all financial institutions must adopt internal policies regulating transactions with related parties.
Law No. 7,492 enacted on June 16, 1986, which regulates crimes against the Brazilian financial system, criminalized the extension of credit by a financial institution to certain related parties mentioned in the Banking Law, which are any of its controlling individuals or entities, directors or officers, members of statutory or contractual bodies and certain of their family individual members or legal entities with a qualified interest in the financial institution, as well as any legal entity with qualified interest in the financial institution or in which the financial institution has a qualified interest, either direct or indirect, under common effective control or with common officers or directors.
Punitive Sanctions
Legal violations under Brazilian banking and/or securities laws may lead to administrative, civil and criminal liability. Offenders may be prosecuted under all three legal theories separately, before different courts and regulatory authorities, and face different sanctions with respect to the same legal offense.
Law No. 13,506, Central Bank Resolution No. 131 of August 20, 2021 and CVM Resolution No. 45 of August 31, 2021, as amended, regulate administrative sanctioning proceedings as well as the various penalties, consent orders, injunctive measures, fines and administrative settlements imposed by the Central Bank and the CVM.
Law No. 13,506 is noteworthy, as it:
•sets fines imposed by the Central Bank of up to R$2 billion or 0.5% of the entity’s revenue, arising from services and financial products provided in the year prior to the violation;
•limits fines imposed by the CVM to the greater of the following amounts: R$50 million, twice the value of the irregular transaction, three times the amount of the economic gain improperly obtained or loss improperly avoided, or twice the damage caused by the irregular conduct. Repeat offenders may be subject to treble the amounts above;
•provides for the suspension, disqualification and prohibition from engaging in certain activities or transactions in the banking or securities market for a period of up to twenty years;
•temporarily bans offending individuals from serving in any managerial capacity for financial institutions;
•imposes coercive or precautionary fines of up to R$100,000 per day, subject to a maximum period of 30 days in punitive fines;
•defines the scope of the Central Bank’s regulatory authority;
•prohibits the offending institutions themselves from participating in the markets;
•provides for a penalty of “public admonition” in place of “warning,” imposed by the Central Bank;
•empowers the Central Bank to enter into cease-and-desist commitments;
•empowers the Central Bank and the CVM to enter into administrative agreements;
•provides the CVM with the authority to ban the accused from contracting with official Brazilian financial institutions and participating in public bidding processes for a period of up to five years; and
•redefines related-party transactions.
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Penalties may be aggregated, and are calculated based on the following factors:
•gains obtained or attempted to be gained by the offender;
•economic capability to comply;
•severity of the offense;
•actual losses;
•any recurrence of the offense; and
•the offender’s cooperativeness with the investigation.
Law No. 7,492 provides a legal framework to hold controlling shareholders, officers and managers of a financial institution criminally liable. The regime under Law No. 7,492 also covers interventionists, liquidators and real estate managers, in the context of interventions, extrajudicial liquidation or bankruptcy, respectively. Those found criminally liable under Law No. 7,492 will be subject to detention and/or pecuniary fines.
Law No. 6,385 also imposes imprisonment and/or fines for banking or securities infractions. For example, those liable for market manipulation and insider trading are subject to sentences of up to eight and five years, respectively, plus fines of up to three times the illicit benefit gained.
Regulation Against Money Laundering and Bank Secrecy in Brazil
Law No. 9,613 of March 3, 1998, as amended by Law No. 12,683 of July 9, 2012, or the “Anti-Money Laundering Law,” and Law No. 13,506 of November 13, 2017 (related to administrative procedures and enforcement conducted by CVM and the Central Bank) play a major regulatory role in the oversight of banking and financial and insurance activities in Brazil. The Anti-Money Laundering Law sets forth the rules and the penalties to be imposed upon persons engaging in activities that constitute “laundering” or the concealing of property, cash or assets acquired or resulting from any kind of criminal activity. Such regulation further prohibits individuals from using the financial system for the aforementioned illicit acts.
Pursuant to the Anti-Money Laundering Law, banks (such as Banco XP), securities brokers (such as XP CCTVM), securities distributors, asset managers (such as XP Gestão, XP Advisory and XP Vista), leasing companies, credit card companies, insurance companies and insurance brokers (such as XP VP and XP CS, respectively), among others, must: (1) identify and maintain up-to-date records of their clients, for a period of at least five years; (2) keep up-to-date records of all transactions, for a period of at least five years, in Brazilian and foreign currencies, involving securities, bonds, credit, financial instruments, metals or any asset that if converted into cash exceed the amount set forth by the competent authorities, and which shall be in accordance with the instruction issued by these authorities; (3) keep up-to-date records of all transactions, for a period of at least five years, in Brazilian and foreign currency, involving securities, bonds, credit, instruments, metals, or any asset that if converted into cash exceeds the applicable minimum amount set forth by the relevant authorities, such transactions must be in accordance with guidance on amount, timing and counterparties from the relevant authorities; (4) adopt AML internal control policies and procedures that are compatible with the size of the company; (5) register and maintain up-to-date records with the appropriate regulatory agency (i.e., the Brazilian Financial Intelligence Unit (Unidade de Inteligência Finceira), or “UIF,” CVM and/or SUSEP); (6) comply with UIF’s requests and obligations; (7) pay special attention to any transaction that, in light of the provisions set forth by competent authorities, may indicate the existence of a money laundering crime; (8) report all transactions referred to in items 2, 3 and 7 to UIF within twenty-four hours, while abstaining from notifying their customers of such report; and (9) confirm to the applicable regulatory agency (i.e., UIF, CVM and/or SUSEP) that no offending transactions have occurred.
