The CMVM - Comissão do Mercado de Valores Mobiliários (Portuguese Securities Market Commission) was established in May 1991 (Decree-Law No. 142-A/91 of 10 April) and is tasked with supervising and regulating the financial instruments markets as well as the agents operating within those markets and promoting investor protection. The CMVM also has the following responsibilities:
- Sanction breaches of
the Securities Code and of supplementary legislation;
Ensure the stability
of financial markets by contributing to the identifying and preventing systemic
risk;
Contribute to the
development of financial instrument markets;
Provide information
and handle complaints from retail investors;
Mediate conflicts
between entities subject to its supervision and between them and investors;
Assist the Government
and its member responsible for Finance;
Perform any other
duties assigned to it by law.
The CMVM is a
public legal entity, with administrative and financial autonomy and its own
assets.
The CMVM carries
out its duties autonomously having the following at its disposal for said
purpose:
Management, administrative, financial and asset autonomy;
Structural, functional and technical independence;
Own bodies, services, personnel and assets;
Regulation, regulatory, supervisory, oversight and infraction sanctioning powers.
The CMVM is part
of the European System of Financial Supervision and the National Council of
Financial Supervisors.
CMVM Bodies
- Management Board;
- Oversight Committee;
- Advisory Board;
- Ethics Committee.
The Management Board is responsible for defining the CMVM's performance including the management of the respetive services. It is comprised of five members - Chair, Vice-Chair and three Board Members - who are appointed by the member of the Government responsible for finance for a six-year term and in non-renewable. It exercises the necessary competence for carrying
out the CMVM’s duties, namely in:
- defining the general CMVM policy and manage the respective activity;
- drawing-up plans and budget to be submitted annually to the Assembly of the Republic and to the Government and ensure its execution;
- preparing a report on the activity developed by the CMVM for each financial year, including the situation of the markets in financial instruments and disclose it to the Government member responsible for the finance by 30 June of each year;
- preparing the report and accounts for the financial year and submit it by 31 March of the following year with the opinion of the oversight committee for approval of the Government member responsible for the finance;
- ensuring the necessary conditions for the exercise of financial and budgetary control by legally competent entities;
- assigning its members posts corresponding to one or more CMVM services, at the Chair's proposal;
- appointing the secondment of holders of management positions or equivalent, in accordance with the internal regulations;
- organising the services and managing the human resources of the CMVM, exercising managerial and management powers and employee discipline and carrying out acts regarding personnel that are provided for in the general law and current statutes;
- appointing representatives of the CMVM with other entities and representatives of the regulatory entity, in and out of court, incluiding the power to substitute;
- managing the CMVM's financial and asset resources;
-
systematic monitoring and assessment of the activity carried out, namely making the different services responsible for the efficient use of the means put at their disposal and the results achieved;
- resolving on the acquisition, disposal and leasing or rental of movable assets and the rental of immovable assets intended for the facility, equipment and functioning of the CMVM;
- resolving on the acquisition, disposal and leasing real estate for the same purposes with prior authorisation of the Government member responsible for finance;
- contracting services and authorising execution of expenses;
- collecting and managing revenues;
- accepting donations, inheritances and legacies for benefit of inventory with prior authorisation of the government member responsible for finance;
- passing resolutions on the facility, relocation and closing of delegations and other forms of representation;
- approving regulations and other normative acts whose competence the law assigns to the CMVM;
- approving generic recommendations addressed to the entities subject to the CMVM's supervision and generic advice on relevant issues that may arise;
- prosecuting or practicing any
similar act that imputes facts to the accused, imposes fines and ancillary
sanctions in an administrative proceeding and carry out the respective collection;
- determining the opening of a preliminary investigations concerning crimes against the markets and its closure;
- issuing, at the request of the Assembly of the Republic, opinions on legislative projects in the area of its competence and providing information and
clarifications on its activity;
- assisting the Government through technical support, drafting of opinion, studies, information and draft legislation;
- ensuring the CMVM's representation and, at the request of the Government, of the State at bodies and national and international fora within the scope of liaising with national entities and international counterparts or with relevance to the respective activity;
- carry out any other supervisory acts of the CMVM defined by law and any other management acts arising from applying the law and of the current statutes that are required for the proper functioning of the services;
- pass resolutions on any other matters that are assigned to the CMVM by law.
The Oversight Committee is
responsible for checking the legality, regularity and sound financial and asset
management of the CMVM and for consulting its management board in these areas.
