BCB Resolution No. 50

BCB RESOLUTION NO. 50, OF DECEMBER 16, 2020

Establishes the requirements for the establishment and execution by the Central Bank of Brazil of the Controlled Testing Environment for Financial and Payment Innovations (Regulated Sandbox) – Cycle 1, as well as the procedures and requirements applicable to the classification and authorization for participation in this environment.

The Collegiate Board of the Central Bank of Brazil, in a session held on December 15, 2020, based on arts. 9, 10, item XI, of Law No. 4.595, of December 31, 1964, 9, item II, and 15 of Law No. 12.865, of October 9, 2013, 25, 40, sole paragraph, and 45 of CMN Resolution No. 4.865, of October 26, 2020, and 26 and 41, sole paragraph, of BCB Resolution No. 29, of October 26, 2020,

RESOLVES:

CHAPTER I

ON THE OBJECT AND SCOPE OF APPLICATION

Art. 1. This Resolution establishes the requirements for the establishment and execution by the Central Bank of Brazil of the Controlled Testing Environment for Financial and Payment Innovations (Regulated Sandbox) – Cycle 1, as well as the procedures and requirements applicable to the classification and authorization for participation in this environment.

CHAPTER II

ON THE CONTROLLED TESTING ENVIRONMENT FOR FINANCIAL AND PAYMENT INNOVATIONS (SANDBOX REGULATORY) – CYCLE 1

Section I

On Basic Characteristics

Art. 2. The Regulated Sandbox – Cycle 1 will begin five business days after the publication of the final result referred to in art. 8, with a duration of one year, which may be extended for an equal period.

Art. 3. The Regulated Sandbox – Cycle 1 is limited to ten participants, this number may be increased by up to 50% (fifty percent), after analysis of the innovative projects.

Section II

On the Registration Phase

Art. 4. Entities interested in participating in the Regulated Sandbox – Cycle 1 may register in the period from February 22 to March 19, 2021, by sending, through the Digital Protocol system of the Central Bank of Brazil (Digital Protocol), available on the Central Bank of Brazil's website on the internet, the documents and information referred to in items 1 to 9 of Annex I of this Resolution.

Sole paragraph. Institutions authorized to participate in the Regulated Sandbox must present the documents referred to in items 10 to 12 of Annex I of this Resolution when requested by the Central Bank of Brazil.

Section III

On the Selection and Authorization Process

Art. 5. The selection and authorization period for participants of the Regulated Sandbox – Cycle 1 will be from March 22 to June 25, 2021.

Art. 5. The selection and authorization period for participants of the Regulated Sandbox – Cycle 1 will be from March 22 to November 26, 2021. (Redacted by BCB Resolution No. 141, of 9/16/2021.)

Sole paragraph. In the event that the number of registered entities is equal to or greater than double the limit established in the caput of art. 3, the Central Bank of Brazil may extend this period by up to ninety days.

Sole paragraph. (Revoked by BCB Resolution No. 141, of 9/16/2021.)

Art. 6. The classification referred to in arts. 30 of CMN Resolution No. 4.865, of October 26, 2020, and 31 of BCB Resolution No. 29, of October 26, 2020, will be carried out based on the criteria and scoring related in the table contained in Annex III of this Resolution.

Art. 7. The strategic priorities of the Central Bank of Brazil referred to in art. 30, item I, of CMN Resolution No. 4.865, of 2020, and 31, item I, of BCB Resolution No. 29, of 2020, are:

I - solutions for the foreign exchange market;

II - promotion of the capital market through mechanisms of synergy with the credit market;

III - promotion of credit for micro-entrepreneurs and small businesses;

IV - solutions for the Open Banking System (Open Banking);

V - solutions for the Instant Payment Arrangement (Pix);

VI - solutions for the rural credit market;

VII - solutions for increasing competition in the National Financial System and the Brazilian Payments System;

VIII - financial and payment solutions with potential effects of stimulating financial inclusion; and

IX - promotion of sustainable finance.

Art. 8. The Central Bank of Brazil will publish the final result, containing the list of entities authorized to participate in the Regulated Sandbox – Cycle 1, after the selection and authorization period referred to in art. 5 of this Resolution.

Section IV

On the Activity Discontinuation Plan

Art. 9. In the event of execution of the activity discontinuation plan mentioned in arts. 40, sole paragraph, item II, of CMN Resolution No. 4.865, of 2020, and 41, sole paragraph, item II, of BCB Resolution No. 29, of 2020, the participant will immediately communicate the fact to its clients and users and will, within ninety days, close or transfer the operations and contracts exclusive to institutions authorized by the Central Bank of Brazil to institutions regularly authorized to operate by this autarchy.

§ 1. The participant will use the same channels used for advertising its products to inform its clients and users about the impediment to continuing their operations at the institution, as well as about the procedures and deadline for closing or transferring the operations.

§ 2. The deadline referred to in the caput may, at the discretion of the Central Bank of Brazil, be extended for an equal period.