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In accordance with Circular No. 3,978 enacted by the Central Bank on January 23, 2020, as amended, or “Central Bank Circular No. 3,978,” financial institutions are required to (1) maintain updated client registration data (including declarations regarding the purposes and nature of the transactions and verification of the of clients’ statuses as politically prominent persons); (2) adopt preventative internal policies and procedures; (3) record transactions involving amounts in national or foreign currencies, securities, metals or any other assets that may be converted to cash, including specific records for the issuance or reloading of amounts in the form of prepaid cards; (4) maintain records of all financial services provided and all financial transactions carried out with clients or on their behalf as well as consolidated information that allows for verification of the flow of funds, the economic activity and financial capacity of the client, the origin of funds and end beneficiaries of the transactions; (5) maintain records of transactions carried out by individuals or legal entities that involve the same groups of companies, in an amount greater than R$10,000.00 over the course of a calendar month or transactions that reveal patterns of activity that indicate a scheme to prevent identification; (6) review transactions or proposals that may indicate criminal activities; (7) maintain records of all transfers of funds related to (a) deposits, electronic transfers, checks, among others, and (b) issuance of checks, payment orders, among others, in amounts greater than R$1,000.00; (8) maintain records of issuances or loading of credit cards that allow the identification of transactions in amounts greater than R$100,000.00 or which reveal patterns of activity that indicate a scheme to prevent identification; (9) maintain records of transaction activities in amounts greater than R$100,000.00 in cash or which reveal patterns of activity that indicate a scheme to prevent identification; and (10) notify the relevant authority of any transaction that may be deemed suspicious by the financial institution.
SUSEP Circular No. 612/2020, as amended, or “SUSEP Circular No. 612/2020” imposes similar internal controls and monitoring requirements upon insurance and capitalization companies, complementary retirement companies, (entidades abertas de previdência complementar), cooperative companies (sociedades cooperativas), including those authorized to provide reinsurance services, in particular: (1) the monitoring of transactions involving politically prominent persons, terrorism and money laundering; (2) the prevention, monitoring and detection of suspicious transactions; (3) the registration of transactions with clients and beneficiaries, third parties and related parties; and (4) the validation of compliance mechanisms by internal auditing. Companies subject to this regulation are also required to appoint one of their Officers as head of compliance and register such individual in accordance with the Anti-Money Laundering Law and SUSEP Circular No. 612/2020.
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Along the same lines, CVM Resolution No. 50 of August 31, 2021, as amended, or “CVM Resolution No. 50,” which entered into force on October 1, 2021, establishes, among other obligations, that persons who engage in, on a permanent or occasional basis, as a main or ancillary activity, cumulatively or not, the custody, issuance, distribution, settlement, trade, intermediation, consultancy or management of bonds or securities, and independent audit within the scope of the stock exchange market must adopt rules, procedures and internal controls in accordance with previously and expressly established procedures to confirm the registration information of its clients, keep such information updated and monitor the transactions carried out thereby, so as to prevent the use of the account by third parties and identify the end beneficiaries of the transactions, such entities shall also identify and closely monitor the business relations maintained with politically exposed person. Under CVM Resolution No. 50, the following should be monitored: (1) situations in which (a) it is not possible to maintain current their client registration information, (b) it is not possible to identify the ultimate beneficial owner of a transaction and/or (c) independent auditors are unable to undertake the verifications required by article 19 of CVM Instruction No. 50; (2) transactions in amounts incompatible with the transacting parties’ professional occupation, income, and/or equity/financial position (applicable to natural person); (3) transactions incompatible with the transacting parties’ economic activity, corporate purpose or income, when compared with the operational pattern adopted by clients with the same profile (applicable to legal entities); (4) repeated transactions between the same parties, through which one or all of the parties involved has registered consistent gains or losses; (5) transactions indicating a material discrepancy between the volume and/or frequency of the business of the parties involved; (6) transactions that may involve identity deception of the parties involved and/or their beneficiaries; (7) transactions that may indicate insubordinate acts committed by agents against their principals; (8) transactions reflecting a sudden and objectively unjustified change in the operations of the persons involved; (9) transactions reflecting a complexity and risk profile incompatible with the investment profile (suitability) of the client or its agent and/or the clients’ size and corporate purpose; (10) transactions carried out with the purpose of generating loss or gain for which there is no objective economic basis; (11) private transfers, without apparent reason, of funds and securities; (12) deposits or transfers made by third parties in order to settle client transactions or in order to provide collateral in transactions in future settlement markets; (13) payments made to third parties, in any form, by means of settlement of transactions or redemption of amounts deposited as collateral, registered in the client’s name; (14) transactions made with off-market prices; (15) transactions and situations related to people with suspicions to be involved with terrorist acts; (16) transactions with the participation of individuals residing, or entities organized, in countries that either do not follow or insufficiently follow the recommendations from the Financial Action Group against Money Laundering and Terrorism Financing – GAFI, or in countries with favorable taxation and subject to privileged tax regimes, pursuant to the regulation issued by the Brazilian Federal Revenue; (17) transactions settled in cash, if and where permitted; (18) transactions with individuals considered to be Politically Exposed Persons; (19) the business relationship maintained with Politically Exposed Persons, non-resident investors (especially when incorporated as trusts) and private banking; (20) the proposals of new relationships and operations with Politically Exposed Persons, including those from countries with which Brazil has a large volume of financial and commercial transactions, common borders or ethnic, linguistic or political proximity; (21) clients that have become, since the beginning of the relationship with the institution or have already initially been considered to be Politically Exposed Persons, and apply the treatment of items (18) and (19) above; and (22) the origin of the resources involved in the transactions of clients and beneficiaries identified as Politically Exposed Persons.
