Central Bank of Brazil Regulatory Instruction No. 771 — Establishes procedures for central credit cooperative, credit confederation or service confederation to temporarily assume administration of credit cooperative within same system

The Heads of the Department of Supervision of Cooperatives and Non-Banking Institutions - Desuc and of the Department of Organization of the Financial System - Deorf, in the exercise of the powers conferred upon them by art. 23, item I, subitem "a", of the Internal Regulations of the Central Bank of Brazil, annexed to Central Bank of Brazil Resolution No. 340, of September 21, 2023, based, respectively, on arts. 92, item V, subitem "a" and 98, item VI, and in view of the provisions of National Monetary Council (CMN) Resolution No. 5.051, of November 25, 2022, and CMN Resolution No. 5.061, of February 16, 2023,

RESOLVE:

CHAPTER I

OBJECT AND SCOPE OF APPLICATION

Art. 1 This Regulatory Instruction establishes the procedures relating to the request and granting of authorization, on a temporary basis, for the administration of a singular cooperative or central credit cooperative by a central credit cooperative, credit confederation or service confederation, in situations that compromise or may compromise the continuity of the affiliate or that cause or may cause losses to its associates, as addressed in art. 43-A of CMN Resolution No. 5.051, of November 25, 2022, and art. 4º-B of CMN Resolution No. 5.061, of February 16, 2023.

§ 1 The authorization for temporary administration addressed in this Regulatory Instruction constitutes a supervisory measure, without prejudice to the investigation of any infractions in a specific sanctioning administrative process.

§ 2 Central credit cooperatives, credit confederations and service confederations may only request and exercise temporary administration of a credit cooperative, for which they are responsible for auxiliary supervision, arising from the powers defined in Chapter VII of CMN Resolution No. 5.051, of November 25, 2022.

CHAPTER II

PROCESS INSTRUCTION

Section I

General provisions

Art. 2 The request for authorization for temporary administration referred to in art. 1 must be addressed to the Head of the Department of Supervision of Cooperatives and Non-Banking Institutions - Desuc, by means of an official letter signed by the legal representatives of the requesting entity or their constituted attorneys, accompanied by the documents and information provided for in the Annex to this Regulatory Instruction.

Sole paragraph. The Central Bank of Brazil may request additional information or documents necessary for the instruction of the request for the temporary administration regime, setting a deadline for their submission.

Section II

Removal or substitution of administrators

Art. 3 If the requesting entity intends to remove or substitute administrators of the singular cooperative or central credit cooperative to be administered concomitantly with the start of the regime, under the terms of art. 16-A, § 1, item II, of Complementary Law No. 130, of April 17, 2009, and art. 43-A, § 4, of CMN Resolution No. 5.051, of November 25, 2022, the request must contain this information and indicate the members of statutory bodies to be removed or substituted.

§ 1 If there is an indication of administrators to hold positions in statutory bodies of the singular cooperative or central credit cooperative to be administered, the request must be instructed, when exigible, with the documents and information provided for in the specific regulation applicable to authorization for investiture and exercise of positions in statutory bodies.

§ 2 In the hypothesis of § 1:

I – the analysis and decision relating to the authorization for investiture and exercise of the indicated administrators shall observe the pertinent regulation; and

II – the decision on the authorization for investiture and exercise of the indicated administrators shall only produce effects if the temporary administration is approved.

Section III

Governance model of the temporary administration regime

Art. 4 The request must describe the governance model to be adopted during the temporary administration, with the identification of the persons, bodies or instances of the entity in charge that will exercise the corresponding powers.

§ 1 The description of the governance model referred to in the main provision must cover, at minimum:

I – the powers of the statutory bodies of the administered cooperative that will be exercised by the entity in charge of the temporary administration;

II – the instances responsible for deliberation and execution of management acts;

III – the form of representation of the administered cooperative before third parties, administrative authorities and judicial bodies;

IV – the mechanisms for segregation of functions, control and documentation of acts practiced; and

V – the procedures for provision of information to the Central Bank of Brazil.

