Importancia de la Certificación y Educación al Inversionista: La Experiencia de Brasil

Strengthening the industry professional's ability to provide investor education to individuals

Día de Actualidad al Inversionista

Superintendencia del Mercado de Valores de Panamá

Octubre, 11 de 2013.

Agenda

ANBIMA

Reasons for developing Investors Education and Certification processes together

ANBIMA’s Investors Education Initiatives

Partnerships

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Agenda

ANBIMA

Reasons for developing Investors Education and Certification processes together

ANBIMA’s Investors Education Initiatives

Partnerships

3

Membership More than 330 members among banks, non-bank financial institutions and asset

managers Membership is voluntary, but we estimate that more than 90% of financial and capital

market entities are associates

Distribution (approximate): Asset Managers =132 (40%) Banks = 108 (33%) Securities Firms = 45 (14%) Brokerage Firms = 40 (12%) Others (non-bank FI, non-financial advisors) = 6 (2%)

ANBIMA – Brazilian Financial and Capital Markets Association

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ANBIMA - Main objectives

Representation of its members Committees, Subcommittees and Working Groups Discussion of strategies to improve market development and establishing priorities for

conducting the dialogue with regulators, authorities and other market entities

Self regulation of the activities represented by the Association Private voluntary SRO, with full range of regulatory activities - rule making, supervision and

enforcement

Education of professionals and investors, through Development of Investor Education initiatives Certification of market professionals Education and Training activities

Information by acting as main provider of financial and capital markets data Indicative prices for securities and indexes (benchmarks)Weekly, monthly and quarterly reports for several markets

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The regulation behind the ANBIMA’s Certification program

2001: CVM issues ICVM 355, de 01/08/01 defining that an independent financial advisor must be approved in a certification exam developed by an entity approved by CVM

June/2002: ANBIMA issues its “Código de Regulação e Melhores Práticas paraPrograma de Certificação Continuada”.

November/2002: ANBIMA organizes the first certification exam for professionals who sell investment products to accredited investors

2003: ANBIMA organizes the first certification exam for professionals who sell investment products to ordinary investors in a bank branches.

December/2003: CMN and CB issue an Resolution defining that all employees who sell investment products in a financial institution must be approved in a certification exam developed by institutions with proved technical capacity.

ANBIMA - Certification

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1st CGA exam

1st online CEA exam

CPA-10 online exam

1st CPA-20 updating exam

Publication of the Certification Code

1st CPA-20 exam (paper and pencil)

CPA-10 updating exam

Daily online CPA-10 and CPA-20 exams

Updating process: courses or exams

20022003/2004

2005/20062007

20082009

1st CPA-10 exam

Professionals can register directly to take

the exams.

Incorporation of ANDIMA’s certifications

1st CPA-20 online examination

1st online CGA exam

250,000 certificates granted

Certification exams in the 27 Brazilian states

2010/2011

Currently, more than 327,000 professionals have one of ANBIMA’s certifications, which represents ethics and qualification, in the Brazilian market. In addition to being required by law, the 

certification gained strength with the adhesion of institutions, professionals and investors, who recognize its value and importance.

Anbima – Certification programs timeline

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CPA-10 – professionals who sell investment products directly to retail investors CPA-20 – professionals who sell investment products to accredited investors CEA – investment products specialists CGA – portfolio managers CFP (from IBCPF) – distinction for personal financial planners

ANBIMA’s Regulation and Best Practices Code for the Continued Certification Program serves as a reference to ANBIMA’s members and is aimed at:

Adhering to ethical standards. Promoting fair competitive practices. Establishing self-regulatory rules and sound market practices. Supervising compliance and applying sanctions or conventional fines

when necessary. Minimum level of Knowledge for a candidate to become certified

ANBIMA – Certification programs

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Certifications given

ANBIMA - Certification

CPA-20: 56.385CPA-10: 269.889

CEA: 635 CGA: 391

Registrations received (since 2002): 595.604

* Until 31/08/2013

TOTAL: 327.300

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Average approval rate – historical and in 2013

ANBIMA - Certification

Data: 31 july 2013

ANBIMA

Reasons for developing Investors Education and Certification processes together

ANBIMA’s Investors Education

Partnerships

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Provide the market with necessary means for upgrading the skills and knowledge of its professionals and investors

ANBIMA believes that stronger financial and capital markets in Brazil depend, among other factors, on the Education of Investors and continuous skill upgrading of market professionals.

