Circular No. 3885 — Establishes Requirements and Procedures for Authorization to Operate, Change of Control, Corporate Reorganization, Cancellation of Authorization, and Conditions for Executive Positions in Payment Institutions

The Collegiate Board of the Central Bank of Brazil, in a session held on March 22, 2018, based on the provisions of Articles 6, §§ 1 and 4, and 9 of Law No. 12,865, of October 9, 2013, and considering the provisions of Resolution No. 4,282 of November 4, 2013,

R E S O L V E:

CHAPTER I

OF THE OBJECT AND SCOPE OF APPLICATION

Art. 1. This Circular establishes requirements and procedures for authorization to operate, change of control, changes in the structure of executive positions, corporate name, and headquarters location, corporate reorganization, and for the cancellation of authorization to operate, the conditions for exercising executive positions in payment institutions, and for authorization to provide payment services by financial institutions and other institutions authorized to operate by the Central Bank of Brazil.

Art. 2. The provisions of this Circular do not apply to payment institutions that:

I - participate exclusively in the limited-purpose payment arrangements referred to in item I of Art. 2 of Circular No. 3,682, of November 4, 2013; or

II - provide payment services exclusively within the scope of a program intended to grant benefits to natural persons based on employment relationships, service provision, or similar, established by federal, state, or municipal law, referred to in item III of Art. 2 of Circular No. 3,682, of 2013.

CHAPTER II

OF DEFINITIONS

Art. 3. For the purposes of this Circular, the following are considered:

I - control group: a person, or group of persons linked by a voting agreement or under common control, that holds shareholder rights corresponding to the majority of voting capital of a corporation or at least 75% (seventy-five percent) of the share capital of a limited liability company; and

II - qualified participation: the direct or indirect participation held by natural or legal persons, equivalent to 15% (fifteen percent) or more of shares or quotas representing the total capital.

§ 1. In cases where the control of the company is not identified according to the criteria mentioned in item I of the main text, the Central Bank of Brazil may use other elements to identify the control group.

§ 2. In the case of undefined control by shareholding, represented by the absence of a single shareholder with more than 50% (fifty percent) of the voting capital, in the case of a corporation, or of a single quota holder with 75% (seventy-five percent) or more of the share capital, in the case of a limited liability company, the members of the control group must present a draft shareholders' or quota holders' agreement involving all levels of shareholding, with the purpose of defining the exercise of control power, which must include a clause establishing the precedence of such agreement over any other not submitted to the appreciation of the Central Bank of Brazil.

CHAPTER III

OF THE CLASSIFICATION AND CONSTITUTION OF PAYMENT INSTITUTIONS

Art. 4. Payment institutions are classified into the following modalities, according to the payment services provided:

I - e-money issuer: a payment institution that manages a pre-paid type end-user payment account, provides a payment transaction involving the act of paying or transferring, based on e-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;

II - post-paid payment instrument issuer: a payment institution that manages a payer end-user payment account, of the post-paid type, and provides payment transactions based on that account; and

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 payment transaction settlement process as a creditor against the issuer, according to the rules of the payment arrangement.

§ 1. For the purpose of item I of the main text, e-money is considered to be resources in reais stored in an electronic device or system that allow the end-user to perform a payment transaction.

§ 2. A payment institution may be classified in more than one of the modalities mentioned in items I to III of the main text, according to the payment services provided.

§ 3. The e-money issuing payment institution must request authorization to provide services as an acquirer, under item III of the main text, within the scope of any other payment arrangements other than its own.

Art. 5. 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.

Sole Paragraph. The execution of other activities by the payment institution, in addition to those provided in the main text, is admitted, provided they have the purpose of enabling the provision of the payment service or adding value to the service provided to the user, at the discretion of the Central Bank of Brazil.

CHAPTER IV

OF THE AUTHORIZATIONS FOR THE OPERATION OF PAYMENT INSTITUTIONS

Section I

Of the Parameters to File a Request for Authorization to Operate

Art. 6. The authorization to operate must be requested by a payment institution that presents financial values higher than at least one of the following parameters:

I - R$500,000,000.00 (five hundred million reais) in payment transactions; or

II - R$50,000,000.00 (fifty million reais) in resources maintained in a pre-paid payment account.

§ 1. E-money issuing payment institutions must calculate the value referred to in item I of the main text considering the sum of the values corresponding to payment transactions executed in the last twelve months.

§ 2. In the transfer of resources between pre-paid payment accounts maintained in the same payment institution, the value corresponding to the operation must be considered as a transaction in the calculation of the value referred to in § 1.

§ 3. Post-paid payment instrument issuing payment institutions must calculate the value referred to in item I of the main text considering the sum of the values corresponding to payment transactions authorized in the last twelve months.

§ 4. Acquiring payment institutions must calculate the value referred to in item I of the main text considering the sum of the values corresponding to payment transactions in which they participate in the settlement process as a creditor against the issuer, in the last twelve months.

§ 5. The value referred to in item II of the main text must be calculated based on the arithmetic mean of the thirty largest daily balances in e-money maintained in pre-paid payment accounts, in the last twelve months.

§ 6. Payment institutions that do not participate exclusively in the payment arrangements or benefit programs mentioned in items I and II of Art. 2 must not consider, in the calculation of the financial values mentioned in items I and II of the main text, transactions carried out within the scope of the respective payment arrangements or benefit programs.

§ 7. The authorization to operate must be requested within ninety days, counted from the date on which the payment institution reaches one of the parameters established in items I and II of the main text.

