Jayme Petra de Mello Neto
Lawyer at Marcos Martins Advogados
The Brazilian Securities and Exchange Commission has extended the deadline for public hearing SDM 09/2019, which was scheduled to close on February 28, 2020. The public hearing deals with the relevant issue of “Best Execution of Orders”, referred to in market parlance as best execution.
It’s not that the subject was unknown to Brazilian capital market law, since CVM Instruction 505 already disciplined it and made it the object of surveillance, seeking to attract more and more investors without an institutional profile or high technical knowledge of capital markets.
The Public Hearing proposes a draft instruction, which will change the current rule of CVM Instruction 505, creating a greater set of obligations for the Intermediary – Financial Institution – in relation to information and publicity. This proposal is fully in line with the legal rules on ethical principles, especially in relation to objective good faith.
Although the focus is on information and publicity, it can be seen that the draft imposes a series of duties that should in fact lead to best execution as a material idea, taking the investor’s final intention as a necessary and constant collaboration burden assigned to the Intermediary. It has not gone so far as to create an obligation of result, but the intensity of the means (best execution) being proposed gives a greater sense of collaborative business for those who, without the characteristics of a financial technician, propose to invest in the Capital Markets.
Marcos Martins Advogados, through its Corporate Law team, is following the development of this Public Hearing, always aiming to maintain the highest level of service to its clients.
