CMN Resolution No. 2212 — Amending Provisions of Resolutions Nos. 2,099 and 2,122

RESOLUTION NO. 002212

Amending Provisions of Resolutions
Nos. 2,099, of 17.08.94, and 2,122, of 30.11.94.

The CENTRAL BANK OF BRAZIL, in accordance with Article 9 of Law No. 4,595, of 31.12.64, makes public that the President of the NATIONAL MONETARY COUNCIL, by act of 16.11.95, based on Article 8, paragraph 1, of Law No. 9,069, of 29.06.95, "ad referendum" of that Council, and having in view the provisions of Article 7 of Decree-Law No. 2,291, of 21.11.86, and Article 4, items VIII, XI, and XXII, of the aforementioned Law No. 4,595, of 31.12.64,

RESOLVES:

Article 1. Institutions authorized to operate by the
Central Bank of Brazil from the date of publication of this Resolution must maintain a value of adjusted net worth compatible with the degree of risk of the structure of their assets, for the purposes provided for in the Regulation annexed to Resolution No. 2,099, of 17.08.94, in accordance with the following formulas, considering the variables also defined in the cited regulation:

I - during the 2 (two) first years: PLE = 0.32 (APR) + 0.015 (SW);

II - from 2 (two) to 4 (four) years: PLE = 0.24 (APR) +
0.015 (SW);

III - from 4 (four) to 6 (six) years: PLE = 0.16 (APR) +
0.015 (SW);

IV - from 6 (six) years onwards: PLE = 0.08 (APR) +
0.015 (SW).

Paragraph 1. The annual periods referred to in this article shall be counted from the start of operation of the institution.

Paragraph 2. The provisions of this article do not apply to the following cases:

I - authorization to operate for a new institution or for a change in the corporate control of an existing institution, provided that these result from a merger or incorporation involving at least one financial institution operating before the date of publication of this Resolution;

II - transfer of corporate control of a financial institution operating before the date of publication of this Resolution;

III - to other cases provided for in Article 4 of the Regulation annexed to Resolution No. 2,099, of 17.08.94, provided that involving a financial institution operating before the date of publication of this Resolution.

Article 2. Article 1 of the Regulation annexed
to Resolution No. 2,099, of 17.08.94, is amended, which shall henceforth read as follows:

"Article 1. The granting, by the Central Bank of Brazil, of authorization to operate multiple banks, commercial banks, investment banks, development banks, credit, financing and investment companies, real estate credit companies, leasing companies, securities brokerage companies, securities distribution companies and foreign exchange correction companies is conditioned on:

I - proof by the direct and indirect controllers of an economic situation compatible with the undertaking;

II - the absence of credit restrictions on administrators and controllers, including due to the declaration of purpose mentioned in Article 2 of this Regulation;

III - that the amount of paid-in capital corresponds, at minimum, to the limit established for the institution under the terms of the Regulation annexed to Resolution No. 2,099, of 17.08.94."

Article 3. The economic-financial situation of the
controllers must correspond to at least 220% (two hundred and twenty percent) of the undertaking and shall be based on:

I - the value of subscribed capital, in the case of authorization to operate for a new institution;

II - the greater of the following parameters, when it concerns a transfer of corporate control:

a) book value;

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

c) acquisition price;

III - the value of the minimum capital required for the new institution, in cases of corporate reorganization, when it implies a need for higher capital requirements.

Paragraph 1. In the calculation of the requirement referred to in this article, participations in subsidiaries that are financial institutions and other institutions authorized to operate by the Central Bank of Brazil shall be considered, using as a parameter the minimum capital required for these institutions.

Paragraph 2. In cases of transfer of corporate control, the calculation of the proof of economic-financial capacity shall be performed considering 220% (two hundred and twenty percent) of the value of the minimum capital required for the institution, plus the difference between the greater of the values mentioned in item II of this
article and the minimum capital required.

Article 4. Proof of the economic-financial capacity referred
to in Article 1 of the Regulation annexed to Resolution No. 2,099, of 17.08.94, as amended by Article 2 of this Resolution, is waived for:

I - cases where there is a change in corporate control exercised by legal entities, directly or indirectly, provided that the individual controlling persons remain the same;

II - in the case of authorization to operate for a new institution or for a change in the corporate control of an existing institution, provided that these result from a merger or incorporation involving at least one financial institution operating before the date of publication of this Resolution;

Article 5. Any change, whether direct or indirect, in the
shareholder composition of the institution, that may imply effective interference in the business affairs due to:

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

II - shareholder/partnership agreement.

shall be subject to the same procedures applicable to the transfer of corporate control.