Art. 7. The payment institution that provides service in more than one of the modalities provided for in items I to III of Art. 4 and presents financial values higher than at least one of the parameters mentioned in items I and II of the main text of Art. 6, in at least one of the modalities, must request authorization to operate for all modalities it exercises.

Section II

Of the Authorization Process

Subsection I

Of the Application

Art. 8. Payment institutions that reach at least one of the parameters established in items I and II of the main text of Art. 6 must request authorization to operate from the Central Bank of Brazil, through an application accompanied by the following documents:

I - demonstration that the control group or, individually, each member of the control group, at the discretion of the Central Bank of Brazil, holds economic and financial capacity compatible with the venture, by presenting, at minimum, audited financial statements by an independent auditor registered with the Securities and Exchange Commission (CVM) or copies of annual income tax adjustment declarations;

II - declaration mentioned in Art. 22, signed by the members of the control group and by holders of qualified participation;

III - copy of the act of election of administrators with a mandate in force;

IV - registration form filled out by all administrators with a mandate in force;

V - documents provided for in Art. 19, § 1, items IV to VI and VIII for administrators with a mandate in force;

VI - document with the identification of any foreign authorities that supervise the direct or indirect controllers; and

VII - other documents provided for in Art. 42, items I and II, as applicable.

§ 1. Companies controlled exclusively by financial institutions and other institutions authorized to operate by the Central Bank of Brazil are exempt from presenting the document mentioned in item I of the main text.

§ 2. The Central Bank of Brazil may require:

I - the identification of the origin of the resources used in the venture by the members of the control group and by holders of qualified participation; and

II - the publication of a purpose declaration by the administrators and by the natural or legal persons who make up the control group of the payment institution.

§ 3. Payment institutions must ensure that controllers and holders of qualified participation are exempt from restrictions that may affect their reputation, considering the requirements established in Arts. 20 and 21.

§ 4. The bylaws or articles of association of payment institutions must expressly contain clauses establishing that:

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

II - the company will be governed supplementarily by Law No. 6,404, of December 15, 1976, under the terms of Art. 1,053, sole paragraph, of Law No. 10,406, of January 10, 2002 (Civil Code), when organized as a limited liability company.

§ 5. The Central Bank of Brazil may require the presentation, in whole or in part, of the business plan referred to in Art. 1 of Annex I of this Circular.

Subsection II

Of the Interview

Art. 9. The Central Bank of Brazil may summon the members of the control group for a technical interview on any topics related to the venture proposal or to the applicant group.

§ 1. In cases where they are summoned for a technical interview, the members of the control group may not be replaced by attorneys or representatives.

§ 2. In the case of a payment institution controlled by a legal entity headquartered abroad, the controller or the members of the control group may, at the discretion of the Central Bank of Brazil, be represented in the technical interview by an attorney with specific powers who holds the necessary knowledge for the interview, especially regarding the controller, the control group of the institution, and its holders of qualified participation.

Subsection III

Of the Statement of the Central Bank of Brazil

Art. 10. Upon verification of compliance with the conditions provided for in this Circular, the Central Bank of Brazil will issue the authorization to operate the institution.

Sole Paragraph. The authorization to operate is conditioned on the approval of the names of the administrators with a mandate in force by the Central Bank of Brazil.

CHAPTER V

OF THE AUTHORIZATION TO ACT IN A NEW MODALITY

Art. 11. Payment institutions must request authorization when they intend to act in a modality related to items I to III of Art. 4 not provided for in the previously granted authorization.

Sole Paragraph. The institutions mentioned in the main text must present to the Central Bank of Brazil a reasoned justification of the intention and other documents provided for in Art. 42, item IV.

Art. 12. The payment institution that wishes to no longer operate in an authorized modality must request the Central Bank of Brazil to cancel the authorization of the referred modality, through an application accompanied by the documents provided for in Art. 42, item VIII.

CHAPTER VI

OF THE TRANSFER OF CONTROL AND CORPORATE REORGANIZATION

Art. 13. The transfer of corporate control and any change, direct or indirect, in the control group that may imply a change in the board of persons exercising the effective management of the business of the payment institution, resulting from:

I - shareholders' or quota holders' agreement;

II - inheritance and acts of disposition of will, such as donation, advance of legitime, and constitution of usufruct; and

III - act, isolated or combined, of any person, natural or legal, or group of persons representing a common interest,

are subject to authorization by the Central Bank of Brazil.

§ 1. The provisions of this article do not apply to transfers of corporate control to legal entities where there is no change in the board of final controllers of the institution.

§ 2. In any of the cases referred to in the main text, the request for authorization must be filed with the Central Bank of Brazil, within fifteen days, counted from the date of the corresponding legal act, purchase and sale contract, deed of donation, partition deed, usufruct contract, or other legal form, accompanied by a copy of the contract, corporate act, or instrument that formalizes the operation and with the documents and information provided for in items I and II of Art. 8, item V of Art. 42, and the draft purpose declaration provided for in Art. 49, pertinent to the new members of the control group.

§ 3. After the statement of the Central Bank of Brazil on the draft purpose declaration mentioned in § 2, the new members of the control group must arrange for its publication and carry out the procedures provided for in Art. 49.

Art. 14. The following are also subject to authorization by the Central Bank of Brazil:

I - merger, spin-off, or incorporation; and

II - corporate transformation.

Sole Paragraph. In the cases provided for in this article, requests for authorization must be filed with the Central Bank of Brazil, within thirty days, counted from the date of the respective act or deliberation, accompanied by a reasoned justification for the operation, highlighting the strategic, corporate, and economic-financial aspects.