On March 3, 1998, the Federal Government created the Council of Control of Financial Activities, or the “COAF,” that was reviewed and changed in 2019 and in 2020. Pursuant to Federal Law No. 13,974/2020, as amended, COAF was transformed into the Brazilian Financial Intelligence Unit (Unidade de Inteligência Finceira), or “UIF.” UIF’s purpose is to verify, examine, identify and apply administrative penalties to any suspicious or unlawful activities related to money laundering in Brazil, without prejudice to the jurisdiction of other bodies and entities, as well as report suspicious activities to the prosecutors and the police. UIF’s full commission is composed of a president appointed by the President of the Central Bank and by a representative of each one of the following bodies and entities: (1) the Central Bank; (2) the CVM; (3) the Ministry of Foreign Relations; (4) SUSEP; (5) the Federal Revenue Office; (6) the Federal Police Department; (7) the Brazilian Intelligence Agency; (8) the Comptroller General; and (9) the National Treasury Attorney-General’s Office. The term of office for each member is three years, with the option of reelection.
The financial institutions shall inform UIF (necessarily without informing its client) of certain transactions that present the characteristics established in the Central Bank Circular No. 3.978, CVM Resolution No. 50 and Circular SUSEP No. 612/2020, under the suspicion of money laundering.
The same obligation is imposed upon asset managers (such as XP Gestão, XP Advisory, XP PE Gestão de Recursos Ltda., XP Vista and XP Allocation Asset Management Ltda.) and insurance companies and insurance brokers (such as XP CS and XP VP).
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Bank Secrecy
Brazilian financial institutions, by virtue of Supplementary Law No. 105 of January 10, 2001, are also subject to strict secrecy rules on transactions, and are required to preserve the confidential nature of their assets and liabilities transactions and of the services provided to their clients. The only circumstances under which the information regarding clients, services or transactions of the financial institutions may be disclosed to third parties are as follows: (1) disclosure of confidential information with the express consent of the interested parties; (2) exchange of information between financial institutions for data registration purposes, including through risk assessment centers, subject to the rules issued by the CMN and the Central Bank; (3) the supply, to credit protection entities, of information included in the register of issuers of rubber checks and debtors, subject to the rules issued by the CMN and the Central Bank; (4) disclosure of the occurrence or suspicion of unlawful criminal or administrative acts, among others; (5) reporting of information addressed by article 11, paragraph 2 of Law No. 9,311 of October 24, 1996; (6) reporting of information in accordance with the conditions foreseen in articles 2, 3, 4, 5, 6, 7 and 9 of Supplementary Law No. 105 of January 10, 2001; and (7) reporting of financial and payment data related to credit operations and completed or ongoing payment obligations from individuals or legal entities to database administrators for the purpose of credit history formation.
Politically Exposed Persons
Pursuant to Central Bank Circular No. 3,978, SUSEP Circular No. 612/2020 and CVM Instruction No. 50, those financial institutions and other institutions authorized to operate by the Central Bank, SUSEP and CVM are required to obtain sufficient information from their clients to identify any Politically Exposed Persons from their client base and monitor their transactions accordingly.
Central Bank Circular No. 3,978, SUSEP Circular No. 612/2020 and CVM Instruction No. 50 define Politically Exposed Persons as any government agent who, in the last five years, has held or is holding, in Brazil or in foreign territories relevant government positions, jobs or public office, as well as their representatives, family members and other closely related persons.
Central Bank Circular No. 3,978, SUSEP Circular No. 612/2020 and CVM Instruction No. 50 establish that the internal procedures developed and implemented by the financial institutions subject to such regulation must be structured to enable the identification of Politically Exposed Persons and the origin of the funds for such clients’ transactions.
Internal Auditors
On December 23, 2020, the CMN issued Resolution No. 4,879 establishing the rules governing internal audits at financial institutions and others authorized to operate by the Central Bank. Pursuant to the resolution, financial institutions and others authorized to operate by the 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 the responsibility of a discrete unit in the institution or institutions that are part of its financial conglomerate, directly subordinated to the board of directors or by an independent auditor, provided that such independent auditor is not in charge of the institution’s financial statements or any other activity that may create a conflict of interest.
Independent Auditors in Brazil
Pursuant to CMN Resolution No. 4,910 of May 27, 2021 as amended, or “CMN Resolution No. 4,910,” all financial institutions must be audited by independent auditors. The financial institutions may only hire independent auditors registered with the CVM and certified as experts in banking analysis by the Central Bank. After such auditors have issued opinions auditing the financial statement of a certain financial institution for up to five consecutive fiscal years, the Auditor’s team, including managers, supervisors or any members with managerial positions, must be replaced.
Similarly, pursuant to CVM Resolution No. 23 of February 25, 2021, if the audited company has a permanent audit committee, the term limit of five consecutive years provided above may be increased to ten years.
The independent auditors and the audit committee, if applicable, must notify the Central Bank, within three business days, of the existence or evidence of error or fraud, such as:
•lack of compliance with rules and regulations, which could affect the business of the audited entity;
•fraud of any amount conducted by the management of the institution;
•relevant fraud conducted by employees of the institution or of third parties; and
•relevant errors in the accounting records of the audited entity.
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Audit Committee
CMN Resolution No. 4,910 requires financial institutions and other institutions authorized by the Central Bank to operate in Brazil, as well as for clearinghouses and clearance and custody service providers that (1) present reference equity equal to, or greater than, R$1 billion; (2) manage third-party funds in amounts equal to, or greater than, R$1 billion; or (3) have deposits and funds under management in a total amount equal to, or greater than, R$5 billion, to maintain an audit committee (comitê de auditoria).
The Brazilian legislation, in certain circumstances, allows the creation of a single audit committee for the financial operating companies (such as XP CCTVM, Banco XP, XP DTVM and XP Serviços Financeiros DTVM) of an economic group.
