Circular No. 3705 — Amends Circularity Nos. 3,681, 3,682, and 3,683 of November 4, 2013, Regarding Payment Arrangements and Payment Institutions, and Circular No. 3,347 of April 11, 2007, Regarding the National Financial System Client Register (CCS)

The Collegiate Board of Directors of the Central Bank of Brazil, in an extraordinary session held on April 23, 2014, based on the provisions of Arts. 6, §§ 1 and 4, 9, and 15 of Law No. 12,865 of October 9, 2013, and considering the provisions of Resolution No. 4,282 of November 4, 2013,

RESOLVES:

Art. 1. Arts. 12 and 18 of Circular No. 3,681 of November 4, 2013, shall enter into force with the following wording:

“Art. 12. Electronic money issuing institutions must maintain liquid resources corresponding to the balances of electronic money held in payment accounts, plus the balances of electronic money in transit between payment accounts within the same payment institution.

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

§ 9. The allocation of the resources referred to in the caput must be carried out observing the following percentages on the electronic money balances:

I - 20%, from May 5, 2014;

II - 40%, from January 1, 2016;

III - 60%, from January 1, 2017;

IV - 80%, from January 1, 2018; and

V - 100%, from January 1, 2019.” (NR)

“Art. 18. .....................................................

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

III - Circular No. 3,289 of August 31, 2005, which provides for the constitution and implementation, at the Central Bank of Brazil, of the System for Recording Reports, Complaints and Requests for Information (RDR).

Sole paragraph. The provision in item II applies from May 4, 2015.” (NR)

Art. 2. Art. 2 of Circular No. 3,682 of November 4, 2013, shall enter into force with the following wording:

“Art. 2. .....................................................

I - ...........................................................

a) accepted only in the network of establishments of the same business entity, even if not issued by it;

b) accepted only in a network of establishments that clearly present the same visual identity among themselves, such as franchisees and fuel station networks; and

c) intended for the payment of specific public services, such as public transport and public telephony;

II - .........................................................

a) R$500,000,000.00 (five hundred million reais) in total transaction value, accumulated over the last twelve months;

b) 25,000,000 (twenty-five million) transactions, accumulated over the last twelve months;

c) R$50,000,000.00 (fifty million reais) in resources deposited in a payment account in thirty days, over the last twelve months; and

d) 2,500,000 (two million and five hundred thousand) active end users in thirty days, over the last twelve months.

§ 1. The payment arrangement issuer not part of the Brazilian Payments System (SPB) based on item II of the caput must monitor the evolution of the indicated limits and, upon verifying the breach of any of these limits, must:

I - submit an authorization request within thirty days, counted from the date of breach; and

II - communicate to the institutions participating in the arrangement, by letter and publication in a newspaper with circulation compatible with the scope of the payment service regulated by the arrangement, regarding the need to request authorization for operation, when applicable, in accordance with Circular No. 3,683 of November 4, 2013.

§ 2. The values referred to in item II of the caput shall be reduced to 50% on January 1, 2016 and to 10% on January 1, 2017.” (NR)

Art. 3. Arts. 2 and 19 of the Regulation attached to Circular No. 3,682 of 2013, shall enter into force with the following wording:

“Art. 2. .....................................................

I - closed payment arrangement: a payment arrangement in which the management of electronic money or, cumulatively, the management of the account, the issuance and accreditation of a payment instrument are carried out:

a) by only one payment institution or financial institution, whose legal entity is the same as that of the arrangement issuer; or

b) by a payment institution or financial institution controlling the arrangement issuer or controlled by it.

.........................................................” (NR)

“Art. 19. ....................................................

I - if established by a government entity; or

II - if it is a closed arrangement established by a commercial bank, a multiple bank with a commercial portfolio, a savings bank, a singular credit cooperative, and a credit, financing and investment company, in the cases where these institutions are exempt from authorization in accordance with Art. 43 of Circular No. 3,683 of November 4, 2013.

