BCB Resolution No. 199 — Methodology for Calculating Reference Equity (PR) for Type 3 Prudential Conglomerates

Resolução Nº 199

BCB RESOLUTION NO. 199, OF MARCH 11, 2022

Specifies the methodology for calculating the Reference Equity (PR) for a prudential conglomerate classified as Type 3.

Specifies the methodology for calculating the Reference Equity – PR for an institution classified as Type 3. (Revised, effective from 1/1/2025, by BCB Resolution No. 447, of 12/19/2024.)

The Collegiate Board of the Central Bank of Brazil, in a session held on March 9, 2022, based on arts. 9, item II, 14 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,

R E S O L V E S:

TITLE I

PRELIMINARY PROVISIONS

CHAPTER I

OF THE OBJECT AND SCOPE OF APPLICATION

Art. 1º This Resolution establishes the calculation methodology for Reference Equity (PR) calculated by a prudential conglomerate classified as Type 3, as established in BCB Resolution No. 197, of March 11, 2022.

Art. 1º This Resolution establishes the calculation methodology for Reference Equity – PR calculated by an institution classified as Type 3, as established in BCB Resolution No. 436, of November 28, 2024. (Revised, effective from 1/1/2025, by BCB Resolution No. 447, of 12/19/2024.)

§ 1º The calculation of PR must be performed on a consolidated basis for the entities comprising the same prudential conglomerate, in accordance with specific regulation.

§ 1º The provisions of this Resolution apply on a consolidated basis to the prudential conglomerate constituted in accordance with the Accounting Standard for Institutions Regulated by the Central Bank of Brazil – Cosif. (Revised, effective from 1/1/2025, by BCB Resolution No. 447, of 12/19/2024.)

§ 2º The provisions of the main text are excepted for the conglomerate classified as Type 3 framed in Segment 5 (S5), in accordance with BCB Resolution No. 197, of 2022.

§ 2º The provisions of this Resolution do not apply to the Type 3 institution framed in Segment 5 – S5, in accordance with BCB Resolution No. 436, of November 28, 2024. (Revised, effective from 1/1/2025, by BCB Resolution No. 447, of 12/19/2024.)

CHAPTER II

OF DEFINITIONS

Art. 2º PR consists of the sum of Tier 1 and Tier 2.

§ 1º Tier 1 consists of the sum of Principal Capital and Complementary Capital.

§ 2º For the purposes of calculating the value of PR, the following definitions apply:

I - subsidiary is the entity comprising the conglomerate, with the exception of the leading entity and consolidated investment fund; and

I - subsidiary is the entity comprising the conglomerate, with the exception of the leading institution and consolidated investment fund; and (Revised, effective from 1/1/2025, by BCB Resolution No. 447, of 12/19/2024.)

II - non-controlling interest is the portion of the subsidiary's capital not held, directly or indirectly, by the leading institution of the conglomerate.

TITLE II

OF THE CALCULATION OF REFERENCE EQUITY

CHAPTER I

OF THE CALCULATION OF TIER 1

Section I

Of the calculation of Principal Capital

Art. 3º Principal Capital is calculated through:

I - the sum of the corresponding values:

a) to the share capital constituted by quotas or by non-redemption shares and without mechanisms for dividend cumulativity;

b) to capital reserves, revaluation reserves, and profit reserves;

c) to unrealized gains resulting from asset valuation adjustments, with the exception of those provided for in item “g”;

c) to unrealized gains resulting from asset valuation adjustments, with the exception of those provided for in items “g” and “h”; (Revised by BCB Resolution No. 474, of 5/22/2025.)

d) to accumulated surpluses or profits;

e) to credit result accounts;

f) to the deposit in a restricted account admitted for the purposes of reclassification of the conglomerate, in situations that constitute disqualification in the minimum capital requirements, in accordance with specific regulation;

f) to the deposit in a restricted account admitted for the purposes of reclassification of the institution, in situations that constitute disqualification in the minimum capital requirements, in accordance with specific regulation; (Revised, effective from 1/1/2025, by BCB Resolution No. 447, of 12/19/2024.)

g) to the balance of the positive adjustment to the market value of derivative financial instruments used for cash flow hedge; and

g) to the balance of the positive adjustment to the market value of derivative financial instruments used for hedge of cash flow; (Revised, effective from 1/1/2025, by BCB Resolution No. 448, of 12/23/2024.)

h) to the balance of the positive adjustment to the market value of derivative financial instruments accounted for as liabilities resulting from changes in the institution's own credit risk, net of tax effects; and

i) to the absolute value of the negative adjustment registered in equity, resulting from the application, on January 1, 2025, of the criteria for the formation of provisions for expected losses provided for in BCB Resolution No. 352, of November 23, 2023, including the floors established therein, observing the applicable percentages in the form of § 9º; and (Included, effective from 1/1/2025, by BCB Resolution No. 448, of 12/23/2024.)

II - the deduction of the corresponding values:

a) to unrealized losses resulting from asset valuation adjustments, with the exception of those provided for in item “e”;

a) to unrealized losses resulting from asset valuation adjustments, with the exception of those provided for in items “e” and “f”; (Revised by BCB Resolution No. 474, of 5/22/2025.)

b) to shares or any other instruments of its own issuance, authorized to compose Principal Capital, acquired directly, indirectly, or synthetically, including through:

1. quotas of investment funds, proportionally to the participation of these instruments in the fund's portfolio;

2. entities similar to financial institutions or non-financial entities, controlled; or

3. derivative operations, including index derivatives;

c) to accumulated losses or deficits;

d) to debit result accounts;

e) to the balance of the negative adjustment to the market value of derivative financial instruments used for hedge of cash flow;

f) to the balance of the negative adjustment to the market value of derivative financial instruments accounted for as liabilities resulting from changes in the institution's own credit risk, net of tax effects; and

g) to the prudential adjustments enumerated in art. 4º.

§ 1º In the sum of the values referred to in item I of the main text, the capital increase in the process of authorization must not be considered, with the exception of the capital increase carried out through:

I - incorporation of reserves and accumulated profits; and

II - the deposit in a restricted account mentioned in item “f” of item I of the main text.

§ 2º For the purposes of calculating the values corresponding to items “g” of item I and “e” of item II of the main text, the values relating to the market value adjustments of derivative financial instruments used for hedge of cash flow of protected items that do not have their mark-to-market adjustments registered in accounting must not be considered.

