Circular No. 4013 — Amends Circular No. 3,590 of April 26, 2012, Regarding the Analysis of Concentration Acts in the National Financial System by the Central Bank of Brazil

The Collegiate Board of Directors of the Central Bank of Brazil, in a session held on April 28, 2020, based on Article 18, § 2, of Law No. 4,595 of December 31, 1964, and taking into account the provisions of Article 10, item X, items "c" and "g", of the aforementioned Law,

R E S O L V E:

Art. 1. Circular No. 3,590 of April 26, 2012, shall enter into force with the following alterations:

“Art. 1. The following concentration acts involving, directly or indirectly, financial institutions shall be submitted to the Central Bank of Brazil:

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IV - transfer of business;

V - execution of contracts or creation of corporate structures with a view to cooperation in the financial sector;

VI - acquisition of a minority stake that results, for the acquiring institution or its holding company, in a direct or indirect participation of 5% (five percent) or more of the voting capital of the acquired institution; and

VII - the last acquisition that results, for the acquiring institution or its holding company, in an increase in direct or indirect corporate participation greater than or equal to 5% (five percent), in cases where the investor holds 5% (five percent) or more of the voting capital of the acquired entity.

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§ 2. ..........................................................

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II - assignments of credits that do not involve the operations referred to in items I to VII; and

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§ 3. The acts referred to in the main text of this article must be submitted to the examination of the Central Bank of Brazil within a period of up to thirty days, counted from the first legal act celebrated between the parties.” (NR)

“Art. 2. The acts referred to in Art. 1 must be submitted to the Central Bank of Brazil with the following information and documents:

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§ 1. In the case of the operation referred to in items I and II of Art. 1, the following additional information must be provided to the Central Bank of Brazil:

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“Art. 3. The Central Bank of Brazil may request other documents and information, including from institutions within the financial system that, although not involved in the operation, are relevant for the analysis of the concentration act.” (NR)

“Art. 6. The specific procedures regarding the provision of information by credit cooperatives for the examination of concentration acts in this segment shall be established in a complementary normative act of the Central Bank of Brazil.” (NR)

“Art. 6-A. The analysis by the Central Bank of Brazil will prioritize prudential aspects involved in the concentration act referred to in the main text of Art. 1, when supervening situations, at its discretion, indicate the existence of relevant and imminent risks to the solvency and stability of the National Financial System.

Sole Paragraph. For the purposes of this article, concentration acts with prudential aspects are considered those that, in the judgment of the Central Bank of Brazil:

I - involve risk to the solvency of a financial institution or a segment of the National Financial System;

II - compromise the maintenance of the stability of the National Financial System and the prevention of systemic crisis;

III - prejudice the effectiveness of a resolution regime applied to a financial institution;

IV - prejudice the effectiveness of measures necessary to mitigate the need for the application of a resolution regime; or

V - prejudice the effectiveness of measures necessary to reverse a trajectory of loss of solvency of a financial institution or a segment of the National Financial System, with a business model identified as inconsistent, vulnerable, or unviable.” (NR)

Art. 2. Item I of § 1 of Art. 1 of Circular No. 3,590 of 2012 is hereby repealed.

Art. 3. This Circular enters into force on June 1, 2020.

João Manoel Pinho de Mello Otávio Ribeiro Damaso Director of System Organization Director of Regulation and Resolution