BRAZIL Law and Practice Contributed by: Alessandra Martins and Amanda Blum Colloca, Machado, Meyer, Sendacz e Opice Advogados
from the CVM. Alternatively, the introducing bro - ker business model must be used, involving a partnership with a securities distributor/broker in Brazil. 3. Robo-Advisers 3.1 Requirement for Different Business Models Law No 14,478 of 21 December 2022 (the “Crypto Law” ) provides guidelines that must be observed for the provision of virtual asset ser - vices by virtual asset service providers. Pursuant to Article 3, Section IV of the Crypto Law, “assets for which the issuance, registering, negotiation or settlement are provided for in specific capital markets law” are excluded from the regulation. Therefore, securities tokens fall within the scope of the CVM’s regulation, while cryptocurrencies fall within the scope of the BCB’s regulation. The BCB has still not issued specific rules governing cryptocurrencies, but through ECP 109, 110 and 111 (as defined in 1.1 Evolution of the Fintech Market ), the BCB is soliciting opinions from the general public before issuing applicable rules. In summary, security tokens would fall within the regulatory scope of the CVM, while cryptocur - rencies would fall within the scope of the BCB. 3.2 Legacy Players’ Implementation of Solutions Introduced by Robo-Advisers The offering of financial and investment advice to the general public is regulated by the CVM. The CVM considers the activity of robo-advisers offering asset management services to be sub - ject to their prior approval, in the form of CVM Resolution No 21 of 25 February 2021( “Reso- lution 21” ), and consultancy services are sub - ject to CVM Resolution No 19 of the same date ( “Resolution 19” ). Order execution robots are also subject to the CVM’s prior approval, under
CVM Resolution No 20 of the same date ( “Res- olution 20” ). Legacy players implement these business models after obtaining prior approval from the CVM. 3.3 Issues Relating to Best Execution of Customer Trades The main issues relating to best execution of customer trades include (i) data quality, since robo-advisers rely heavily on the data fed to them, and where the data may not be openly available; (ii) the instability of the Brazilian mar - ket, which could be an issue since robo-advis - ers rely on practice, and where such instability could complicate prediction of the movements of the market; and (iii) regulatory compliance, where offering investments to the public is heav - ily regulated, requiring specific knowledge and certification that has not been fully adapted to robo-advisers. There are no major differences in the regulation of loans to individuals, small businesses and others. The only entities that can offer loans are those listed in 2.1 Predominant Business Mod- els and 2.2 Regulatory Regime . It should be highlighted that on 3 January 2024, the interest rate on rolling credit card debts was limited to 100% of the original amount of the debt by Law No 14,690 of 3 October 2020. This law improved the conditions of credit card debts contracted by credit card holders, which are usually individu - als and small businesses. Due to credit condi - tions, individuals and small businesses usually have the worst credit offers, and this law has 4. Online Lenders 4.1 Differences in the Business or Regulation of Fiat Currency Loans Provided to Different Entities
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