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Brazilian brokerage firms seeking new business models amid hard times

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Brazilian brokerage firms seeking new business models amid hard times

As an increasing number of Brazilian brokerage firms are feelingthe squeeze from the tightening Brazilian recession, they are either looking tomerge or implement new business models as a solution, Valor Econômico reported.

Recently, FatorSA Corretora de Valores announced plans to seek a partner to outsourceits stock operations after sharp losses in 2015, the report noted.

The industry is also looking for help with tax changes for thesmaller and midsized brokerage firm. Caio Villares of Ancord, Brazil's nationalassociation of brokers and dealers, said the organization has been talking withBovespa, the securities exchange commission CVM and the central bank to try andimplement changes that would improve the tax structure for independent brokerages.

"They all have the same taxation of larger ones, which becomesineffective for smaller brokerage companies," Villares said, adding that eventhough the discussion is underway, it will take some time to find viable solutions.