The online investing market in Brazil is limited to a few players. However, recently, local stakeholders have started a dialogue with the relevant authorities to raise awareness on the potential of online investing and demand ad hoc regulations.
The current legal framework and moving forward
The small but growing online investing sector in Brazil has so far been operating within the existing legal framework, in particular under Comissão de Valores Mobiliários (CVM— Brazil’s Securities and Exchange Commission) Instruction 400 (2003), which regulates public offerings in the country. Several exemptions within this rule, in fact, allow SMEs (defined as firms with annual turnover of 3.6 million real, or $1 million) to forego some registration requirements. Since the beginning of the year, the local stakeholders have been discussing with CMV the possibility to create an ad-hoc legislations for equity crowdfunding.
Although no official documents have been published yet, rumors say that CMV is likely to limit investments up to ten percent, in aggregate, of individuals’ total financial investments or their annual income, whichever is higher. Nevertheless, we won’t exactly know how Brazil will act about online investing until next year at the earliest, when CMV is supposed to release a public consultation. In a positive light the local online investing sector has started a discussion with the authority, which means that it recognizes the potential of the market and the importance of taking actions.