Building Enforcement Capacity for Brazilian Corporate and Securities Law

26 Pages Posted: 23 Jan 2017 Last revised: 25 Feb 2017

See all articles by John Armour

John Armour

University of Oxford - Faculty of Law; University of Oxford - Said Business School; European Corporate Governance Institute (ECGI)

Caroline Schmidt

University of Oxford

Date Written: February 18, 2017


Brazil is one of the world’s largest emerging markets, with many opportunities for development. Persuading financiers to commit funds to Brazilian firms requires effective corporate and securities laws to facilitate ‘arm’s length’ contracting. Enforcement of these laws is problematic. Brazilian judges are over-worked, with a long case backlog. They lack relevant business expertise, and are often expected to anticipate ‘social and economic consequences’ in their judgments. This provides little certainty. Nevertheless, authorities and market participants have developed an array of specialist enforcement institutions, which build upward from the authority of the inefficient courts, and overlap each other. Drawing on qualitative data from interviews with participants, we document the evolution and interaction of four such institutions in Brazilian corporate and securities law: (i) The growing role of arbitration; (ii) the restructuring of the São Paulo Court of Justice to create specialist panels of expert commercial judges; (iii) a dedicated administrative court operated by the Brazilian securities regulator (the ‘CVM’); and (iv) a recent initiative to create a Brazilian Takeover Panel (the ‘CAF’). Together they form a mutually reinforcing system of enforcement, the sum of which is far greater than its unpromising judicial foundations.

Keywords: Brazil, Shareholder Litigation, Securities Law, Corporate Law, Arbitration, Novo Mercado, Legal Institutions, Takeovers

JEL Classification: G38, K22, K41

Suggested Citation

Armour, John and Schmidt, Caroline, Building Enforcement Capacity for Brazilian Corporate and Securities Law (February 18, 2017). European Corporate Governance Institute (ECGI) - Law Working Paper No. 344/2017, Available at SSRN: or

John Armour (Contact Author)

University of Oxford - Faculty of Law ( email )

St Cross Building
St Cross Road
Oxford, OX1 3UL
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+44 1865 281616 (Phone)


University of Oxford - Said Business School ( email )

Park End Street
Oxford, OX1 1HP
Great Britain


European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels


Caroline Schmidt

University of Oxford ( email )

Mansfield Road
Oxford, Oxfordshire OX1 4AU
United Kingdom

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