Art. 15. In the analysis of the requests referred to in Arts. 13 and 14, the Central Bank of Brazil may:

I - summon the interested parties for a technical interview; and

II - require the presentation of documents provided for in Art. 8.

Art. 16. The following changes in payment institutions must be submitted to the authorization of the Central Bank of Brazil:

I - entry of a shareholder or quota holder with qualified participation or with rights corresponding to qualified participation;

II - assumption of the condition of shareholder or quota holder holding qualified participation; and

III - expansion of qualified participation by a percentage equal to or greater than 15% (fifteen percent) of the capital of the institution, cumulatively or not.

§ 1. After examining the aspects of the change and finding any irregularity, the institution must arrange for its regularization, by undoing or alienating the qualified participation.

§ 2. The changes provided for in items I and II of the main text must be submitted to the Central Bank of Brazil, within fifteen days of their occurrence, through the filing of an application accompanied by a copy of the contract, corporate act, or instrument that supports the change and the documents provided for in Art. 42, item VI, as well as the declaration referred to in Art. 22, signed by the holders of qualified participation involved in the change.

§ 3. The changes provided for in item III of the main text must be submitted to the Central Bank of Brazil, within fifteen days of their occurrence, through the filing of an application accompanied by a copy of the contract, corporate act, or instrument that supports the change and the documents provided for in Art. 42, item VI.

§ 4. In the analysis of the changes referred to in § 3, the Central Bank of Brazil may request the declaration referred to in Art. 22, signed by the holders of qualified participation involved in the change.

CHAPTER VII

OF THE CANCELLATION OF THE AUTHORIZATION TO OPERATE PAYMENT INSTITUTIONS

Art. 17. The cancellation of the authorization to operate at the request of a payment institution is conditioned on the adoption of the following measures:

I - filing of the request with the Central Bank of Brazil, accompanied by a draft of the purpose declaration under the terms and conditions established in Art. 49;

II - publication of the purpose declaration as provided for in item II of Art. 49, after the statement of the Central Bank of Brazil on the draft presented;

III - presentation of a corporate act of dissolution or change of corporate object that disqualifies the institution as a payment institution; and

IV - other documents provided for in Art. 42, item XI.

§ 1. In addition to the requirements established in this article, the applicant must settle all obligations related to the activities exclusive to payment institutions.

§ 2. Interested parties must conclude the instruction of the respective process within thirty days counted from the date of filing of the request.

§ 3. The provisions of this article do not apply to the extinction of the company resulting from merger, spin-off, or incorporation, provided that the resulting or successor institution is a payment institution authorized to operate by the Central Bank of Brazil.

§ 4. The corporate acts referred to in item III of the main text can only be registered after authorization by the Central Bank of Brazil, observing the procedure provided for in this article.

§ 5. The Central Bank of Brazil, after authorizing the registration of the corporate acts referred to in item III of the main text, will cancel the authorization to operate the payment institution.

Art. 18. The authorization to operate the payment institution may be cancelled when it is found, at any time, one or more of the following situations:

I - lack of habitual practice of payment services;

II - operational inactivity;

III - non-location of the institution at the address informed to the Central Bank of Brazil;

IV - interruption, for more than four months, without justification, of the sending to the Central Bank of Brazil of the statements required by current regulation; or

V - non-compliance with the business plan during the first five years of the coverage period, in cases where the Central Bank of Brazil requires its presentation.

§ 1. The Central Bank of Brazil, prior to the cancellation referred to in the main text, will initiate an administrative process to:

I - disclose to the public its intention to cancel the respective authorization, with a view to the possible presentation of objections within thirty days; and

II - notify the interested institution, at the address provided to the Central Bank of Brazil, to manifest its position on the intention to cancel.

§ 2. In the case of item III of the main text, or if the interested party cannot be found, the notification referred to in item II of § 1 will be carried out by means of a public notice.

§ 3. Upon the effective cancellation referred to in the main text, the Central Bank of Brazil will communicate the fact to the Commercial Registry or the competent registration body.

CHAPTER VIII

OF THE POSSESSION AND EXERCISE OF EXECUTIVE POSITIONS IN PAYMENT INSTITUTIONS

Art. 19. The election or appointment to a management position or member of the board of directors in a payment institution must be submitted to the approval of the Central Bank of Brazil, within fifteen days of its occurrence.

§ 1. The approval requests referred to in the main text must be formulated through an application addressed to the Central Bank of Brazil, accompanied by the following documentation, as applicable:

I - full sheet of newspaper copies containing the publication of the notice or announcement of the call for the general meeting, in the form of the law;

II - two authentic copies of the minutes of the general meeting or of the board of directors meeting;

III - two authentic copies of the instrument of contractual amendment or of the minutes of the meeting or of the shareholders' meeting;

IV - authorization, signed by the elected or appointed person, to the Central Bank of Brazil, for access to information about them in any public or private registration and information system, including judicial or administrative processes and police inquiries, for exclusive use in the respective authorization process;

V - declaration, signed by the elected or appointed person, referred to in Art. 22;

VI - declaration signed by the institution that the elected or appointed person meets the technical qualification requirement referred to in Art. 23;

VII - full sheets of newspapers containing the publications, by the elected or appointed person, of the purpose declaration referred to in Art. 24; and

VIII - curriculum vitae of the elected or appointed person, dispensed with when it concerns:

a) an administrator with a mandate in force in the institution or in another institution part of the financial conglomerate in which they participate, provided that previously approved by the Central Bank of Brazil; or

b) a liquidator of an institution subject to ordinary liquidation regime.

§ 2. In the document referred to in item V of § 1, the institution must declare that it has conducted research regarding the elected or appointed person in public and private registration and information systems, taking responsibility for the veracity of the information provided.

