Brazil’s central bank proposes rules on distribution transparency and customer protection for fundraising products

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On October 23, Brazil’s central bank proposed a joint resolution on financial institutions’ distribution of fundraising products and launched a public consultation, requiring institutions to prioritize customers’ best interests. The draft aims to strengthen the matching of products to customers’ risk profiles, transparency around distribution compensation, and conflict-of-interest management, while restricting practices such as minimum sales targets. To address the power imbalance between issuers and distributors, the draft also proposes banning unfair or anticompetitive practices such as exclusivity agreements, and requires institutions to provide Brazil’s central bank with data on distribution volumes, compensation, and issuance information.