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Brazil to Become a Part of OECD and Plans to Launch IPO for Its Digital Bank

Emily Daniel
October 21, 2020
2 minutes read
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During a virtual event on Tuesday, Paulo Guedes, Brazil’s Minister of Economy, announced that the country is about to become a part of the Organisation of Economic Cooperation Development (OECD). Furthermore, he said that the government is planning to launch IPOs for its newly-introduced digital bank of Caixa Econômica Federal.
Caixa Econômica Federal introduced a digital bank during the COVID-19 pandemic for assisting the government to financially aid the residents. About 64 million Brazilians were assisted during the pandemic. In the Milken Institute Global Conference, Guedes commented that the Central Bank wants to attract new investors for the state.

Brazilian Minister wants to attract investors with IPO of a federal digital bank https://t.co/UqW607RVrl

— Cointelegraph (@Cointelegraph) October 20, 2020

Reuters highlighted Guedes’ statement that mentioned Caixa’s role in plans for IPO for the digital bank. As per InfoMoney, a Brazilian website, the Minister also said that the Central Bank will thrive to ensure lesser risks for foreign investors.
For entering the OECD, Brazil has to meet a few benchmarks including combating corruption, regulation, developing acquisition protocols, and transparency.
According to the Paulo Guedes, Brazil has fulfilled two-thirds of the requirements already to be accepted as a member of the OECD and should be entering the organisation within a year.

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Only 57 per cent of the legal businesses had a system for business risk assessment (BRA) in place the previous year which places the legal industry at the bottom of the list of sectors for compliance requirements including credit institutions, gaming companies, service providers, auditors and accountants.

However, FIAU is driven to gain more compliance management measures from the listed sectors. The overall results indicate that the improvement was seen in every sector as Malta continues to focus on its fight against money laundering terrorism funding.

Business Risk Assessment is a tool through which the members of the financial services can analyse the risks attached to a client and which measures can ensure minimized risks. This tool is a part of anti-money laundering compliance.

FIAU reported a significant improvement among real estate agents that shot up to 73% from 40% in a year regarding the Business Risk Assessment.

Credit institutions made it to the top of the list with a 100% increase in having the Business Risk Assessment in place and the financial institutions made it to the second with 94%.

“The FIAU acknowledges the subject persons’ commitment to engage consultants to assist them in carrying out certain anti-money laundering and financing of terrorism obligations. However, subject persons remain solely responsible for the BRA and most importantly should ensure that they have knowledge of both the content and result of it,” the FIAU said.

The FIAU highlighted that the BRA must not be a side document that the operators are required to fulfil. It must be tailored to represent the business operations, scenarios, and models.

The financial watchdogs revealed that a number of operators took the help of consultants to carry out the risk assessment and they were responsible and understood the importance of the exercise.

FIAU analysed one risk assessment and discovered that “An operator listed the application of client due diligence (CDD) measures as a safeguard against risks arising from exposure to politically exposed persons (PEPs).” FIAU added, “This is not sufficient given that CDD measures are to be applied in all circumstances irrespective of the risk level. In cases PEPs, subject persons are expected to define in more detail the type of enhanced due diligence measures to be applied.”