Section IV

Communication of the decision

Art. 5 The decision that authorizes the temporary administration shall be communicated by the Central Bank of Brazil to the requesting institution and to the singular cooperative or central credit cooperative to be administered.

§ 1 The communication to the singular cooperative or central credit cooperative to be administered shall be addressed to its statutory members, or to whoever has powers of representation before the Central Bank of Brazil, without prejudice to communication to the administrators directly affected by the decision.

§ 2 The communications referred to in this article shall be carried out by the means considered adequate by the Central Bank of Brazil, including by electronic means, correspondence, public notice or other means apt to give notice to interested parties.

§ 3 The communication of the decision shall indicate, when applicable, the deadline for submission of objection, the competent authority for its appreciation and the absence of suspensive effect.

Section V

Duration period of the regime and its termination

Art. 6 The duration period of the temporary administration regime established in the authorization may be extended once, for up to an equal period, upon request sent to Desuc, under the terms of art. 43-A, § 3, of CMN Resolution No. 5.051, of November 25, 2022.

Sole paragraph. The request for extension must be instructed with:

I – report on the execution of the action plan;

II – indication of measures already adopted;

III – indication of remaining pending issues; and

IV – justification for the additional period requested.

Art. 7 The termination of the temporary administration must be preceded by a manifestation from the institution in charge to Desuc, accompanied by:

I – report on:

a) the effects of the measures adopted;

b) the situation of the administered cooperative;

c) pending provisions; and

II – transition plan for the resumption of ordinary governance or for the adoption of another feasible solution.

§ 1 The manifestation referred to in the main provision must be sent with a minimum advance notice of sixty days from the end of the period fixed for the temporary administration, unless a different period is established in the authorization decision or in a subsequent act of the Central Bank of Brazil.

§ 2 The termination of the temporary administration shall depend on Desuc's knowledge of the effects of the measures adopted and the transition plan presented, without prejudice to observance of the duration period fixed in the authorization act or in any extension.

§ 3 If administrative discontinuity risk, insufficiency of adopted measures or relevant pending issues for the resumption of ordinary governance are verified, the Central Bank of Brazil may request additional information, determine provisions, appreciate extension request, when applicable, and within the limits of art. 43-A, § 3, of CMN Resolution No. 5.051, of November 25, 2022, or adopt other supervisory measures provided for in current regulation.

§ 4 Without prejudice to the duration period fixed in the authorization act or in any extension, the Central Bank of Brazil may revoke the temporary administration authorization when the reasons that gave rise to its granting cease or when the measure ceases to show itself adequate to the preservation of the objectives provided for in current regulation.

Art. 8 The entity in charge of the temporary administration must indicate a person apt to respond to any questions about the information provided, under the terms of the Annex to this Regulatory Instruction.

Section VI

Submission of objection and appeal

Art. 9 From the decision on the request for authorization of temporary administration, issued by the Head of Desuc, an objection may be filed, without suspensive effect, within ten days.

§ 1 The objection may be presented by the requesting institution, by the administered cooperative or by administrators directly affected by the decision.

§ 2 In the case of approval of the request for authorization of temporary administration, the period referred to in the main provision shall be counted, for each interested party, from the respective communication referred to in art. 4.

§ 3 In the case of denial of the request for authorization of temporary administration, the period referred to in the main provision shall be counted from the notification of the requesting institution.

Art. 10 From the decision that appreciates the objection, an appeal may be filed to the Director of Supervision, without suspensive effect, within ten days, counted from the knowledge or official disclosure of the appealed decision.

Section VII

Rendering of accounts and information

Art. 11. The entity in charge of the temporary administration must send to Desuc a copy of the minutes of the ordinary general assembly in which the rendering of accounts of its acts to the associates of the cooperative under its administration has been presented, under the terms of art. 43-A, § 5, of CMN Resolution No. 5.051, of November 25, 2022, and art. 4º-B, sole paragraph, of CMN Resolution No. 5.061, of February 16, 2023.

