Central Bank of Brazil Normative Instruction No. 292 of August 1, 2022

CENTRAL BANK OF BRAZIL NORMATIVE INSTRUCTION NO. 292, OF AUGUST 1, 2022

Discloses procedures, documents, and information necessary for the processing of authorization requests for instruments to form the Main Capital, Supplementary Capital, and Level II of Reference Equity (PR), for the repurchase and redemption of the aforementioned instruments, and for the amendment, alteration, and revocation of their subordination cores, as provided for in CMN Resolution No. 4,955, of October 21, 2021.

The Acting Head of the Department of Financial System Organization (Deorf), using the authority granted by Articles 23, item I, letter “a”, and 96, item XII, of the Internal Regulations of the Central Bank of Brazil, annexed to Ordinance No. 84,287, of February 27, 2015, based on Articles 25 and 33, item I, of CMN Resolution No. 4,955, of October 21, 2021,

R E S O L V E S:

Article 1. Procedures, documents, and information necessary for the processing of authorization requests for instruments to form the Main Capital, Supplementary Capital, and Level II of Reference Equity (PR), for the repurchase and redemption of the aforementioned instruments, and for the amendment, alteration, and revocation of their subordination cores, as provided for in CMN Resolution No. 4,955, of October 21, 2021, are hereby disclosed.

Article 2. Authorization requests referred to in this Normative Instruction must be filed with the Central Bank of Brazil, addressed to the Department of Financial System Organization (Deorf), in accordance with current regulations, accompanied by the relevant documents and information.

Article 3. The authorization request for instruments to form the Main Capital, Supplementary Capital, or Level II must be accompanied by:

I - a copy of the Subordination Core, as provided for in Article 12 of CMN Resolution No. 4,955, of 2021;

II - proof of registration of the instrument in a financial asset registration and settlement system authorized by the Central Bank of Brazil or by the Securities and Exchange Commission (CVM), which must cover the components of the Subordination Core;

III - proof of the full payment of resources.

§ 1. In the case of an instrument issued abroad, the request must additionally be accompanied by:

I - a translation into Portuguese of the Subordination Core, as provided for in Article 12 of CMN Resolution No. 4,955, of 2021, performed by a sworn public translator; and

II - a legal opinion issued by a lawyer or law firm qualified in the country whose legislation is applicable to the instrument, attesting, without reservation, that the contractual clauses of the instrument do not conflict with the regulatory structure of the country where the operation is carried out, accompanied by its translation into Portuguese, performed by a sworn public translator.

§ 2. In the case of an instrument that provides for the conversion of its balance into shares, as provided for in Article 15, item XV, or Article 20, item X, of Resolution No. 4,955, of 2021, the request must be accompanied by the following information:

I - date and type of the corporate act that authorized the issuance of the instrument and of the shares to be used in the conversion;

II - criteria that will be used for the conversion and the maximum limit of shares to be delivered to the investor, which must also appear in the Subordination Core of the instrument;

III - statement from the Fiscal Council regarding the issuance, if applicable;

IV - demonstration that the preferential rights of minority shareholders were respected, if applicable;

V - declaration by the issuing institution stating that it has 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 Article 168 of Law No. 6,404, of December 15, 1976, in an amount sufficient to cover any eventual capital increase resulting from the conversion; and

VI - commitment to preserve the limit of authorized capital referred to in Article 168 of Law No. 6,404, of 1976, necessary for the eventual conversion of the instruments into shares, during the period in which the credits represented by the instruments remain due.

Article 4. Authorization requests for the redemption or repurchase of instruments authorized to form the Main Capital, Supplementary Capital, and Level II of PR must be accompanied by:

I - a description of the business conditions justifying the institution's claim, including an estimate of the impact on the operational limits referred to in prudential regulation, in the six months following the request; or

II - information regarding the issuance of new instruments, in an amount equivalent to the redemption or repurchase and under more favorable conditions.

Article 5. The provisions of Article 4 apply to the request for early redemption of Financial Notes with subordination clauses for the immediate exchange of the title for another Financial Note issued by the same institution, except in the case of exemption from authorization referred to in Article 5, § 6, of CMN Resolution No. 5,007, of March 24, 2022.

Sole Paragraph. In addition to the provisions of Article 4, the request must be accompanied by the registration codes of the Financial Notes subject to redemption in a financial asset registration and settlement system.

Article 6. Authorization requests for the amendment, alteration, or revocation of the Subordination Core, as provided for in Article 12 of CMN Resolution No. 4,955, of 2021, must be accompanied by:

I - a description of the business conditions justifying the institution's claim; and

II - a draft of the subordination core reflecting the intended changes.

Article 7. Articles 1 to 3 of Circular No. 3,343, of March 1, 2007, are hereby revoked.

Article 8. This Normative Instruction enters into force on the date of its publication.

Adriano Pereira Rubim Silva

NOTE

CMN Resolution No. 4,955, of October 21, 2021, provides for the methodology for calculating Reference Equity (PR), including the characteristics of the instruments that compose it. Based on the aforementioned resolution, this Central Bank Normative Instruction (IN BCB) aims to disclose the procedures, documents, and information necessary for the processing of authorization requests for instruments to form the Main Capital, Supplementary Capital, and Level II of PR, for the repurchase and redemption of the aforementioned instruments, and for the amendment, alteration, and revocation of their subordination cores, as provided for in the aforementioned resolution.

2. Decree No. 10,411, of June 30, 2020, regulates the carrying out of regulatory impact analysis (RIA) as a prerequisite for the issuance of normative acts. However, in its Article 4, the aforementioned decree establishes the exemptions for carrying out RIA. This IN BCB falls under the exemption provided for in item III, a normative act considered to have low impact, as it only guides the execution of an obligation already contained in another current regulation. Thus, based on item III of Article 4 of Decree No. 10,411, of 2020, it is understood that the issuance of this IN BCB is exempt from carrying out RIA.

Adriano Pereira Rubim Silva
Acting Head