The Office of the Auditor-General of the Securities Market (Auditoria Geral do Mercado de Valores Mobiliários: AGMVM), which is dependent on the Governor of BCV, is the service responsible for supervising the securities market, in accordance with paragraph 1 of Article 5 of the Securities Code, which was approved by Legislative Decree No. 1/2012, of January 27, and republished on April 3. Its mission is to supervise and regulate the securities and derivative financial instruments markets (traditionally known as "stock markets") and the activity of everyone that operates in them.
The Office of the Auditor-General of the Securities Market (AGMVM), its composition, powers, as well as the incompatibilities of the people who comprise it, appear in Chapter II of Legislative Decree No. 1/2012, of January 27, which was republished on April 3.
The Securities Market Code aims to establish the fundamental principles and rules that govern the organization, functioning and operations of securities markets and the activities of everyone involved in them.
The AGMVM pursues the following objectives:
• Investor protection
• Efficient and regular functioning of markets
• Information control
• Risk prevention
• Prevention and prosecution of illegal assets
Supervision and Regulation
Regulation consists in applying rules on the functioning of a sector of economic activity and/or the functioning of markets and activities of entities involved in them.
The AGMVM regulates the functioning of securities markets, the carrying out of public offerings, the actions of all entities operating in those markets and, in general, all matters pertaining to this area of activity.
The supervision and regulation exercised by the AGMVM consist in:
• On-going monitoring of the conduct of persons or entities involved in the capital market in order to detect illegal acts, including stock market trading
• Monitoring compliance with the rules
• Controlling the activity of the Stock Exchange and that of everyone involved in the securities market
• Verifying compliance with duty to provide information to the public which is imposed on issuers of securities admitted to trading on the Stock Exchange
• Determining the unofficial admission of securities to listing
• Granting registration to public subscription offers and to public offerings of securities
• Authorizing or prohibiting the execution of takeover bids
• Regulating on matters that are assigned by law
• Taking all the necessary steps to determine liability and to initiate relevant disciplinary procedures, as well as informing judicial authorities of irregularities liable to criminal proceedings in the functioning of the securities market
• Imposing the fines referred to in the present Code and complementary legislation
• Exercising other powers that are conferred by the legislation or regulation applicable to the securities market, as well as those necessary for the effective performance of its duties
• Verifying the smooth, efficient and credible functioning of the securities markets and entities involved in them and protecting investors
Persons or Entities subject to AGMVM supervision
The following persons and entities are supervised by the AGMVM:
• Issuers of securities
• Financial intermediaries
• Entities that manage markets, settlement systems and centralized securities systems and entities that are engaged in the clearing of transactions in commodity derivatives markets
• Institutional investors
• Investment funds
• Qualified shareholders in public companies
• Other persons who, in a professional or ancillary capacity, engage in activities related securities
Through cooperation, the AGMVM seeks to:
• Make supervision more effective
• Model its performance on the practices followed by institutions that perform the same duties in other countries
• Fight fraudulent international practices
In the financial sector and, in particular in the capital markets, efforts have been made to strengthen mechanisms that protect those who have greater difficulty in defending their clients – investors. This requirement results from the sophistication and technical complexity that has accompanied the development of markets.
The AGMVM protects investors, be it through the constant exercise of the supervision and regulation powers conferred upon it by law, or through the development of services designed to provide direct support to the general public and to investors, in particular.