§ 3. The documents referred to in this article, when signed by the institution, must be countersigned by administrators whose representativeness is recognized by the bylaws or articles of association.

Art. 20. The conditions for exercising the positions referred to in Art. 19, in addition to other requirements established by legislation and current regulation, are:

I - to have an impeccable reputation;

II - to be a resident in the country, except in the case of a member of the board of directors;

III - not to be barred by special law, nor convicted of bankruptcy crime, tax evasion, prevarication, active or passive corruption, extortion, embezzlement, against the popular economy, public faith, property, or the National Financial System, or sentenced to a penalty that prohibits, even temporarily, access to public office;

IV - not be declared ineligible or suspended from holding positions as a fiscal councilor, administrative councilor, director, or administrator in payment institutions, financial institutions, and other institutions authorized to operate by the Central Bank of Brazil or entities of supplementary pension, insurance companies, capitalization societies, publicly held companies, or entities subject to the supervision of the Securities and Exchange Commission;

V - not be subject to, nor any company of which they are a controlling shareholder or administrator, to protests of titles, judicial collections, issuance of bad checks, default on obligations, and other analogous occurrences or circumstances;

VI - not be declared bankrupt or insolvent; and

VII - not have controlled or administered, in the two years preceding the election or appointment, a firm or company subject to a declaration of insolvency, liquidation, intervention, bankruptcy, or judicial reorganization.

Sole Paragraph. In cases of elected or appointed individuals who do not meet the provisions of items V to VII of the caput, the Central Bank of Brazil may analyze the individual situation of the candidates, with a view to evaluating the possibility of approving their names.

Art. 21. To evaluate compliance by the elected or appointed person with the requirement established in Art. 20, item I, the following situations and occurrences will be considered:

I - criminal process or police inquiry to which the elected or appointed person, or any company of which they were or were, at the time of the facts, a controlling shareholder or administrator, is responding;

II - judicial or administrative process related to the National Financial System; and

III - other situations, occurrences, or analogous circumstances deemed relevant by the Central Bank of Brazil.

Sole Paragraph. In the analysis regarding the parameters stipulated in this article, the circumstances of each case will be considered, as well as the context in which the election of the candidates occurs, with the purpose of evaluating the possibility of accepting or refusing their names, in view of the public interest.

Art. 22. Without prejudice to the other documents necessary to instruct the process, those elected or appointed to the positions referred to in Art. 19 must submit to the Central Bank of Brazil a declaration regarding their eventual classification in any of the situations provided for in Arts. 20 and 21.

§ 1º If the elected or appointed person falls into any of the situations provided for in Art. 21, such circumstance must be informed in the declaration referred to in the caput, which must be accompanied by documents that allow assessing the nature and stage of the reported occurrences.

§ 2º The acceptance, by the Central Bank of Brazil, of names for the exercise of the positions referred to in Art. 19 does not exempt the elected or appointed persons, the institution, its controlling shareholders, and administrators from responsibility for the veracity of the information provided.

Art. 23. It is also a condition for exercising the positions referred to in Art. 19 to possess technical qualification compatible with the duties of the position for which they were elected or appointed.

§ 1º The technical qualification mentioned in the caput must be proven based on academic training, professional experience, or other criteria deemed relevant, through documents and a declaration signed by the payment institutions, submitted for evaluation by the Central Bank of Brazil concurrently with the documentation provided for in Art. 22 and the authorization mentioned in Art. 19, § 1º, item IV.

§ 2º The declaration referred to in § 1º is waived in the case of an administrator with a mandate in force in the payment institution itself or, if applicable, in another institution belonging to a financial conglomerate in which they participate, provided that previously approved by the Central Bank of Brazil, unless otherwise determined.

Art. 24. A statement of purpose must be published, with a view to exercising the positions referred to in Art. 19, regarding the elected or appointed persons.

Sole Paragraph. The statement of purpose referred to in the caput must be prepared in observance of the provisions of Art. 49.

Art. 25. The temporary removal of occupants of the positions referred to in Art. 19, determined during the course of a process instituted in accordance with current legislation, does not exclude the removed person from the scope of the prohibitions applicable to those in office.

Art. 26. The Central Bank of Brazil will publish the names of the elected or appointed persons accepted by it.

Art. 27. The articles of association of payment institutions constituted in the form of limited liability companies must contain clauses specifying that:

I - the term of office of occupants of administrative positions may not exceed four years, with reelection permitted; and

II - the term of office of occupants of administrative positions will extend until the assumption of office by their substitutes.

Art. 28. If the name of an elected or appointed person for the positions referred to in Art. 19 is rejected by the Central Bank of Brazil, the payment institution must, within thirty days from the date the decision of denial becomes final, carry out the election or appointment of the substitute for the unapproved name.

Art. 29. Information regarding the dates of assumption of office, resignation, and dismissal, as well as temporary removals exceeding fifteen days, of occupants of positions referred to in Art. 19 in payment institutions must be communicated to the Central Bank of Brazil within five business days from the date of the event.

CHAPTER IX

OF THE CAPITAL AND EQUITY OF PAYMENT INSTITUTIONS

Art. 30. Payment institutions authorized to operate by the Central Bank of Brazil must fully pay a minimum capital of R$2,000,000.00 (two million reais) for each of the types of payment institutions provided for in Art. 4º.

Sole Paragraph. Payment institutions that participate exclusively in a closed payment arrangement, providing services in the modalities provided for in items I and II of Art. 4º, must fully pay a minimum capital of R$3,000,000.00 (three million reais).

Art. 31. The capital of payment institutions must be fully paid in current currency, except as provided for in Art. 33.

