Broadly conceived, the Brazilian Financial System is composed of normative and supervisory authorities, which are segmented into different areas of expertise, as follows:

• The National Monetary Council (Conselho Monetário Nacional or CMN) and the Brazilian Central Bank (“Central Bank”) are the rule making and supervisory authorities of the Brazilian monetary, credit and foreign exchange markets. These bodies are responsible for regulating and supervising public and private banks, government saving banks, brokers and dealers, consortium group managers, credit unions, and other non-banking institutions.
• The Brazilian Securities and Exchange Commission (Comissão de Valores Mobiliários or CVM) is the supervisory authority of the Brazilian capital market. CVM is responsible for regulating and supervising stock exchanges, commodities and futures exchanges, publicly traded companies, public issuance of securities, securities portfolio management, etc.
• The National Council of Private Insurance (Conselho Nacional de Seguros Privados or CNSP) and the Superintendency of Private Insurance (Superintendência de Seguros Privados or SUSEP) are (respectively) the normative and the supervisory authorities of the private insurance market, open supplementary pension plans and capitalization agreements. These bodies are responsible for regulating and supervising insurance and reinsurance companies, open pension funds, and capitalization companies.
• The National Council of Complementary Pensions (Conselho Nacional de Previdência Complementar or CNPC) and the National Superintendency of Supplementary Pension (Superintendência Nacional de Previdência Complementar or PREVIC) are (respectively) the normative and the supervisory authorities of the pension funds sector. These bodies are responsible for regulating and supervising closed supplementary pension entities (pension funds).

However, in Brazil, "financial services" is a concept that includes in particular banking and finance activities, as well as the capital markets. More recently, certain payment services have been regulated and are carried on by payment institutions. Although they are not part of the Brazilian Financial System, certain payment institutions may be part of the Brazilian Payment System and, by law, are subject to regulation and licensing by the Central Bank, depending on its size, role and systemic importance.

Banking activities and financial services are regulated by statutory and infra-statutory laws enacted by the Brazilian Congress and by the CMN, respectively. The CMN is an ad hoc regulatory body composed of the Ministry of Finance, the Ministry of Planning, and the Central Bank president. Its main role is to issue regulations and guidelines to execute public policy concerning credit and currency affairs (including monetary and foreign exchange policies).

The Central Bank is responsible for implementing and enforcing the regulations and guidelines set forth by the CMN. The Central Bank's main goal is to promote the stability and purchasing power of the Brazilian currency, as well as to strengthen the local monetary system and supervise the conduct of financial institutions.

The Central Bank is responsible for implementing monetary policies, as well as exercising control over foreign investments and inflow and outflow of capital in Brazil, as provided by Law No. 4,595/1964 and several other specific rules enacted by the CMN. The Central Bank is also competent in granting licenses to financial institutions, including securities brokers.

In respect of capital markets activities, CVM is the regulatory agency in charge of regulating public offerings of securities, registering listed companies, the trading of securities on public markets, custody of securities, and supervision of publicly traded companies, among others.

Pursuant to Law No. 4,595/64, only a licensed financial institution may perform banking and finance activities such as the collection, intermediation and investment of its own or third parties’ funds (whether in national or foreign currency), as well as holding custody of third parties’ financial assets.

Anti-money laundering (AML) rules in Brazil are in general governed by Law No. 9.613 of 3 March 1998, as amended by Law No. 12.683 of 9 July 2012. Decree 9.663 of 1 January 2019 approved the new by-laws of the Council of Financial Activities Control (Conselho de Controle de Atividades Financeiras or COAF), which is responsible for receiving and analyzing information on financial transactions considered to be linked to money laundering. COAF may commence administrative proceedings against offenders and apply penalties ranging from  suspending  the operation license of the  regulated entity to fines. In addition, specific supervisory bodies, such as the Central Bank and CVM, establish specific AML rules applicable to their regulated entities.