CVM wants to regulate financial market influencers – 04/19/2023 – Market

The CVM (Comissão de Valores Mobiliários) proposes that financial market influencers start to alert their followers about publications sponsored by companies. The objective is to provide greater transparency regarding the content published on social networks.

The proposal is part of a study on the regulation of the performance of digital influencers, released this Wednesday (19). The new rules will still undergo a public hearing before they come into force.

Bruno Luna, head of the Economic Analysis and Risk Management advisory at the CVM, says that the proposal responds to the increase in the number of influencers in the market. “An important part of this group has a contractual relationship with participants regulated by the CVM and the investor often does not know.”

According to data from Anbima (Brazilian Association of Financial and Capital Market Entities), Brazil had 515 digital influencers who talk about capital markets in the second half of 2022, almost double the 255 verified in the first half of the same year.

CVM argues that B3 research carried out in 2020 indicated that the main source of information for individual investors is digital media: 73% of respondents said they learned to invest by following YouTube channels or influencer accounts.

“It must be clear that the influencer is being paid to give that opinion”, says Luna. “Transparency to investors is part of good conduct in the capital market and must be zealous and practiced by everyone who works in it.”

The proposal from the technical area of ​​the CVM gives contracting companies the responsibility of supervising compliance with the new rule, as they must follow a series of rules regarding transparency and isonomy in the disclosure of information.

“The same conduct must also occur for those hired by the regulated [pela CVM]”, says the analyst of the autarchy José Antônio de Souza. “The proposal is to demonstrate that transparency with the investor should be extended to influencers and investment platforms contracted by CVM regulated.”

The CVM argues that the number of individual investors in the Brazilian market has skyrocketed in recent years, going from around 700 thousand in 2019 to more than 4.6 million in September 2022.

Ensuring greater transparency for this public, he says, guarantees “greater health in the capital market, mitigation of potential conflicts of interest, greater legal certainty, prevention of financial risks and greater credibility for the participants involved”.

The autarchy says it has already been working on mapping influencers and atypical movements in negotiations made in the market by some profiles. A tool for analyzing potential insider trading use cases was adapted to evaluate influencer deals as well.