Art. 12. For the purposes of the provisions of art. 43-A, § 2, item III, of CMN Resolution No. 5.051, of November 25, 2022, the indicated administrators must provide information to Desuc, in the periodicity provided for in the act that authorized the temporary administration, on:

I – compliance with the action plan, attesting to the achievement or not of goals, as provided in the schedule, justifying when these are not achieved;

II – the occurrence of relevant facts detected in the period and the provisions adopted for their treatment; and

III – the corporate, administrative or judicial acts that may affect governance, representation, continuity or execution of the temporary administration.

Art. 13. The entity in charge of the temporary administration must maintain individualized documentation of acts practiced during the regime, with identification of those responsible for their deliberation and execution, in order to allow the rendering of accounts to the associates of the administered cooperative and to the Central Bank of Brazil.

Art. 14. The authorization of temporary administration does not remove the exercise of supervisory powers of the Central Bank of Brazil, which may request information, determine provisions and adopt other feasible measures in the form of current regulation.

CHAPTER III

FINAL PROVISIONS

Art. 15. This Regulatory Instruction enters into force on the date of its publication.

ADALBERTO FELINTO DA CRUZ JUNIOR

Head of Desuc

CAROLINA PANCOTTO BOHRER

Head of Deorf

Annex to Central Bank of Brazil Regulatory Instruction No. 771, of August 26, 2026.

Essential elements for the request for authorization to administer, on a temporary basis, an affiliate credit cooperative.

1. IDENTIFICATION

1.1. Central cooperative or confederation in charge of temporary administration: corporate name, CNPJ and address; and

1.2. Affiliate cooperative object of temporary administration: corporate name, CNPJ and address.

2. FORMALIZATION OF THE REQUEST

2.1. The reasons for the request for temporary administration, with indication of the correlated regulatory device;

2.2 The situation and prognosis of the affiliate cooperative regarding which the request for authorization for the temporary administration regime is being presented;

2.3. When the facts that underlie the request have originated in a period prior to the validity of art. 43-A of CMN Resolution No. 5.051, of November 25, 2022, the request must demonstrate the persistence of their effects and their current aptitude to compromise or be able to compromise the continuity of the affiliate cooperative or cause or be able to cause losses to associates;

2.4. When there are other supervisory or cooperative assistance measures in progress or previously considered, the request must inform the reasons why temporary administration is considered necessary, including in relation to the insufficiency, inadequacy or failure of measures already adopted or evaluated.

3. PROCESS INSTRUCTION

3.1. Documents that evidence:

3.1.1. The deliberation of the competent body of the central credit cooperative, credit confederation or service confederation that authorizes the presentation of the request for temporary administration, formalized and signed in the form of the respective social statute or applicable internal norms of the requesting entity;

3.1.2. The proof of alleged facts; and

3.1.3. The action plan for the remediation of the situations that motivated the request for temporary administration.

3.2. Report on the situations ascertained and the respective actions already taken by the central credit cooperative or by the confederation responsible for the supervision of the credit cooperative and of their results and obstacles found for their implementation; and

3.3. Treatment of temporary administration and its provision in internal norms of the respective cooperative system.

4. CHARACTERISTICS OF TEMPORARY ADMINISTRATION

4.1. Identification of the person responsible for clarifications regarding the information provided: name, telephone and e-mail;

4.2. Suggested start date of temporary administration;

4.3. Period necessary for remediation of the situation that motivated the request for authorization of temporary administration, not exceeding one year;

4.4. Holders of positions in statutory bodies of the affiliate credit cooperative who must be removed: name, position and CPF;

4.5. Identification of administrators indicated to act in the temporary administration with name, CPF, telephone and e-mail, observing the following:

4.5.1. If the administrator is authorized to exercise a position in a statutory body of a credit cooperative, the position, the date of investiture and the end of the mandate must be informed, in addition to the identification of the cooperative; and

4.5.2. For purposes of authorization for the investiture and exercise of indicated administrator, the pertinent documents and information must be sent, under the terms of applicable regulation, to be submitted to the approval of this Central Bank.