§ 1. The arrangement issuer that falls under item II of the caput must send and keep updated, with the Central Bank of Brazil, the information listed in items I to III of Art. 4 of Circular No. 3,682 of November 4, 2013.

........................................................” (NR)

Art. 4. Arts. 2, 3, 8, 9, 10, 14, 16, 20, 24, 35, 38, 41, 43, 46, 52 and 66 of Circular No. 3,683 of November 4, 2013, shall enter into force with the following wording:

“Art. 2. ....................................................

I - electronic money issuer: a payment institution that manages a payment account of an end user, of the prepaid type, makes a payment transaction available based on electronic money deposited in that account, converts such resources into physical or book money, or vice-versa, and may enable its acceptance with settlement in a payment account managed by it;

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

III - acquirer: a payment institution that, without managing a payment account:

a) enables receivers to accept a payment instrument issued by a payment institution or by a financial institution participating in the same payment arrangement; and

b) participates in the settlement process of payment transactions as a creditor vis-à-vis the issuer, according to the arrangement's rules.

.......................................................” (NR)

“Art. 3. ...................................................

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

II - licensing, issued by a payment arrangement issuer, for the applicant to participate in one or more payment arrangements that are part of the Brazilian Payments System (SPB);

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

§ 1. The payment institution must be constituted as a limited liability company or a corporation and have as its main corporate object at least one of the activities listed in Art. 6, item III, of Law No. 12,865 of October 9, 2013.

........................................................” (NR)

“Art. 8. ...................................................

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

III - present licensing or a commitment to licensing signed by at least one payment arrangement issuer that is part of the SPB;

........................................................” (NR)

“Art. 9. ...................................................

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

§ 1. .......................................................

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

III - in case of archiving or denial of the authorization request for operation, the company must, within a period of up to thirty days, be dissolved or change its corporate object to an activity not subject to authorization by the Central Bank of Brazil.

........................................................” (NR)

“Art. 10. Within ninety days from receipt of the document provided for in item III of the caput of Art. 9, the Central Bank of Brazil will conduct an inspection at the institution, in order to evaluate the compatibility between the organizational structure implemented and that provided for in the business plan.

........................................................” (NR)

“Art. 14. Payment institutions in operation must send to the Central Bank of Brazil:

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

§ 1. Companies exclusively controlled by financial institutions and other institutions authorized to operate by the Central Bank of Brazil must instruct the authorization request for operation referred to in the caput with the documents listed in items III to V and VIII of Art. 5 and I and III to VI of this article.

§ 2. The Central Bank of Brazil, in cases deemed necessary, may require the identification of the origin of the resources used in the enterprise by the members of the control group and by holders of qualified participation.” (NR)

“Art. 16. ...................................................

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

§ 2. ........................................................

I - the company has as its main corporate object at least one of the activities listed in Art. 6, item III, of Law No. 12,865 of 2013; and

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

§ 3. Companies exclusively controlled by financial institutions and other institutions authorized to operate by the Central Bank of Brazil are exempt from presenting the documents listed in item V of Art. 8.

.......................................................” (NR)

“Art. 20. A payment institution that wishes to no longer operate in the authorized mode(s) must request the Central Bank of Brazil to cancel the authorization(s) of the referred mode(s), accompanied by the documents provided for in Art. 52, item IX.” (NR)

“Art. 24. ..................................................

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

§ 2. The changes provided for in items I and II of the caput must be submitted to the Central Bank of Brazil, within 15 (fifteen) days of their occurrence, by filing a request accompanied by a copy of the contract, corporate act or instrument that supports the change and the documents provided for in Art. 52, item VII, as well as the declaration referred to in Art. 30, signed by the holders of qualified participation involved in the change.

§ 3. The changes provided for in item III of the caput must be submitted to the Central Bank of Brazil, within 15 (fifteen) days of their occurrence, by filing a request accompanied by a copy of the contract, corporate act or instrument that supports the change and the documents provided for in Art. 52, item VIII.