Ombudsman
Pursuant to CMN Resolution No. 4,860 of October 23, 2020, financial institutions (such as XP CCTVM and Banco XP) and other entities authorized to operate by the Central Bank are required to create an Ombudsman to establish an independent communication channel between the institutions and their clients, while observing strict compliance with consumer protection legislation and seeking improvement and enhancement of products, consumer services and other services. The Ombudsman shall be the responsibility of an appointed officer (who can also be the ombudsman himself, however, such person shall not be in charge of any other activity in the financial institution) and shall be compatible with the activities of the institution, as well as the complexity of its operations. Those institutions that are part of a financial conglomerate shall be authorized to implement a single Ombudsman to assist the entire conglomerate.
The following are the ombudsman department’s responsibilities: (1) receiving, recording, instructing, analyzing and providing formal and adequate attention to claims from clients and users of products and services of financial institutions; (2) providing clarification 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; (4) keeping the board of directors or, if one does not exist, the financial institution’s board of executive officers, informed of the problems and shortcomings detected in the performance of its duties and the results of the actions taken by the financial institution’s officers to resolve them; and (5) preparing and sending to the internal audit department, to the audit committee (if one exists), and to the board of directors (or if one does not exist, to the board of executive officers of the financial institution), at the end of each fiscal semester, a quantitative and qualitative report on the ombudsman department’s activities and its performance.
The financial institutions must report and keep up-to-date information on the officer in charge of the Ombudsman. Such officer shall prepare a semiannual report (on June 30 and December 31 of each year) and whenever a material event is determined, in accordance with the Central Bank’s instructions. 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 be responsible for all financial institutions that are part of the same group. Any financial institution carrying out leasing transactions, however, shall create its own segregated ombudsman structure.
Insurance companies (such as XP VP) are likewise required by local insurance regulations (CNSP Resolution No. 445/2022) to have an Ombudsman with a substantially similar purpose and responsibilities as those described above.
Whistleblowing/Hotline
Pursuant to CMN Resolution No. 4,859 of October 23, 2020, financial institutions (such as XP CCTVM and Banco XP) are required to have a whistleblower hotline (canal de denúncias), through which their employees, clients, contractors and/or suppliers may anonymously report situations involving potential illicit activities of any nature related to the financial institution. Accordingly, financial institutions are required to appoint a responsible department for forwarding all reported events to the appropriate departments for further handling. This department is also required to prepare reports semiannually detailing, at minimum, the following information relating to each reported event: (1) number of reported events and their nature; (2) the relevant departments that handled them; and (3) the average time frame and relevant measures adopted to solve them. Such reports must be (a) approved by the board of directors of the financial institution or, absent the board of directors, by its officers; and (b) made available to the Central Bank for at least five years.
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Foreign Investment in National Financial Institutions
In accordance with Article 192 of the Constitution, Article 52, II, of the Brazilian Transitory Constitutional Rulings enacted in 1988, or “ADCT,” foreign investors (regardless of being an individual or entity and irrespective of their nationality) are prevented from controlling, acquiring or increasing equity interest held in a Brazilian financial institution, directly or indirectly, unless there is a bilateral international treaty or such foreign acquisition or increase is in the interest of the Brazilian government. Until September 26, 2019, the interest of the Brazilian government for such foreign acquisition of voting or nonvoting equity interest in financial institutions was determined by specific Presidential Decree. On September 26, 2019, the Brazilian president enacted Decree No. 10,029, transferring to the Central Bank the authority to approve foreign investments in Brazilian financial institutions, eliminating the necessity of specific presidential decree on a case-by-case basis. Decree 10,029 was regulated by Circular No. 3,977 of January 22, 2020, providing that the acquisition of voting or nonvoting equity interest in a Brazilian financial institution by foreign investors, held directly or indirectly, will depend only on the Central Bank’s prior approval. On November 13, 2019, the Central Bank authorized direct or indirect foreign investments in XP CCTVM and Banco XP of up to 100% of their respective capital stock.
Furthermore, a Presidential Decree of December 9, 1996, declared that it is in the interest of the Brazilian government to allow foreign investors to acquire non-voting shares issued by Brazilian financial institutions that are traded on a stock exchange. Such Decree is generally applicable to all Brazilian financial institutions.
Corporate Interest Held by Financial Institutions in Nonfinancial Companies
Pursuant to CMN Resolution No. 5,043 of November 25, 2022, as amended, or “CMN Resolution No. 5,043,” financial institutions may only directly or indirectly hold equity in legal entities (incorporated locally or abroad) that supplement or subsidize the financial institutions’ activities, provided that they obtain prior authorization from the Central Bank and that the invested entity does not hold, directly or indirectly, equity of the referred financial institution. However, this requirement for authorization does not apply to (1) equity interests typically held in the investment portfolios of investment banks, development banks, development agencies (agências de fomento) and multiservice banks with investment or development portfolios; and (2) temporary equity interests not registered as permanent assets and not subject to consolidation of the financial institution.
Regulation of Branches and Subsidiaries
As provided by CMN Resolution No. 5,043, Central Bank authorization is required for operations of foreign branches or subsidiaries of Brazilian financial institutions, including compliance with the following rules: (1) the institution must be in compliance with operational limits and minimum capital and equity requirements currently in force; (2) the entity must carry out complementary or subsidiary activities to those of the institution holding the equity interest; (3) consistency with the institution´s operating strategy.
In addition, the Central Bank will only grant such authorization if it has access to information, data and documents relating to the operations and accounting records of such subsidiary financial institutions abroad. In addition, the failure by a Brazilian bank to comply with the requirements of CMN Resolution No. 5,043 would cause the deduction of a designated percentage of the assets of such branch or subsidiary from the net worth of such bank for the purpose of calculating such bank’s compliance with the capital adequacy requirements of the Central Bank, on top of the other penalties imposed pursuant to the applicable regulation, including the cancellation of the Central Bank’s authorization.