§ 3º The following must not be considered in Principal Capital:

I - resources raised but not yet fully paid;

II - shares for which the institution has created, upon issuance, an expectation of redemption, reimbursement, amortization, repurchase, or cancellation;

III - shares whose purchase was financed, directly or indirectly, by the issuing institution or by any entity of the conglomerate; and

IV - savings deposits in savings and loan associations.

§ 4º For the purposes of calculating the values corresponding to item “b” of item II of the main text, the respective values may be calculated considering the net position between long and short positions, provided there is no counterparty credit risk in the short positions.

§ 5º For indirect acquisitions carried out through index operations, including derivatives, the net calculation referred to in § 4º must consider only the compensation between long and short positions of operations whose underlying asset is the respective index, whether or not there is counterparty credit risk.

§ 6º For the calculation of the net position mentioned in §§ 4º and 5º, the effective residual maturity of the short position must be:

I - equal to or greater than that of the long position; or

II - greater than 1 (one) year.

§ 7º For the purposes of calculating the values referred to in item “h” of item I of the main text and item “f” of item II of the main text, the values relating to the market value adjustments of derivative financial instruments accounted for as liabilities evaluated at market, in accordance with specific regulation, must not be considered.

§ 8º The negative adjustment calculated on January 1, 2025, mentioned in item I, item “i”, of the main text must be net of tax effects and consider all financial instruments subject to the formation of provisions for losses associated with credit risk, in accordance with BCB Resolution No. 352, of November 23, 2023. (Included, effective from 1/1/2025, by BCB Resolution No. 448, of 12/23/2024.)

§ 9º The value referred to in item I, item “i”, of the main text must be multiplied by: (Included, effective from 1/1/2025, by BCB Resolution No. 448, of 12/23/2024.)

I - 75% (seventy-five percent), until December 31, 2025; (Included, effective from 1/1/2025, by BCB Resolution No. 448, of 12/23/2024.)

II - 50% (fifty percent), from January 1, 2026 to December 31, 2026; (Included, effective from 1/1/2025, by BCB Resolution No. 448, of 12/23/2024.)

III - 25% (twenty-five percent), from January 1, 2027 to December 31, 2027; and (Included, effective from 1/1/2025, by BCB Resolution No. 448, of 12/23/2024.)

IV - 0% (zero percent), from January 1, 2028. (Included, effective from 1/1/2025, by BCB Resolution No. 448, of 12/23/2024.)

Art. 4º The prudential adjustments mentioned in art. 3º, item II, item “g”, correspond to the following equity elements:

I - premiums paid in the acquisition of investments based on the expectation of future profitability, net of deferred tax liabilities associated with them;

II - intangible assets;

III - actuarial assets related to defined benefit pension funds, net of deferred tax liabilities associated with them to which the conglomerate does not have unrestricted access;

III - actuarial assets related to defined benefit pension funds, net of deferred tax liabilities associated with them to which the institution does not have unrestricted access; (Revised, effective from 1/1/2025, by BCB Resolution No. 447, of 12/19/2024.)

IV - in accordance with art. 7º, investments in:

a) entities similar to financial institutions not consolidated, insurance companies, reinsurers, capitalization companies, and open complementary pension entities;

b) institutions authorized to operate by the Central Bank of Brazil or in institutions located abroad that carry out activities equivalent to those of a financial institution in Brazil, which do not comprise the conglomerate;

V - non-controlling interest, in accordance with art. 9º, § 1º, in the capital of:

a) a subsidiary that is an institution authorized to operate by the Central Bank of Brazil; and

b) a subsidiary abroad that carries out activities equivalent to those of a financial institution in Brazil;

VI - tax credits resulting from temporary differences that depend on the generation of future taxable profits or revenues for their realization, in accordance with art. 7º;

VII - tax credits resulting from tax losses and negative base of the Social Contribution on Net Profit and those originated from this contribution relating to assessment periods closed until December 31, 1998, calculated in accordance with art. 8º of Provisional Measure No. 2.158-35, of August 24, 2001;

VIII - value corresponding to the investment in a branch, a financial institution controlled abroad, or a non-financial entity that comprises the conglomerate, with respect to which the Central Bank of Brazil does not have access to sufficient information, data, and documents for the purposes of global consolidated supervision;

IX - value of the difference between the provisioned value and the expected loss in exposures covered by internal credit risk classification systems (IRB approaches);

X - non-controlling interest in the capital of:

a) a subsidiary in the country that is not an institution authorized to operate by the Central Bank of Brazil; and

b) a subsidiary abroad that does not carry out activities equivalent to those of a financial institution in Brazil;

XI - value of the difference between the book value and the amount of prudential adjustments resulting from the evaluation provided for in accordance with specific regulation.

§ 1º For the purposes of calculating the value relating to the equity element mentioned in item VI of the main text, it is optional to deduct from the value of tax credits resulting from temporary differences the value of deferred tax obligations of the same entity or of entities belonging to the same conglomerate, with the exception of tax obligations associated with:

I - premiums paid in the acquisition of investments based on the expectation of future profitability; and

II - actuarial assets related to defined benefit pension funds.

§ 2º For the purposes of calculating the value relating to the equity element mentioned in item VII of the main text, it is optional to deduct from the total registered balance of tax credits resulting from tax losses and negative base of the Social Contribution on Net Profit any remaining balance of deferred tax obligations resulting from the treatment provided for in § 1º.

§ 3º Only the positive value of tax credits after the deductions mentioned in §§ 1º and 2º must be considered, for the purposes of calculating the values relating to the equity elements mentioned in items VI and VII of the main text.

§ 4º The calculation mentioned in §§ 1º to 3º must be carried out only between the existing tax credits and deferred tax obligations, separately by relevant tax authority, in each jurisdiction in which an entity comprising the conglomerate has a branch or subsidiary.

§ 4º The calculation mentioned in §§ 1º to 3º must be carried out only between the existing tax credits and deferred tax obligations, separately by relevant tax authority, in each jurisdiction in which the institution or the entity comprising the conglomerate has a branch or subsidiary. (Revised, effective from 1/1/2025, by BCB Resolution No. 447, of 12/19/2024.)

