Cade signs Memorandum of Understanding with the Central Bank of Brazil
The Administrative Council for Economic Defense – CADE and the Central Bank of Brazil – BCB in its acronym in Portuguese signed a Memorandum of Understanding (MoU) to coordinate and give greater predictability to the assessment of mergers involving companies in the financial sector. In addition, the agencies agreed to line up actions to stimulate competition in regulated markets.
The document is the result of the discussions that occurred within a Working Group formed by representatives of the two agencies.
The MoU states that CADE and BCB will foster the exchange of information. One of the measures provided is the discussion of technical parameters in order to ensure greater coordination and consistency in the assessment of the proceedings and in the enactment of standards of common interest.
Both authorities will continue to review the mergers and a consent from both institutions will be required for approval. In the few mergers that could impact the stability of the national financial system, the BCB will notify the merger to CADE and both agencies will approve the transaction. In other cases, that occur more often, the two institutions will have to approve the deal for its clearance.
Cade will be responsible for the control of anticompetitive conducts involving companies in the financial sector. During the analysis, CADE will use data provided by BCB through information exchange in order to increase the technical consistency and the articulation of its decisions.
The Memorandum also includes the commitment of CADE and the Central Bank of Brazil to review their regulations, if necessary. In addition, the institutions will conduct joint activities to approve a complementary bill establishing clear and defined parameters of their performance, following the general guidelines established in the Memorandum. The expected outcome is to provide greater legal certainty and predictability for the defense of competition in the national financial system.