Circular No. 3974 — Amends Circular No. 3,885 of March 26, 2018, Regarding Authorization for Operation and Payment Services by Payment Institutions, Financial Institutions, and Other Authorized Entities

The Collegiate Board of the Central Bank of Brazil, in a session held on December 17, 2019, based on arts. 6, §§ 1 and 4, and 9, items X and XIV, 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:

Art. 1º Circular No. 3,885, of March 26, 2018, shall enter into force with the following alterations:

"Art. 3º ......

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§ 2º 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 partner with 75% (seventy-five percent) or more of the social capital, in the case of a limited liability company, the members of the control group must present a shareholders' or partners' agreement, involving all levels of shareholding participation, with the purpose of defining the exercise of control power, which must contain a clause stating the precedence of said agreement over any other not submitted to the appreciation of the Central Bank of Brazil.

§ 3º If the shareholders' or partners' agreement mentioned in § 2º has not been finalized, the presentation of the draft of said agreement is admitted." (NR)

"Art. 4º ......

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§ 3º The payment institution issuing electronic money or post-paid payment instrument must request authorization to provide the service as an acquirer, in accordance with item III of the caput, within the scope of any other payment arrangements other than its own." (NR)

"Art. 8º ......

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§ 3º Payment institutions must ensure that controllers and holders of qualified participation do not have restrictions that may affect their reputation, considering the requirements established in art. 20 and the situations and occurrences provided for in art. 21.

......" (NR)

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

......" (NR)

"Art. 13. ......

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§ 2º In any of the cases referred to in the caput, the application 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, donation instrument, 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 the caput of art. 8º and in item V of the caput of art. 42, pertinent to the new members of the control group.

......" (NR)

"Art. 16. The following alterations in the shareholding composition of payment institutions must be submitted to the authorization of the Central Bank of Brazil:

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§ 3º The alterations provided for in item III of the caput must be submitted to the Central Bank of Brazil within fifteen days of their occurrence, by filing a request accompanied by a copy of the contract, corporate act, or instrument that formalizes the alteration and the documents provided for in art. 42, item VII of the caput.

......" (NR)

"Art. 17. ......

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

......" (NR)

"Art. 19. ......

§ 1º ......

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IV - authorization, signed by the elected or appointed person, to the Central Bank of Brazil, for access to information about themselves, during the approval processes and the period of holding the office, in any public or private registration and information system, including judicial or administrative processes and police inquiries, for exclusive use by the Central Bank of Brazil in its authorization, monitoring, and supervision processes;

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VIII - ......

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

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§ 4º The use of the term director is exclusive to persons elected or appointed in the manner of the bylaws or social contract of the payment institution." (NR)

"Art. 22. Without prejudice to the other documents necessary for the instruction of the process, those elected or appointed to the offices referred to in art. 19 must present to the Central Bank of Brazil a declaration regarding compliance with the conditions established in art. 20 and their eventual classification in any situations and occurrences provided for in art. 21.

......" (NR)

"Art. 23. ......

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§ 2º The declaration mentioned in § 1º is waived in the case of an administrator with a mandate in force at the payment institution itself or at another institution part of a financial or prudential conglomerate in which they participate, provided that previously approved by the Central Bank of Brazil, unless otherwise determined." (NR)

"Art. 27. ......

I - the mandate of elected administrators shall be for a fixed term, not exceeding four years, with reelection admitted; and

......" (NR)

"Art. 29. Information regarding the dates of assumption, resignation, and dismissal of occupants of the offices referred to in art. 19 in payment institutions must be communicated to the Central Bank of Brazil within five business days counted from the date of the event." (NR)

"Art. 34. ......

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II - multiple banks with credit, financing, and investment portfolios and credit, financing, and investment companies, for the provision of payment services mentioned in item II of art. 4º;

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§ 1º Institutions authorized to operate by the Central Bank of Brazil not mentioned in the caput must request prior authorization from the Central Bank of Brazil to provide payment services in any of the modalities provided for in art. 4º.

