Brazil wrappers: COEs continue to thrive, lack of market transparency remains

Taxes are levied on revenues and cash flows rather than income or value added create a bias towards a system in which profits and losses of individual contracts can be netted, which reduces the tax burden. This is the case on exchanges, where purchases and sales of the same contract can be offset against each other, but not in most OTC markets, where positions are closed by offsetting outstanding trades. (Source: Bank for International Settlements (BIS)) Over the past year, the Brazilian finan