Section V

On Modification of the Innovative Project Scope

Art. 10. The modification of the scope of the innovative project referred to in art. 9 of CMN Resolution No. 4.865, of 2020, and art. 9 of BCB Resolution No. 29, of 2020, must be requested to the Central Bank of Brazil by sending, through the Digital Protocol mentioned in art. 4, the following documents contained in Annex I of this Resolution:

I - form referred to in item 13; and

II - activity discontinuation plan referred to in item 5, with the appropriate adaptations, if necessary.

Section VI

On the Replacement of Controller or Administrator

Art. 11. The replacement of administrator or controller of the participant referred to in art. 38 of CMN Resolution No. 4.865, of 2020, and art. 39 of BCB Resolution No. 29, of 2020, must be requested by sending a request, through the Digital Protocol mentioned in art. 4, accompanied by the following documents contained in Annex I of this Resolution, as applicable:

I - form referred to in item 14;

II - registration form referred to in item 4;

III - declarations referred to in items 7 and 8; and

IV - authorizations referred to in item 9.

Sole paragraph. The Central Bank of Brazil may request the sending of the documents referred to in items 10 to 12.

Section VII

On Cancellation of Authorization to Participate in the Regulated Sandbox – Cycle 1

Art. 12. The examination of acts that imply the cancellation upon request of the authorization to participate in the Regulated Sandbox – Cycle 1, as provided in arts. 40, item III, letter "a", of CMN Resolution No. 4.865, of 2020, and 41, item III, letter "a", of BCB Resolution No. 29, of 2020, is conditioned to the adoption of the following measures:

I - presentation of the form referred to in item 15 of Annex I of this Resolution;

II - presentation of a liability declaration referred to in item 16 of Annex I of this Resolution; and

III - proof of execution of the activity discontinuation plan, referred to in art. 9 of this Resolution.

Art. 13. Prior to the ex officio cancellation of the authorization to participate in the Regulated Sandbox – Cycle 1 referred to in arts. 40, item III, letter "b", of CMN Resolution No. 4.865, of 2020, and 41, item III, letter "b", of BCB Resolution No. 29, of 2020, the Central Bank of Brazil:

I - will notify the participant by any means that ensures certainty of the interested party's knowledge, preferably by electronic means, to manifest its intention regarding the cancellation; and

II - will publish to the public, through its website on the internet, the cancellation of the authorization to participate in the Regulated Sandbox, after the conclusion of the notification and manifestation process referred to in item I.

CHAPTER III

FINAL PROVISIONS

Art. 14. The document models for instructing processes related to the matters regulated in this Resolution will be made available on the Central Bank of Brazil's website on the internet.

Art. 15. The documents mentioned in Annex I of this Resolution, when signed by the interested entity, must be subscribed by administrators whose representativeness is recognized by the bylaws or the articles of association.

Art. 16. This Resolution enters into force on January 4, 2021.

Otávio Ribeiro Damaso
Director of Regulation

João Manoel Pinho de Mello
Director of System Organization
Financial and Resolution

ANNEX I TO BCB RESOLUTION NO. 50, OF DECEMBER 16, 2020

DOCUMENTS AND INFORMATION NECESSARY FOR PROCESS INSTRUCTION

1 - Registration form containing the information contained in Annex II to BCB Resolution No. 50, of December 16, 2020.

2 - Registration form with information about the interested entity.

3 - Registration form with information about the director or legal representative, as applicable, responsible for the Regulated Sandbox.

4 - Registration form with information about the controllers, with their respective shareholdings, and administrators of the interested entity.

5 - Activity discontinuation plan, which must include, at a minimum, the following aspects:

I - sequence of acts and procedures to be executed upon the closure of activities, aiming to comply with legal, regulatory, and contractual obligations;

II - assignment of responsibilities to the participant and any third parties (e.g., contractors, insurers);

III - communication plan so that stakeholders are notified in a timely manner about the closure of activities, observing the provisions of art. 9, § 1, of this Resolution;

IV - alternatives offered to clients and users in case of closure of activities;

V - deadlines and terms for the return of any amounts to clients and users;

VI - barriers and risks that may affect the execution of the activity discontinuation plan;

VII - mechanisms to be adopted to eliminate or mitigate the barriers and risks mentioned in sub-item VI;

VIII - existence of instruments that guarantee the transfer of operations and contracts exclusive to institutions authorized by the Central Bank of Brazil to institutions regularly authorized to operate by this autarchy; and

IX - type of support to be provided to clients and users after the closure of activities.

6 - Declaration, signed by the interested entity, that it is aware of its obligations towards the Central Bank of Brazil and its clients and users, in accordance with the provisions of CMN Resolution No. 4.865, of October 26, 2020, BCB Resolution No. 29, of October 26, 2020, and this Resolution.

7 - Declaration, signed by the interested entity, that it has conducted research regarding its administrators in public and private registration and information systems, taking responsibility for the veracity of the information provided.

