The Audit Court Will Examine How the CVM Spends Its New Money
BRAZIL · REGULATION
Key Facts
- —The audit The TCU authorised an examination of the CVM’s institutional management capacity on 9 September.
- —Who proposed it AudBancos, the TCU unit specialising in public banks and financial regulators.
- —What triggered it A Supreme Court ruling requiring at least 70 percent of capital-markets supervision fee revenue to be allocated to the CVM.
- —The earlier step In June 2026 Justice Flávio Dino approved an emergency CVM restructuring plan.
- —The stated problem Serious deficiencies in staffing structure and operational capacity at the regulator.
- —The sequence The court gave the CVM money. The audit court now wants to see how it is managed.
The Supreme Court ordered that Brazil’s securities regulator be properly funded. The federal audit court has now decided to check what it does with the money.
Brazil’s federal audit court authorised an examination of the securities regulator’s management capacity on Wednesday, months after the Supreme Court ordered a substantial increase in the CVM’s funding.
What Was Authorised
The Tribunal de Contas da União approved an audit of the CVM’s institutional management capacity on 9 September. It was proposed by AudBancos, the TCU unit that specialises in public banks and financial regulators.
The trigger is a Supreme Court decision requiring that at least 70 percent of the capital-markets supervision fee, the taxa de fiscalização, be allocated to the regulator that collects it.
The Underlying Problem
The CVM has argued for years that it collects a supervision fee from the market it regulates and does not receive most of it, because the revenue goes into general treasury funds.
In June 2026 Justice Flávio Dino approved an emergency restructuring plan for the regulator, citing serious problems in its personnel structure and operational capacity.
An underfunded securities regulator is not an abstract problem. It shows up as slow enforcement, understaffed supervision of a growing listed market, and an inability to compete for the technical staff it needs.
Why the Audit Is Reasonable
A regulator that wins a court order redirecting earmarked revenue to itself has, in effect, been given a budget increase without the ordinary scrutiny a budget increase attracts.
The audit court’s interest in checking what happens next follows naturally. That is what a court of accounts is for.
What it should not become is a mechanism for reversing through audit findings what was granted through a court ruling. The CVM’s complaint was about the level of funding, and an examination of management capacity does not answer that complaint either way.
Why the CVM Was Short of Money
The taxa de fiscalização do mercado de capitais is levied on listed companies, funds and market intermediaries, and it exists to fund supervision of those same entities.
In practice the revenue has flowed into general federal accounts and been subject to the contingency mechanisms Brazil uses to hit its fiscal targets. Money earmarked in principle has been withheld in practice.
The CVM has argued for years that this leaves it supervising a market that has grown enormously with a staff that has not. Brazil’s fund industry, its retail investor base and the number of registered intermediaries have all multiplied since the current establishment was set.
The Supreme Court decision requiring at least 70 percent of the fee to reach the regulator is a judicial answer to a budgetary dispute, which is itself an unusual thing to need.
What an Underfunded Regulator Looks Like
The visible symptoms are enforcement delays measured in years, administrative proceedings that expire before they conclude, and an inability to keep technical staff who can earn several times as much on the other side of the market.
The less visible symptom is selective supervision. A regulator that cannot cover everything covers what it can, and the gaps are wherever the resources ran out rather than wherever the risk was highest.
Brazil has had a series of market failures in recent years, from fund blow-ups to the accounting scandal at a large listed retailer, in which the question of what the regulator knew and when has been raised each time.
The Institutional Tangle
There is an awkwardness in the current arrangement worth naming. The Supreme Court ordered funding for the CVM. Justice Flávio Dino approved its emergency restructuring plan. The federal audit court is now examining how it manages itself.
Three separate institutions are exercising oversight over a securities regulator whose ordinary supervisor is the executive branch, and the executive branch is the party that was withholding the revenue.
That is a workable arrangement in the short term and a strange one in the long term. Regulatory independence built through litigation is independence that depends on the litigation continuing to go the same way.
The durable fix is a budgetary settlement rather than a judicial one, and none is currently in prospect.
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Frequently Asked Questions
What did the TCU authorise?
An audit of the CVM’s institutional management capacity, approved on 9 September 2026.
Who proposed it?
AudBancos, the TCU unit for public banks and financial regulators.
What triggered it?
A Supreme Court ruling requiring at least 70 percent of the capital-markets supervision fee to be allocated to the CVM.
What happened in June?
Justice Flávio Dino approved an emergency restructuring plan for the CVM, citing personnel and operational capacity problems.
Does the audit undo the funding decision?
No. It examines how the regulator is managed, which is a separate question from how much revenue it receives.
Sources: Diário do Grande ABC, InfoMoney, STF.
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