The Open Capital Market is an initiative introduced by the president of the Securities and Exchange Commission (CVM), João Pedro Barroso do Nascimento, aimed at strengthening and expanding the capital market in Brazil. The aim is to make the capital market more attractive, inclusive and competitive, contributing to the country’s economic growth. The actions mentioned below are an integral part of this initiative:
- Investor PIX: Instant and cost-free portability of investments between brokers via a mobile application.
- Encouraging Activism: Increasing the engagement of individual investors in meetings by revising resolution 81.
- Simplified Registration: Simplification of client registration by brokers, with a single shared registration.
- Funds Framework: New regulatory framework for funds in force as of October, empowering investors.
- Crowdfunding: Adjustments to crowdfunding rules to include small and medium-sized companies.
- Review of takeover bids: Promise of a “revolution” in the way takeover bids are thought of in 2024.
In addition to adjustments to existing regulations and the creation of new financial products, CVM aims to focus on the development of the following key sectors:
- Agribusiness: Despite accounting for around 25% of Brazil’s GDP, agribusiness still has a limited presence in the capital markets, accounting for only 5%. The CVM plans to expand the regulation of Fiagros in order to attract more participants from this sector.
- Sustainable Finance: The commitment to environmental issues offers significant opportunities for Brazil. The CVM is seeking to attract investors of different profiles to invest in sustainable finance.
- Cryptoassets: CVM recognizes the potential of cryptoassets as a way to modernize and innovate the capital market. It seeks to bring market players more in line with regulations and offer opportunities for different investor profiles who wish to participate in the organized market.
- Sociedades Anônimas do Futebol (SAFs): With the implementation of Law 14.193/2021 (Sociedade Anônima do Futebol Law), the CVM is identifying opportunities for funds to invest in the soccer industry. It intends to adopt a similar approach to that of crypto-assets.
In short, the Open Capital Market initiative promises to reinvigorate and expand the capital market in Brazil. Through innovative actions and strategic plans, it seeks to simplify the investment journey, increase investor engagement and create a more favorable environment for the Brazilian capital market.
Written by Arthur Manetta, Paralegal at Drummond Advisors