Circular No. 2502 — Provides for authorization for operation, transfer of corporate control and reorganization of institutions authorized to operate by the Central Bank of Brazil, except credit unions

CIRCULAR N. 002502

Provides for authorization for operation, transfer of corporate control and reorganization of institutions authorized to operate by the Central Bank of Brazil, except credit unions.

The Board of the Central Bank of Brazil, in a session held on 10.26.94, based on arts. 7 of Resolution No. 2,099, of 08.17.94, and 2 of the Regulation annexed to the cited Resolution,

D E C I D E D:

Art. 1. To establish the following procedures, to be observed by those interested in obtaining authorization for the operation of a new institution or transfer of corporate control and/or reorganization of an institution in operation:

I - file a request with the Regional Office of the Central Bank of Brazil that has jurisdiction over the institution, accompanied by a draft statement of purpose, in the form of Annex I;

II - publish the statement of purpose in the Official Gazette of the Union and in the economics section or equivalent, of a newspaper of large circulation, three times, with a minimum interval of 5 (five) days between publications, in the location of the institution's headquarters and of the domicile, in the country, of the direct and indirect controllers;

III - instruct the process, within a maximum period of 90 (ninety) days counted from the date of filing referred to in item I, at the Regional Office mentioned therein, in the form set forth in art. 3.

Sole paragraph. Failure to comply with the period established in item III of this article implies the archiving of the respective request.

Art. 2. The following are exempt from the statement of purpose:

I - individuals and/or legal entities that already control a multiple bank, commercial bank, investment bank, development bank, credit, financing and investment company, real estate credit company and/or leasing company;

II - the transfer of control to a legal entity, provided that the individuals controlling the institution and their respective levels of participation remain the same;

III - the change of corporate purpose, merger, spin-off or incorporation of an institution resulting in a securities brokerage company, securities distribution company or exchange brokerage company;

IV - change of legal type, provided there is no expansion of the corporate purpose.

Sole paragraph. When corporate control is not perfectly defined, all shareholders/quota holders holding shares/quotas with voting rights shall be considered controllers.

Art. 3. Observing the provisions of arts. 1 and 2, the process must be instructed at the Regional Office that has jurisdiction over the institution, upon request accompanied by the documents indicated below, among those listed in Annex II:

I - operation of a new institution: documents nos. 01 to 19;

II - transfer of corporate control: documents nos. 01 to 08, 10, 15 to 17 and 23;

III - transformation into a multiple bank: documents nos. 01 to 05, 07, 09 and 10;

IV - change of corporate purpose: documents nos. 01 to 05, 07, 09 and 10;

V - creation of operational portfolio, by a multiple bank: documents nos. 01 to 05, 07, 09 and 10;

VI - change of legal type: documents nos. 07 and 09 to 11;

VII - merger: documents nos. 07 to 11, 15, 17, 18 and 20 to 22;

VIII - spin-off: documents nos. 07 to 11, 15, 17, 18 and 20 to 22;

IX - incorporation: documents nos. 07 to 11, 15, 17, 18 and 20 to 22.

Art. 4. In the change of corporate purpose that transforms the company into an institution not part of the financial system, the instruction of the respective process must meet only the following requirements:

I - proof of publication of the notice of call for the general meeting, in the form of the law, if applicable;

II - 2 (two) certified copies of the minutes of the general meeting or of the instrument of contractual amendment, as the case may be;

III - declaration, signed by the controlling partners or by the administrators, that all operations exclusive to an institution authorized to operate by the Central Bank of Brazil have been settled.

Art. 5. Proof of the economic-financial capacity of the controllers shall be required in the following cases:

I - authorization for operation of a new institution, based on the value of subscribed capital;

II - transfer of corporate control, based on the highest of the following parameters:

a) book equity value;

b) minimum capital for the institution, provided for in current regulations;

c) acquisition price;

III - corporate reorganization, for cases that imply the need for a higher limit of minimum capital and net equity, based on the difference between the required capital of the original institution and that required for the new institution.

Sole paragraph. The constitution of a new institution or the alteration of corporate control of an existing institution that cumulatively meet the following conditions are exempt from compliance with the provisions of this article:

I - result from a merger involving more than one institution authorized by the Central Bank of Brazil, in operation before 08.18.94;

II - have been deliberated and formalized with the Central Bank of Brazil by 04.30.95.

Art. 6. Any alteration, directly or indirectly, that occurs in the corporate composition of the institution, which may imply effective interference in corporate business as a result of:

I - act, isolated or in conjunction, of any individual or legal entity, or group of persons representing a common interest;

II - shareholders'/quota holders' agreement,

is subject to the same procedures applicable to the transfer of corporate control.

Art. 7. This Circular enters into force on the date of its publication.

Brasília, October 26, 1994

Cláudio Ness Mauch
Director of Norms and Organization of the Financial System

ANNEX I

MODEL

STATEMENT OF PURPOSE

......(name)......

