Circular No. 2163 — Regulates Authorization to Administer Consortia, Transfer of Control, Spin-off, Merger, and Fusion of Authorized Administrators, and Process Instructions

Circular n° 2163, of April 20, 1992

CIRCULAR NO. 2163
To Consortium Administrators

Regulates the granting of authorization to administer consortia, the transfer of control, the spin-off, merger, and fusion of already authorized consortium administrators, as well as disciplines the processing of applications.

We communicate that the Board of Directors of the Central Bank of Brazil, in a session held on 15.04.92, based on Law No. 8.177, of March 1, 1991,

DECIDED:

Art. 1. Approve the attached regulation, which disciplines the granting of authorization to administer consortia, the transfer of control, the spin-off, merger, and fusion of already authorized consortium administrators, and the processing of applications.

Art. 2. Non-compliance with legal or regulatory provisions constitutes an impediment to approval by the Central Bank of Brazil of any request submitted by administrators of movable and/or immovable goods consortia.

Art. 3. The provisions of the attached regulation also apply to requests that have already been filed with the Central Bank of Brazil by the date of entry into force of this Circular.

Art. 4. Items 2, 3, 4, and 5 of Normative Instruction No. 042, of April 28, 1989, from the Department of the Federal Revenue, Item 3, Sub-items 4.4 to 4.6, Item 8, and the main text and items "a" and "b" of Item 9 of Ordinance No. 190, of October 27, 1989, from the Ministry of Economy, Finance, and Planning, Circular No. 2,021, of August 22, 1991, Article 5, and the sole paragraph of Article 6 of Circular No. 2,027, of August 28, 1991, are hereby revoked.

Art. 5. This Circular enters into force on the date of its publication.

Brasília (DF), April 20, 1992.

Gustavo Jorge Laboissière Loyola
Director

This text does not replace that published in the DOU and Sisbacen.

Attached Regulation to Circular No. 2,163, of April 20, 1992, which disciplines the granting of authorization to administer consortia, acts of spin-off, merger, and fusion of already authorized consortium administrators, as well as the processing of applications.

Chapter I

Circular n° 2163, of April 20, 1992
On Authorization to Administer Consortium Groups

Art. 1. Authorization to administer consortium groups will be granted without charge, in a non-negotiable and non-transferable manner.

Art. 2. Interested controlling natural or legal persons wishing to administer consortium groups must file their request with the Central Bank of Brazil/regional branch to which the administrator's headquarters is subject, and arrange for the publication of a statement of purpose, according to Model No. 1 attached, citing the respective protocol number.

Sole Paragraph. The publication will be made 3 (three) times, with a minimum interval of 5 (five) days, in the official gazette and in newspapers of large circulation in the location where the administrator's headquarters will be installed and in the location of the domicile of the controlling natural or legal persons.

Art. 3. Any and all restrictions on the interested party or the enterprise must be sent to any regional branch of the Central Bank of Brazil within a maximum period of 30 (thirty) days counted from the last publication.

Art. 4. After the period provided for in the previous article, the respective authorization process with the Central Bank of Brazil must be accompanied by the following documentation:

I - Request, containing:
a - name(s) and full address(es) of the applicant(s); b - registration number with CGC/MEFP; c - location and date; d - full name(s) of the signatory(ies);

II - Proof of the origin of the resources used by partners to integrate the capital;

III - Complete pages of the newspapers where the statement of purpose was published;

IV - Statement of the groups to be organized, containing:
a - number of shares requested; b - discrimination, by type, of goods of each group;

V - Copy of the constitutive acts showing the value of the realized capital;

VI - Drafts of the consortium regulation, the adherence proposal, and guarantee contracts;

Circular n° 2163, of April 20, 1992

VII - Complete organizational chart of the conglomerate to which it belongs, if applicable, with the indication of respective shareholding percentages, with and without voting rights;

VIII - Independent audit report, accompanied by a copy of the balance sheets closed in the three last fiscal years prior to the request, relating to the economic and financial situation of the controlling legal entities, where it must include, among others, a statement regarding the economic and financial capacity to meet the investment;

IX - Copy of the last income tax declaration of all controlling natural persons;

X - CAPEF maps - capital composition (CADOC code 59.1.9.040-4) and CAPEF - information on election/appointment acts (CADOC code 59.1.90.050-7), prepared in the form of Circular No. 518, of April 1, 1980, with the changes introduced by Circular No. 624, of March 31, 1981;

XI - Administrative registration form, prepared in the form of Circular No. 1,958, of May 10, 1991.

