Brazil: Financial System
Banking System
Institutional Structure
The Brazilian banking system is characterized by the presence of large, private financial conglomerates, State banks and smaller, private banks.
Brazil: Institutional Features
Brazilian Capital Market: Institutional Features
Intermediation System
The distribution and intermediation system of the Brazilian capital market is made up of 566 institutions, of which 227 are brokerage firms dealing in securities, 316 are distributors, 17 are categorized as investment banks and six can be described as development banks. Another three companies are responsible for custody and registration of operations. Bearer shares are not authorized in Brazil and almost all other transactions are registered, a method which demands a high level of operational sophistication from the companies looking after their custody.
All trades on the stock exchanges are made through brokers; that is, even financial institutions must use brokerage services. The commissions levied in Brazil are fixed at competitive rates and all negotiations are performed in the name of the end client.
Brazil: Investment Funds Industry
The Brazilian Investment Funds Industry
The investment funds industry in Brazil is regulated by Law No. 4728/65, which establishes the essential structure of requirements for listing, reimbursement of investors, tariffs and administrational practices. The responsibility for the supervision and discipline of all the funds originally fell to Brazilian Central Bank. But once the CVM was created the latter took over the duties of regulating the funds containing assets yielding variable returns, while the bank retained responsibility for the funds yielding fixed returns. The various categories of investment funds are currently regulated through the Resolutions of the National Monetary Council and disciplined through Circulars issued by the Central Bank and Directives from the CVM.