§ 5º At the discretion of the Central Bank of Brazil, the value relating to the equity element mentioned in item VIII of the main text may be replaced by a specific value, limited to the total of assets plus the exposures not recognized in the balance sheet of the branch or subsidiary that is not an institution authorized to operate by the Central Bank of Brazil.

§ 6º For the purposes of calculating the value relating to the equity element mentioned in item IV, item “a”, of the main text, entities similar to financial institutions are considered:

I - consortium administrators;

II - payment institutions;

III - companies that carry out the acquisition of credit operations, including real estate, such as business development companies, securitization companies, and single-purpose companies; and

IV - other legal entities headquartered in the country whose corporate purpose is exclusively the equity participation in the entities mentioned in items I to III.

§ 7º The prudential adjustment referred to in item IV, item “a”, of the main text, includes investments in any instrument convertible into equity participation in the invested entity or that can be unilaterally extinguished.

§ 8º The deduction of the prudential adjustment referred to in item IV of the main text can be calculated considering the net position in the conglomerate between long and short positions by instrument and by invested entity.

§ 8º The deduction of the prudential adjustment referred to in item IV of the main text can be calculated considering the net position in the institution between long and short positions by instrument and by invested institution. (Revised, effective from 1/1/2025, by BCB Resolution No. 447, of 12/19/2024.)

§ 9º For the calculation of the net position mentioned in § 8º, the effective residual maturity of the short position must be:

I - equal to or greater than that of the long position; or

II - greater than 1 (one) year.

§ 10. The following must not be considered in the deduction of the prudential adjustments mentioned in the main text: the values relating to losses in financial leasing to be amortized deducted in the calculation of insufficiency or subsequent depreciation.

§ 11. The prudential adjustment provided for in item V, item “a”, of the main text does not apply to the portion of non-controlling interest held, directly or indirectly, by the controller of the leading entity of the conglomerate.

§ 11. The prudential adjustment provided for in item V, item “a”, of the main text does not apply to the portion of non-controlling interest held, directly or indirectly, by the controller of the leading institution of the conglomerate. (Revised, effective from 1/1/2025, by BCB Resolution No. 447, of 12/19/2024.)

§ 12. The deduction of prudential adjustments resulting from the consolidation of a subsidiary is limited to the total value of the assets of the consolidated subsidiary, plus the exposures not recognized in the balance sheet of that subsidiary.

Section II

Of the calculation of Complementary Capital

Art. 5º Complementary Capital is calculated through:

I - the sum of the values corresponding to instruments that meet the requirements established in art. 13; and

II - the deduction of the corresponding values:

a) to investments in instruments eligible for PR issued by an institution authorized to operate by the Central Bank of Brazil or by an institution located abroad that carries out activities equivalent to those of a financial institution in Brazil, which do not comprise the conglomerate, in accordance with art. 7º; and

b) to shares of its own issuance and to instruments that meet the requirements established in art. 13, authorized to compose Complementary Capital, redeemed or repurchased directly, indirectly, or synthetically, including through:

1. quotas of investment funds, proportionally to the participation of these instruments in the fund's portfolio;

2. entities similar to financial institutions or non-financial entities, controlled; or

3. derivative operations, including index derivatives.

§ 1º In the deduction referred to in item II of the main text, the respective values may be calculated considering the net position in the conglomerate between long and short positions by instrument and by invested entity.

§ 1º In the deduction referred to in item II of the main text, the respective values may be calculated considering the net position in the institution between long and short positions by instrument and by invested institution. (Revised, effective from 1/1/2025, by BCB Resolution No. 447, of 12/19/2024.)

§ 2º For the calculation of the net position mentioned in § 1º, the effective residual maturity of the short position must be:

I - equal to or greater than that of the long position; or

II - greater than 1 (one) year.

§ 3º The values relating to the placement on the market of instruments that meet the requirements established in art. 13, deducted as a result of the provisions of the main text, item II, item “b”, may again compose Complementary Capital upon communication to the Central Bank of Brazil.

CHAPTER II

OF THE CALCULATION OF TIER 2

Art. 6º Tier 2 is calculated through:

I - the sum of the corresponding values:

a) to instruments that meet the requirements established in art. 18; and

b) to the difference between the provisioned value and the expected loss in exposures covered by internal credit risk classification systems (IRB approaches); and

II - the deduction of the corresponding values:

a) to investments in instruments eligible for PR issued by an institution authorized to operate by the Central Bank of Brazil or by an institution located abroad that carries out activities equivalent to those of a financial institution in Brazil, which do not comprise the conglomerate, in accordance with art. 7º; and

b) to shares of its own issuance and to instruments that meet the requirements established in art. 18, authorized to compose Tier 2, redeemed or repurchased directly, indirectly, or synthetically, including through:

1. quotas of investment funds, proportionally to the participation of these instruments in the fund's portfolio;

2. entities similar to financial institutions or non-financial entities, controlled; or

3. derivative operations, including index derivatives.

§ 1º The participation in the composition of Level II of the difference mentioned in the caput, item I, letter “b”, is limited to a maximum equivalent to 0.6% (six tenths of one percent) of the RWACIRB portion, defined in specific regulation.

§ 2º In the deduction referred to in item II of the caput, the respective values may be calculated considering the net position in the conglomerate between purchased and sold positions by instrument and by invested entity.

§ 2º In the deduction referred to in item II of the caput, the respective values may be calculated considering the net position in the institution between purchased and sold positions by instrument and by invested institution. (Redacted, effective from 1/1/2025, by Resolution BCB No. 447, of 12/19/2024.)

§ 3º For the calculation of the net position mentioned in § 2º, the effective residual maturity of the sold position must be:

I - equal to or greater than that of the purchased position; or

II - greater than 1 (one) year.

§ 4º The values related to the placement in the market of instruments that meet the requirements established in art. 18, deducted as a result of the provision in the caput, item II, letter “b”, may return to compose Level II upon communication to the Central Bank of Brazil and provided that the interval between the date of placement and the maturity date is greater than 5 (five) years.

