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Investor protection rules
The Capital Market
Effective protection of investors is essential for the development and improvement of the Brazilian capital market. In addition to the existence of a set of rules to discipline the market, it is essential that there be effective compliance with the laws and regulation of corporate law and the capital market, both in the administrative and judicial spheres.
At the administrative level, it is the Securities and Exchange Commission (CVM) that fulfills this role.
- Brazilian Securities and Exchange Commission (CVM)
- Investor Orientation and Defense Program (PRODIN)
- What is PRODIN
Brazilian Securities and Exchange Commission (CVM)
he market regulatory agency with power to punish practices harmful to investors annually receives various complaints of illegal offers made by people without authorization to engage in activities related to the market.
Consequently, the Commission warns that, before investing or whenever you receive an investment offer, you should check whether the person is authorized to offer titles or securities to the public, as well as whether these investments, in fact, exist.
Thus, the Investor Orientation and Defense Program (PRODIN) was established in 1998 by CVM, responsible for providing assistance to investors. To do so, a specific unit was created at the superintendence level, focused on the investor.
Investor Orientation and Defense Program (PRODIN)
Registration of issuers and the offer ensures that information necessary for the investment decision, both with regard to the company and the securities offered, is adequately provided.
An important requirement for the public offer is that a financial institution place the securities with the public. This entity does not just offer a service to the company that hired it, but also to the recipients of the offer (the investors).
Based on its experience and technical capacity, the entity has the ability and obligation to review the information provided in order to assure the public that the information is accurate.
Therefore, when an investor participates in an irregular offer of securities, or rather, one not registered with the CVM, he/she does not have this protection and assumes additional market risks.
The Superintendence for Investor Protection and Guidance (SOI) has the objective of guiding and protecting small investors in the securities market. Its main characteristics:
- Provide assistance focused on the questions and problems that investors may have;
- Develop investor guidance and education programs;
- Although it cannot suggest the most appropriate type of investment, it can guide in the sense of explaining how to invest safely and how to protect your money from potential fraud and irregular market practices.
What is PRODIN
The Superintendent of Investor Protection and Guidance is not only responsible for responding to inquiries and complaints from investors, but also to develop mentoring programs and educate investors through the establishment of a call center 0800, conducting lectures and seminars, establishing partnerships with universities, the production of manuals and leaflets about the market and the CVM, and develop project aiming the public disclosure of the role played by the CVM.