CDC inapplicability in the capital market

The growing maturity of the Brazilian capital markets has increasingly attracting the interest of Brazilian citizens in diversification of their investments, through the acquisition of shares and other securities registered in Brazil. However, if on the one hand the Securities Commission strives to create a business environment aimed at promoting the capital market, the judiciary has not followed the same path.

State courts and higher cuts have taken a protectionist position, creating jurisprudential understandings that aim to protect investors against the market. In this context, jurisprudence has been applying the Consumer Protection Code in legal demands involving investors and action brokers. This fact not only disregards the entire regulation of the CVM on the subject, but weakens the performance and position of the municipality. CVM has been active over decades modernizing regulation and creating a wide range of market regulations and investors protections, and it is the entity responsible for ensuring investors the necessary protection for the negotiation of securities and investment.

investments in the capital market, by their nature, are justified by providing investors expectations of much higher yields to other investment modalities. On the other hand, it also brings greater loss risk exhibitions. And such a dichotomy is part of the game whose rules, again, are established by the Securities Commission.

Therefore, the judiciary cannot apply consumer protection code rules for investments in the capital market. One, because it is not a consumer relationship. Another, because the judiciary is not to regulate, even more topics already regulated by public entities created to do so.