On March 6, 2007, the Financial Committee of the Brazilian Senate approved a bill aiming at fostering competition among financial institutions in the Brazilian market.
The proposed bill stipulates that the antitrust agencies will be competent to investigate and prosecute anticompetitive conducts, as well as to review and clear transactions carried out in the financial market.
In turn, the Brazilian Central Bank will be entitled to review transactions which may adversely affect the soundness of the financial system (in such cases, the antitrust authorities will not take part in the merger review process).
The text of the bill – prepared by Senator Antônio Carlos Magalhães – is in line with the studies undertaken by a working group formed by officials from the Central Bank and the Administrative Council for Economic Defense (CADE), the Brazilian agency in charge of deciding antitrust cases.
With a view to further promote competition, the bill will also contribute to put an end to the discussion about the authority to review financial market transactions. Although Brazilian antitrust legislation does not provide for any specific market exemption and CADE declares itself competent to review transactions in this market, the majority of the banks and certain governmental sectors have argued that the Central Bank is the sole authority competent to do so.
The bill is still subject to final approval by the Senate and the House of Representatives.