Co-written by Adriana Gödel Stuber
The Brazilian Monetary Council (CMN) decided to create a new player in the domestic capital market, i.e. the Agente Autonomo de Investimento that could be translated as Independent Investment Agent. CMN additionally determined the scope of activity to be performed by such agent, the basic governing rules of which are contemplated in Resolution number 2838, of May 30, 2001, issued by the Central Bank of Brazil (Bacen).
As defined under said Resolution, independent investment agent is an individual or legal entity formed by authorised professionals and whose activity is the distribution and mediation of instruments, securities, shares of investment funds and derivatives, at all times under the charge of and as an employee of the licensed institutions, which are those deemed to be part of the Brazilian securities distribution system. Pursuant to article 15 of Law number 6385, of December 7, 1976, the Brazilian securities distribution system shall include the following institutions:
- financial institutions and other companies engaged in the distribution of securities issues: (a) as agents of the issuing company; and/or (b) on their own account, subscribing to or purchasing the issue for market placement purposes;
- companies engaged in the purchase of securities outstanding in the market, in order to resell them on their own account;
- companies and independent agents engaged in the mediation in securities trading on stock exchanges or over-the-counter market;
- stock exchanges.
According to the law (article 16 of Law number 6385/76), the following activities shall require prior authorisation by the Brazilian Securities and Exchange Commission (Comissão de Valores Mobiliários – CVM): (a) distribution of an issue in the market; (b) purchase of securities for resale on one’s own account; and (c) mediation or brokerage on the stock exchange. Only independent agents and companies registered with the CVM may engage in securities mediation or brokerage activities outside the stock exchange.
In order to perform his/its activity, the independent investment agent must:
- be duly certified as being able to act in such capacity by an entity licensed by the CVM, provided, however, that the performance of the distribution and mediation activities in the derivatives market is still conditioned on the approval in a specific exam that may evaluate the knowledge of the operation and inherent risks of such derivatives market;
- obtain the CVM authorisation;
- enter into a contract for distribution and mediation with one or more of the licensed institutions referred to above;
- act in the distribution and mediation exclusively as an employee of such institutions;
- refrain from receiving or delivering to the investors, for any reason whatsoever, money, instruments, securities or any other amounts that can only be effected through financial institutions or through the Brazilian securities distribution system.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.