BRAZIL Law and Practice Contributed by: Alessandra Martins and Amanda Blum Colloca, Machado, Meyer, Sendacz e Opice Advogados
Any security considered to be publicly or pri - vately traded must follow the CVM’s rules; if it is not a security, it will now fall within the BCB’s regulatory scope. 6.5 Order Handling Rules Order handling rules apply, as described in 3.1 Requirement for Different Business Models . 6.6 Rise of Peer-to-Peer Trading Platforms P2P trading is currently not regulated, which sig - nificantly impacts traditional and fintech players. The only regulatory requirement that must be fol - lowed is that, whenever an individual or com - pany purchases a crypto-asset from abroad, it must conduct a foreign exchange transaction, notified to the BCB as the purchase of crypto- assets abroad, with collection of the applicable taxes. In accordance with the ongoing public consultations described in 1.1 Evolution of the Fintech Market , the rules will change, and vir - tual asset service providers will need to obtain a licence from the BCB. Market makers might need to be regulated, even if they are individuals. 6.7 Rules of Payment for Order Flow As evidenced in the foregoing, payment orders made from/to other countries are subject to the execution of a prior foreign exchange trans - action, which leads to the use of institutions authorised by the BCB as gatekeepers for for - eign exchange controls and AML/CTF. However, the payment order flow is not restricted. Certain rules issued by the BCB and the CVM aim to prevent market manipulation and other forms of abuse. 6.8 Market Integrity Principles In Brazil, the BCB and CVM regulate and super - vise the activities of financial institutions and the securities market, respectively. The CVM
has issued rules to prevent market and trad - ing abuse, and there are many famous cases of administrative sanctioning proceedings against individuals and companies that initiated mar - ket abuse. It should be noted that the CVM has many rules preventing insider trading and con - flict of interests, including the requirement that investment policies prevent employees of asset manager firms from purchasing securities. 7. High-Frequency and Algorithmic Trading 7.1 Creation and Usage Regulations No response has been provided in this jurisdic - tion. 7.2 Requirement to Be Licensed or Otherwise Register as Market Makers When Functioning in a Principal Capacity No response has been provided in this jurisdic - tion. 7.3 Regulatory Distinction Between Funds and Dealers No response has been provided in this jurisdic - tion. 7.4 Regulation of Programmers and Programming No response has been provided in this jurisdic - tion. 8. Insurtech 8.1 Underwriting Processes No response has been provided in this jurisdic - tion.
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