The undersigned individuals, in the capacity of ...... (FILL IN WITH CONTROLLING SHAREHOLDERS/QUOTA HOLDERS), through this instrument,

I - DECLARE:

1. Their intention to ......(fill in with the type of authorization sought, in one of the forms below)......

• constitute an institution with the characteristics specified below:
• acquire corporate control of ....... (indicate the institution), which will operate with the characteristics specified below, a transaction whose completion depends on approval by the Central Bank of Brazil, as provided in the purchase and sale agreement signed between the parties:
• participate in the corporate control of ......(indicate the institution), as a result of ...... (fill in with the instrument used, such as: purchase and sale agreement/shareholders' agreement/donation/inheritance) which will operate with the characteristics specified below, a transaction whose completion depends on approval by the Central Bank of Brazil:
• reorganize ...... (indicate the institution), through ...... (FILL IN WITH THE PROCESS ADOPTED, SUCH AS: TRANSFORMATION INTO A MULTIPLE BANK/CHANGE OF CORPORATE PURPOSE), which will operate with the characteristics specified below:

Corporate name:

Location of headquarters:

Portfolios: ...... (inform only in the case of a multiple bank).

Initial capital: ...... (inform in the case of constitution)

Net equity: ...... Reference date: ...... (inform in the case of transfer of corporate control or reorganization)

Corporate composition:

• controllers: name and CGC/CPF of the shareholders/quota holders who control the institution and percentage of participation (list all levels of participation, until the corporate control of the institution by an individual is clearly evidenced)

• other shareholders/quota holders holding 10% (ten percent) or more of the capital: name and CGC/CPF of the shareholders/quota holders and percentage of participation of each.

Administration:

• name(s), CPF and position of the administrator(s).

2. That the value of their assets constitutes sufficient backing for the implementation of the enterprise.

3. That they have no registration restrictions and enjoy an unblemished reputation and, furthermore, that they have not been and are not being held liable in a judicial action or administrative process before the public authorities.

II - CLARIFY that, under the terms of current regulations, any objections to this declaration must be communicated directly to the Central Bank of Brazil, at the address below, within up to 30 (thirty) days counted from the date of publication hereof, through a document in which the authors are duly identified, accompanied by supporting documentation, it being clarified that the declarants will have, under current legislation, the right to view the respective process.

CENTRAL BANK OF BRAZIL -
(Address of the Regional Office)
Protocol No.

III - Place and date:

IV - Name(s) of the signatory(ies):

ANNEX II

DOCUMENTS NECESSARY FOR THE INSTRUCTION OF THE PROCESS

01 - Complete pages of a copy of the newspapers in which the statement of purpose was published, if applicable.

02 - Independent audit report, based on the balance sheets closed in the last three fiscal years immediately prior to the request, regarding the economic-financial situation of the controlling legal entities - except when it is an institution authorized to operate by the Central Bank -, which must also include an assessment of their economic-financial capacity to meet the enterprise, in view of the parameters established in art. 1, item I, of the Regulation annexed to Resolution No. 2,099, of 08.17.94.

03 - Copy of the balance sheet of the last fiscal year, of the controlling legal entities - except when it is an institution authorized to operate by the Central Bank -, audited by an independent auditor duly registered with the Securities and Exchange Commission - CVM.

04 - Declaration of assets, rights and obligations, of the individual(s) controlling, directly or indirectly, the institution, proven by a copy of the income tax return(s).

05 - Copy of the income tax return of the last fiscal year, if not included in no. 04.

06 - Registration form, in the form of current regulations.

07 - Capital composition map of the institution and of the legal entities that participate in it, in the form of current regulations.

08 - Complete organization chart, when it is an economic conglomerate.

09 - Proof of publication of the notice of call for the general meeting, in the form of the law, if applicable.

10 - 4 (four) certified copies of the articles of association or bylaws and two copies of the minutes of the general meeting or of the certified copy of the public deed, as the case may be.

11 - 2 (two) certified copies of the minutes of the board of directors' meeting that elected the board of officers, if applicable.

12 - Subscription list, in the regulatory form.

13 - Proof of registration of the issue with the Securities and Exchange Commission - CVM, when it is a company constituted by public subscription.

14 - Proof of deposits required by legal and regulatory provisions, if applicable.

15 - Copy of shareholders'/quota holders' agreement, which must contain a clause of prevalence over any other not submitted to the approval of the Central Bank, or a declaration of its non-existence.

16 - Proof of the origin of the funds used by the controller(s) to meet the enterprise.

17 - Information on the existence of corporate participation of the controller(s) and/or administrators in other companies, when greater than 10% (ten percent) of the voting capital.

18 - Document Information on Act of Election or Appointment, in the regulatory form.

19 - Proof of acquisition of a patrimonial title of a stock exchange, in the case of a securities brokerage company.

20 - 2 (two) certified copies of the minutes of the general meetings of the institutions involved, which deliberated on the merger/spin-off/incorporation and the appointment of experts for valuation of the assets, in the form of the law, or of the contractual amendment, as the case may be.

21 - 2 (two) certified copies of the minutes of the debenture holders' meeting that approved the merger/spin-off/incorporation, or document proving that the rights of the debenture holders were assured, when a leasing company issuing debentures in circulation is involved.

22 - 2 (two) copies of the Protocol and Justification and of the valuation reports of the appointed experts, if they have not been transcribed in the minutes referred to in no. 20, and of the trial balances/balance sheets on which they were based.

23 - Purchase and sale agreement, or equivalent instrument, which must contain a clause stipulating that the completion of the transaction is conditioned upon its approval by the Central Bank.