It comprises a Chair and two members, appointed by the government member responsible for finance and one of the members is a statutory auditor with a non-renewable four-year
office term. This committee:
- Monitors
and controls the financial management of the CMVM;
- Gives its
opinion on the budget as well as on the business plan concerning its budget
coverage;
- Gives its
opinion on the annual report and accounts;
- Gives
advice on acquisition, lease, disposal and encumbrance of real estate;
- Gives
advice on accepting donations, inheritances and legacies;
- Gives
advice on borrowing;
- Keeps the management
board informed of the results of its verifications and examinations;
- Draws up
reports of its oversight action;
- Proposes to
the management board to carry out external audits, when deemed necessary or
convenient;
- Has an
opinion on matters submitted to it by the Management Board, the Court of
Auditors or public entities responsible for the inspection and audit of State
services;
- Reports
irregularities to the competent authorities.
The
Advisory Board is an advisory body of the Management Board on matters covered
by the CMVM's responsibilities.
It is chaired by a person designated by the Government
member responsible for finance, on proposal of the Chair of the
CMVM's Management Board. It comprises a member of the Management Board of the
Banco de Portugal; a member of the Management Board of the Insurance and
Pension Funds Supervisory Authority; a member of the Management Board of the
Treasury and Public Debt Management Agency; a director of market management
companies located or operating in Portugal; a management company director of a
settlement system or centralised securities system; a central counterparty director
located or operating in Portugal; two representatives of issuers of securities
admitted to trading on a regulated market; three investor representatives, one at
least, representing retail investors; two representatives of several financial
intermediary categories; an entity representing the entity that manages the
multilateral trading system; a representative of the Statutory Auditors Bar
Association.
Each member has a four-year term of office and
may be replaced, until the end of the term of office, by his/her designator.
The Advisory Board shall:
The Ethics Committee comprises three members: a person appointed by the Government member responsible for the finance area, who presides, the chair of the advisory board and a member of the board appointed by said, who decides unanimously. It is a body which issues a statement of reasons relating to a conflict of interests, particularly regarding:
- The
suspension, for a limited period, of ties formed prior to the commencement of
activity at the CMVM;
- The teaching
activity in higher education and research in conjunction with the activity
developed at CMVM;
- Performing
any operations on financial instruments or entering into, modifying or
terminating any financial intermediation agreement;
- The
establishment by service providers of any tie or contractual relationship with
other entities, namely when providing services in the legal or
economic-financial area;
- The
establishment of any tie or contractual relationship, paid or unpaid, with
other entities whose activity may conflict with the tasks and powers after
termination of office or duties.
The
Ethics Committee meets at the request of the management board or of the person
concerned in the mentioned situations and decides unanimously and its members
are not remunerated.
The CMVM
performs its duties within the scope of the European System of Financial
Supervision and the National Council of Financial Supervisors, integrating the
respective bodies.
It is a
member of international organisations such as ESMA - European Securities and
Markets Authority, IOSCO - International Organization of Securities Commissions
and IIMV - Ibero-American Securities Institute, inter alia.
ENTITIES
SUBJECT TO THE CMVM’S SUPERVISION
The following
persons and entities are subject to the CMVM’s supervision:
- Securities
issuers;
- Financial
intermediaries;
- Independent
consultants;
- Management
entities of markets, settlement systems and centralised securities systems and
entities whose purpose is to clear transactions in commodity derivatives
markets;
- Professional
investors;
- Investment
funds;
- Holders of
qualifying holdings in public companies;
- Guarantee
funds, investor compensation schemes and their management entities;
- Auditors
and credit rating companies;
- Funds and
venture capital companies;
- Funds and
securitisation companies and securitisation fund management companies;
- Other
persons who carry out securities related activities in a professional or
ancillary capacity.
Being
subject to CMVM supervision, these entities must provide the CMVM with all
requested collaboration.
To the
extent permitted by law, the CMVM informs the public of detected law violations
and sanctions imposed.
The CMVM
performs on-sight supervision of financial intermediaries and managers of
markets, centralised securities systems and settlement systems. This
supervision is carried out by teams that routinely act, monitor the activities
of these entities, either on their premises, as well as via the Internet or
direct and continuous electronic means.
The CMVM
regulates the functioning of the securities markets, the execution of public
offerings, the performance of all entities operating in those markets and, in
general, all matters related to this area of activity.
In its
regulation activity, the CMVM approves:
- Regulations;
- Instructions
that define internal procedures for certain entity categories;
- Recommendations
addressed to one or more persons subject to its supervision;
- Generic
opinions on issues raised in writing by any of the supervised entities or their
associations.
EXTERNAL
CONTROL OF CMVM ACTIVITY
(a)
essentially financial in nature
- Directorate-General for Budget: To whom the CMVM reports monthly, quarterly and annually.
- External Auditor: Reviews and issues opinion on the CMVM's annual accounts.
Court of Auditors:
- Oversees the legality and regularity of the CMVM's income and expenditure.
- Reviews the sound financial management of the CMVM.
b) General in nature:
