Financial and Banking Systems
Brazil has a highly developed capital market which offers numerous investment opportunities, along with a wide range of services and products. The financial market is based on a modern and solid banking system, a state-of-the-art payment system, and reliable market infrastructure. The National Financial System includes both financial and non-financial institutions covering a broad range of services. In 2002, the Brazilian Central Bank launched the new Brazilian Payment System which allows final and irrevocable transfers in real time. Brazil has national banks with branches throughout the country, all of which boast advanced technology – all payment orders are handled electronically, cheques issued anywhere in the country are cleared and settled within 48 hours, and Brazilian banks are also leaders in the field of internet banking.
The state of São Paulo stock exchange (BOVESPA) is the largest in Latin America and the third largest equity option exchange in the world, trading equities, futures, forward and options on equities, and a broad range of fixed income instruments. Since 2002, foreign investors have been exempt from the Provisory Contribution on Financial Transactions (CPMF) with regard to equity transactions conducted on the stock exchange, and this exemption was extended earlier this year to include public offerings (either initial or secondary) of listed companies, thereby benefiting investors interested in participating in the IPOs coming to BOVESPA. Since 2005, IPOs and secondary offerings activity on BOVESPA have reached unprecedented levels, and the companies which listed in the market in 2005 and 2006 have joined "Novo Mercado" and the Level 2 of Corporate Governance of BOVESPA, which means these companies are adhering to the highest levels of corporate governance and transparency.
The Mercantile & Futures Exchange (BM&F) is the world's fifth largest futures exchange, trading futures, forwards, options on futures, flexible options, swaps, spot, structured transactions and government bonds. The BM&F also boasts all the necessary conditions to become a key player in the international carbon credit market. In 2005 it launched the BM&F Carbon Facility as part of a joint initiative with the Ministry of Development, Industry and Foreign Trade, aimed at developing a Brazilian carbon market that will provide incentives for the reduction of greenhouse gas emissions. The BM&F Carbon Facility is a state-of-the-art electronic system designed for the online registration of projects that have the potential to generate carbon credits in accordance with the principles established by the Kyoto Protocol. The second stage of the organisation of the Brazilian carbon market entails the setting up of a carbon credit trading environment in the option, forward and spot markets.