The Financial Stability Board (FSB) highlighted progress in Brazilian fund regulation and supervision in its Peer Review Brazil report released in late November. The report evaluates Brazil’s regulatory practices and policies in comparison to international standards, with a focus on the fund industry.

“We are pleased with the FSB’s evaluation, which holds great significance for fund industries worldwide. This is international recognition of the robustness and resilience of the Brazilian sector, supported by effective regulation and supervision to accompany the industry’s growth,” said ANBIMA CEO Zeca Doherty.

Since 2017, when the FSB published its last report, the net assets of Brazil’s fund industry have grown to R$9.4 trillion from R$7.3 trillion.

According to the FSB, Brazil has made progress in addressing the recommendations from its 2017 report. These measures included limiting leverage and expanding liquidity management mechanisms, which were addressed through the enactment of Resolution 175 by the Securities and Exchange Commission of Brazil (CVM) and preventive self-regulation efforts by ANBIMA.

“The measures adopted by Brazil serve as a reference point for other countries facing similar challenges,” said Ryozo Himino, chair of the FSB’s Standing Committee on Standards Implementation, in a statement.

The FSB also commended ANBIMA’s agreements with the CVM. Since 2017, new partnerships have been established, including those focused on monitoring and sharing information about fund compliance.

“The longstanding partnership between ANBIMA and CVM enhances risk and vulnerability monitoring efforts within the industry, avoiding overlaps and allowing the regulator to concentrate resources on more critical matters,” Doherty added.

Review process

The FSB delegation visited Brazil in July, engaging with various market institutions, including ANBIMA, and regulators to assess the Brazilian fund industry’s operations. Discussions with ANBIMA focused on its role, agreements with the CVM, relationships with international regulators, and potential industry vulnerabilities.