CADE and BACEN formed a Working Group to study and discuss
antitrust matters related to the National Financial System,
focusing in form, limits of competence and cooperation among them.
The Working Group is formed by 4 representatives of each authority
and will have 120 days to conclude their activities, with the
possibility of extending this period, if necessary.
The opportunity of forming this working group arises out of the
discussions relating M&A transactions that must be submitted to
CADE, according to Law n. 12.529/11 (Brazilian Antitrust Law),
which involves financial institutions, where one more step may be
taken before the BACEN, which is responsible for supervising the
national financial system and to protect harming situations for
national economy, pursuant Law n. 4.595/64.
There is a competence conflict between these two rules, where in
one side, Law n. 4.595/64 provides the private competence to BACEN
to approve corporate transactions involving financial institutions
and to regulate competition conditions between financial
institutions and, on the other side, law 12.529/11 sets forth that
CADE is the competent authority to authorize corporate transactions
which may impact competition, according to the thresholds and
conditions provided by law.
This conflict is currently under judicial discussion. In 2001,
Banco Bradesco acquired Banco BCN and did not submitted the
transaction to CADE, claiming that the Brazilian Central Bank was
the competent authority to approve the transaction. CADE fined
Banco Bradesco, which took the case to the Judiciary. Brazilian
Superior Court of Justice (STJ) decided that the BACEN has
exclusive jurisdiction for approving transactions between financial
institutions. Therefrom, CADE appealed to Brazilian Supreme Court
(STF) and until now there is no decision awarded.
Furthermore, this matter is also being discussed in Brazilian
Congress through Bill of Law n. 350/2015. In summary, the Bill
provides a mutual cooperation between both authorities, in which a
corporate transaction involving financial institution should be
firstly submitted to BACEN. If denied, then CADE should abstain to
verify the transaction. However, if approved, should be then
submitted to CADE, which may approve it or not.
The active discussion of this matter represents a major step in
improving Brazilian Competition System, where BACEN will keep its
important hole of protecting the national economy and CADE will
continue to be the defense of competition watchdog.
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