CMN Resolution No. 4,970 sets forth the Central Bank requirements and procedures for approving the establishment, authorization to operate, cancellation of authorization, changes of control and corporate reorganizations of Brazilian financial institutions. Such resolution further requires the Central Bank’s approval for the election and confirmation of directors, executive officers and members of the audit committee as set forth in the company’s bylaws.
In addition, under the terms of CMN Resolution No. 5,043, the Central Bank’s prior authorization is also required in order for Brazilian financial institutions to: (1) acquire equity interests, directly or indirectly, in any entity incorporated in Brazil or abroad; (2) increase equity interests, directly or indirectly, in subsidiaries abroad; and/or (3) establish a branch abroad.
Legislation Applicable to Insurance Brokerage Firms in Brazil
XP VP is a Brazil-based insurance company formed in 2018 and licensed by SUSEP to operate in the life and private retirement lines, focusing primarily on the distribution of its products to individuals through XP’s proprietary digital platform. As a local insurer, XP Seguros is subject to the insurance laws and regulation generally applicable to life and private retirement carriers in Brazil.
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XP CS is an insurance brokerage company focused on life and retirement insurance brokerage, duly licensed by SUSEP to operate in the insurance market as per SUSEP Circular Letter No. 510 of January 22, 2015, and registered with SUSEP under No. 10,0628468. Therefore, it is subject to the applicable legislation and regulation applicable to insurance brokers.
Insurance companies such as XP Seguros and XP VP are required to be duly licensed by SUSEP in order to operate in any given insurance field and are subject to the local legal and regulatory framework governing their operations, governance, solvency, products, accounting, actuarial standards and other technical aspects of their business. By engaging in the insurance business, XP Seguros is subject to a number of regulatory risks, such as (1) changes in solvency and minimum capital regulation, which could result in the need for increased capital to cover new solvency requirements and/or in the divestment of certain classes of assets; (2) changes in product regulation, which could materially alter the way in which the company’s products are created, sold or operated in general; (3) intervention and/or liquidation proceedings by SUSEP in the event of solvency-sensitive scenarios, which could lead to material deviations or interruptions to the company’s ordinary course of business and/or regulatory sanctions upon the company and its management; and (4) incurrence of fines and other penalties (such as temporary suspension of activities or license cancellation) imposed by SUSEP for perceived breaches of applicable regulation, among others.
Insurance brokerage firms such as XP CS must obtain SUSEP registration and authorization for their operations, pursuant to the rules in force and in accordance with Law No. 4,594 of December 29, 1964, as amended, or “Law No. 4,594/64” and Decree-Law No. 73/66. The insurance broker, whether an individual or legal entity, is the intermediary legally authorized to solicit and promote insurance contracts accepted by the current legislation, between the insurance companies and individuals or public or private legal entities. Only duly qualified insurance brokers pursuant to Law No. 4,594/64 that have signed the insurance proposal shall be paid the brokerage fees related to each insurance modality, based on the respective tariffs, including in case of adjustment to the issued premium.
It is not mandatory that an insurance brokerage company sells its insurance through intermediation. Such companies may seek clients directly. However, when a direct sale of insurance occurs, a fee must be paid to FUNENSEG. The Brazilian legislation does not establish a minimum brokerage fee in such cases.
Under the applicable regulation, insurance brokerage companies, such as XP CS, are obligated to prove technical certification of all their employees and workers who directly participate in the regulation and settlement of insurance claims, customer service and direct sales of insurance, capitalization and open supplementary retirement products. Such certification shall be provided by an institution of recognized technical capacity, duly accredited by SUSEP.
Insured persons and insurance firms can pursue civil action against insurance brokers for losses incurred as a result of intentional malfeasance or negligence caused by brokerage activity. In case of noncompliance with the regulatory rules, in addition to the legal sanctions, insurance brokers and managers are subject to fines, temporary suspension from the exercise of the profession or registration cancellation.
Regulation Applicable to the Controlled Companies Outside Brazil
XP Investments – United States of America
XP Investments is registered as a securities broker-dealer with the SEC and in thirty U.S. states and territories, and is a member of FINRA, a self-regulatory organization, or “SRO,” subject to SEC oversight. Consequently, XP Investments and its personnel are subject to extensive requirements under the Exchange Act, state securities laws and SEC and FINRA rules, including requirements relating to, among other things, sales and trading practices, recordkeeping, anti-money laundering, financial and other reporting, supervision, misuse of material nonpublic information and the conduct and qualifications of certain personnel. SEC-registered broker-dealers are also subject to capital requirements, which mandate that they maintain minimum levels of capital, or “net capital,” and effectively require that a significant portion of a broker-dealer’s assets be kept in relatively liquid form. SEC and FINRA rules also require notification when a broker-dealer’s net capital falls below certain predefined criteria, limit the ratio of subordinated debt to equity in a broker-dealer’s regulatory capital composition and constrain the ability of a broker-dealer to expand its business or distribute capital under certain circumstances.
XP Investments is also registered with the CFTC as a swap dealer, an introducing broker and is a member of the NFA, an SRO that regulates certain CFTC-registrants. CFTC-registered introducing brokers are subject to expansive requirements under the Commodity Exchange Act and CFTC and NFA rules, including requirements relating to, among other things, sales practices, regulatory capital, anti-money laundering, financial reporting, supervision and recordkeeping.