§ 4. In the analysis of the changes referred to in § 3, the Central Bank of Brazil may request the declaration referred to in Art. 30, as well as the authorizations referred to in Art. 5, item VIII, signed by the holders of qualified participation involved in the change.” (NR)

“Art. 35. ..................................................

I - the term of office of those occupying administrative positions may not exceed four years, reelection being permitted; and

.......................................................” (NR)

“Art. 38. ..................................................

Sole paragraph. Payment institutions that participate exclusively in a closed payment arrangement, providing services in more than one of the modes provided for in items I to III of Art. 2, must fully pay initial capital of R$2,000,000.00 (two million reais) for one of these modes and of R$1,000,000.00 (one million reais) for each additional mode.” (NR)

“Art. 41. Capital increases that are not made in current currency may only be fully paid with:

I - accumulated profits;

II - capital and profit reserves; or

III - credits to shareholders related to the payment of interest on equity, as provided for in Art. 9 of Law No. 9,249 of December 26, 1995, or to the payment of dividends.

......................................................” (NR)

“Art. 43. The following are exempt from authorization by the Central Bank of Brazil:

I - commercial banks, multiple banks with a commercial portfolio and savings banks, for the provision of the services mentioned in Art. 2;

II - credit, financing and investment companies, for the provision of the payment services mentioned in item II of Art. 2; and

III - singular credit cooperatives, for the provision of the services mentioned in items I and II of Art. 2 exclusively to their members.

Sole paragraph. Financial institutions not listed in the caput and other institutions authorized to operate by the Central Bank of Brazil that provide or intend to provide payment services in a payment arrangement that is part of or will become part of the SPB must request authorization to provide the payment services related to one or more of the modes provided for in items I to III of Art. 2.” (NR)

“Art. 46. .................................................

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

II - present licensing or a commitment to licensing signed by at least one payment arrangement issuer that is part of the SPB; and

.......................................................” (NR)

“Art. 52. .................................................

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

II - .......................................................

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

b) authorization for operation: documents 1, 16, 18, 19, 21 to 23, 37, 41 and 43, and, in case of increase in share capital, documents 24, 25, 28 and 29; in the case of companies exclusively controlled by financial institutions and other institutions authorized to operate by the Central Bank of Brazil: documents 1, 16, 21 to 23, 37, 41 and 43, and, in case of increase in share capital, documents 24, 25, 28 and 29;

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

XIII - change in the value of share capital: documents 1, 22 to 25, 28, 41 and, at the discretion of the Central Bank of Brazil, document 29, and, additionally, in the case of capital reduction, document 31;

........................................................” (NR)

“Art. 66. Payment institutions in operation and the institutions mentioned in the sole paragraph of Art. 43 that, on the date of entry into force of this Circular, participate in a payment arrangement that is part of the SPB must file a request for authorization for operation or a request for authorization to provide payment services, respectively, within 180 (one hundred and eighty) calendar days counted from the date of entry into force of this Circular.” (NR)

Art. 5. Circular No. 3,683 of 2013 is amended by adding Arts. 3-A, 12-A, 66-A and 66-B, with the following wording:

“Art. 3-A. The authorization for constitution and for operation of payment institutions must be requested, as the case may be:

I - by the interested party in the constitution and operation of a payment institution that intends to adhere to a payment arrangement that is part of the SPB;

II - by a payment institution in operation that intends to adhere to a payment arrangement that is part of the SPB; and

III - by a payment institution in operation participating in a payment arrangement that will become part of the SPB.

Sole paragraph. For the purposes of this Circular, a payment institution in operation is considered to be one in operational activity that provides at least one of the payment services provided for in items I to III of Art. 2.” (NR)

“Art. 12-A. In case of archiving or denial of an authorization request for operation, the requesting company must, within thirty days of notice of the decision, be dissolved or change its corporate object to an activity not subject to authorization by the Central Bank of Brazil.