CHAPTER III

OF THE DEDUCTION OF INVESTMENTS IN OTHER ENTITIES AND TAX CREDITS ARISING FROM TEMPORARY DIFFERENCES

Art. 7º The following must be deducted from Principal Capital, Supplementary Capital, or Level II:

I - investments in the entities mentioned in art. 4º, item IV, letter “a”, observing the provision in art. 4º, § 7º;

II - investments in Principal Capital of entities mentioned in art. 4º, item IV, letter “b”;

III - the equity elements mentioned in art. 4º, item VI;

IV - investments in instruments eligible for PR mentioned in arts. 5º, item II, letter “a”, and 6º, item II, letter “a”; and

V - investments in other instruments that meet the following conditions:

a) they are eligible to meet the minimum regulatory requirement of an institution listed as systemically important on a global basis by the Financial Stability Board (FSB) or on a domestic basis by the competent authority; and

b) they can be extinguished or converted into shares, as a result of the action of competent authorities during the course of a resolution regime.

§ 1º The deduction provided for in the caput must also be carried out for values referring to the following situations:

I - direct, indirect, or synthetic acquisition of the assets mentioned in the caput through:

a) an entity similar to a financial institution or a non-financial entity, controlled; and

b) derivative operations, including index derivatives;

II - acquisition of the instruments mentioned in the caput through investment fund quotas, proportionally to the participation of these in the fund's portfolio;

III - granting of credit to third parties with knowledge, even if subsequent to the granting, that the resources are specifically intended to compose the capital of an institution authorized to operate by the Central Bank of Brazil, with the exception of credit cooperatives;

IV - acquisition of instruments that, during the course of a resolution regime, absorb losses prior to or concomitantly with the instruments referred to in item IV of the caput.

§ 2º For the purposes of the provision in letter “a” of item V of the caput, the minimum requirement is understood as that which is intended to ensure the availability of resources for loss absorption during the course of a resolution regime and can be met by instruments eligible to compose PR.

§ 3º For the purposes of this article, resolution regime is that defined as the restructuring process conducted by public authorities in the face of threats to the operational continuity of the financial institution that may have repercussions on financial stability.

§ 4º For the purposes of the provisions in §§ 5º to 7º, a participation in the entity mentioned below shall be considered significant when the conglomerate holds more than 10% (ten percent) of the social capital of:

§ 4º For the purposes of the provisions in §§ 5º to 7º, a participation in the entity mentioned below shall be considered significant when the institution holds more than 10% (ten percent) of the social capital of:

I - an entity similar to a non-consolidated financial institution, insurance company, reinsurance company, capitalization society, and open complementary pension entity; or

II - an institution authorized to operate by the Central Bank of Brazil or of an institution located abroad that exercises an activity equivalent to that of a financial institution in Brazil, which does not compose the conglomerate.

§ 5º The following investments shall not be deducted if their aggregated value is less than 10% (ten percent) of the value calculated according to the provision in art. 3º, disregarding the deductions referring to the equity elements mentioned in art. 4º, items IV and VI:

I - investments in the entity mentioned in § 4º, item I, and those convertible into equity participation in the entity or that can be unilaterally extinguished, in accordance with art. 4º, § 7º, when the respective participation is not significant; and

II - investments in the instruments referred to in items II, IV, and V of the caput, when the participation in the institution mentioned in § 4º, item II, is not significant.

§ 6º The following items must be deducted from Principal Capital, observing the provision in § 7º:

I - the equity element mentioned in art. 4º, item VI;

II - investments in the entity mentioned in § 4º, item I, and those convertible into equity participation in the entity or that can be unilaterally extinguished, in accordance with art. 4º, § 7º, when the respective participation is significant; and

III - investments in Principal Capital, when the participation in the entity mentioned in § 4º, item II, is significant.

§ 7º The items listed in § 6º that represent:

I - up to 10% (ten percent) of the value calculated in art. 3º, disregarding the deduction provided in § 6º and the deduction of values resulting from the treatment specified in this paragraph, observing that:

a) for the value referring to § 6º, item I, the indicated limit is individualized; and

b) for the values referring to § 6º, items II and III, the indicated limit is applied to the aggregate of the two items; and

II - in aggregate, up to 15% (fifteen percent) of Principal Capital, considering the deduction of values referring to all equity elements mentioned in art. 4º and in §§ 5º and 6º, as well as the treatment specified in this paragraph.

§ 8º After the adjustments referred to in §§ 5º to 7º, the deduction provided for in the caput must be carried out:

I - in the case of the value that exceeds the limit applied to the aggregated value established in § 5º:

a) in Principal Capital, for investments in the entity mentioned in § 4º, item I; and

b) in each portion of PR, in proportion to the investments made, for the other investments;

II - in the case of the instruments referred to in item V of the caput, in Level II; and

III - in the other cases, in the respective portion of PR to which the equity element is eligible.

§ 9º In the event that the value to be deducted in the manner established in § 8º exceeds the respective portion of PR, the excess must be deducted:

I - from Supplementary Capital and Principal Capital, in that order, in the case of instruments eligible for Level II or of the instruments referred to in item V of the caput; and

II - from Principal Capital, in the case of instruments eligible for Supplementary Capital.

§ 10. The granting of credit provided for in § 1º, item III, must be considered as participation held by the institution in the assessment of significance referred to in § 4º, when the resources of the credit granting are intended to compose the social capital, except in the case of acquisition of equity participation authorized by the Central Bank of Brazil.

§ 11. For the purposes of §§ 5º to 9º, the granting of credit provided for in § 1º, item III:

I - when the institution's participation in the social capital of the investee is not significant or when applied to the exception referred to in § 10, must follow the treatment for the institution's investments provided for in § 5º, item II; and

II - when the participation is significant:

a) must follow the treatment for the institution's investments in Principal Capital provided for in §§ 6º, item III, and 7º; or

b) must be deducted in the manner of § 8º, item III, when the resources are intended to compose Supplementary Capital or Level II.

Art. 8º The reciprocal acquisitions of instruments must be fully deducted when these acquisitions artificially increase Principal Capital, Level I, or PR or, in the case of the entity mentioned in art. 4º, item IV, letter “a”, the index object of a regulatory requirement similar to PR, of at least one of the entities involved.

§ 1º A reciprocal acquisition constitutes the investment in an instrument eligible to compose PR or, in the case of the institution mentioned in art. 4º, item IV, letter “a”, in an instrument with characteristics similar to those eligible for PR or that compose an index object of a regulatory requirement similar to PR, in immediate or future consideration, to the raising of resources through an instrument eligible to compose PR of the conglomerate.

