Brazil sets 60-day deadline for tokenized securities rules

Brazil's CVM formed a 14-member group to draft tokenized securities rules, with a 60-day deadline for an initial proposal and a 120-day review covering all aspects of DLT-based securities.

Brazil's securities regulator, the Comissão de Valores Mobiliários (CVM), has formed a 14-member working group to create an experimental regulatory framework for tokenized securities. Launched on July 17, the group must deliver an initial proposal within 60 days and complete a comprehensive review in 120 days, with a possible 30-day extension. The framework will cover all aspects of tokenized securities, including registration, custody, trading, settlement, cybersecurity, operational risk, ownership records, private key management, transaction reversibility, and system liability. The initiative includes representatives from various CVM departments and may involve consultations with government agencies, industry associations, self-regulatory organizations, and external experts. This move highlights Brazil's commitment to expanding regulated digital asset markets and integrating distributed ledger technology into its capital markets. The CVM aims to balance innovation with lessons learned from previous regulatory sandbox programs, ensuring a cautious and comprehensive approach.