Page 35 - InvestmentGuideBrasilEng

STRONG FINANCIAL Bovespa BM&FBOVESPA is the world’s third-largest exchange and the second-largest
BM&F
in the Americas by market value. It has 80% of the total volume traded in Lat-
in American stock exchange markets. BM&FBOVESPA is the only futures ex-
change in Brazil and largest in Latin America based on the number of futures
SYSTEM AND LARGEST contracts traded. BM&FBOVESPA develops and manages systems for the
trading and settlement of derivatives products, equities and securities.
Under Brazil’s financial system, there are four main institutions:

STOCK MARKET BRAZILIAN SECURITIES AND

EXCHANGE COMMISSION (CVM)
IN LATIN AMERICA MINISTRY OF FINANCE www.cvm.gov.br

The Brazilian Securities and Exchange Commission
has a mandate to ensure the proper functioning of
www.fazenda.gov.br
securities holders against fraud; ensure public access
A government department responsible for fram- the exchange and over-the-counter markets; protect
ing and implementing Brazilian economic pol- to relevant information about Brazil’s securities mar-
icy. The Ministry has a wide mandate covering ket and the companies that issue securities; ensure
Stability is one of the defining characteristics of For almost 20 years, Brazil’s financial system has money, credit, financial institutions, tax policy, fair trading practices; encourage savings and invest-
the Brazilian financial system. Since the struc- been prudently managed by an autonomous Cen- administration of public accounts, management ments in securities; and promote the expansion and
tural reforms of the 1990s, Brazil has developed tral Bank whose primary mandate is price stability of public debt, international economic dialogue efficiency of the securities market in Brazil to benefit
a robust financial system that comprises 2,300 through an inflation-targeting regime, fiscal re- and coordinating Brazil’s participation in interna- the capitalization of Brazil-based companies.
financial institutions with total assets of over sponsibility in government expenditures and regu- tional economic bodies. The Ministry of Finance is
$1.78 trillion and 85 million active consumer and lations and a free-floating currency. Commitment composed of five bureaus: (1) the National Trea-
business accounts. to this “tripod” of macroeconomic stability is firm. sury; (2) Brazilian Inland Revenue Service & Cus- BRAZILIAN ANTITRUST
Today, Brazil is strengthened by a record-low toms (Receita Federal); (3) the Economic Policy
net public debt-to-GDP rate of 35% and re- Bureau (SPE/MF); (4) the Economic Surveillance COUNCIL (CADE)
cord-high international reserves of over $380 bil- Bureau (ESEA/MF); and (5) the International Af-
lion. A strong symbol of how Brazil has evolved in fairs Bureau (SAIN/MF).
terms of financial stability over the past decade www.cade.gov.br
came in 2009, when Brazil became a net credi- Antitrust policy in Brazil is the responsibility of the
tor of the International Monetary Fund (IMF) at BRAZILIAN CENTRAL BANK Brazilian Competition Policy System (BCPS), which
a time when a number of Eurozone economies is composed of three agencies: the Economic Mon-
were applying to the IMF for stabilization loans. www.bcb.gov.br itoring Bureau of the Ministry of Finance (SEAE),
Despite the onset of the global credit crunch An autonomous government institution, the the Secretariat of Economic Law of the Ministry of
and ensuing global recession in 2008/09, total Central Bank’s primary mandate is price stability Justice (SDE), and the Brazilian Antitrust Council
credit volume in the Brazilian financial system through inflation-targeting aimed at anchoring (CADE). SDE is the chief investigative body in mat-
expanded by 39.8% over the period between Sep- inflation expectations around a target set by the ters related to anticompetitive practices and it also
tember 2008 and September 2010. Real interest National Monetary Council (CNM), which has been issues non-binding opinions in merger cases. SEAE
rates have been brought down from 13% on aver- 4.5% p.a., plus or minus 2%, since 2006. The Central issues non-binding economic opinion in merger
age from 1995 through 2008, to less than 2% on Bank is also the Brazilian banking regulator and is review and it may also issue non-binding opinions
average in 2012 and 2013. Public banks in particu- responsible for overseeing the investment frame- related to anticompetitive practices. CADE is the ad-
lar have played a key role in credit growth. work as it relates to foreign capital entering and ministrative tribunal, composed of seven Commis-
As a member of the G20, Brazil is committed leaving Brazil. The Central Bank is also responsible sioners, which makes the final rulings in connection
to coordinate with advanced economies and peer for operating Brazil’s payment system. with anticompetitive practices and merger review.
emerging markets to help bring stability to glob-
al financial architecture. In this regard, Brazil has
begun early implementation of new rules for cap-
ital requirements in banks to provide even greater To learn more about the BM&FBOVESPA equities exchange, including information on non-resident invest-
strength to Brazil’s financial system ment in Brazil’s financial market, please visit www.bmfbovespa.com.br
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