For this reason ANBIMA has been developing a broad-based educational scheme divided in two main areas

Investors Education Certification for Professionals

ANBIMA Certification - to foster a process of skill upgrading for market professionals who are in contact with investors in the selling of investment products

ANBIMA Certification and Education

ANBIMA Education - to develop Educational programs with the objective to disseminate knowledge of the mechanism to be used in personal investments

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Investor Education Importance

Brazil has 200 million inhabitants: 28,2 million investors (14%), most of them invest only in savings accounts (R$ 567 billion)

Less than 4 million investors in Mutual Funds (R$ 2,37 trillion), 600.000 individuals investing directly in the stock exchange and 350.000 in Treasury securities

Almost 50% of the people believe mutual funds are products for rich people and 60% don’t know how much is the minimum amount to invest in a mutual fund

Souce: IBOPE and ANBIMA

60% of the Brazilians believe the amount they save for retirement is inadequate: 19% don’t have any investment and 41% don’t have enough for retirement

Brazilians believe they will be on retirement for 23 years but the amount they have invested will last only 12 years

When the decide to save: 49% save for the next vacation and 43% save for retirement

Source: HSBC– ago/1213

1995New Regulation for Investment Funds

CB and CVM

2000Code of Regulation and Best Practices for the Investment

Funds

2002 / 2003Certification and

Investors Education

ANBIMA - Certification and EducationImportance of growing together

2004Launch IE website

Agreement with IBCPF

2007100.000

professionals certified

2012300.000

professionals certified

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Increase the complexity of products

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PremiumRetail

Visits to a bank branch/manager

53% 34% 27%61%

Newspapers / magazines / television

Information on the bank’s website

Phone calls to the bank/manager

34%

54%Bank manager

Investor Education Resourcing

How people look for information about financial products - 2005

Source: IBOPE 2005Base: Retail (786) Base: Premium (264)

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Visit to a bank branch / manager

56% 10%

43% Talks to friends and relatives

39%

Investor Education Resourcing

Source: IBOPE 2011

How people look for information about financial products - 2011

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Newspapers / magazines /

television

Information on the bank’s website

Source:

Investor Education Resourcing

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National Investment Fraud Vulnerability Report ‐ British Colombia Securities Commission, March 2012

Investor Education Resourcing

Source:

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ANBIMA

Reasons for developing Investors Education and Certification processes together

ANBIMA’s Investors Education Initiatives

Partnerships

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“How to Invest?”- the creation of a brand

Como Investir?: ANBID’s brand to promote Investors Education programs trough the delivery channels: website and brochures

Initially developed one logo and the brand

Defined the target audience: new investors, youth, university students

Hired seasoned marketing professionals to develop the web site and brochures

Hired products specialists and personal financial planners to write the content of the website and brochures

ANBIMA – Investors Education

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www.comoinvestir.com.brThe website mission is to become abenchmark by offering the mostcomprehensive and didacticinformation on the various investmentalternatives in Brazil, such as mutualand hedge funds, equities,debentures, private and public bondsas well as highlighting the importanceof financial planning.

This website was developed andfunded by ANBIMA

228.000 Facebook fans 49.000 videos watched 50.000 people registered in

the site 31.000 monthly visitors

Anbima – Investors Education website

Contribute for the Investors Education encouraging a better understanding of investment characteristics

Demystify that investing is complex and equipping consumers with unbiased and free investment information

Disseminate knowledge of the mechanism to be used in households budgets and personal financial planning

Areas: Personal Finance, Mutual Funds, Equities, Debentures , Investors and Market News

“Contact us” area for solving additional problems.

