BRAZIL Law and Practice Contributed by: Alessandra Martins and Amanda Blum Colloca, Machado, Meyer, Sendacz e Opice Advogados
Machado, Meyer, Sendacz e Opice Advogados Avenida Brigadeiro Faria Lima 3200
Itaim Bibi São Paulo Brazil Tel: + 55 11 3150 7000
Email: bd@machadomeyer.com.br Web: www.machadomeyer.com.br
1. Fintech Market 1.1 Evolution of the Fintech Market The Brazilian fintech market has been evolving at a rapid rate, with the Central Bank of Brazil ( Banco Central do Brasil BCB) and the National Monetary Council ( Conselho Monetário Nacional CMN) being very active regulatory authorities incentivising evolution and modernisation. Particularly over the past 12 months, the BCB has issued a series of public consultation notic - es in a number of matters that are expected to change, including: • the regulatory framework for the investment of non-residents in the Brazilian financial market, through Public Consultation Notice No 103 of 2024( “ECP 103” ) • the rules of centralised risk management in payment schemes forming part of the Brazil - ian Payment System ( sistema de pagamentos brasileiro SPB) through Public Consultation Notice No 104 of 204( “ECP 104” ) • the rules of banking as a service (BaaS) part - nerships through Public Consultation Notice No 108 of 2024( “ECP 108” ) and • the regulation of virtual asset service provi - sion in general through Public Consultation
Notice No 109, which provides the overall rules ( “ECP 109” ), No 110, which provides the authorisation process ( “ECP 110” ), and No 111, which includes virtual asset service provisions for the foreign exchange market ( “ECP 111” ). These public consultation notices have the potential to be “game changers” for many fin - techs because they add regulatory obligations to institutions that were not previously regulated, such as virtual asset service providers. BaaS providers will also need their service users to comply with regulatory responsibilities, making their regulation very similar to that currently in place for banking correspondents, another busi - ness model used by many fintechs. With these changes, fintechs that operate as service users will have limited compensations and will have to provide clear information to their clients, as well as observe restrictions about sub-contracting functions within the same economic group.
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