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The violation of laws, rules or regulation that govern the activities of an SEC-registered broker-dealer or CFTC-registered introducing broker could result in administrative or court proceedings, censures, fines, penalties, disgorgement, suspension or expulsion from a certain jurisdiction, SRO or market, the revocation or limitation of licenses, the issuance of cease-and-desist orders or injunctions or the suspension or disqualification of the entity and/or its officers, employees or other associated persons.
C. Organizational Structure
We are a Cayman Islands exempted company incorporated with limited liability on August 29, 2019 for purposes of effectuating our initial public offering. At the time of our incorporation, XP Controle (the predecessor-in-interest to XP Control), Itaú Unibanco (the predecessor-in-interest to ITB Holding and Itaú Unibanco Holding), G.A. Brasil IV Fundo de Investimento em Participações (the predecessor-in-interest to GA Bermuda) and DYNA III held 2,036,988,542 shares (prior to giving effect to the Share Split) of XP Brazil, which were all of the shares of XP Brazil, our Brazilian principal non-operating holding company at the time.
The table below is a list of our subsidiaries, joint ventures and associated companies:
% of Group’s interest (i)
Entity name Country of incorporation Principal activities 2025 2024 2023
Directly controlled
XPAC Sponsor LLC Cayman Special Purpose Acquisition (SPAC) Sponsor 100.00 % 100.00 % 100.00 %
XProject LTD Cayman Holding 100.00 % 100.00 % 100.00 %
XP Holding International LLC USA International financial holding 100.00 % 100.00 % 100.00 %
XP Advisory US USA Investment advisor 100.00 % 100.00 % 100.00 %
XP Holding UK Ltd UK International financial holding 100.00 % 100.00 % 100.00 %
XP Finance Holding S.A. (vi) Brazil Financial holding 100.00 % 100.00 % 100.00 %
Indirectly controlled
XP Investimentos S.A. Brazil Holding 100.00 % 100.00 % 100.00 %
XP Investimentos Corretora de Câmbio, Títulos e Valores Mobiliários S.A. Brazil Broker-dealer 100.00 % 100.00 % 100.00 %
XP Vida e Previdência S.A. (ii) Brazil Retirement plans and insurance 100.00 % 100.00 % 100.00 %
Banco XP S.A. Brazil Multipurpose bank 100.00 % 100.00 % 100.00 %
XPE Infomoney Educação Assessoria Empresarial e Participações Ltda. Brazil Digital content services 100.00 % 100.00 % 100.00 %
Tecfinance Informática e Projetos de Sistemas Ltda. Brazil Rendering of IT services 99.70 % 99.70 % 99.70 %
XP Corretora de Seguros Ltda. Brazil Insurance broker 99.99 % 99.99 % 99.99 %
XP Gestão de Recursos Ltda. Brazil Asset management 95.76 % 95.80 % 95.50 %
XP Finanças Assessoria Financeira Ltda. Brazil Investment consulting services 99.99 % 99.99 % 99.99 %
Infostocks Informações e Sistemas Ltda. Brazil Mediation of information systems 100.00 % 100.00 % 100.00 %
XP Advisory Gestão Recursos Ltda. Brazil Asset management 95.55 % 99.53 % 99.53 %
XP Vista Asset Management Ltda. Brazil Asset management 99.99 % 99.99 % 99.99 %
XP Controle 4 Participações S.A. Brazil Insurance holding 100.00 % 100.00 % 100.00 %
XP Investments UK LLP UK Inter-dealer broker and Organized Trading Facility (OTF) 100.00 % 100.00 % 100.00 %
XP Private Holding UK Ltd UK Investment Advisor — % 100.00 % 100.00 %
XP Investments US, LLC US Broker-dealer 100.00 % 100.00 % 100.00 %
XP PE Gestão de Recursos Ltda. Brazil Asset management 98.00 % 97.90 % 98.10 %
XP Allocation Asset Management Ltda. Brazil Asset management 99.96 % 99.97 % 99.97 %
XP Eventos Ltda. Brazil Media and events 100.00 % 100.00 % 100.00 %
DM10 Corretora de Seguros Ltda. Brazil Insurance broker — % — % 100.00 %
XP Comercializadora de Energia Ltda. Brazil Energy trading 100.00 % 100.00 % 100.00 %
XP Distribuidora de Títulos e Valores Mobiliários Brazil Securities dealer 100.00 % 100.00 % 100.00 %
Instituto de Gestão e Tecnologia da Informação Ltda. Brazil Educational content services 100.00 % 100.00 % 100.00 %
Xtage Intermediação S.A. Brazil Digital assets 100.00 % 100.00 % 100.00 %
XP Administradora de Benefícios Ltda. Brazil Individual health plan intermediation 100.00 % 100.00 % 100.00 %
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XP Corretora de Seguros Riscos Brazil Retirement plans and insurance 100.00 % 100.00 % 100.00 %
XP Representação Seguros Ltda. Brazil Insurance broker 100.00 % 100.00 % 100.00 %
Banco Modal S.A. (iii) Brazil Multipurpose bank — % 100.00 % 100.00 %
Modal Assessoria Financeira Ltda. Brazil Investment consulting services 100.00 % 100.00 % 100.00 %
XP Serviços Financeiros DTVM Ltda. (v) Brazil Securities dealer 100.00 % 100.00 % 100.00 %
Modalmais Treinamento e Desenvolvimento Ltda. Brazil Professional training services — % — % 100.00 %
XP Holding Participações Brazil Insurance broker — % 100.00 % 100.00 %
Eleven Serviços de Consultoria e Análise S.A. (iii) Brazil Investment consulting services — % 100.00 % 100.00 %
Banking and Trading Desenvolvimento de Sistemas Ltda. (“Carteira Global”) Brazil Softwares development services — % — % 100.00 %
Refinaria de Dados – Análise de Dados Ltda. Brazil Digital content services — % — % 100.00 %
Hum Bilhão Educação Financeira Ltda. Brazil Digital content services — % — % 100.00 %
Vaivoa Educação Financeira Ltda. Brazil Digital content services — % — % 100.00 %
Modal As a Service S.A. Brazil Financial services — % — % 100.00 %
Galapos Consultoria e Participações Ltda. Brazil Consulting services 100.00 % 100.00 % 100.00 %
W2D Tecnologia e Soluções Ltda. Brazil Rendering of IT services — % — % 100.00 %
