Understand the importance of the CVM, the financial market regulator, and Traders, people who carry out financial transactions on a daily basis in order to make a profit.
A Bovespa (B3 - Brazilian Stock Exchange)In recent months, the Brazilian stock market has reached its fifth record in a row, reaching the 130,000-point level. Never before in their history have Brazilians invested so much in stock exchangeThis has a lot to do with the exponential increase in content on the subject on the web.
But as content about the financial market increases and being a trader becomes a profession for many, the need arises to filter and know who really has the right knowledge and endorsement to be a financial mentor.
The Securities and Exchange Commission (CVM) plays a key role for traders and investors in the financial market. It is responsible for regulating and supervising the securities market in Brazil, overseeing the activities of brokers, investment companies and other market participants.
This regulation provides a safer and more transparent environment for traders, ensuring that operations are carried out in accordance with the established rules.
In addition, the CVM's main objective is to protect investors by ensuring that they receive adequate and truthful information about the financial products available on the market.
This includes preventing fraudulent and abusive practices that could harm investors, such as price manipulation and the dissemination of misleading information.
By promoting transparency and efficiency in the market, the CVM contributes to the formation of fair prices and the smooth running of securities buying and selling operations.
This is important for traders, as it allows them to make more informed and reliable investment decisions, based on accurate and publicly available data.
In addition to its regulatory and supervisory functions, the CVM also plays an educational role, providing useful guidance and information to investors and traders. This helps traders to better understand how the market works and the risks associated with financial operations, enabling them to make more informed and responsible decisions.
Here's a summary of what the CVM means and what its regulations and requirements are.
What do the CVM regulations say?
Regulation and the role of the Securities and Exchange Commission (CVM):
- The Securities and Exchange Commission (CVM) is responsible for regulating the securities market in Brazil.
- Created by Federal Law No. 6.385 on 7 December 1976, the CVM is a federal authority linked to the Ministry of Finance.
- CVM's responsibilities include stimulating the formation of savings and their investment in the stock market, promoting the efficient and regular functioning of the market, among others.
Crime and regulation of the activity of securities analyst:
- The irregular exercise of the activity of securities analyst is a criminal offence under Article 27-E of Law 6.385/76, subject to detention and a fine.
- CVM president Daniel Maeda detailed the activity of securities analysts in Circular Letter CVM/SIN 13/20, in accordance with CVM Instruction 598.
- The document clarifies that the dissemination of falsely positive results and the attraction of investors through social networks, with the intention of misleading investors, may constitute a criminal offence.
Consequences for irregular performance by securities analysts:
- The professional preparation of analysis reports is a private activity of securities analysts accredited by CVM Instruction 598.
- Acting without proper registration can result in administrative sanctions, such as the Stop Order, which orders the immediate cessation of sanctioning activities and the imposition of fines for non-compliance.
The need for vigilance and reporting:
- It is essential that investors are aware of the origin of the information and report any suspicious activity to the competent body (CVM) and, if necessary, to the Public Prosecutor's Office, for investigation and possible criminal prosecution.
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Do you need legal advice? Get in touch!
Raphael F.
Lawyer
Specialist in European Economic Criminal Law from the University of Coimbra - Portugal
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