§ 1. In the cases provided for in the caput, the respective corporate acts must be submitted to the Central Bank of Brazil within a period of up to fifteen days after their realization.

§ 2. In case of non-compliance with the provision of § 1, the Central Bank of Brazil may publish, by the means it deems appropriate, the archiving or denial of the request.” (NR)

“Art. 66-A. Payment institutions in operation and the institutions mentioned in the sole paragraph of Art. 43 that participate in a payment arrangement that will become part of the SPB must file a request for authorization for operation or a request for authorization to provide payment services, respectively, within ninety days counted from the moment they become aware that at least one of the arrangements they participate in has become part of the SPB.” (NR)

“Art. 66-B. The company that, on the date of entry into force of this Circular, provides a payment service related to the modes provided for in items I to III of Art. 2 in a payment arrangement that is part of the SPB or in a payment arrangement that will become part of the SPB, may only continue to exercise such activity until:

I - the expiration of the term provided for, as the case may be, in Art. 66 or in Art. 66-A, in the event that it has not timely and properly instructed the respective request for authorization for operation as a payment institution; or

II - thirty days after having notice of a decision by the Central Bank of Brazil, from which no further appeal lies, of archiving or denial of the respective request for authorization for operation as a payment institution.” (NR)

Art. 6. Art. 2 of Annex I to Circular No. 3,683 of 2013 shall enter into force with the following wording:

“Art. 2. Payment institutions in operation on the date of entry into force of this Circular that participate in a payment arrangement that is part of the SPB, as well as payment institutions that participate in a payment arrangement that will become part of the SPB, must present the business plan referred to in Art. 16, item IV, of this Circular, encompassing, at minimum:

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

§ 3. The Central Bank of Brazil, in cases it deems necessary, may require the economic-financial feasibility study provided for in item V of Art. 1 of this Annex.” (NR)

Art. 7. Items 40, 42 and 43 of Annex II to Circular No. 3,683 of 2013 shall enter into force with the following wording:

“40 - in the case of an institution holding a Clearing Account, a copy of the correspondence sent to the Department of Banking Operations and Payment Systems (Deban), requesting the closure of the said account;” (NR)

“42 - commitment signed by at least one payment arrangement issuer that is part of the SPB to license the applicant to participate in one or more payment arrangements that are part of the SPB;” (NR)

“43 - licensing, issued by a payment arrangement issuer that is part of the SPB, for the applicant to participate in one or more payment arrangements that are part of the SPB; and” (NR)

Art. 8. Art. 2 of Circular No. 3,347 of April 11, 2007, shall enter into force with the following wording:

“Art. 2. ....................................................

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

§ 1. ........................................................

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

V - Group 5: deposits in national currency, in the country, owned by natural or legal persons residing, domiciled or headquartered abroad; and

VI - Group 6: prepaid payment accounts, excluding payment accounts held by an end user exclusively for the deposit of resources related to social benefit programs established within the municipal, state or federal scope.

........................................................” (NR)

Art. 9. This Circular enters into force on the date of its publication, except for Art. 8, which enters into force on November 1, 2014.

Art. 10. The following are revoked:

I - Art. 8 of Circular No. 3,680 of November 4, 2013;

II - the sole paragraph of Art. 10, item III of the caput and §§ 4, 5 and 6 of Art. 19 of the Regulation attached to Circular No. 3,682 of November 4, 2013; and

III - the sole paragraph of Art. 14, the sole paragraph of Art. 35, item II of Art. 50 and Art. 64 of Circular No. 3,683 of November 4, 2013.

Luiz Awazu Pereira da Silva Aldo Luiz Mendes Director of Regulation Director of Monetary Policy

Sidnei Corrêa Marques
Director of Organization of the
Financial System and Control of Rural Credit Operations