Regulatory Alerts2018-12-20
CVM Instruction No. 51 of June 9, 1986, with amendments introduced by CVM Instruction No. 604/18
The Brazilian Securities and Exchange Commission (CVM) regulates margin financing for stock purchases and stock lending for short sales by broker-dealers to ensure market stability and transparency. The instruction mandates strict collateral requirements, including a minimum 140% coverage ratio, detailed contract clauses, segregated accounting, and daily operational limits capped at five times the firm's net worth. It further establishes comprehensive control systems, reporting obligations, and specific responsibilities for broker-dealers regarding the identification and replacement of lent securities.
Share