Financial law specialist André Jerusalmy, from our law firm Mazzucco & Mello Advogados, believes that the biggest effort will be to bring and keep clients in compliance with the new regulation.
With the potential to introduce innovations in the financial market through the intensive use of technology, Fintechs and Payment Institutions will have to comply with some of the same rules of the Central Bank of Brazil that currently apply to traditional banks, particularly in the prevention of money laundering crimes, financial fraud and also prudential capital limit rules.
According to BCB Resolutions nos. 197, 198, 199, 200, 201 and 202, published on March 11, 2022, the new rules will come into force only in January 2023 and will comply with the prudential rules applicable to financial institutions and will be divided into three types of prudential conglomerates:
– Those controlled by financial institutions (type 1);
– Those controlled by a payment institution and not part of a financial institution (type 2);
– Those controlled by a payment institution and part of a financial institution (type 3).
André Jerusalmy, a financial law specialist at Mazzucco & Mello Advogados, says that since new rules are expected to be published to regulate the topic, it is difficult to foresee what the impact of such regulation will be on fintechs. However, it is reasonable to predict that stricter rules will impact the structure of less robust fintechs, as they are the ones with fewer resources to comply with such rules.
“Thus, resources that before would have been directed to investments in Research and Development (R&D) and Marketing (essential for innovation) will be directed to other areas. Also, given the increased regulatory burden that fintechs will have to comply with, lawyers and accountants will have an increased demand for services aiming to adapt and retain clients in accordance with the new regulation.”