IMK – Capital Markets Initiatives

IMK is a work group with the participation of the Central Bank of Brazil, Brazilian Securities & Exchange Commission, Secretariat of Economic Planning, Special Treasury Office, National Treasury Secretariat, Superintendence of Private Insurance (SUSEP) and National Superintendence for Complementary Pension Funds (Previc), as representatives of the Brazilian Government, and 13 private Brazilian entities, among which B3, FEBRABAN, ANBIMA, ABVCAP, and ABRASCA.

According to the Brazilian Government, IMK has three main objectives: evaluate and propose regulatory enhancement measures to reduce capital cost in Brazil; boost the growth of long-term savings and the efficiency of financial intermediation and private investment; and develop the Brazilian capital, insurance and private pension markets. IMK is engaged in the same scope of activity carried out until last year by the now extinct Capital Markets Work Group (GTMK).

In 2019, the IMK meeting agenda featured 15 topics and B3 attended all the meetings. Furthermore, B3 acted as rapporteur in the discussions on financing small and medium-sized enterprises, on expanding the share of non-resident retail investors and simplifying the income tax for equity trades, in addition to having actively participated in the preparation of proposals for improvements in ETF (creation of new ETFs), nonresident investors, and minority shareholders, among others.

Of the 15 topics on the IMK agenda in 2019, 12 were delivered in whole or in part in the form of drafts for infralegal measures or bills, which should be part of the regulatory and legislative agenda of the Brazilian Ministry of Economy (ME) in 2020.

The following were the topics with full or partial delivery in 2019: foreign exchange hedge; review of investment rules for social security entities; requirements to enable the purchase of instruments from private companies by pension funds; greater efficiency of real estate guarantees; deductibility of contributions to cover income tax deficits by sponsors and participants; enabling the issuance of Real Estate Secured Bills (LIGs) abroad; improvements in ETFs (Exchange Traded Funds); financing for small and medium-sized enterprises; upgrade of the Real Estate Funds law; foreign currency debt lockout; expanding the share of nonresident retail investors; and minority investors (amendments to Law No. 6,404/76).

For further information, please contact your RM