Brazil’s Securities Commission (Comissão de Valores Mobiliários, “CVM”) has amended its main rules (set out in CVM Resolution 13/2020) applicable to non-resident investors in securities traded in Brazil. The amendment (Regulation 64/2022) was officially published on 8 February 2022.
I address the main changes below.
Less Paperwork: Electronic Registration of Individuals
Non-resident individuals will no longer be required to register directly with CVM before they can buy registered securities. Instead, his or her representative merely will be required to fill in the information on CVM’s online platform or via the exchange responsible for the market where the securities are traded.
The amount of information to be provided has also been reduced. Investors are no longer required to provide, their genders, dates of birth, nationalities or their mothers’ full names.
This avoids various bureaucratic steps required for direct registration with CVM.
More Flexibility: Wider Range of Investment Vehicles Allowed
Previously, only individuals, legal entities with an independent legal capacity, funds and “other vehicles of collective investment” domiciled outside of Brazil were allowed to be registered.
Now the word “collective” has been removed, which will facilitate the use of other investment vehicles (such as trusts with merely one beneficiary) for the purpose of investing in Brazilian securities.
No Conflicts: Broker cannot act as Investor’s Legal Representative
Although the amendments largely aim to reduce bureaucracy, a change has been made so that the broker through which the investor trades securities is expressly not allowed to act as the investor’s legal representative. This aims to avoid conflicts of interest.
Instead, investors will need to use other CVM-registered entities to act as their representatives.
When do the amendments come into force?
The amendments come into force on 2 May 2022.
Last modified: February 9, 2022