Art. 5. Based on the presented documentation and any public manifestations as provided in Article 3 of this regulation, the Central Bank of Brazil will examine the request, with a view to verifying:

I - The compatibility of the economic and financial capacity of the controllers with the enterprise, considering in this evaluation, in addition to what is contained in the independent audit reports, the following:
a - if the net worth of the legal entities corresponds, individually, to at least 200% (two hundred percent) of their respective investment in the new administrator; and b - if the assets of the natural persons correspond, individually, to at least 120% (one hundred and twenty percent) of their respective investment in the new administrator, disregarding the portion already computed due to the provision of the previous item;

II - The technical qualification of the administrators and the integrity of the controllers and administrators; and

III - Compliance with the minimum limits of realized capital and net worth, and other regulatory requirements.

Art. 6. Authorization to administer consortium groups may not be granted to administrators linked, defined as linked companies:

I - In which one participates with 10% (ten percent) or more of the capital of another, directly or indirectly;

Circular n° 2163, of April 20, 1992

II - In which the administrators and/or controllers of one and their relatives up to the second degree participate, jointly or individually, with 10% (ten percent) or more of the capital of another, directly or indirectly;

III - In which partners or shareholders with 10% (ten percent) or more of the capital of one participate in the capital of another, directly or indirectly;

IV - That have a common administrator.

Sole Paragraph. Linked administrators must regularize their situation by December 31, 1992.

Art. 7. If the request is approved, the decision will be published in the official gazette, and in case of denial, the Central Bank of Brazil may point out the reasons to the interested party, making them public when it considers the matter to be of public interest.

Art. 8. The consortium administrator must begin its activities within a maximum period of 180 (one hundred and eighty) days counted from the date of publication of the decision by the Central Bank of Brazil.

Sole Paragraph. The authorization will be automatically cancelled in case of non-compliance with the provisions of this article.

Chapter II

On Transfer of Control and Spin-off, Merger, or Fusion of Administrators with Ongoing Groups

Art. 9. Transfers of control, directly or indirectly, of already authorized consortium administrators to administer consortium groups depend on authorization from the Central Bank of Brazil, observing the following:

I - The respective purchase and sale contract must contain a clause conditioning the completion of the business to its approval by the Central Bank;

II - After signing the contract, the acquirers will publish the statement of purpose, according to Model No. 2 attached, observing the provisions of the sole paragraph of Article 2 of this regulation;

III. After the period provided for in Article 3, the respective authorization process with the Central Bank must be accompanied by the relevant documentation referred to in Article 4 of this regulation.

Art. 10. The authorization process for the spin-off, merger, or fusion of already authorized societies to administer consortia, with ongoing groups, must be filed with the Central Bank with the relevant documentation referred to in Article 4 of this regulation, plus:

Circular n° 2163, of April 20, 1992

I - Valuation report prepared in accordance with Article 8 of Law No. 6.404, of December 15, 1976;

II - Balance sheet, as of the base date, of the spun-off, merged, or consolidated society, duly transcribed from the daily ledger or daily balance sheets and balance sheets, accompanied by the respective opinion of external audit, certified by accounting audit firms or independent auditors, registered with the securities commission.

Sole Paragraph. Administrators constituted in the manner established in this article, by December 31, 1992, whose exclusive corporate purpose is the administration of consortium groups of goods, provided that the same shareholder structure of the spun-off, merged, or consolidated company is maintained, are not subject to the provisions contained in the main text of Article 4 of Circular No. 2,027, of August 28, 1991, and in Article 2 of this regulation.