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§ 4º The institutions mentioned in the caput must request prior authorization from the Central Bank of Brazil to provide payment services in modalities not covered by the authorization exemption." (NR)

"Art. 36. The requests referred to in §§ 1º and 2º 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 mentioned in the caput must contain, at minimum, the payment service modalities according to art. 4º of this Circular, the description of the business, the payment arrangements the institution will be part of, the indication of the services to be provided, the target audience, the area of operation, and the competitive differentials of the institution.

......" (NR)

"Art. 40. The cancellation of the authorization to provide payment services at the request of the institutions mentioned in §§ 1º and 2º of art. 34 is conditioned to the adoption of the following measures:

......" (NR)

"Art. 41. Institutions authorized to operate by the Central Bank of Brazil, in addition to the minimum capital required in specific regulation, must fully integrate the amount of capital established in the caput of art. 30 regarding each of the payment service modalities provided for in art. 4º." (NR)

"Art. 42. ......

I - authorization for payment institutions not exclusively controlled 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, 40 and 41, and, if there is an increase in social capital, documents 21, 22, 24 and 25;

II - authorization for payment institutions exclusively controlled 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, 40 and 41, and if there is an increase in social capital, documents 21, 22, 24 and 25;

III - authorization for institutions mentioned in §§ 1º and 2º of art. 34: documents 1, 2, 19, 20 and 39;

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V - transfer or alteration of control: documents 1, 4, 6 to 12, 15 to 18, 25, 26 and 37;

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XI - cancellation of authorization for operation at request: documents 1, 19, 20, 28, 32, 34 and 36;

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XIII - alteration of the administrative structure provided for in the bylaws or social contract: documents 1, 19 and 20;

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XV - change of corporate name: documents 1, 19, 20 and 35." (NR)

"Art. 44. Payment institutions must include in the Information System on Entities of Interest of the Central Bank (Unicad) the information necessary for the instruction of processes as defined by the Central Bank of Brazil." (NR)

"Art. 45. ......

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

......" (NR)

"Art. 49-A. The Central Bank of Brazil will publish, with a view to enabling the manifestation of the general public regarding possible objections, the following information, regarding requests of interest to payment institutions:

I - the names of persons interested in joining the control group, in the cases referred to in the caput of art. 13;

II - the names of those elected or appointed to administrative positions in payment institutions; and

III - requests for cancellation of authorization for operation.

§ 1º The deadline for presenting objections to the Central Bank of Brazil by the general public as a result of the publication of the information referred to in the caput will be:

I - thirty days counted from the date of publication, in the cases provided for in items I and III of the caput; and

II - fifteen days counted from the date of publication, in the case provided for in item II of the caput.

§ 2º The payment institution that intends to file a request for cancellation of authorization for operation must notify its clients through its website (internet) and in its premises.

§ 3º The provisions in the caput do not apply in the cases of:

I - natural and legal persons who already form part of the control group of a payment institution or financial institutions or other institutions authorized to operate by the Central Bank of Brazil; and

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

§ 4º The Central Bank of Brazil may publish the information referred to in items I and II of the caput in the occurrence of situations for which there is no specific provision." (NR)

Art. 2º Annex II to Circular No. 3,885, of 2018, shall enter into force with the following alterations:

"11 - authorizations signed by controllers, holders of qualified participation, and the company, signed by its legal representative, to the Federal Revenue Secretariat of Brazil, 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 the case may be, relating to the last three fiscal years, for exclusive use by the Central Bank of Brazil in its authorization, monitoring, and supervision processes, during the authorization and approval processes and the period of exercising control, ownership of participations, and their functions, respectively;” (NR)