Article 6. From the group of institutions forming part of
the same conglomerate controlled by foreign capital, only one of them may be transformed into a multiple bank, commercial bank or investment bank.

Sole Paragraph. In the event of the direct or indirect transfer of corporate control of any of the institutions referred to by persons residing or domiciled abroad, their transformation into a multiple bank, commercial bank or investment bank is prohibited.

Article 7. Mortgage credit pass-through companies,
thus defined by Vote No. 239, of 05.06.85, of the National Monetary Council, within the Financial System, may only transform into mortgage companies, observing the norms of Resolution No. 2,099, of 17.08.94, and subsequent regulation, not being subject to the exceptions provided for in this Resolution.

Article 8. The following are amended:

I - paragraphs 2 of Articles 1 and 4 of the Regulation annexed to Resolution No. 2,099, of 17.08.94, which shall henceforth read as follows:

"Article 1 ......................................................

"Paragraph 2. In the case of an institution that has a head office or parent company and, at least, 70% (seventy percent) of its branches operating outside the States of Rio de Janeiro and/or São Paulo, the values of paid-in capital and required net worth under the terms of this article shall be reduced by 30% (thirty percent)."

"Article 4 .......................................................

"Paragraph 2. The granting of any authorization provided for in the Regulation annexed to Resolution No. 2,099, of 17.08.94, the authorization for the opening of new branches, as well as the qualification or authorization to exercise activity for which there is a provision for paid-in capital and net worth, will imply the need for prompt compliance with the minimum limits established in this Regulation."

II - Articles 2 and 8, item I, of the Regulation annexed to Resolution No. 2,099, of 17.08.94, which shall henceforth read as follows:

"Article 2. A branch is a dependency of financial institutions and other institutions authorized to operate by the Central Bank of Brazil intended for the practice of activities for which the institution is regulatory qualified.

"Sole Paragraph. The institutions referred to in this article may centralize the accounting of branches in the same municipality in a branch of the same location, observing the following:

I - prior communication to the Central Bank of Brazil, which may adopt specific procedures regarding foreign exchange operations;

II - use of a single 'Daily Balance Sheets and Balance Sheets' book, or 'Daily Book', for recording the accounting movement of branches in the same municipality;

III - maintenance of accounting books in a single branch, to be indicated by the institution, belonging to the same municipality."

"Article 8 ......................................................

I - may be installed exclusively in the area of operation of the cooperative;
...............................................................

Article 9. Amend Article 8 of Resolution No. 2,122, of
30.11.94, which shall henceforth read as follows:

"Article 8. To mortgage companies:

I - the norms of the Housing Finance System - SFH do not apply;

II - transformation into any of the institutions listed in Article 1 of the Regulation annexed to Resolution No. 2,099, of 17.08.94, is prohibited."

Article 10. It is an indispensable condition for the granting of
any authorization provided for in the Regulation annexed to Resolution No. 2,099, of 17.08.94, compliance with legal and regulatory provisions, especially:

I - immobilization index;

II - risk diversification limit and other operational limits.

Sole Paragraph. The Central Bank of Brazil may waive compliance with the requirement referred to in this article in the cases provided for in Article 4 of this Resolution.

Article 11. In cases of non-compliance with the minimum
limits of paid-in capital and net worth referred to in the Regulations Annexed II and IV to Resolution No. 2,099, of 17.08.94, the Central Bank of Brazil, without prejudice to the provisions of Articles 2 and 3 of that Resolution, may determine, on a case-by-case basis:

I - the increase of requirements regarding the operational limits referred to in Article 10;

II - the reduction of the operational structure of the institution, through the cancellation of authorizations, in order to adapt it to its capitalization levels.

Article 12. Multiple banks must maintain, for each
portfolio they operate, a technically qualified director responsible for the respective operations, with the accumulation of positions permitted, in accordance with the legislation in force.

Article 13. New authorizations to operate for financial
institutions will be conditioned on adherence to the mechanism of protection for holders of claims against financial institutions, established by Resolution No. 2,197, of 31.08.95.

Article 14. The Central Bank of Brazil may issue
norms and adopt measures deemed necessary for the execution of this Resolution.

Article 15. This Resolution enters into force on the date of its
publication.

Article 16. Article 36 of the Regulation annexed
to Resolution No. 1,914, of 11.03.92, Articles 5 and 6 of the Regulation annexed to Resolution No. 2,099, of 17.08.94, and paragraph 3 of Article 1 of the Regulation annexed II to Resolution No. 2,099, of 17.08.94, are revoked.

Brasília, November 16, 1995

Gustavo Jorge Laboissière Loyola
President

Resolution retransmitted due to adjustment in the caput of Article 11 and item I.