Art. 11. The Central Bank of Brazil will examine requests regarding the matters covered in this chapter in accordance with the provisions mentioned in Articles 5 and 6, and, based on the consortium operations status document (CADOC code 59.1.9.200-0), will evaluate the administrator's performance regarding the delivery of goods within regulatory deadlines.

Sole Paragraph. The existence of goods pending delivery for more than 30 (thirty) days counted from the date of delivery of the documentation regarding the guarantees provided for receiving the goods may be grounds for denial of the request.

Art. 12. The provision of Article 7 applies to processes related to the subjects of this chapter.

Chapter III

On Processing Applications Related to Other Requests

Art. 13. Processes related to the expansion or reallocation of consortium quotas must be accompanied by a request, containing:

I - Full name(s) and address(es) of the applicant(s);

II - Registration Number with CGC/MEFP;

III – Number of shares intended, discriminated by type of goods, and the average price of each requested good;

IV - Location and Date;

V - Full name(s) of the signatory(ies).

Sole Paragraph. Processes related to shares of foreign-manufactured goods must also be accompanied by the following documents:

Circular n° 2163, of April 20, 1992

a - statement regarding inclusion, in the regulation, of a reference to the administration of consortium groups of foreign-manufactured goods;

b - statement that the provisions of Article 2 of Circular No. 2,080, of November 7, 1991, are met;

c - in the case of vehicles, a copy of the adherence proposal with information regarding the provision contained in Article 2 of Resolution No. 1,870, of September 25, 1991.

Art. 14. Processes related to the holding of consortium group meetings, subject to the homologation of the Central Bank of Brazil, must be accompanied by the following documents:

I - Request from the administrator or the group representative named in the assembly, if the meeting was convened at the request of the consortium members;

II - Copy of the minutes of the respective meeting;

III - In case of convening the meeting in accordance with Article 3 of Circular No. 2,074, of October 31, 1991, a copy of the notice referred to in the sole paragraph of said article.

Art. 15. Other requests from an already authorized administrator must be accompanied by a request, containing:

I - Full name(s) and address(es) of the applicant(s);

II - Registration Number with CGC/MEFP;

III - Statement of the request;

IV - Location and Date;

V - Full name(s) of the signatory(ies).

Art. 16. Based on the presented documentation, as well as the consortium operations status document (CADOC code 59.1.9.200-0), the Central Bank of Brazil will examine the request, with a view to verifying:

I - The technical qualification of the administrators and the integrity of the controllers and administrators;

II - Compliance with the minimum limits of realized capital and net worth, the limit referred to in Item 59 of Ordinance No. 190, of October 27, 1989, and other regulatory requirements.

III - The administrator's performance regarding the delivery of goods within regulatory deadlines.

Circular n° 2163, of April 20, 1992

Paragraph 1. The existence of goods pending delivery for more than 30 (thirty) days counted from the date of delivery of the documentation regarding the guarantees provided for receiving the goods will be grounds for denial of the request.

Paragraph 2. In the event that the pending issue does not refer to goods subject to the request, the request may be accepted, taking into account the number of goods pending delivery and proof of the availability of sufficient resources for their acquisition.

CHAPTER IV

On General Norms

Art. 17. Changes related to:

I - Social capital and transfers and assignments of shares or capital stock, which do not imply a change in corporate control, with mandatory sending of a copy of the corresponding instrument, as well as the CAPEF map - capital composition (CADOC code 59.1.9.040-4);

II - The names of the institution's administrators, with mandatory sending of the CAPEF map - information on election/appointment acts (CADOC code 59.1.9.050-7).

must be reported to the Central Bank/regional branch to which the administrator's headquarters is subject, within a maximum period of 15 (fifteen) days from the occurrence.

Art. 18. For the evaluation of requests, the Central Bank of Brazil may request complementary documentation, if deemed necessary.