Art. 32. The alteration of the value of share capital depends on authorization from the Central Bank of Brazil.

§ 1º The payment institution must file a request for authorization to alter the share capital accompanied by the documents listed in Art. 42, item XII.

§ 2º The Central Bank of Brazil may require proof of the origin and respective financial movement of the resources used in the increase of share capital in current currency.

Art. 33. 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. 9º of Law No. 9,249, of December 26, 1995, or to the payment of dividends.

Sole Paragraph. The capital increases mentioned in the caput are independent of the authorization provided for in Art. 32.

CHAPTER X

OF THE AUTHORIZATION FOR THE PROVISION OF PAYMENT SERVICES BY AN INSTITUTION AUTHORIZED TO OPERATE BY THE CENTRAL BANK OF BRAZIL

Section I

Of the Authorization Process

Art. 34. The following are exempt from authorization by the Central Bank of Brazil:

I - commercial banks, multiple banks with commercial portfolios, and savings banks, for the provision of the services mentioned in items I to III of Art. 4º;

II - credit, financing, and investment companies, for the provision of payment services mentioned in item II of Art. 4º; and

III - single credit cooperatives, for the provision of the services mentioned in items I and II of Art. 4º exclusively to their members.

§ 1º Institutions authorized to operate by the Central Bank of Brazil not listed in the caput must:

I - request authorization to provide payment services related to one or more of the modalities provided for in Art. 4º, items I to III, when they present financial values superior to at least one of the parameters mentioned in Art. 6º, items I and II; and

II - request authorization to provide payment services in all modalities in which they operate, provided for in Art. 4º, items I to III, in the case where at least one of the modalities presents financial values superior to at least one of the parameters mentioned in Art. 6º, items I and II.

§ 2º The institutions referred to in item II of the caput, if they provide payment services in the modalities mentioned in items I and III of Art. 4º, must consider, in the calculation of the parameters referred to in Art. 6º, only the financial values related to these services.

§ 3º The institutions referred to in item III of the caput, if they provide payment services in the modality mentioned in item III of Art. 4º, must consider, in the calculation of the parameters referred to in Art. 6º, only the financial values related to this service.

Art. 35. Financial institutions and other institutions authorized to operate by the Central Bank of Brazil may only provide payment services that are complementary or subsidiary to their activities.

Art. 36. The requests referred to in § 1º of Art. 34 must be filed with the Central Bank of Brazil with the identification of the technically qualified person responsible for leading the project, accompanied by a reasoned justification for the operation and the documents listed in Art. 42, item III.

§ 1º The reasoned justification referred to in the caput must contain, at a minimum, the modalities of payment services according to Art. 4º of this Circular, the description of the business, the payment arrangements of which it is or was part, the indication of the services provided, the target audience, the area of operation, and the competitive differentials of the institution.

§ 2º The Central Bank of Brazil may require the presentation, in whole or in part, of the business plan mentioned in Art. 1º of Annex I of this Circular.

Art. 37. Upon verification of compliance with the provisions of Art. 36, authorization to provide payment services in the requested modality will be issued.

Art. 38. In the event of withdrawal or denial of the request for authorization to provide payment services, the institutions mentioned in § 1º of Art. 34 must cease the provision of the services related to items I to III of Art. 4º within thirty days of the decision.

Art. 39. The institutions mentioned in § 1º of Art. 34 must request authorization when they intend to operate in a modality related to items I to III of Art. 4º not provided for in the previously granted authorization.

§ 1º The request mentioned in the caput must be presented to the Central Bank of Brazil accompanied by a reasoned justification of the intention and the other documents provided for in Art. 42, item IV.

§ 2º The Central Bank of Brazil may conduct an inspection to verify the organizational structure implemented for the provision of payment activities in the requested modality.

§ 3º Upon verification of compliance with the provisions of this article, authorization to provide payment services in the requested modality will be issued.

Section II

Of the Cancellation of Authorization

Art. 40. The cancellation of the authorization to provide payment services at the request of the institutions mentioned in § 1º of Art. 34 is conditioned on the adoption of the following measures:

I - filing of the request with the Central Bank of Brazil; and

II - declaration of liquidation of all obligations related to the payment services of the corresponding modality.

Section III

Of the Capital

Art. 41. The institutions mentioned in § 1º of Art. 34, in addition to the minimum capital required by current regulation, must fully pay the amount of capital provided for in Art. 30, for each of the payment service modalities provided for in items I to III of Art. 4º.

CHAPTER XI

OF THE DOCUMENTS FOR INSTRUCTION OF PROCESSES

Art. 42. Processes related to the matters governed by this Circular must be instructed, as appropriate, by providing the Central Bank of Brazil with the documents and information indicated below, contained in the List of Documents and Information Necessary for the Instruction of Processes, in Annex II to this Circular:

I - authorization for payment institutions not controlled exclusively by financial institutions and other institutions authorized to operate by the Central Bank of Brazil: documents 1, 2, 4 to 8, 11, 12, 15, 16, 18 to 20, 23, 33, 37, 39, and 40, and, if there is an increase in share capital, documents 21, 22, 24, and 25;

II - authorization for payment institutions controlled exclusively by financial institutions and other institutions authorized to operate by the Central Bank of Brazil: documents 1, 2, 4, 6 to 8, 11, 12, 18 to 20, 23, 33, 37, 39, and 40, and if there is an increase in share capital, documents 21, 22, 24, and 25;

III - authorization for financial institutions and other institutions authorized by the Central Bank of Brazil, mentioned in § 1º of Art. 34, that provide the payment services related to items I to III of Art. 4º: documents 1, 2, and 39;

