The Brazil Securities Commission (CVM), via its Superintendence of Institutional Investor Supervision, published Circular Letter CVM/SIN 4/2025 to address recurring questions on exchange-traded funds (ETFs), focusing on the market maker function, the index provider role, and naming practices for Brazilian Depositary Receipts of ETFs (BDR-ETFs). The circular reiterates that a portfolio manager is prohibited from acting as market maker for units of funds under its own management, while allowing related parties of an ETF manager to act as market maker for ETF units regardless of the ETF’s classification. It also notes that, in certain specific cases, the prohibition in Article 2, paragraph 2 of Annex V to CVM Resolution 175 on establishing an ETF whose index provider is a related party of the fund administrator or manager does not apply. For BDR-ETFs, market maker engagement may be carried out by the issuer of the foreign ETF used as the backing asset for the BDR, or by its controlling, controlled or affiliated companies. CVM further states there is no prohibition on using the term “ETF Global” for BDR-ETFs and related disclosure materials, while emphasizing that this terminology does not exempt responsible parties from complying with applicable regulation.

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