BCB RESOLUTION NO. 197, OF MARCH 11, 2022

Regulatory document revoked, from 1/1/2025, by BCB Resolution No. 436, of 11/28/2024.

Classifies the prudential conglomerate integrated by at least one institution that performs payment services and establishes segmentation for prudential conglomerates classified as Type 3 for purposes of applying proportional prudential regulation.

The Collegiate Board of the Central Bank of Brazil, in a session held on March 9, 2022, based on arts. 9, item II, and 15 of Law No. 12,865, of October 9, 2013, and taking into account the provisions of art. 14 of Resolution No. 4,282, of November 4, 2013,

RESOLVES:

CHAPTER I

OF THE OBJECT AND SCOPE OF APPLICATION

Art. 1. This Resolution classifies the prudential conglomerate integrated by at least one institution that performs payment services and establishes segmentation for prudential conglomerates classified as Type 3 for purposes of applying proportional prudential regulation, considering the size of the institutions that make up each segment.

§ 1. For the purposes of this Resolution, payment services are those provided for in art. 3 of BCB Resolution No. 80, of March 25, 2021.

§ 2. This Resolution does not apply to consortium administrators.

CHAPTER II

OF THE CLASSIFICATION OF THE PRUDENTIAL CONGLOMERATE AND PROPORTIONAL RISK REGULATION

Art. 2. For the purposes of this Resolution, the prudential conglomerate integrated by at least one institution that performs payment services must be classified into one of the following types:

I - Type 1: prudential conglomerate whose lead institution is a financial institution or another institution authorized to operate by the Central Bank of Brazil subject to Law No. 4,595, of December 31, 1964;

II - Type 2: prudential conglomerate whose lead institution is a payment institution and that is not integrated by a financial institution or another institution authorized to operate by the Central Bank of Brazil subject to Law No. 4,595, of 1964, or subject to Law No. 10,194, of February 14, 2001; or

III - Type 3: prudential conglomerate whose lead institution is a payment institution and that is integrated by a financial institution or another institution authorized to operate by the Central Bank of Brazil subject to Law No. 4,595, of 1964, or subject to Law No. 10,194, of 2001.

§ 1. For the purposes of this Resolution, the lead institution of a prudential conglomerate is defined in accordance with the regulation dealing with the accounting criteria for the preparation of consolidated accounting documents of the prudential conglomerate.

§ 2. A financial institution or another institution authorized to operate by the Central Bank of Brazil subject to Law No. 4,595, of 1964, or to Law No. 10,194, of 2001, that performs payment services and is not part of a prudential conglomerate must also be classified as Type 1.

§ 3. The proportional application of prudential regulation defined by the Central Bank of Brazil:

I - for the Type 2 conglomerate and for the payment institution not part of a prudential conglomerate, is defined in specific regulation, considering the respective risk profile; and

II - for the Type 3 conglomerate, must consider the segment in which it is classified and its risk profile as provided for in art. 5.

§ 4. It is the responsibility of the lead institution to comply with the obligations assigned to the respective conglomerate provided for in this Resolution.

CHAPTER III

OF THE TRANSITION BETWEEN CONGLOMERATE TYPES

Art. 3. A period of 3 (three) months will be granted for adaptation to the prudential framework applicable to Type 3 in the following cases:

I - the payment institution acquires control of a financial institution or another institution authorized to operate by the Central Bank of Brazil subject to Law No. 4,595, of 1964, or subject to Law No. 10,194, of 2001; and

II - the Type 2 conglomerate becomes integrated by a financial institution or another institution authorized to operate by the Central Bank of Brazil subject to Law No. 4,595, of 1964, or subject to Law No. 10,194, of 2001.

Art. 4. The Type 3 conglomerate that ceases to be integrated by a financial institution or another institution authorized to operate by the Central Bank of Brazil subject to Law No. 4,595, of 1964, or subject to Law No. 10,194, of 2001, will have a period of 3 (three) months to adapt to the prudential framework applicable to the Type 2 conglomerate.

CHAPTER IV

OF THE SEGMENTS

Art. 5. The prudential conglomerate referred to in art. 2, item III, must be classified into one of the following segments:

I - Segment 2 (S2);

II - Segment 3 (S3);

III - Segment 4 (S4); or

IV - Segment 5 (S5).

§ 1. The classification provided for in the main text must consider the information of the entities participating in the respective conglomerate on a consolidated basis, in accordance with the Accounting Standard of Institutions Regulated by the Central Bank of Brazil (Cosif).

§ 2. S2 is composed of prudential conglomerates of size equal to or greater than 1% (one percent) of Gross Domestic Product (GDP).

§ 3. S3 is composed of prudential conglomerates of size less than 1% (one percent) and equal to or greater than 0.1% (one tenth of a percent) of GDP.

