By Brazil Stock Guide – Brazil’s securities regulator said its authority to regulate and supervise investment funds is defined by law, responding to comments by Finance Minister Fernando Haddad suggesting a possible expansion of the central bank’s oversight role.
The Comissão de Valores Mobiliários, known as the CVM, said on Tuesday that its mandate over investment funds is set out in legislation and cannot be altered by executive action. The regulator argued that the current framework reflects technical expertise built up over roughly 25 years of supervising the capital markets.
Haddad said on Monday that the government is discussing whether to give the Banco Central do Brasil broader supervisory powers over investment funds, potentially shifting responsibilities that currently fall under the CVM. The debate gained momentum after investment funds were linked to alleged irregularities involving Banco Master, which was placed under extrajudicial liquidation by the central bank in November last year.
In its statement, the CVM emphasized that the division of responsibilities between financial regulators is a legal arrangement rather than an administrative choice. The agency said any redesign of that structure would require legislative change, underscoring its resistance to measures that could reduce its role or transfer oversight of funds to the central bank.
The regulator also highlighted existing coordination between authorities. According to the CVM, the current institutional framework already ensures joint action aimed at safeguarding financial stability, and the central bank has broad access to detailed information on investment funds.
“The central bank receives and has broad access to information on investment funds, including detailed portfolio data and the identification of investors. Both agencies maintain a permanent effort to update their operational agreement to improve their performance within their respective mandates,” the CVM said.
The statement seeks to counter arguments that gaps in information justify a transfer of powers, suggesting instead that cooperation can be strengthened within the current legal framework.
The CVM further stressed that its responsibilities are complementary to those of the central bank, whose primary focus is prudential supervision and financial system stability. It said it is appropriate for the central bank to monitor capital market activities that resemble banking operations and may pose systemic risks.
“It is therefore relevant for the central bank to include in its analysis data on capital market activities that are economically similar to banking operations, including potential systemic impacts — so-called shadow banking. This includes certain types of investment funds, but is not limited to them,” the regulator said.
The agency also pointed to a December 2025 decree that provided for the creation of a new Superintendence for Market Supervision, Derivatives and Systemic Risks within the CVM. The unit was formally established on Jan. 12, reinforcing the regulator’s argument that prudential oversight is already being strengthened internally.
The CVM concluded that enhancing supervisory tools within existing legal mandates is the most appropriate path to ensure financial stability and protect investors’ assets.
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