XP Controle 5 Participações Ltda. Brazil Holding 100.00 % 100.00 % 100.00 %
XP Sports Asset Management Ltda. Brazil Asset management 100.00 % 100.00 % 100.00 %
Our material subsidiaries and a summary of their operations are as follows:
XP Investimentos Corretora de Câmbio, Títulos e Valores Mobiliários S.A., or “XP CCTVM”
XP CCTVM, our 100% owned indirect subsidiary incorporated in Brazil, is a Brazilian broker-dealer entity and the core entity of the group, with the highest concentration of the group’s employees. All retail clients of XP Investimentos (including XP Direct and through our IFA network), Clear and Rico brands onboard and access all the products in our investment platform through XP CCTVM. In addition, it provides brokerage and issuer services to institutional and corporate clients. XP CCTVM had assets of R$103,289 million (representing 41.5% of our consolidated assets) as of December 31, 2023, R$154,407 million (representing 44.4% of our consolidated assets) as of December 31, 2024, and R$132,881 million (representing 33.5% of our consolidated assets) as of December 31, 2025. XP CCTVM recorded total revenue and income of R$7,832 million during 2023 (representing 52.7% of our consolidated total revenue and income), R$7,693 million during 2024 (representing 45.2% of our consolidated total revenue and income) and R$8,493 million during 2025 (representing 46.2% of our consolidated total revenue and income).
XP Gestão de Recursos Ltda., or “XP Gestão”
XP Gestão, our 100% owned indirect subsidiary incorporated in Brazil in 2005, was the first asset management firm within the group. It manages mutual funds focused on stocks and macro strategies, which are distributed to our retail clients via XP CCTVM and to institutional clients. XP Gestão had assets of R$108 million (representing 0.04% of our consolidated assets) as of December 31, 2023, R$89 million (representing 0.03% of our consolidated assets) as of December 31, 2024 and R$54 million (representing 0.01% of our consolidated assets) as of December 31, 2025. XP Gestão recorded total revenue and income of R$91 million during 2023 (representing 0.6% of our consolidated total revenue and income), R$63 million during 2024 (representing 0.4% of our consolidated total revenue and income) and R$46 million during 2025 (representing 0.3% of our consolidated total revenue and income).
XP Advisory Gestão de Recursos Ltda., or “XP Advisory”
XP Advisory, our 100% owned indirect subsidiary incorporated in Brazil, is a Brazilian asset management firm focused on single client mandates, including managing exclusive funds and managed portfolios for our high-net-worth retail clients via XP CCTVM and managing proprietary treasury funds that constitute part of our Adjusted Gross Financial Assets. XP Advisory had assets of R$48 million (representing 0.02% of our consolidated assets) as of December 31, 2023, R$30 million (representing 0.01% of our consolidated assets) as of December 31, 2024 and R$39 million (representing 0.01% of our consolidated assets) as of December 31, 2025. XP Advisory recorded total revenue and income of R$49 million during 2023 (representing 0.3% of our consolidated total revenue and income), R$36 million during 2024 (representing 0.2% of our consolidated total revenue and income) and R$39 million during 2025 (representing 0.2% of our consolidated total revenue and income).
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XP Vista Asset Management Ltda., or “XP Vista”
XP Vista, our 100% owned indirect subsidiary incorporated in Brazil and acquired in 2018, is a Brazilian asset management firm focused on managing passive mutual funds that track market indexes, and mutual and investment funds focused on fixed income, credit, real estate, infrastructure and other alternative strategies, which are distributed to our retail clients (via XP CCTVM) and institutional clients. XP Vista had assets of R$266 million (representing 0.1% of our consolidated assets) as of December 31, 2023, R$332 million (representing 0.1% of our consolidated assets) as of December 31, 2024 and R$380 million (representing 0.1% of our consolidated assets) as of December 31, 2025. XP Vista recorded total revenue and income of R$225 million during 2023 (representing 1.7% of our consolidated total revenue and income), R$317 million during 2024 (representing 1.9% of our consolidated total revenue and income) and R$359 million during 2025 (representing 1.9% of our consolidated total revenue and income).
XP Corretora de Seguros Ltda., or “XP Seguros”
XP Seguros, our 100% owned indirect subsidiary incorporated in Brazil in founded in 2008, is a Brazilian insurance broker focused on providing retirement plans, both from our insurance company and from third-party insurance companies, and life insurance products from third-party insurance companies. XP Seguros provides such products to our retail clients through our platform. XP Seguros had assets of R$134 million (representing 0.1% of our consolidated assets) as of December 31, 2023, R$229 million (representing 0.1% of our consolidated assets) as of December 31, 2024 and R$336 million (representing 0.1% of our consolidated assets) as of December 31, 2025. XP Seguros recorded total revenue and income of R$43 million during 2023 (representing 0.3% of our consolidated total revenue and income), R$144 million during 2024 (representing 0.8% of our consolidated total revenue and income) and R$310 million during 2025 (representing 1.7% of our consolidated total revenue and income).
