CVM regulatory rules ordered for review by Brazilian Supreme Court

Supreme Court Minister Flávio Dino has ordered the Brazilian federal government to conduct a technical evaluation and reassessment of the regulatory rules governing the Comissão de Valores Mobiliários (CVM), the country's capital markets regulator. The decision, which mandates compliance within 90 days, follows concerns regarding the agency's internal controls and functional independence.

Citing reports from Transparency International, Dino noted vulnerabilities in CVM's oversight, including instances where complaints were allegedly archived without minimal due diligence. The ruling specifically referenced a 2022 case involving Banco Master, where irregularities were reportedly anticipated with high detail. Additionally, Dino highlighted concerns that a 2022 resolution allowing multi-layered investment structures without caps could facilitate money laundering by creating systemic permissiveness.

In response to evolving market needs, CVM officials have indicated plans to utilize a significant budget increase—with discretionary funds rising from R$ 35 million to nearly R$ 600 million—to modernize supervision. The agency is exploring the integration of artificial intelligence to improve the differentiation between legitimate market participants and those engaging in irregular activities, aiming to bolster investor confidence.