IV - authorization to operate in a new modality: documents 1, 19, 20, and 27;

V - transfer or alteration of control: documents 1, 3, 4, 6 to 13, 15 to 18, 25, 26, and 37;

VI - acquisition of qualified participation: documents 1, 4, 6, 11, 12, 25, 26, and 37;

VII - expansion of qualified participation: documents 1, 25, 26, and 37;

VIII - cancellation of authorization to operate in an authorized modality: documents 1, 19, 20, 27, and 28;

IX - merger, spin-off, or incorporation: documents 1, 7, 19, 27, 29 to 31, and 37;

X - corporate transformation: documents 1, 17, 19, 20, 22, 27, and 37;

XI - cancellation of authorization to operate at request: documents 1, 3, 13, 19, 20, 28, 32, 34, and 36;

XII - alteration of the value of share capital: documents 1, 19 to 22, 24, 37, and, at the discretion of the Central Bank of Brazil, document 25, and, additionally, in the case of capital reduction, document 27;

XIII - statutory reform or contractual alteration related to the alteration of the structure of administrative positions: documents 1, 19, and 20;

XIV - transfer of registered office to another municipality: documents 1, 19, 20, and 38; and

XV - change of corporate name: documents 1, 19, 20, 37, including the new corporate name, and document 35.

Art. 43. The Central Bank of Brazil will establish models of documents for the instruction of processes related to the matters governed by this Circular.

CHAPTER XII

GENERAL PROVISIONS

Art. 44. Payment institutions must include in the Information System on Entities of Interest to the Central Bank (Unicad) the information necessary for the instruction of processes as defined by the Central Bank of Brazil and send the articles of association or bylaws in the form of Circular No. 3,215, of December 12, 2003.

Art. 45. In the examination of processes governed by this Circular, the Central Bank of Brazil may:

I - require additional documents and information;

II - summon members of the control group, holders of qualified participation, and administrators indicated by the payment institution for a technical interview, in order to obtain additional information for the examination of the matter; and

III - conduct an inspection to verify the organizational structure implemented related to the provision of payment services.

Art. 46. The Central Bank of Brazil, in the analysis of the processes governed by this Circular, considering the circumstances of each concrete case and the context of the facts, may exceptionally waive, due to duly justified public interest, compliance with the conditions established for entry into the control group of payment institutions or for the exercise of administrative positions in payment institutions.

Art. 47. The deadline for the instruction of processes, when not specified, is thirty days, counted from the date of the corporate deliberation or formalization of the operation.

Art. 48. Changes in the capital composition of payment institutions must be communicated to the Central Bank of Brazil within fifteen days of their occurrence, in accordance with current regulation, except those resulting from the matters mentioned in Chapter VI.

Art. 49. The statement of purpose referred to in this Circular must be:

I - prepared according to models published by the Central Bank of Brazil and, in the case of the statements referred to in Art. 13, § 2º, presented previously to the instruction of the authorization process, in the form of a draft;

II - published, in the country, twice, on different dates, in the economics section or equivalent of a widely circulated newspaper:

a) in the locations of the headquarters and domicile of the controlling shareholders, in the case of the statements referred to in Art. 13, § 2º, citing the process number provided at the time of registration of the request, observing the provisions of § 1º of this article; and

b) in the locations of the headquarters and domicile of the administrators, in the case of the statement referred to in Art. 24; and

III - transmitted to the Central Bank of Brazil, using the Rich Text Format (rtf) standard, via the internet, to the electronic address "digep.deorf@bcb.gov.br", immediately after the last publication, with the indication of the newspapers and the dates of publication.

§ 1º In the event of cancellation of the authorization to operate, the publication of the statement of purpose must also be carried out in a widely circulated newspaper in the locations of the other dependencies of the payment institution, whether affiliated or not, maintained in the last twelve months.

§ 2º The following are exempt from the publication of a statement of purpose:

I - natural and legal persons who already belong to the control group of a payment institution or financial institutions or other institutions authorized to operate by the Central Bank of Brazil, except microentrepreneur and small business credit societies, in processes related to the authorization to operate or transfer of corporate control; and

II - those elected or appointed to administrative positions in payment institutions whose names have already been previously approved for the said positions in payment institutions or financial institutions or other institutions authorized to operate by the Central Bank of Brazil, except for positions in:

a) microentrepreneur and small business credit societies; and

b) credit cooperatives in which the elected persons have not submitted to the statement of purpose in accordance with current regulation.

§ 3º The deadline for submission to the Central Bank of Brazil of objections by the public as a result of the publication of the statement of purpose will be thirty days, counted from the date of dissemination of the respective notice.

§ 4º The Central Bank of Brazil may determine the republication of the statement of purpose if it considers that the newspaper in which it was originally published does not meet the objective of dissemination.

§ 5º The Central Bank of Brazil may adopt the following measures regarding the statements of purpose:

I - determine their publication, in the occurrence of situations for which publication has been waived or there is no specific provision; and

II - proceed with their dissemination by any means.

Art. 50. The authorization requests referred to in this Circular may be denied if verified:

I - a circumstance that may affect the reputation of the administrators, members of the control group, and holders of qualified participation;

II - falsity in the declarations or documents presented in the instruction of the process; or

III - discrepancy between the declarations and documents presented in the instruction of the process and the facts or data investigated in the analysis.

Sole Paragraph. In the cases governed by this article, a deadline may be granted to the interested parties for the presentation of justifications.