Anbima – Investors Education website

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Investors Guide: launched May 2005; updated in 20104 brochures distributed: 200,0004 distribution: partnership with financial institutions and specialized magazines

Students Guide: launched May 2006; updated in 20104 brochures distributed: 30,0004 distribution: through Universities and eventsfor students

Investors and Student guidesANBIMA – Investors Education

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Como Investir?: ANBIMA’s brand to promote Investors Education programs

Language easy to understand for ordinary people

Investors and Student guidesANBIMA – Investors Education

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Started in 2002 – ANBIMA’s Board decided to allocate part of the budget to develop educational programs

2003 – Self-regulation settlement raised US$ 750,000 (R$ 1.75 million) with the commitiment to invest in Investors Education programs

1st project: launch a website, brochures and broadcast radio programs

After 2005 – All fines, settlements and moneys raised under ANBIMA’s Self Regulation activities revert to Investors Education initiatives

Projects: develop the website, brochures, academic studies and workshops

From January 2012 to July 2013 – Almost R$ 2 million invested in projects Dedicated team: 03 Investors Education and 06 Certification

ANBIMA – Investors EducationFunding

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ANBIMA

Reasons for developing Investors Education and Certification processes together

Evolution of the Certification for market professionals in Brazil

ANBIMA’s Investors Education

Partnerships

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1. National Strategy for Financial Literacy (ENEF) – Government initiative coordinated by the Brazilian Securities and Exchange Commission (CVM)

ANBMA was the writer of National Strategy for Financial Literacy – Investments Chapter with the cooperation of others entities

2. CVM Education Committee started in 2005: ANBIMA participates along with 5 associations and 1 company (BM&FBovespa)

3. Creation of the Financial Education Association (AEF) to coordinate the projects in schools – Partnership of 04 private entities:

Development of the pilot project with 30.000 students at secondary schools, coordinated by the CVM: - 2nd half of 2010: distribution of books, classes and impact evaluation

ANBIMA partnerships for investors education

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ENEF’s objectives

Source: ENEF

Promote the financial educationculture in Brazil, creating conditions for the conscious acquisition of products and financial services and providing information on the risks and benefits involved

― Training of the adult audience― Training in schools for primary

and secondary education students

Contribute to boosting solidity of the financial, capital, insurance, social security and capitalization markets

Strengthen stability and reliability of the National Financial System

Financial education

• Campaigns to raise awareness among the stakeholders involved with education and the learning community

• Teacher training• Implementation (pilot project)• Control and evaluation• Expansion of ENEF

• Financial inclusion• Consumer protection• Personal finance• Economics basics• Conscious consumption• Social security• Preparation for retirement• Other

Schools Adults

ANBIMA partnerships for investors education

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Guidance for FE in Schools: presents a conceptual model to bring Financial Education to schools, having been prepared based on contributions of experts from various areas. It starts with a current problem and presents a set of principles that should guide the actions needed to improve FE of students. This proposal is distinguished for the flexibility it embodies, which allows for adaptation to different school contexts.

“It is expected that the change of attitude that could result from the Financial Education may help people solve their daily challenges”.

FE takes place at a given space and time, so the FE in schools program should consider the spatial and temporal dimensions.

ENEF guidance for FE in schools

30Source: ENEF

ANBIMA partnerships for investors education

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AEF Website

www.vidaedinheiro.com.br

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International Forum for Investors Education - IFIE

Regulators

SRO’s

Non Profit Service Providers

Community-based Organizations

Associations

Foundations

Exchanges

Public and private sector providers of investor education

programs

ANBIMA partnerships for investors education

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IFIE - What we do

Networks and platforms

Partnerships

Resource Clearinghouse

Surveys

Regional Chapters

Meetings

Joint efforts through the exchange of information, ideas, programmes, strategies and

plans that help members to further develop local projects

ANBIMA partnerships for investors education

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IFIE Americas Chapter

20 Founding members

ANBIMA, FINRA, IIROC, SMV Panamá

Focus on discuss regional issues and challenges

Exchange information and develop common tools

Regional IFIE Chapters:AsiaMENAAmericas

ANBIMA partnerships for investors education

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São Paulo

Av. das Nações Unidas, 8.501 11º e 21º andar05425-070 São Paulo SP Brasil+ 55 11 3471 4200 Fax 11 3471 4230

www.anbima.com.br

Rio de Janeiro

Av. República do Chile, 230 13º andar20031-170 Rio de Janeiro RJ Brasil+ 55 21 3814 3800 Fax 21 3814 3960

Ricardo Nardini Executive Manager - Certification and Education

ricardo.nardini@anbima.com.br