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INSTITUTIONAL PROGRESS

Joint CADE-Central Bank Regulatory Act 1/18:
the end to a long-running dispute?

After years of jurisdictional conflict, CADE and the Central Bank issued a
regulation setting out procedures for controlling financial institutions’ conducts and mergers.
In addition to creating information sharing mechanisms and mandating
periodic meetings and interagency cooperation, the Act stipulates each agency’s jurisdiction:

i. In cases concerning anticompetitive conducts, CADE will notify the Central Bank whenever
CADE’s General Superintendence initiates administrative proceedings and also when it
refers the case to CADE’s Tribunal;

ii. In merger cases, the Act provides that both institutions must be notified of any relevant deals and
will analyze them independently, following their own rules and deadlines. However, the Central
Bank now has the authority to unilaterally approve mergers “whenever prudential aspects
indicate imminent and significant risks to the stability and solidity of the National
Financial System”.

CADE’s Guidelines on Antitrust Remedie

In October, CADE published its non-binding Guidelines on Antitrust Remedies.
The Guidelines aim at consolidating and providing transparency on the agency’s views about best
practices for elaborating, assessing and monitoring antitrust remedies imposed for addressing
antitrust concerns in mergers. The Guidelines present orientations drawn from CADE’s case law
and foreign agencies experience.
A few highlights from the Guidelines are the following:

i. Overall, CADE favors structural (divestures of assets) HOWEVER, THE CENTRAL
over behavioral remedies, since the former are easier BANK NOW HAS THE
to implement and to monitor; AUTHORITY TO UNILATERALLY
APPROVE MERGERS
ii. In complex cases that require divestures of assets, “WHENEVER PRUDENTIAL
CADE prefers that the parties seek for an upfront ASPECTS INDICATE IMMINENT
buyer and conclude the divesture within six months AND SIGNIFICANT RISKS
after the agency approves it; TO THE STABILITY AND
SOLIDITY OF THE NATIONAL
FINANCIAL SYSTEM”.