8 - Declaration, signed by the controllers and administrators, that they meet the condition established in arts. 27, item III, of the caput of CMN Resolution No. 4.865, of 2020, and 28, item III, of the caput of BCB Resolution No. 29, of 2020, taking responsibility for the veracity of the information provided.

9 - Authorization:

a) signed by the controllers and administrators, to the Central Bank of Brazil, for access to information about them in any public or private registration and information system, including judicial or administrative processes and police inquiries, for exclusive use by the Central Bank of Brazil in its authorization and monitoring processes, during the authorization and approval processes and in the period of exercise of control and their functions, respectively; and

b) signed by the controllers, to the Federal Revenue Secretariat of Brazil for provision to the Central Bank of Brazil of the Annual Income Tax Adjustment Declaration – Individual or the Economic-Fiscal Information Declaration of the Legal Entity, as applicable, relating to the last three fiscal years, for exclusive use by the Central Bank of Brazil in its authorization and monitoring processes, during the authorization and approval processes and in the period of exercise of control.

10 - Copy of the financial statements of the last three fiscal years of the controlling legal entities – except when it is an institution authorized to operate by the Central Bank of Brazil –, audited by an independent auditor duly registered with the Securities and Exchange Commission (CVM), or equivalent document in the case of a legal entity headquartered abroad.

11 - Copy of Annual Income Tax Adjustment Declarations – Individual of the controlling natural persons, direct or indirect, relating to the last three fiscal years, with proof of submission to the Federal Revenue Secretariat of Brazil, or equivalent document, in the case of residents abroad, which evidences the annual income earned and a list of assets, rights, and liabilities of the natural person, with the respective value, except in the case of natural persons controlling institutions authorized to operate by the Central Bank of Brazil.

12 - Proof of the origin and respective financial movement of the resources used in the development of the innovative project.

13 - Form for request of modification of the scope of the innovative project.

14 - Form for request of replacement of controller or administrator.

15 - Form for request of cancellation, upon request, of the authorization to participate in the Regulated Sandbox.

16 - Liability declaration relating to the cancellation, upon request, of the authorization to participate in the Regulated Sandbox.

ANNEX II TO BCB RESOLUTION NO. 50, OF DECEMBER 16, 2020

INFORMATION NECESSARY FOR REGISTRATION

REGULATED SANDBOX – CYCLE 1:
A. Information about the interested entity
1. Description of the team working on the innovative project, including quantity and profile of employees, as well as physical and technological infrastructure.
2. Description of the governance structure of the interested entity.
B. Information about the innovative project
1. Description of the innovative project, containing, at a minimum, information about the area of operation and products or services to be provided.
2. Description of the types of clients and users who will participate in the innovative project.
3. Description of the maturity level of the innovative project, presenting a schedule, procedures, and resources required to put it into execution.
4. Indication of the origin of the resources used or to be used in the development of the innovative project.
5. Description of the reasons why the innovative project is subject to the regulatory competence of the Monetary National Council or the Central Bank of Brazil.
6. Identification of the norms of the Monetary National Council or the Central Bank of Brazil that would hinder the execution of the innovative project and description of how these norms interfere in the provision of products and services.
7. Demonstration that the project fits the concept of innovative project, identifying its differential in relation to the criteria listed in art. 2, item II, of CMN Resolution No. 4.865, of October 26, 2020, and in art. 2, item II, of BCB Resolution No. 29, of October 26, 2020.
8. Description of the opportunity or problem that will be addressed, explaining how the solution proposed by the innovative project will benefit consumers, companies, the National Financial System or the Brazilian Payments System, in general.
9. Identification of the strategic priority(ies) of the Central Bank of Brazil, referred to in art. 7 of this Resolution, to which the innovative project is aligned, accompanied by its justification.
10. Description of the risks involved in the implementation of the innovative project and their mitigators, indicating the magnitude of each of the described risks and suggesting conditions, limits, and safeguards that may be established by the Central Bank of Brazil, alone or together with other regulators.
11. Information on whether the innovative project to be executed will need to participate in the Regulated Sandbox of the Securities and Exchange Commission or the Private Insurance Superintendence. If affirmative, explain.
12. Indication, in a justified manner, of the information and documents presented in this form whose disclosure could represent competitive advantages to other economic agents, and which, therefore, must be treated by the Central Bank of Brazil as confidential, protected under the legal hypotheses of confidentiality.

ANNEX III TO BCB RESOLUTION NO. 50, OF DECEMBER 16, 2020

CLASSIFICATION CRITERIA AND SCORING TABLE

CLASSIFICATION CRITERIA	MINIMUM SCORE	MAXIMUM SCORE
Strategic priorities of the Central Bank of Brazil	0	40
Maturity level of the innovative project	0	30
Nature and magnitude of risks inherent to the innovative project	0	20
Technical-operational capacity and governance structure of the interested entity	0	10