Circular No. 3524 — Establishes leverage and immobilization limits for consortium administrators

CIRCULAR NO. 003524

Dispenses with the leverage and immobilization limits for consortium administrators, and gives other provisions.

The Collegiate Board of the Central Bank of Brazil, in a session held on February 2, 2011, based on Articles 6 and 7 of Law No. 11,795, of October 8, 2008,

D E C I D E D:

Art. 1. The sum of the balance of passive operations of consortium administrators with the balance of resources of consortium groups may not exceed six times the value of the respective Adjusted Net Equity (PLA), calculated in accordance with Art. 6, § 1, of Circular No. 3,433, of February 3, 2009.

§ 1. For the purposes of calculating the leverage limit referred to in this article:

I - the balance of passive operations is considered to be the value corresponding to group 4.0.0.00.00-8 - Current and Long-Term Payable, from document 4010 - Balance Sheet, subtracting the value recorded in accounting title 4.9.8.93.20-9 - Resources Pending Receipt - Judicial Collection;

II - the balance of resources of consortium groups is considered to be the sum of the values recorded in accounting titles 1.1.0.00.00-6 - Cash and Equivalents, 1.2.0.00.00-5 - Interfinancial Liquidity Applications, and 1.8.7.98.00-5 - Checks and Other Values Receivable, from document 4110 - Statement of Consortium Resources, subtracting the sum of the values recorded in accounting titles 1.2.9.90.25-6 - Linked to Drawings - SELIC and 1.2.9.90.35-9 - Linked to Drawings - Other Applications;

III - the amount corresponding to any participations held in the share capital of companies that exercise the same activity must be deducted from the administrator's PLA.

§ 2. The leverage degree of each consortium administrator, observed the limit referred to in the caput of this article, must be compatible with the levels of excellence of internal controls, in accordance with current regulations.

Art. 2. The Permanent Assets of consortium administrators may not exceed 100% of the PLA.

§ 1. Administrators in operation that on the date of entry into force of this circular are exceeding the immobilization limit referred to in the caput must observe the following compliance schedule:

I - from January 31, 2012, the immobilization limit may not exceed 200% of the value of the respective PLA;

II - from January 31, 2013, the immobilization limit may not exceed 150% of the value of the respective PLA;

III - from January 31, 2014, the immobilization limit may not exceed 120% of the value of the respective PLA; and

IV - from January 31, 2015, the immobilization limit may not exceed 100% of the value of the respective PLA.

§ 2. It is prohibited for administrators, in the situation described in § 1, to carry out any operation that implies increasing the proportion between Permanent Assets and the PLA calculated on the date of entry into force of this circular.

Art. 3. The leverage and immobilization limits referred to in this circular must be complied with daily.

Art. 4. The legal representatives of the administrator and, if deemed necessary, its controllers, may be summoned to inform about the measures that will be adopted when the following facts occur, individually or cumulatively:

I - non-compliance with the minimum standards of paid-in capital and PLA required by current regulations;

II - non-compliance with the leverage and immobilization limits defined in this circular; and

III - irregularities found in the administrator or deficiencies in internal controls that imply the assumption of risks for the consortium groups or for the administrator, which are considered disproportionate, atypical, or not subject to adequate prevention and mitigation.

§ 1. The appearance of the legal representatives of the administrator and/or its controllers must occur within a maximum period of five days counted from the date of the summons, formalized through the drafting of a statement of appearance by the Central Bank of Brazil.

§ 2. A regularization plan endorsed by the board of directors of the administrator, as well as by the board of directors, if any, must be presented to the Central Bank of Brazil for evaluation, within a period fixed by it, not exceeding sixty days, counted from the date of drafting the statement of appearance, containing the measures provided for compliance and regularization of the identified issues and respective execution schedule, which may not exceed six months, extendable at the discretion of the Central Bank of Brazil, for two additional identical periods, in response to a request from the administrator, duly justified.

§ 3. After the drafting of the statement of appearance, the directors of the administrator must send monthly reports to the Central Bank of Brazil informing about the progress of the work aimed at elaborating the regularization plan referred to in § 2 and/or the measures adopted in the month for the effective execution of the procedures proposed in said plan and the expectation for the following months.

§ 4. The administrator may only distribute results, under any title, in an amount higher than the minimum limits provided by law or in its bylaws or articles of association, in situations where the distribution does not compromise the compliance with the requirements referred to in this circular.

Art. 5. Art. 1 of Circular No. 3,398, of July 23, 2008, shall enter into force with the following wording:

"Art. 1. .............................................

.......................................................

XIII - paid-in capital and adjusted net equity, from Circular No. 3,433, of February 3, 2009, and leverage limit, from Circular No. 3,524, of February 3, 2011." (NR)

Art. 6. Arts. 5 and 23 of Circular No. 3,433, of 2009, shall enter into force with the following wording:

"Art. 5. Capital increases that are not made in current currency may only result from the incorporation of reserves and profit, prohibiting the use of revaluation reserves for this purpose." (NR)

"Art. 23. It is also a condition for holding administrative positions to possess technical capability compatible with the duties of the position for which was elected or appointed.

................................................ " (NR)

Art. 7. From April 4, 2011, the application of resources of consortium groups in progress constituted before February 6, 2009, must be carried out in accordance with the terms established in Art. 6 of Circular No. 3,432, of February 3, 2009.

Art. 8. Consortium groups constituted by associations and non-profit civil entities may only be composed of effective members of their social body, in accordance with their social bylaws.

Art. 9. Art. 2 of Circular No. 3,394, of July 9, 2008, shall enter into force with the following wording:

"Art. 2. .............................................

.......................................................

VI - services.

................................................." (NR)

Art. 10. The provisions of Arts. 1 to 6 of this circular do not apply to associations and non-profit civil entities authorized to administer consortium groups.

Art. 11. This circular enters into force on the date of its publication.

Art. 12. Circulars Nos. 2,861, of February 10, 1999, 3,026, of February 1, 2001, 3,261, of October 28, 2004, the sole paragraph of Art. 2 of Circular No. 3,394, of July 9, 2008, and, on April 4, 2011, Circular No. 2,454, of July 27, 1994, are hereby repealed.

Brasília, February 3, 2011.

Aldo Luiz Mendes
Deputy Director of Norms and Organization of the Financial System