4.6. If there is a proposal for removal of members of statutory bodies without indication of substitutes for the respective positions, the request must describe:

4.6.1. The bodies or instances of the institution in charge that will exercise, during the temporary administration, the corresponding powers;

4.6.2. The applicable decision flows;

4.6.3. Those responsible for the execution of management acts; and

4.6.4. The mechanisms for segregation, control and provision of information to the Central Bank of Brazil.

5. DATE AND SIGNATURE OF THE REQUESTERS (LEGAL REPRESENTATIVES OF THE ENTITY)

5.1. The request must be dated and signed by the legal representatives of the requesting entity or by constituted attorneys, under the terms of art. 2 of this Regulatory Instruction.

NOTE

Substantiates proposal for issuance of regulatory instruction that establishes the procedures to authorize the central credit cooperative, the credit confederation or the service confederation to assume, on a temporary basis, the administration of a credit cooperative member of the same system.

Dear Heads of Desuc and Deorf,

Temporary administration is an institute originally provided for in the context of Complementary Law No. 130, of April 17, 2009, specifically in its article 16-A, introduced by Complementary Law No. 196, of August 24, 2022. In a next step, National Monetary Council Resolution No. 5.051, in its article 43-A, brings the contours for the effectiveness of the legal device. Already the present Regulatory Instruction aims, from pre-established regulatory direction, to elucidate the operational path to be followed in the hypothesis of central cooperative, credit confederation or service confederation making use of the anticipated faculty, considered the division of powers provided for in the Internal Regulations of the Central Bank of Brazil (RIBCB).

In this sense, the present Regulatory Instruction fits into the hypothesis of waiver of carrying out regulatory impact analysis - AIR provided for in subitem "b" of item V of art. 4 of Decree No. 10.411, of June 30, 2020, normative act that aims to preserve liquidity, solvency or health of the financial market. After all, the regulatory instruction standardizes the procedure to be adopted in cases of temporary administration of credit cooperative, a measure destined precisely to remedy a situation of risk to the continuity of the financial institution and of prejudice to its associates. The procedural standardization confers greater transparency and agility to the processing of requests for temporary administration, which contributes decisively to the preservation of the health of the market.

Temporary administration of credit cooperative finds foundation in art. 16-A of Complementary Law No. 130, of April 17, 2009, introduced by Complementary Law No. 196, of August 24, 2022. Within the infralegal scope, the matter was disciplined by art. 43-A of CMN Resolution No. 5.051, of November 25, 2022, which establishes the normative conditions for the adoption of the measure in situations that compromise or may compromise the continuity of the affiliate cooperative or that cause or may cause losses to its associates.

The present Regulatory Instruction has the purpose of establishing operational procedures relating to the request, instruction, analysis, communication and monitoring of the authorization for temporary administration of credit cooperative by central credit cooperative, credit confederation or service confederation member of the same cooperative system, observed the division of powers provided for in the Internal Regulations of the Central Bank of Brazil.

The issuance of the act contributes to the standardization of procedural treatment applicable to the matter, conferring greater transparency, predictability and efficiency to the administrative performance of the Central Bank of Brazil and of the requesting entities, without innovating regarding the material assumptions already established in current legislation and regulation.

In this context, it is understood that the present Regulatory Instruction fits into the hypothesis of waiver of regulatory impact analysis provided for in subitem "b" of item V of art. 4 of Decree No. 10.411, of June 30, 2020, as it is a normative act related to the preservation of liquidity, solvency or health of the financial market, by disciplining procedure applicable to supervisory measure aimed at mitigating risks to continuity of credit cooperatives and to the protection of the interests of their associates.

For your consideration.

ÍVENS ARUÃ NEVES DE MIRANDA

Deputy Head of Desuc

JOÃO LUIZ FAUSTINO MARQUES

Deputy Head of Deorf

Approved.

ADALBERTO FELINTO DA CRUZ JUNIOR

Head of Desuc

CAROLINA PANCOTTO BOHRER

Head of Deorf