Annex 1 of Circular No. 2,163, of April 20, 1992
Model No. 1

Statement of Purpose
Authorization to Administer Consortium Groups

The undersigned, in their capacity as controllers, through this instrument,

1. DECLARE:

1.1 Their intention to form and administer consortium groups, through a company constituted with the following characteristics:

1.1.1. Company Identification:

Social Name:

Headquarters:

Branches:

Initial Capital:

Circular n° 2163, of April 20, 1992

1.1.2. Shareholder Composition:

1.1.2.1 - Controllers:

a - legal entities: (all levels of participation must be discriminated until it is clearly evident that the corporate control of the company is by a natural person)

Company Name:

Headquarters:

CGC/MEFP:

Net Worth: base date:

Participation Percentage:

b - natural persons:

Name:

Domicile:

Nationality:

Profession:

CPF/MEFP:

Participation Percentage:

1.1.3. Other shareholders/partners with 10% (ten percent) or more of the capital:

a - legal entities:

Company Name:

Headquarters:

CGC/MEFP:

Net Worth: base date:

Participation Percentage:

b - natural persons:

Name:

Domicile:

Nationality:

Profession:

Circular n° 2163, of April 20, 1992

CPF/MEFP:

Participation Percentage:

1.2. That the company will be administered by the following persons:

1.2.1. Name:

1.2.2. Qualification:

1.2.3. Experience in the consortium area:

1.2.4. Position:

1.3. That the value of their assets constitutes sufficient backing for the establishment of the company.

1.4. That they have no registration restrictions and enjoy an unblemished reputation, and furthermore, have not been nor are being held liable in a judicial action or administrative process before the public authority, capable of preventing them from proceeding with the present enterprise.

2. CLARIFY that, in accordance with current regulations, any objections to this statement by interested parties must be sent directly to the Central Bank of Brazil, at the address below, duly identified, along with all supporting documentation, within a period of up to 30 (thirty) days after this publication, clarifying that the applicants will have, in accordance with current legislation, the right to view the respective process.

Central Bank of Brazil
(address of the regional branch to which the administrator's headquarters is subject)

Protocol No.

Location and Date

Annex 2 of Circular No. 2,163, of April 20, 1992
Model No. 2

Circular n° 2163, of April 20, 1992

Statement of Purpose
Transfer of Corporate Control - Consortium Administrator

The undersigned, through this instrument,

1. DECLARE:

1.1 Their intention to acquire corporate control of the consortium administrator specified below, the completion of which business depends on the approval of the Central Bank of Brazil, as provided in the purchase and sale contract signed between the parties:

1.1.1. Company Identification:

Social Name:

Headquarters:

Branches/Location:

Initial Capital: base date:

Net Worth: base date:

1.1.2. Resulting Shareholder Composition:

1.1.2.1 - Controllers:

a - legal entities:

Company Name:

Headquarters:

CGC/MEFP:

Net Worth: base date:

Participation Percentage:

b - natural persons:

Name:

Domicile:

Nationality:

Profession:

Circular n° 2163, of April 20, 1992

CPF/MEFP:

Participation Percentage:

1.1.3. Other shareholders/partners with 10% (ten percent) or more of the capital:

a - legal entities: (all levels of participation must be discriminated until it is clearly evident that the corporate control of the company is by a natural person)

Company Name:

Headquarters:

CGC/MEFP:

Net Worth: base date:

Participation Percentage:

b - natural persons:

Name:

Domicile:

Nationality:

Profession:

CPF/MEFP:

Participation Percentage:

1.2. That the company will be administered by the following persons:

1.2.1. Name:

1.2.2. Qualification:

1.2.3. Experience in the consortium area:

1.2.4. Position:

1.3. That they have no registration restrictions and enjoy an unblemished reputation, and furthermore, have not been nor are being held liable in a judicial action or administrative process before the public authority, capable of preventing them from proceeding with the present enterprise.

Circular n° 2163, of April 20, 1992

2. CLARIFY that, in accordance with current regulations, any objections to this statement by interested parties must be sent directly to the Central Bank of Brazil, at the address below, duly identified, along with all supporting documentation, within a period of up to 30 (thirty) days after this publication, clarifying that the applicants will have, in accordance with current legislation, the right to view the respective process.

Central Bank of Brazil (address of the regional branch to which the administrator's headquarters is subject)

Protocol No.

Location and Date