§ 1º A reciprocal acquisition constitutes the investment in an instrument eligible to compose PR or, in the case of the institution mentioned in art. 4º, caput, item IV, letter “a”, in an instrument with characteristics similar to those of instruments eligible for PR or that are admitted for the purposes of meeting a requirement analogous to the minimum exigibility of PR, in immediate or future consideration, to the raising of resources, by the said institution, through an instrument eligible to compose PR of the investor. (Redacted, effective from 1/1/2025, by Resolution BCB No. 447, of 12/19/2024.)

§ 2º The interposition of an intermediate counterparty does not exclude the deduction referred to in the caput.

§ 3º The provision in art. 7º, § 1º applies to the provision in the caput.

§ 4º The deduction referred to in the caput must be carried out in the respective portion of PR to which the equity element is eligible.

§ 5º The acquisitions mentioned in the caput shall not be considered in the calculation referred to in art. 7º.

CHAPTER IV

OF THE DEDUCTION OF NON-CONTROLLING INTERESTS IN THE REFERENCE EQUITY OF THE CONGLOMERATE

Art. 9º The values of the non-controlling interest in the capital of a subsidiary that is an institution authorized to operate by the Central Bank of Brazil or of a subsidiary abroad that exercises an activity equivalent to that of a financial institution in Brazil that exceed the minimum requirements of Principal Capital, Level I, and PR of that subsidiary must be deducted, respectively, from Principal Capital, Level I, and PR of the conglomerate.

§ 1º For Principal Capital, the excess mentioned in the caput shall be calculated by the following formula:

KEXC-CP= Max{0; (KSUB-CP – RWASUB X 0.07) X PNCSUB-CP},

where:

I - KEXC-CP = value of the Principal Capital exceeding the respective minimum requirement of the subsidiary;

II - KSUB-CP = Principal Capital of the subsidiary;

III - RWASUB = value of risk-weighted assets (RWA) of the conglomerate attributable to the subsidiary; and

IV - PNCSUB-CP = percentage of non-controlling interest in the instruments that compose the Principal Capital of the subsidiary.

§ 2º For Level I, the excess mentioned in the caput shall be calculated by the following formula:

KEXC-NI= Max{0; (KSUB-NI – RWASUB X 0.085) X PNCSUB-NI},

where:

I - KEXC-NI = value of Level I exceeding the respective minimum requirement of the subsidiary;

II - KSUB-NI = Level I of the subsidiary;

III - RWASUB = value of risk-weighted assets (RWA) of the conglomerate attributable to the subsidiary; and

IV - PNCSUB-NI = percentage of non-controlling interest in the instruments that compose Level I of the subsidiary.

§ 3º For PR, the excess mentioned in the caput shall be calculated by the following formula:

KEXC-PR= Max{0; (KSUB-PR – RWASUB X 0.105) X PNCSUB-PR},

where:

I - KEXC-PR = value of PR exceeding the respective minimum requirement of the subsidiary;

II - KSUB-PR = PR of the subsidiary;

III - RWASUB = value of risk-weighted assets (RWA) of the conglomerate attributable to the subsidiary; and

IV - PNCSUB-PR = percentage of non-controlling interest in the instruments that compose PR of the subsidiary.

§ 4º For the purposes of the provision in the caput, the exclusion of the full value of the non-controlling interest in Principal Capital, Level I, and PR of the subsidiary is optional, observing the provision in art. 4º, § 13.

§ 4º For the purposes of the provision in the caput, the exclusion of the full value of the non-controlling interest in Principal Capital, Level I, and PR of the subsidiary is optional, observing the provision in art. 4º, § 12. (Redacted, effective from 1/1/2025, by Resolution BCB No. 447, of 12/19/2024.)

§ 5º Debt instruments issued until December 31, 2012 shall not be considered in the calculations mentioned in §§ 2º and 3º.

§ 6º For the purposes of this article, the portion of the capital of a subsidiary that is an institution authorized to operate by the Central Bank of Brazil, held, directly or indirectly, by the controller of the leading institution of the conglomerate, shall not be considered.

CHAPTER V

OF LINKED ASSET OPERATIONS

Art. 10. Resources delivered or placed at the disposal of the conglomerate mentioned in art. 1º by third parties for the purposes of carrying out linked asset operations, in accordance with Resolution No. 2,921, of January 17, 2002, are not eligible to compose PR.

Art. 10. Resources delivered or placed at the disposal of the institution mentioned in art. 1º by third parties for the purposes of carrying out linked asset operations, in accordance with Resolution No. 2,921, of January 17, 2002, are not eligible to compose PR. (Redacted, effective from 1/1/2025, by Resolution BCB No. 447, of 12/19/2024.)

TITLE III

OF THE INSTRUMENTS THAT MAY COMPOSE THE REFERENCE EQUITY

CHAPTER I

OF THE SUBORDINATION CORE

Art. 11. The contract or document that supports the raising operation through instruments eligible to compose PR, with the exception of items comprising social capital, must contain a specific chapter called Subordination Core, composed of:

I - clauses that allow evidence of compliance with the requirements for Supplementary Capital and Level II, provided for, respectively, in arts. 13 and 18;

II - clause establishing that any other clause in the contract or in another document that prejudices compliance with the requirements provided for in arts. 13 and 18 is null;

III - clause establishing that the amendment, alteration, or revocation of the terms of the Subordination Core depends on prior authorization from the Central Bank of Brazil, in accordance with art. 23; and

IV - summary of the operation, containing the following information:

a) nature of the raising;

b) amount raised; and

c) structure of the disbursement flow related to the payment of amortizations and charges.

Sole paragraph. The amendment, alteration, or revocation of the terms of the Subordination Core mentioned in the caput can only occur when business conditions are verified that, at the discretion of the Central Bank of Brazil, justify the conglomerate's claim.

Sole paragraph. The amendment, alteration, or revocation of the terms of the Subordination Core mentioned in the caput can only occur when business conditions are verified that, at the discretion of the Central Bank of Brazil, justify the institution's claim. (Redacted, effective from 1/1/2025, by Resolution BCB No. 447, of 12/19/2024.)

Art. 12. In raising operations whose terms are defined by more than one contract or document, the Subordination Core must contain the transcription of all clauses of the contracts or accessory instruments of the operation that establish its subordination to the main instrument.

