Brazil: Regulatory Agencies and Regulation

Article Index

Principal Laws and Regulations of the Capital Market

The Brazilian capital market is regulated by the CMN and disciplined by the CVM, BACEN and SUSEP. The BACEN regulates all financial institutions, SUSEP has a disciplinary role in the private insurance sector, while the CVM regulates institutions that are active in the securities market.
The main laws and regulations applicable to the Brazilian capital market, set out in chronological order, are as follows:

  • Law No. 4,595 of 31/12/64 - Set up the present structure of the financial system and its principal regulatory agencies - the National Monetary Council and the Brazilian Central Bank.
  • Law No. 6,385 of 07/12/76 - Set up the Securities Commission, the main oversight agency for the Brazilian capital market.
  • Law No. 6,404 of 15/12/76 - "the Public Companies Act". Stablishes the legal framework for public companies.
  • CMN Resolution No.1,190 of 17/09/86 - Deals with the negotiation on Exchanges for Commodities and Futures, subject to approval by the Central Bank or the Securities Commission.
  • CMN Resolution No. 1,289 of 20/03/87 - Approves the regulations of Supplements I, II and III, which control the articles of association and workings of the investment companies - foreign capital and investment funds - foreign capital and bond portfolios and securities, respectively.
  • CMN Resolution N o. 1,645 of 06/10/89 - Deals with the standards for scrutiny of the Commodities and Futures Exchanges, subject to the approval and intervention by the Central Bank and the Securities Commission.
  • CMN Resolution N o. 1,655 of 26/10/89 - Regulates the articles of association, organization and workings of brokerage firms dealing with securities.
  • CMN Resolution N o. 1,656 of 26/10/89 - Regulates the constitution, organization and workings of the stock exchanges.
  • CMN Resolution No. 1,832 of 31/05/91 - Approves the regulations in Supplement IV to Regulation 1,289 governing the constitution and administration of securities portfolios held by institutional investors constituted abroad.
  • CMN Resolution N o. 1,927 of 18/05/92 - Approves the regulation in Supplement V to Resolution 1,289, which regulates foreign investment through the mechanism of Depositary Receipts.
  • CMN Resolution N o. 2,099 of 17/08/94 -Deals with the conditions for access to the National Financial System, to minimum values of capital and adjusted net assets, to the setting-up of branches and the obligation to maintain adjusted liquid assets at a value compatible with the degree of risk inherent in the active operations of the institutions authorized to act by the Central Bank ("the Basle Accord").
  • CMN Resolution N o. 2,109 of 20/09/94 - Alters and consolidates the standards which regulate the application of resources of private entities dealing with private insurance schemes and which also operate in Future Markets.
  • CMN Resolution No. 2,138 of 29/12/94 - Deals with authorization to transact swap operations on the over-the-counter market and options on swaps linked to gold, exchange rates, interest rates and price indices as specified by institutions.