§ 4. S4 is composed of prudential conglomerates of size less than 0.1% (one tenth of a percent) of GDP.

§ 5. S5 is composed of institutions of size less than 0.1% (one tenth of a percent) of GDP, which are not multiple banks, commercial banks, investment banks, foreign exchange banks, savings banks, or development agencies, and that use a simplified optional methodology for calculating the minimum requirement for Simplified Reference Equity (PRS5).

§ 6. For a Type 3 prudential conglomerate constituted after the entry into force of this Resolution, the initial classification must be calculated considering the size of the payment institutions and other institutions, entities, and funds comprising the conglomerate, based on:

I - consolidated accounting information, in the case of institutions in operation; and

II - information contained in the business plan submitted to the Central Bank of Brazil, in the case of an institution not yet authorized.

CHAPTER V

OF DEFINITIONS

Art. 6. For the purposes of this Resolution, size is defined based on the ratio between the value of the Total Assets of the prudential conglomerate and the value of Brazil's GDP.

§ 1. For the purposes of the main text, the following must be considered:

I - Total Assets, calculated according to the criteria established in Cosif; and

II - Brazil's GDP at market prices and current values published by the Brazilian Institute of Geography and Statistics (IBGE), accumulated for a period of 4 (four) consecutive quarters ending on each base date mentioned in § 2.

§ 2. For the purposes of § 1, the respective values relative to the base dates of June 30 and December 31 of each year must be considered, calculated within 90 (ninety) days after the base date to which they refer, with no subsequent revision permitted.

CHAPTER VI

OF THE ALTERATION OF CLASSIFICATION

Art. 7. The alteration of classification referred to in art. 5 must occur:

I - for S2, when the prudential conglomerate meets the provisions of § 2 of art. 5 for 3 (three) consecutive semesters, if coming from S3, S4, or S5;

II - for S3, when the prudential conglomerate meets the provisions of § 3 of art. 5:

a) for 3 (three) consecutive semesters, if coming from S4 or S5;

b) for 5 (five) consecutive semesters, if coming from S2;

III - for S4:

a) when the prudential conglomerate meets the provisions of § 4 of art. 5 for 5 (five) consecutive semesters, if coming from S2 or S3;

b) immediately, if coming from S5, upon ceasing to use the simplified optional methodology for calculating the minimum requirements for Reference Equity, Tier 1, and Core Capital; and

IV - for S5, immediately, when the prudential conglomerate meets the requirements mentioned in § 5 of art. 5.

Art. 8. The Central Bank of Brazil may determine the alteration of the classification of the prudential conglomerate:

I - before the periods mentioned in art. 7 have elapsed, provided that its discretionary assessment indicates:

a) absence of perspective of return to meeting the requirements for classification in the segment of origin; and

b) capacity to meet the prudential regulation applicable to the segment of destination;

II - between S2, S3, S4, and S5, based on supervisory actions that demonstrate the best alignment of the activities developed by the prudential conglomerate and the prudential regulation of the segment of destination; and

III - in the case of change of corporate purpose, creation or cancellation of operational portfolio, merger, spin-off, incorporation, or changes in control, as well as significant change of the business model at any time, considering the perspectives for the size of the prudential conglomerate.

§ 1. The date of the alteration of classification referred to in items II and III must be fixed by the Central Bank of Brazil according to the particularities of each case.

§ 2. A prudential conglomerate whose classification is altered from S5 to other segments in accordance with item II of the main text will only be reclassified into S5 by determination of the Central Bank of Brazil.

Art. 9. Alterations of classification take effect after the end of the semester following the date of the respective alteration.

Sole Paragraph. The provisions of the main text do not apply to the cases provided for in art. 7, item III, letter “b”, and item IV, when the alterations will take effect immediately.

CHAPTER VII

OF TRANSPARENCY

Art. 10. The Central Bank of Brazil will publish information regarding the classification of the prudential conglomerates referred to in this Resolution at least semi-annually.

CHAPTER VIII

OF TRANSITIONAL AND FINAL PROVISIONS

Art. 11. Until December 31, 2024, the Type 3 prudential conglomerate will be classified in S4, regardless of its size, or in S5.

§ 1. Classification in S5 depends on the option to use the simplified methodology and is conditioned on meeting the requirements established in art. 5, § 5, and on meeting the specific regulation.

§ 2. The classification may be altered by the Central Bank of Brazil, in accordance with art. 8.

Art. 12. This Resolution enters into force on January 1, 2023.

Art. 12. This Resolution enters into force on July 1, 2023. (Wording given, from 12/1/2022, by BCB Resolution No. 258, of 11/18/2022.)

Otávio Ribeiro Damaso
Director of Regulation