CMN Resolution No. 4388 — Amends Provisions of Resolutions Nos. 3,380, 3,464, 3,488, 3,721, 3,988, and 4,090

The Central Bank of Brazil, pursuant to Article 9 of Law No. 4,595 of December 31, 1964, makes public that the National Monetary Council, in a session held on December 18, 2014, based on Articles 4, item VIII, of the aforementioned Law, Articles 2, item VI, 8, and 9 of Law No. 4,728 of July 14, 1965, Article 20, § 1, of Law No. 4,864 of November 29, 1965, Article 23, item “a”, of Law No. 6,099 of September 12, 1974, Article 1, item II, of Law No. 10,194 of February 14, 2001, and Article 6 of Decree-Law No. 759 of August 12, 1969,

RESOLVES:

Art. 1. Articles 5 and 7 of Resolution No. 3,380 of June 29, 2006, shall enter into force with the following wording:

“Art. 5. The operational risk management structure must identify, assess, monitor, control, and mitigate risks associated with each institution individually and with the prudential conglomerate, defined in accordance with Resolution No. 4,280 of October 31, 2013, as well as identify and monitor risks associated with other companies controlled by members of the prudential conglomerate.

............................................................” (New)

“Art. 7. The establishment of a single unit responsible for the management of operational risk of the prudential conglomerate and its respective member institutions, as well as for the identification and monitoring of risks associated with other companies controlled by members of the prudential conglomerate, is permitted.

Sole Paragraph. The establishment of a single unit responsible for the management of operational risk of a credit cooperative system is permitted, provided it is located in an entity supervised by the Central Bank of Brazil that is part of the respective system.” (New)

Art. 2. Articles 7 and 9 of Resolution No. 3,464 of June 26, 2007, shall enter into force with the following wording:

“Art. 7. The market risk management structure must identify, assess, monitor, and control risks associated with each institution individually and with the prudential conglomerate, defined in accordance with Resolution No. 4,280 of October 31, 2013, as well as identify and monitor risks associated with other companies controlled by members of the prudential conglomerate.” (New)

“Art. 9. The establishment of a single unit responsible for the management of market risk of the prudential conglomerate and its respective member institutions, as well as for the identification and monitoring of risks associated with other companies controlled by members of the prudential conglomerate, is permitted.

Sole Paragraph. The establishment of a single unit responsible for the management of market risk of a credit cooperative system is permitted, provided it is located in an entity supervised by the Central Bank of Brazil that is part of the respective system.” (New)

Art. 3. Article 1 of Resolution No. 3,488 of August 29, 2007, shall enter into force with the following wording:

“Art. 1. .........................................................

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

§ 2. For institutions that are part of a prudential conglomerate, defined in accordance with Resolution No. 4,280 of October 31, 2013, the exposure value must be calculated on a consolidated basis.” (New)

Art. 4. Articles 3 and 9 of Resolution No. 3,721 of April 30, 2009, shall enter into force with the following wording:

“Art. 3. The credit risk management structure must identify, assess, measure, control, and mitigate risks associated with each institution individually and with the prudential conglomerate, defined in accordance with Resolution No. 4,280 of October 31, 2013, as well as identify and monitor risks associated with other companies controlled by members of the prudential conglomerate.” (New)

“Art. 9. The establishment of a single unit responsible for the management of credit risk of the prudential conglomerate and its respective member institutions, as well as for the identification and monitoring of risks associated with other companies controlled by members of the prudential conglomerate, is permitted.

Sole Paragraph. The establishment of a single unit responsible for the management of credit risk of a credit cooperative system is permitted, provided it is located in an entity supervised by the Central Bank of Brazil that is part of the respective system.” (New)

Art. 5. Articles 1, 3, 6, and 9 of Resolution No. 3,988 of June 30, 2011, shall enter into force with the following wording:

“Art. 1. Financial institutions and other institutions authorized to operate by the Central Bank of Brazil required to calculate the minimum requirements for Reference Equity (PR), Tier 1, and Core Capital, as established by Resolution No. 4,193 of March 1, 2013, must implement a capital management structure compatible with the nature of their operations, the complexity of the products and services offered, and the size of their exposure to risks.

............................................................” (New)

“Art. 3. The capital management structure must cover all institutions of the prudential conglomerate, defined in accordance with Resolution No. 4,280 of October 31, 2013.

Sole Paragraph. The capital management structure must also consider possible impacts on the capital of the prudential conglomerate arising from risks associated with other companies controlled by members of the prudential conglomerate.” (New)

“Art. 6. ........................................................

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

III - are members of a prudential conglomerate, defined in accordance with Resolution No. 4,280 of October 31, 2013, that has total assets exceeding BRL 100,000,000,000.00 (one hundred billion reais) and is composed of at least one multiple bank, commercial bank, investment bank, development bank, foreign exchange bank, or savings bank.

............................................................” (New)

“Art. 9. The establishment of a single unit responsible for the management of capital of the prudential conglomerate and its respective member institutions, as well as for the assessment of possible impacts on the capital of said conglomerate arising from risks associated with other companies controlled by members of the prudential conglomerate, is permitted.

............................................................” (New)

Art. 6. Articles 3 and 8 of Resolution No. 4,090 of May 24, 2012, shall enter into force with the following wording:

“Art. 3. The liquidity risk management structure must identify, assess, monitor, and control risks associated with each institution individually and with the prudential conglomerate, defined in accordance with Resolution No. 4,280 of October 31, 2013, as well as consider possible impacts on the liquidity of said conglomerate arising from risks associated with other companies controlled by members of the prudential conglomerate.” (New)

“Art. 8. The establishment of a single unit responsible for the management of liquidity risk of the prudential conglomerate and its respective member institutions, as well as for the assessment of possible impacts on the liquidity of said conglomerate arising from risks associated with other companies controlled by members of the prudential conglomerate, is permitted.

............................................................” (New)

Art. 7. This Resolution enters into force on January 1, 2015.

Art. 8. Article 1, § 3 of Resolution No. 3,488 of August 29, 2007, Articles 10 and 11 of Resolution No. 3,721 of April 30, 2009, and the sole paragraph of Article 3 of Resolution No. 4,090 of May 24, 2012, are hereby repealed.

Alexandre Antonio Tombini
President of the Central Bank of Brazil