Art. 51. If, at any time, a discrepancy or falsity is found in the declarations presented in the instruction of the processes provided for in this Circular and considering the relevance of the facts, based on the circumstances of each case and the public interest, the Central Bank of Brazil may:

I - in the case of authorization processes to operate, review the decision that authorized the operation of the institution;

II - in the case of change of control, corporate reorganization, or acquisition of qualified participation, determine that the operation be regularized; and

III - in the case of election or appointment to exercise an administrative position in the institution, review the decision that approved the election or appointment.

§ 1º In the hypotheses described in the caput, an administrative process will be instituted, notifying the interested party at the address provided to the Central Bank of Brazil to manifest regarding the irregularity found.

§ 2º The interested party will be notified by public notice, if not found at the address provided to the Central Bank of Brazil.

§ 3º The measures provided for in this article may also be adopted if, at any time, pre-existing or subsequent circumstances to the election or appointment are found that may affect the reputation of those elected or appointed to administrative positions.

§ 4º The relevant registry body will be notified of the measure adopted by the Central Bank of Brazil.

Art. 52. The requests related to the matters governed by this Circular may be archived when:

I - there is non-compliance with any of the deadlines provided for in the regulation; or

II - requests for the presentation of additional documents, provision of information, appearance for technical interviews, or other requests related to the process are not met, within the specified deadline.

CHAPTER XIII

FINAL PROVISIONS

Art. 53. The payment institution that, on the date of entry into force of this Circular, provides a payment service related to the modalities provided for in items I to III of Art. 4º and presents financial values superior to at least one of the parameters established in Art. 6º may only continue to exercise such activity until:

I - the deadline of 90 days, counted from the date of entry into force of this Circular, in the event that it has not timely and adequately instructed the respective request for authorization to operate as a payment institution; or

II - the deadline of thirty days after being notified 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 to operate as a payment institution.

Art. 54. Circular No. 3,683, of November 4, 2013, is hereby revoked.

Art. 55. This Circular enters into force on the date of its publication.

Otávio Ribeiro Damaso
Director of Regulation

ANNEX I TO CIRCULAR NO. 3,885, OF MARCH 26, 2018

BUSINESS PLAN REGULATIONS

Art. 1º The business plan mentioned in Art. 8º, § 5º, and in Art. 36, § 2º, of this Circular must include, at a minimum:

I - indication of the payment arrangement whose issuer has formalized a document accepting its participation;

II - indication of the modalities, as referred to in Article 4 of this Circular, in which it operates;

III - breakdown of the payment activities and services to be provided;

IV - its own corporate structure and that of the economic group to which the institution belongs, explicitly identifying, at all levels of participation, the members of the controlling group, the holders of qualified participation, foreign participants, if any, as well as the respective quantities and types of shares or quotas held, until the identity of the ultimate controllers is evident;

V - a financial plan that demonstrates the economic-financial viability of the project, which must include:

a) economic premises of the project;

b) projection, prepared on a monthly basis, of the financial statements and cash flow;

c) capital structure and sources of financing;

d) estimate of the discount rate, calculated based on a widely accepted methodology for calculating the cost of equity capital;

e) calculation of the Net Present Value (NPV) of the project based on the Free Cash Flow to Shareholders; and

f) description of the critical variables for the success of the venture, as well as the construction of three scenarios (base, conservative, and ideal), in which it is possible to verify the impact generated by changes in these variables on the results obtained;

VI - a marketing plan;

VII - a technical-operational plan; and

VIII - a statement regarding the intention to open a Settlement Account from the start of its activities.

§ 1º The marketing plan mentioned in item VI of the caput must include, at a minimum, the following topics:

I - strategic objectives of the venture;

II - description of the market in which the institution intends to operate, including existing risks and those resulting from eventual business concentration;

III - target audience;

IV - main products and services to be offered;

V - competition analysis; and

VI - technologies to be used in the placement of products and sizing of the service structure.

§ 2º The technical-operational plan mentioned in item VII of the caput must include, at a minimum:

I - the organization chart of the institution and the personnel policy;

II - the relationship that the institution intends to maintain with other natural or legal persons that make up the economic group to which it belongs;

III - all operational processes related to the activities of the payment institution, including those performed by third parties, including general flowchart and flowchart of each process;

IV - the physical and technological infrastructure that will support its operations, including the role of third parties as agents of the payment institution;

V - the contract with the clearing and settlement system for the settlement of transactions within the payment arrangement, if applicable;

VI - the supporting documentation of the technical-operational capacity of the payment institution, including tests performed for the licensing of the institution, when required by the issuer of the payment arrangement;

VII - corporate governance standards and the business management structure;

VIII - internal controls and the structure to be used in risk management;

IX - the structure planned to meet the requirements of the Central Bank of Brazil regarding the provision of information for statistical and supervisory purposes and the disclosure of financial statements in the established standards;

X - the indication of systems, procedures, and controls to be used for the detection and prevention of operations whose characteristics may indicate the existence of the crimes of "money laundering" or concealment of assets, rights, and values typified in Law No. 9,613, of March 3, 1998; and

XI - the business continuity plans to be adopted, addressing, at a minimum, the following items:

a) line of responsibility for business continuity, collectively linking the entity's administrators;

b) description of critical scenarios to be included in the approach to business continuity management, which must include situations of severe operational disruption, imposing a substantial risk to the operational continuity of the entity;

c) description of recovery objectives, taking into account the risk imposed by the entity on the fluidity of retail payments in the Country;

d) description of communication procedures with internal and external participants, in cases of severe disruption situations; and

e) description of procedures to periodically test the business continuity plan, as well as its improvement based on the evaluation of the results of these tests.