CHAPTER II

OF THE INSTRUMENTS ELIGIBLE FOR SUPPLEMENTARY CAPITAL

Art. 13. To compose Supplementary Capital, instruments must meet the following requirements:

I - be registered, when issued in Brazil and, when issued abroad, whenever local legislation so permits;

II - be fully paid in cash;

III - have a perpetual nature;

IV - have their payment subordinated to the payment of other liabilities of the entity, with the exception of the payment of the elements that compose Principal Capital, in the event of dissolution of the issuing institution;

V - provide for the payment of their remuneration only with resources from profits and profit reserves eligible for distribution in the last calculation period;

VI - provide for the suspension of the payment of remuneration that exceeds the resources available for this purpose;

VII - provide for the suspension of the payment of remuneration, in the same proportion as the restriction imposed by the Central Bank of Brazil on the distribution of dividends or other results related to shares or quotas, eligible for Principal Capital;

VIII - provide for the suspension of the payment of remuneration of the instrument in the same retention percentages established for the payment of dividends and interest on equity if the conglomerate presents insufficiency in meeting the Principal Capital Additional, in accordance with specific regulation, or if the payment causes disqualification regarding the minimum requirements of Principal Capital, Level I, and PR;

IX - have the redemption or repurchase, even if carried out indirectly through an entity part of the own conglomerate or by a controlled non-financial entity, conditioned to the authorization of the Central Bank of Brazil;

X - be redeemable only at the issuer's initiative;

XI - not be subject to guarantee, insurance, or any other mechanism that obliges or allows payment or transfer of resources, directly or indirectly, from the issuing institution, from an entity of the conglomerate, or from a controlled non-financial entity, to the holder of the instrument, in a way that compromises the condition of subordination expressed in this article;

XII - not possess clauses that, directly or indirectly, alter the originally raised amount, including through agreements that oblige the issuing institution to compensate the investor if a new instrument is issued with better remuneration conditions, with the exception of the cases of repurchase and redemption provided for in art. 14;

XIII - not contain clauses that provide for variation of remuneration conditions after the issuance of the instrument, including due to fluctuations in the issuer's credit quality;

XIV - not have their purchase financed, directly or indirectly, by the issuing institution;

XV - provide for the permanent extinction and in value at least corresponding to the balance calculated in Level I, or, as defined in §§ 2º and 3º, the conversion of the same value into shares of the issuer eligible for Principal Capital, in the following situations:

a) disclosure by the conglomerate, in the manner established by the Central Bank of Brazil, that its Principal Capital is at a level below 5.125% (five and one hundred twenty-five thousandths percent) of the RWA amount, calculated in the manner established by specific regulation;

a) disclosure by the institution, in the manner established by the Central Bank of Brazil, that its Principal Capital is at a level below 5.125% (five and one hundred twenty-five thousandths percent) of the RWA amount, calculated in the manner established by specific regulation; (Redacted, effective from 1/1/2025, by Resolution BCB No. 447, of 12/19/2024.)

b) signing of a capital contribution commitment for the issuing institution, if the exception provided for in the caput of art. 28 of Complementary Law No. 101, of May 4, 2000, applies;

c) decree by the Central Bank of Brazil of a special temporary administration regime or intervention in the issuing institution; or

d) determination by the Central Bank of Brazil of extinction or conversion;

XVI - contain a clause establishing that the occurrence of the situations provided for in items V, VI, VII, VIII, XV, and XVIII shall not be considered as an event of default or another factor that generates the acceleration of maturity of debts in any legal transaction in which the issuing institution participates;

XVII - provide that the remuneration not paid due to the clause referred to in item V and the remuneration referring to the period of suspension carried out due to the provision in items VI, VII, and VIII shall be considered extinguished; and

XVIII - contain a clause providing that the extinction or conversion referred to in item XV shall not occur in the cases of revision or republication of documents that have been used by the conglomerate as a basis for the disclosure of the proportion between Principal Capital and the RWA amount, provided for in item XV, letter “a”.

XVIII - contain a clause providing that the extinction or conversion referred to in item XV shall not occur in the cases of revision or republication of documents that have been used by the institution as a basis for the disclosure of the proportion between Principal Capital and the RWA amount, provided for in item XV, letter “a”. (Redacted, effective from 1/1/2025, by Resolution BCB No. 447, of 12/19/2024.)

§ 1º In the event of issuance abroad, instruments eligible to compose Supplementary Capital must contain a clause choosing the forum in which the requirements for the instrument are recognized, to resolve any judicial disputes.

§ 2º The conversion mentioned in item XV of the caput must meet the following requirements:

I - the issuing institution must possess all necessary internal authorizations for the issuance of the instrument eligible for Supplementary Capital and of the shares to be used in the conversion, including the authorized capital referred to in art. 168 of Law No. 6,404, of December 15, 1976, in a value sufficient to cover any capital increase resulting from the conversion;

II - the conversion into shares must occur prior to the effective entry of the resources referring to the situation provided for in item XV, letter “b”, of the caput; and

III - in the conversion into shares, a maximum limit must be established on the quantity of shares to be delivered to the investor.

§ 3º When requesting the authorization referred to in Art. 23, the issuing institution must assume, in writing, before the Central Bank of Brazil, the commitment to preserve the authorized capital limit referred to in Art. 168 of Law No. 6,404 of 1976, necessary for the eventual conversion of the instruments into shares, in the manner of item XV of the caput and § 2º, item I, during the period in which the credits represented by the instruments remain enforceable.

§ 4º The contract with a clause for conversion into shares must provide for the permanent extinction of the debt in cases where the investor may waive the right to receive the shares.

§ 5º The provision in item XIII of the caput does not allow for the agreement of clauses that increase or decrease interest, stipulate additional values to be paid, or alter in any other way the remuneration of the instrument.

Art. 14. Instruments eligible to compose the Supplementary Capital may be issued with a clause providing for the issuer's option to repurchase or redeem, provided that the following requirements are met:

I - a minimum interval of 5 (five) years between the issuance date and the first date for exercising the option to repurchase or redeem;

II - contractual provision that the exercise of the option to repurchase or redeem is conditioned, on the exercise date, to the authorization of the Central Bank of Brazil; and

III - absence of characteristics that create the expectation that the repurchase or redemption will be exercised.

