Our partner Mauricio Jayme e Silva spoke to Valor Econômico in an article that featured a survey showing that, although Congress has more than 300 bills addressing the Brazilian Securities and Exchange Commission (CVM), investment funds and the Central Bank of Brazil, few actually contain proposals aimed at strengthening regulation.
In Mauricio’s view, the large number of bills involving the CVM reflects the dynamics of Brazilian politics rather than a technical assessment of the regulator’s functioning. “This says far less about the CVM and far more about our political process,” he told the newspaper.
According to him, it is common for parliamentarians to table legislative proposals following incidents with significant public repercussions, as a way of providing a political response to the issue. “MPs and senators rush to table some sort of bill to say that the CVM needs reforming,” he says. In his view, however, few proposals address structural changes capable of effectively strengthening the regulator.
For him, the CVM’s main challenge today lies not in a lack of legislation, but in a shortage of resources. The supervision fee paid by entities supervised by the regulator is not allocated in full to the body, and only around a third of the revenue actually reaches the CVM, whilst the remainder remains with the National Treasury.
In addition to adequate funding, Mauricio advocates for greater integration between the institutions responsible for supervising the financial system: “What really prevents illegal activity is the certainty of punishment”.