ANNEX II TO CIRCULAR NO. 3,885, OF MARCH 26, 2018

LIST OF DOCUMENTS AND INFORMATION NECESSARY FOR THE INSTRUCTION OF PROCESSES

1 - petition signed by the administrators whose representativeness is recognized by the bylaws, articles of association, or equivalent document;

2 - indication of the person responsible for leading the project before the Central Bank of Brazil;

3 - draft of the statement of purpose;

4 - identification of the members of the controlling group and the holders of qualified participation, with their respective corporate participations;

5 - registration form filled out by all members of the controlling group and by all holders of qualified participation, if entering the National Financial System;

6 - declaration referred to in Article 22 of this Circular;

7 - complete organizational chart of the economic conglomerate, containing the identification of all companies with the National Registry of Legal Entities (CNPJ) number, or, if foreign, with the name of the country where the headquarters is located, and respective percentages of voting and total capital held, or a declaration that the institution does not belong to an economic conglomerate;

8 - indication of the manner in which the corporate control of the institution will be exercised;

9 - declarations and documents proving that the members of the controlling group have knowledge of the business branch and the segment in which the institution intends to operate;

10 - identification of the origin of the resources to be used in the operation;

11 - authorizations signed by the controllers, by the holders of qualified participation, and by the company, signed by its legal representative, to the Brazilian Federal Revenue Secretariat, for the provision to the Central Bank of Brazil of the Annual Income Tax Adjustment Declaration – Individual or the Economic-Fiscal Information Declaration of the Legal Entity, as applicable, relating to the last three fiscal years, for exclusive use in the respective authorization process;

12 - authorizations signed by the controllers, by the holders of qualified participation, and by the company, signed by its legal representative, to the Central Bank of Brazil, for access to information about them in any public or private registration and information system, including judicial or administrative processes and police inquiries, for exclusive use in the respective authorization process;

13 - complete pages of the newspaper copies in which the statement of purpose was published;

14 - business plan meeting the requirements established in Article 1 of Annex I to this Circular;

15 - copy of the balance sheet of the last three fiscal years of the controlling legal entities – except when it is an institution authorized to operate by the Central Bank of Brazil –, audited by an independent auditor registered with the Securities and Exchange Commission (CVM), or equivalent document, in the case of a legal entity headquartered abroad;

16 - copy of Annual Income Tax Adjustment Declarations – Individual, of the controlling natural persons, direct or indirect, relating to the last three fiscal years, with proof of submission to the Brazilian Federal Revenue Secretariat, or equivalent document, in the case of a resident abroad, which evidences the annual income earned and a list of the assets, rights, and liabilities of the natural person, with their respective value;

17 - copy or draft of a shareholders' or quota holders' agreement involving all levels of corporate participation, which must include a clause of precedence over any other not submitted to the appreciation of the Central Bank of Brazil, or a declaration of its non-existence;

18 - copy of the usufruct contract relating to the corporate participations of the controllers involving all levels of corporate participation, or a declaration of its non-existence;

19 - proof of publication of the call for the general assembly, in the form of the law, if applicable;

20 - two authentic copies of the corporate acts that deliberated on the subject, when applicable;

21 - subscription list, in the regulatory form;

22 - proof of registration of the issuance of shares with the Securities and Exchange Commission (CVM), when it is an increase in capital by public subscription;

23 - copy of a shareholders' or quota holders' agreement involving all levels of corporate participation, or a declaration of its non-existence;

24 - proof of bank deposit of the amount related to the full payment of the increase in social capital;

25 - proof of the origin and respective financial movement of the resources used in the operation;

26 - purchase and sale contract, or equivalent instrument, which must include a clause stipulating that the completion of the business is conditioned on approval by the Central Bank of Brazil;

27 - reasoned justification for the intended operation, highlighting aspects of a strategic, corporate, and economic-financial nature;

28 - declaration that all passive operations exclusive to the original institution have been settled;

29 - two authentic copies of the corporate acts of the involved institutions that deliberated on the merger/spin-off/incorporation and the appointment of experts to evaluate the assets, in the form of the law;

30 - two authentic copies of the minutes of the debenture holders' assembly that approved the merger/spin-off/incorporation, or supporting document that the rights of the debenture holders were ensured, when involving a company issuing debentures in circulation;

31 - two authentic copies of the protocol and the justification and the appraisal reports of the appointed experts, if they have not been transcribed in the corporate acts, and one copy of the balance sheet/balance statement at the base date, accompanied by the respective report of an independent auditor duly registered with the Securities and Exchange Commission (CVM);

32 - statement of responsibility, as defined by the Central Bank of Brazil;

33 - one copy of the consolidated bylaws or articles of association;

34 - information on the measures that will be adopted regarding third-party resources, if applicable;

35 - reasoned justification for the change of corporate name, with an analysis of any impacts of this change on the relationship with clients and a plan for the disclosure of the new name;

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

37 - capital composition map of the institution and the legal entities participating in it (Capef document – “Capital Composition”, model Cadoc 38029-8), in accordance with current regulation;

38 - reasoned justification for the transfer of the registered office to another municipality, with an analysis of any impacts of this transfer on the organizational structure and on the relationship with clients;

39 - reasoned justification containing, at a minimum, the modalities of payment services according to Article 4 of this Circular, the description of the business, the payment arrangements of which it is part, the indication of the services provided, the statement regarding the intention to be the holder of a Settlement Account, the target audience, the area of operation, the location of the headquarters and any dependencies, and the competitive differentials of the institution; and

40 - copy of the balance sheet of the payment institution, relating to the last three fiscal years, audited by an independent auditor registered with the Securities and Exchange Commission (CVM).