Art. 15. Authorization for the repurchase or redemption of instruments authorized to compose the Supplementary Capital may be granted, provided that:

I - the issuing institution meets the minimum requirements for Principal Capital, Tier 1, and Reference Equity (PR), and complies with the Principal Capital Surcharge, as defined in specific regulation; (Amended, effective 1/1/2025, by Resolution BCB No. 447 of 12/19/2024.)

II - the repurchase or redemption does not result in non-compliance with the requirements and limits or insufficiency of the Principal Capital Surcharge mentioned in item I; and

III - the issuing institution declares to the Central Bank of Brazil its intention to exercise the option to repurchase or redeem, observing the conditions established in Arts. 16 and 17.

Art. 16. The repurchase or redemption of instruments authorized to compose the Supplementary Capital, even if carried out indirectly through an entity of the conglomerate or a controlled non-financial entity, may only be permitted in the following cases:

I - issuance of new instruments eligible for Supplementary Capital, in an amount equivalent to that of the repurchased or redeemed instruments and under more favorable agreed conditions; or

II - proof of business conditions that, at the discretion of the Central Bank of Brazil, justify the conglomerate's intention.

Art. 17. The timeframes and conditions established for the repurchase or redemption of instruments authorized to compose the Supplementary Capital also apply to the termination of the contract or document supporting the funding operation.

CHAPTER III

OF INSTRUMENTS ELIGIBLE FOR TIER 2

Art. 18. To compose Tier 2, instruments must meet the following requirements:

I - be registered in the name, when issued in Brazil and, when issued abroad, whenever local legislation so permits;

II - be fully paid in cash;

III - provide for a minimum interval of 5 (five) years between the issuance date and the maturity date, and may not provide for the payment of amortizations before this interval has elapsed;

IV - have their payment subordinated to the payment of the entity's other liabilities, with the exception of the payment of elements composing Principal Capital and Supplementary Capital, in the event of dissolution of the issuing institution;

V - have early repurchase or redemption, even if carried out indirectly through an entity of the conglomerate or a controlled non-financial entity, conditioned to the authorization of the Central Bank of Brazil;

VI - be redeemable only at the issuer's initiative;

VII - not be subject to guarantee, insurance, or any other mechanism that obligates or permits payment or transfer of resources, directly or indirectly, from the issuing institution, an entity of the conglomerate, or a controlled non-financial entity, to the holder of the instrument, in a manner that compromises the condition of subordination expressed in this article;

VIII - not contain clauses that provide for variation of timeframes or remuneration conditions between issuance and maturity of the instrument, including due to fluctuations in the credit quality of the issuing institution;

IX - not have their purchase financed, directly or indirectly, by the issuing institution;

X - provide for the permanent extinction, in an amount at least corresponding to the balance computed in Tier 2, or, as defined in §§ 2º and 3º, the conversion of the same amount into shares of the issuing institution eligible for Principal Capital, in the following situations:

a) disclosure by the issuing institution, in the manner established by the Central Bank of Brazil, that its Principal Capital is at a level below 4.5% (four and a half percent) of the RWA amount, calculated in the manner established by specific regulation; (Amended, effective 1/1/2025, by Resolution BCB No. 447 of 12/19/2024.)

b) signing of a commitment to inject capital into the issuing institution, if the exception provided for in the caput of Art. 28 of Complementary Law No. 101 of 2000 applies;

c) decree by the Central Bank of Brazil of a special temporary administration regime or intervention in the issuer; or

d) determination by the Central Bank of Brazil for extinction or conversion;

XI - contain a clause establishing that the occurrence of the situations provided for in items X and XII will not be considered as an event of default or other factor that generates the early maturity of debts in any legal transaction in which the issuing institution participates; and

XII - contain a clause providing that the extinction or conversion referred to in item X will not occur in cases of revision or republication of documents that have been used by the issuing institution as a basis for disclosing the proportion between Principal Capital and the RWA amount, provided for in item X, letter "a". (Amended, effective 1/1/2025, by Resolution BCB No. 447 of 12/19/2024.)

§ 1º In the case of issuance abroad, instruments eligible to compose Tier 2 must contain a clause selecting the jurisdiction in which the requirements for the instrument are recognized, to resolve any judicial disputes.

§ 2º The conversion mentioned in item X of the caput must meet the following conditions:

I - the issuing institution must possess all necessary internal authorizations for the issuance of the instrument eligible to compose Tier 2 and of the shares to be used in the conversion, including the authorized capital referred to in Art. 168 of Law No. 6,404 of 1976, in an amount sufficient to cover any capital increase resulting from the conversion;

II - the conversion into shares must occur prior to the effective entry of resources regarding the situation provided for in item X, letter "b", of the caput; and

III - in the conversion into shares, a maximum limit on the quantity of shares to be delivered to the investor must be established.

§ 3º When requesting the authorization referred to in Art. 23, the issuing institution must assume, in writing, before the Central Bank of Brazil, the commitment to preserve the authorized capital limit referred to in Art. 168 of Law No. 6,404 of 1976, necessary for the eventual conversion of the instruments into shares, in the manner of item X of the caput and § 2º, item I, during the period in which the credits represented by the instruments remain enforceable.

§ 4º The contract with a clause for conversion into shares must provide for the permanent extinction of the debt in cases where the investor may waive the right to receive the shares.

§ 5º The provision in item VIII of the caput does not allow for the agreement of clauses that increase or decrease interest, stipulate additional values to be paid, or alter in any other way the remuneration of the instrument.

Art. 19. Instruments eligible to compose Tier 2 may be issued with a clause providing for the issuer's option for early repurchase or redemption, provided that the following requirements are met:

I - a minimum interval of 5 (five) years between the issuance date and the first date for exercising the option for early repurchase or redemption;

II - contractual provision that the exercise of the option for early repurchase or redemption is conditioned, on the exercise date, to the authorization of the Central Bank of Brazil; and

III - absence of characteristics that create the expectation that the early repurchase or redemption will be exercised.

Art. 20. Authorization for the early repurchase or redemption of instruments authorized to compose Tier 2 may be granted, provided that:

I - the issuing institution meets the minimum requirements for Principal Capital, Tier 1, and Reference Equity (PR), and complies with the Principal Capital Surcharge, as defined in specific regulation; (Amended, effective 1/1/2025, by Resolution BCB No. 447 of 12/19/2024.)