“12 - authorizations signed by controllers, holders of qualified participation, and the company, signed by its legal representative, to the Central Bank of Brazil, for access to information about themselves in any public or private registration and information system, including judicial or administrative processes and police inquiries, for exclusive use by the Central Bank of Brazil in its authorization, monitoring, and supervision processes, during the authorization and approval processes and the period of exercising control, ownership of participations, and their functions, respectively;” (NR)

“15 - copy of the financial statements 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 (Comissão de Valores Mobiliários), or equivalent document, in the case of a legal entity headquartered abroad;” (NR)

“22 - declaration regarding the registration of the issuance of shares with the Securities and Exchange Commission (Comissão de Valores Mobiliários), when it is an increase in capital by public subscription;” (NR)

“28 - declaration that all passive operations specific to the original institution or all obligations related to the payment services of the corresponding modality have been settled, as the case may be;” (NR)

“37 - Capital Composition Map of the institution and the legal entities participating in it, in the form of current regulation;” (NR)

“39 - reasoned justification containing, at minimum, the payment service modalities according to art. 4º of this Circular, the description of the business, the payment arrangements it is or will be part of, the indication of services provided or to be provided, the manifestation 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 premises, and the competitive differentials of the institution;” (NR)

“40 - copy of the financial statements of the payment institution relating to the last three fiscal years, audited by an independent auditor registered with the Securities and Exchange Commission (Comissão de Valores Mobiliários); and” (NR)

“41 - presentation of transaction volume information for payment services, according to the payment service modality provided, according to the calculation method described in §§ 1º to 6º of art. 6º of this Circular." (NR)

Art. 3º In cases where the authorization of the Central Bank of Brazil for the provision of payment services has become required due to the alterations promoted by this Circular in §§ 1º and 4º of art. 34 of Circular No. 3,885, of 2018, the institutions mentioned in said devices that provide payment services without the authorization indicated therein must request it from the Central Bank of Brazil within ninety days, counted from the date of entry into force of this Circular.

§ 1º After the deadline established in the caput has ended, the institution that has not instructed the authorization request must interrupt the provision of payment services.

§ 2º In the case of archiving or denial of the request referred to in the caput, the institution must interrupt the provision of payment services within a maximum of thirty days counted from the notification of the decision of the Central Bank of Brazil from which no further administrative appeal is possible.

Art. 4º Institutions authorized to operate by the Central Bank of Brazil that, on the date of entry into force of this Circular, provide payment services in the modalities provided for in art. 4º of Circular No. 3,885, of 2018, must comply with the provisions of art. 41 of said Circular, according to the following schedule:

I - minimum fully integrated capital of R$500,000.00 (five hundred thousand reais) for each of the payment service modalities provided, from June 1, 2020;

II - minimum fully integrated capital of R$1,000,000.00 (one million reais) for each of the payment service modalities provided, from June 1, 2021;

III - minimum fully integrated capital of R$1,500,000.00 (one million and five hundred thousand reais) for each of the payment service modalities provided, from June 1, 2022; and

IV - minimum fully integrated capital of R$2,000,000.00 (two million reais) for each of the payment service modalities provided, from June 1, 2023.

Sole Paragraph. The provisions in the caput also apply to institutions that have filed, by the date of entry into force of this Circular, a request for authorization to operate as a financial institution, whose submitted documentation contemplates the provision of payment services in the modalities provided for in art. 4º of Circular No. 3,885, of 2018.

Art. 5º The following provisions of Circular No. 3,885, of 2018, are revoked:

I - item II of § 2º of art. 8º;

II - § 3º of art. 13;

III - item II of the caput and § 2º of art. 17;

IV - item VII of § 1º of art. 19;

V - art. 24;

VI - items I and II of § 1º and §§ 2º and 3º of art. 34;

VII - arts. 38 and 39;

VIII - art. 49; and

IX - items 3 and 13 of Annex II.

Art. 6º This Circular enters into force on the date of its publication.

Otávio Ribeiro Damaso
Director of Regulation