XP Investments US, LLC, or “XP Investments”
XP Investments, our 100% owned indirect subsidiary incorporated in the United States and founded in 2010, is a broker-dealer registered with the SEC and FINRA, as well as an interdealer broker member with the NFA. With offices in New York and Miami, its key businesses include providing securities brokerage services for institutional and retail investors (most of which are Brazilian) and interdealer brokerage services for institutional traders. XP Investments had assets of R$907 million (representing 0.4% of our consolidated assets) as of December 31, 2023, R$1,252 million (representing 0.4% of our consolidated assets) as of December 31, 2024, and R$1,037 million (representing 0.3% of our consolidated assets) as of December 31, 2025. XP Investments recorded total revenue and income of R$481 million during 2023 (representing 3.2% of our consolidated total revenue and income), R$627 million during 2024 (representing 3.7% of our consolidated total revenue and income) and R$705 million during 2025 (representing 3.8% of our consolidated total revenue and income).
XPE Infomoney Educação Assessoria Empresarial e Participações Ltda., or “XP Educação”
XP Educação, our 100% owned indirect subsidiary incorporated in Brazil in 2003, focuses on our digital content services, including developing and selling financial education courses and events online and in person to retail clients. XP Educação had assets of R$60 million (representing 0.02% of our consolidated assets) as of December 31, 2023, R$62 million (representing 0.02% of our consolidated assets) as of December 31, 2024 and R$66 million (representing 0.02% of our consolidated assets) as of December 31, 2025. XP Educação recorded total revenue and income of R$2 million during 2023 (representing 0.01% of our consolidated total revenue and income), R$70 million during 2024 (representing 0.0004% of our consolidated total revenue and income) and R$62 million during 2025 (representing 0.0003% of our consolidated total revenue and income).
XP Vida e Previdência S.A., or “XP VP”
XP VP, our 100% owned indirect subsidiary incorporated in Brazil in 2017, as a life insurance and retirement plans provider in Brazil. On September 5, 2018, the Superintendence of Private Insurance (Superintendência de Seguros Privados), or “SUSEP,” granted it the authorization to operate as an insurance company in Brazil, and it became operational in April 2019. XP VP had assets of R$56,860 million (representing 23% of our consolidated assets) as of December 31, 2023, R$66,645 million (representing 19.2% of our consolidated assets) as of December 31, 2024 and R$93,577 million (representing 23.6% of our consolidated assets) as of December 31, 2025. XP VP recorded total revenue and income of R$271 million during 2023 (representing 1.8% of our consolidated total revenue and income), R$308 million during 2024 (representing 1.8% of our consolidated total revenue and income) and R$442 million during 2025 (representing 2.4% of our consolidated total revenue and income).
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Banco XP S.A.
Banco XP, our 100% owned indirect subsidiary incorporated in Brazil in 2019, as a financial institution in Brazil. On October 11, 2019, the Central Bank authorized Banco XP to operate as a multipurpose bank, with both commercial and investment banking activities, as well as to carry out transactions in the foreign exchange market. Banco XP had assets of R$114,726 million (representing 46.1% of our consolidated assets) as of December 31, 2023, R$188,670 million (representing 54.3% of our consolidated assets) as of December 31, 2024 and R$208,537 million (representing 52.6% of our consolidated assets) as of December 31, 2025. Banco XP recorded total revenue and income of R$689 million during 2023 (representing 4.6% of our consolidated total revenue and income), R$298 million during 2024 (representing 1.8% of our consolidated total revenue and income) and a loss of R$2,458 million during 2025 (representing (13.4)% of our consolidated total revenue and income).
For the purposes of the foregoing, the assets amounts refer to assets held by each entity directly, as well as their investments in other subsidiaries of ours (not presented on a consolidated basis) in relation to the Group consolidated total assets. Total revenue and income amounts are presented for each entity on a consolidated basis in relation to the Group consolidated total revenue and income. For more details about our organizational structure please refer to note 5 to our audited consolidated financial statements.
D. Property, Plants and Equipment
Intellectual Property
We rely on a combination of trademark, domain names and trade secret laws, as well as employee and third-party nondisclosure, confidentiality and other types of contractual arrangements to establish, maintain and enforce our intellectual property rights, including with respect to our proprietary rights related to our products and services. In addition, we license technology from third parties.
As of December 31, 2025, we did not own any Brazil-issued patents or copyrights. We own a number of trademarks including XP, XP Investimentos, XP Private, RICO CORRETORA, CLEAR CORRETORA DE VALORES, INFOMONEY and TECFINANCE, as well as XP Inc, in the United States, and other valuable trademarks and designs covering various brands, products, programs and services, including EXPERT CONVENÇÃO NACIONAL XP INVESTIMENTOS. We also own a number of domain names registered in Brazil, including “xp.com.br,” “leadr.com.br,” “rico.com.br,” “clear.com.br” and “infomoney.com.br,” and abroad such as “xpi.us.” As of December 31, 2025, we held a 21.83% equity interest in “O Primo Rico Midia, Educacional e Participações Ltda.,” with the remaining interest held by our partner, Thiago Lolkus Nigro, which owns the trademark PRIMO RICO.
Properties
Our corporate headquarters are located in Rio de Janeiro, we have an executive office located in Belo Horizonte and our principal executive offices, which include the majority of our product development, sales, marketing and business operations, are located in São Paulo. Our principal executive offices consist of approximately 129,895 square feet of space under a lease that expires in December 2027. We also have offices in other locations, including offshore in the United States of America and believe our facilities are sufficient for our current needs.
As of December 31, 2025, we had a services agreement with a data center service provider for the provision of data services to us from its data centers in the cities of Barueri and Santana do Parnaíba, in the State of São Paulo, Brazil (which are located approximately five miles apart).
We believe that our facilities are suitable and adequate for our business as presently conducted; however, we expect to continue our periodical review of our facility requirements and may acquire new space to meet the needs of our business or consolidate and dispose of facilities that are no longer required.