• The quiet period in the Brazilian securities market
  • September 2, 2008 | Author: Elaine de Paula Palmer
  • Law Firm: Barbosa, Müssnich & Aragão - Rio de Janeiro Office
  • Created in the second half of the 1970s by Law 6.385/76, the Brazilian Securities Commission, or Comissão de Valores Mobiliários ("CVM"), was given powers to regulate, supervise and sanction market agents. Among the CVM's responsibilities, article 4 of Law 6.835/76 establishes the following objectives: to stimulate the creation of savings and their investment in securities; to promote the expansion and the efficient operation of the stock market, in compliance with applicable legislation; to protect securities holders and investors in general; to repress any type of fraud or manipulation of the securities market; and to ensure that the public has access to information on securities and their issuers. From the time of its creation to the present day, the CVM's powers and responsibilities have grown, through the conferral of greater financial, administrative and operational independence and, principally, through a broadening of the concept of "valor mobiliário". Without question, this evolution in the meaning of "valor mobiliário", from a term narrowly defined in the governing legislation to an open-ended concept more closely resembling the notion of "security" in United States law, with its focus on the appeal to public savings and the connotation of investment, represents a significant increase in the CVM's jurisdiction. In addition, the CVM now operates in segments formerly subject to the exclusive supervisory jurisdiction of the Central Bank of Brazil, without a clear delimitation of its powers vis-à-vis the Central Bank, which sometimes results in an unnecessary overlap of jurisdiction.