II - the repurchase or redemption does not result in non-compliance with the requirements and limits or insufficiency of the Principal Capital Surcharge mentioned in item I of this article; and

III - the institution declares to the Central Bank of Brazil its intention to exercise the option to repurchase or redeem, observing the conditions established in Arts. 21 and 22. (Amended, effective 1/1/2025, by Resolution BCB No. 447 of 12/19/2024.)

Art. 21. The repurchase or redemption of instruments authorized to compose Tier 2, even if carried out indirectly, through an entity of the conglomerate or a controlled non-financial entity, may only be permitted in the following cases:

I - issuance of new instruments eligible for Tier 2, with an effective maturity period greater than or equal to the remaining term of the repurchased or redeemed instruments, in an amount equivalent to those and under more favorable agreed conditions; or

II - proof of business conditions that, at the discretion of the Central Bank of Brazil, justify the institution's intention. (Amended, effective 1/1/2025, by Resolution BCB No. 447 of 12/19/2024.)

Art. 22. The timeframes and conditions established for the repurchase or redemption of instruments authorized to compose Tier 2 also apply to the termination of the contract or document supporting the funding operation.

CHAPTER IV

OF AUTHORIZATION FOR SUPPLEMENTARY CAPITAL AND TIER 2

Art. 23. The amounts actually paid regarding capital or debt instruments may only compose Supplementary Capital and Tier 2 with the authorization of the Central Bank of Brazil.

§ 1º For the purposes of the authorization mentioned in the caput, the Subordination Core mentioned in Art. 11 must, unless specific regulation applies, be submitted to the Central Bank of Brazil, which will consider, among other elements, the payment structure and, for Tier 2, the maturity date.

§ 2º To be authorized to compose Supplementary Capital and Tier 2, instruments must:

I - be issued by an institution authorized to operate by the Central Bank of Brazil or by its branch or subsidiary abroad, provided that the latter are not constituted as a single-purpose entity or special purpose entity, regardless of their legal form;

II - have, at the time of their issuance, a minimum unit nominal value of R$300,000.00 (three hundred thousand reais) or equivalent in foreign currency;

III - be registered in a registration and financial settlement system for assets authorized by the Central Bank of Brazil or by the Securities and Exchange Commission (CVM); and

IV - include, in the registration, the components of the Subordination Core provided for in Art. 11.

§ 3º In the case of instruments issued abroad, the authorization request referred to in this article must be accompanied by a legal opinion, issued by a law firm qualified in the jurisdiction whose legislation is applicable to the instrument, attesting, without reservation, the adequacy of the instrument's clauses to said legislation.

CHAPTER V

OF THE EXTINCTION AND CONVERSION OF THE DEBT BALANCE OF INSTRUMENTS AUTHORIZED TO COMPOSE SUPPLEMENTARY CAPITAL AND TIER 2

Art. 24. The Central Bank of Brazil may determine the extinction of the debt balance of instruments authorized to compose Supplementary Capital or Tier 2 or the conversion of these instruments into shares of the issuing institution, in accordance with Art. 11 of Law No. 12,838 of July 9, 2013, and in the manner established by the National Monetary Council in specific regulation.

Sole Paragraph. The Central Bank of Brazil may only determine:

I - the extinction of the debt balance of an instrument that presents the extinction clause referred to in Arts. 13, item XV, or 18, item X, in the manner established therein; or

II - the conversion into shares of an instrument that presents the conversion clause referred to in Arts. 13, item XV, or 18, item X, in the manner established therein.

Art. 25. The issuer of an instrument authorized to compose Reference Equity (PR) must prepare and permanently keep updated an action plan for the eventual occurrence of the extinction or conversion provided for in Art. 13, item XV, and Art. 18, item X.

§ 1º The action plan referred to in the caput must include:

I - the measures to be taken to comply with any obligations and other operational procedures related to the extinction or conversion process; and

II - the precautions and procedures necessary for the extinction or conversion to occur in a transparent and organized manner.

§ 2º The action plan mentioned in the caput must be part of the capital contingency plan established in specific regulation.

Art. 26. It is the responsibility of the board of directors or, in its absence, the management of the issuing institution of instruments eligible for Reference Equity (PR), in the case of a single institution, or of the leading institution of the conglomerate: (Amended, effective 1/1/2025, by Resolution BCB No. 447 of 12/19/2024.)

I - to fully inform the holders of rights over these instruments about the action plan mentioned in Art. 25; and

II - to disclose and inform the Central Bank of Brazil, according to procedures established by this Agency, regarding situations related to the extinction or conversion mentioned in the caput of Art. 24.

TITLE IV

OF REDUCERS APPLIED TO REFERENCE EQUITY

SINGLE CHAPTER

OF REDUCERS APPLIED TO DEBT INSTRUMENTS ELIGIBLE FOR REFERENCE EQUITY

Art. 27. A reducer will be applied to the balances of capital or debt instruments authorized to compose Tier 2 that have a maturity date, observing the following schedule:

I - 20% (twenty percent), from the 60th (sixtieth) month to the 49th (forty-ninth) month prior to the respective maturity;

II - 40% (forty percent), from the 48th (forty-eighth) month to the 37th (thirty-seventh) month prior to the respective maturity;

III - 60% (sixty percent), from the 36th (thirty-sixth) month to the 25th (twenty-fifth) month prior to the respective maturity;

IV - 80% (eighty percent), from the 24th (twenty-fourth) month to the 13th (thirteenth) month prior to the respective maturity; and

V - 100% (one hundred percent), in the 12 (twelve) months prior to the respective maturity.

TITLE V

FINAL PROVISIONS

CHAPTER I

TRANSITORY PROVISIONS

Art. 28. (Revoked, effective 1/1/2025, by Resolution BCB No. 447 of 12/19/2024.)

CHAPTER II

COMPLEMENTARY PROVISIONS

Art. 29. The Central Bank of Brazil may determine that the amounts regarding instruments authorized to compose Supplementary Capital and Tier 2, in accordance with Arts. 13 and 18, be disregarded for the calculation of Reference Equity (PR), if non-compliance with the requirements and conditions established in this Resolution is found.

Art. 30. This Resolution enters into force on July 1, 2023. (Amended, effective 12/1/2022, by Resolution BCB No. 258 of 11/18/2022.)

Otávio Ribeiro Damaso

Director of Regulation