Tuesday, 10 December 2024
- Published on 29 November 2024
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FSB highlights progress in regulating investment funds in Brazil
The Financial Stability Board (FSB) today published its Peer Review of Brazil, building on the findings and recommendations from the 2017 review.
The Peer Review examined subsequent developments in: authorities’ approach to monitoring vulnerabilities in investment funds; regulatory and supervisory measures to manage identified vulnerabilities and the linkages with banks; and institutional arrangements for supervising investment funds in Brazil.
The review showed that Brazilian authorities have taken significant steps to modernise and strengthen the regulation and supervision of investment funds. Measures have been introduced to limit leverage and expand the availability of tools for the management of liquidity.
The review noted that further steps could be taken to continue to improve authorities’ ability to monitor vulnerabilities associated with investment funds’ activities. This includes continuing to enhance the system-wide monitoring of financial stability risks and market developments that may affect leverage and liquidity mismatch and updating the regulatory framework as appropriate.
Ryozo Himino, chair of the FSB’s Standing Committee on Standards Implementation (SCSI) that oversaw the preparation of the peer review said: “The introduction of the new regulation for the investment funds sector is timely given the growth and importance of the sector to Brazil. The Brazilian authorities have made significant progress since the last FSB peer review to strengthen the regulation concerning leverage and liquidity risks. This report provides a reference point to other jurisdictions with similar challenges.”
Re-disseminated by The Asian Banker
