STF Restores Funding to Brazil's Market Watchdog and Orders Emergency Plan

The ruling forces the federal government to submit a short-term plan to rebuild the regulator's capacity to tackle large frauds and clear its case backlog.

Overview

The Supreme Federal Court unanimously confirmed Minister Flávio Dino's May decision that redirects about 70% of the market supervision tax to the Comissão de Valores Mobiliários (CVM), restoring funds long retained by the Treasury.
The court ordered the Union to deliver an emergency plan within 20 business days and a medium-term plan within 90 days to speed up prosecutions, boost staffing and expand technology for supervision.
The CVM has finalized a draft of emergency measures that includes rapid hiring steps, technology upgrades, concentrated enforcement 'mutirões', temporary bonuses and overtime and has sent the draft to the Ministry of Finance for formal submission.
The regulator operates with roughly 500 employees to oversee a capital market worth about R$18 trillion and carries a large stock of unresolved sanctionable cases, which experts say will require public hiring contests and budget renegotiation to fix.
Two new directors, Otto Lobo and Igor Muniz, were approved by the Senate with one board seat still vacant, and officials warn that legal, administrative and Treasury negotiations will determine how quickly the court's decision produces real enforcement capacity.