By Brazil Stock Guide – Brazil’s Supreme Court approved an emergency restructuring plan for the country’s securities regulator, clearing the way for measures aimed at strengthening oversight of capital markets after concerns over staffing shortages and limited enforcement capacity.
Justice Flávio Dino validated the plan submitted by the federal government for the Comissão de Valores Mobiliários, or CVM, Brazil’s securities watchdog, according to a statement from the Supreme Court. The decision was issued in a case challenging provisions of Law 14,317/2022, which deals with the inspection fee charged in Brazil’s securities and capital markets.
The case exposed what the court described as serious problems in the CVM’s personnel structure and operational ability to supervise the market. Dino had previously ordered that at least 70% of revenue from the inspection fee be allocated to the regulator and required the government to submit an emergency plan to reorganize its enforcement activities.
The government initially filed a version of the plan in June. After partial approval and a request for additional measures, authorities submitted a revised proposal that Dino said complied with the parameters set by the court.
The approved plan is organized around four main areas: faster enforcement and case processing; staff rebuilding and technology integration; inter-agency and financial intelligence cooperation; and preventive supervision of investment funds and regulatory “gray zones.”
On enforcement, the government said it had reviewed more than 90% of a backlog of about 1,500 pending cases. That screening identified 30 cases with potential sanctions, which will now fall under the emergency plan.
“Brazil now has a more consistent and reliable database to define the initial set of cases to be addressed,” Dino said in the decision.
The government also projected that 40 administrative sanctioning cases will be judged in the second half of 2026, a target Dino said is consistent with the Supreme Court’s guidelines.
The staffing component includes a preliminary timetable for assigning candidates approved in Brazil’s unified national public-sector exam to CVM positions. The plan also includes a commitment to strengthen the regulator’s leadership structure through commissioned posts, overtime payments, salary-related measures and initiatives to retain talent.
The cooperation measures include integrating databases, building regulatory intelligence platforms, strengthening technical cooperation agreements and using tools to detect market abuse.
The plan also calls for a permanent forum between CVM and Brazil’s central bank, Banco Central do Brasil, as well as a recurring program to map regulatory gray zones. In 2026, authorities are expected to present an initial risk matrix, formally install the forum, publish the first round of joint technical notes and issue a consolidated report by year-end.
The measures are intended to reduce opportunities for regulatory arbitrage, improve protection for retail investors, strengthen coordinated supervision and allow faster responses to market innovation.
Dino rejected a request by the Novo party, which brought the case, to require inspection-fee revenue to be deposited directly into a bank account exclusively linked to CVM, bypassing the Treasury’s single cash account.
“Since it is possible to identify, track and allocate the amounts with precision, the creation of a segregated bank account is unnecessary, although the issue may be reassessed later,” Dino said.
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