Brazilian Derivatives Market
Intermediaries
Brazil boasts a vast network of financial intermediaries authorized to operate in the derivatives market. Besides the intermediaries linked to the capital market, which has been mentioned above, there are those linked to the exchanges dealing in futures and to banking and non-banking financial institutions, all actively participating in the derivatives market. In addition, Swap operations are carried out by financial institutions in general. On the over-the-counter market, operations are mainly registered in the CETIP. However, the majority of Brazilian financial institutions have the potential to participate in the derivatives markets.
Brazilian Capital Market: Institutional Features
Intermediation System
The distribution and intermediation system of the Brazilian capital market is made up of 566 institutions, of which 227 are brokerage firms dealing in securities, 316 are distributors, 17 are categorized as investment banks and six can be described as development banks. Another three companies are responsible for custody and registration of operations. Bearer shares are not authorized in Brazil and almost all other transactions are registered, a method which demands a high level of operational sophistication from the companies looking after their custody.
All trades on the stock exchanges are made through brokers; that is, even financial institutions must use brokerage services. The commissions levied in Brazil are fixed at competitive rates and all negotiations are performed in the name of the end client.