CMN Resolution No. 4688 — Amends Annexes I and II of Resolution No. 4,222 of May 23, 2013 — Statute and Bylaws of the Credit Guarantee Fund (FGC)

The Central Bank of Brazil, in accordance with Article 9 of Law No. 4,595 of December 31, 1964, makes public that the National Monetary Council, in a session held on September 25, 2018, based on Articles 3, item VI, and 4, item VIII, of the aforementioned Law, and taking into account the provisions of § 1 of Article 28 of Complementary Law No. 101 of May 4, 2000, and § 1, item XIII, of Article 1 of Complementary Law No. 105 of January 10, 2001,

R E S O L V E S:

Art. 1 The Statute and Bylaws of the Credit Guarantee Fund (FGC), which comprise Annexes I and II to Resolution No. 4,222 of May 23, 2013, shall enter into force with amendments, according to consolidated versions as set forth in Annexes I and II to this Resolution.

Art. 2 This Resolution enters into force on the date of its publication.

Ilan Goldfajn
President of the Central Bank of Brazil

ANNEX I TO RESOLUTION NO. 4,688, OF SEPTEMBER 25, 2018

ANNEX I TO RESOLUTION NO. 4,222, OF MAY 23, 2013

STATUTE OF THE FGC

CHAPTER I

OF THE NAME, OBJECTIVE, PURPOSE, HEADQUARTERS, AND TERM

Art. 1 The Credit Guarantee Fund (FGC) is a non-profit civil association, with private legal personality, governed by this Statute and by applicable legal and regulatory provisions.

Sole Paragraph. The FGC does not exercise any public function, including by delegation.

Art. 2 The FGC has the following purposes:

I - to protect depositors and investors within the financial system, up to the limits established by regulation;

II - to contribute to the maintenance of stability of the National Financial System; and

III - to contribute to the prevention of systemic banking crises.

Art. 3 The FGC has the following objectives:

I - to provide guarantees on financial instruments issued or raised by associated institutions in situations of:

a) declaration of intervention or extrajudicial liquidation of an associated institution; and

b) recognition by the Central Bank of Brazil of the insolvency state of an associated institution that, under current legislation, is not subject to the regimes referred to in item "a"; and

II - considering the purposes set forth in items II and III of Article 2, to contract assistance or financial support operations, including liquidity operations, with associated institutions, directly or through companies indicated by them, or with their controlling shareholders.

§ 1 When making payments of debts of associated institutions in accordance with item I of the main text, the FGC is subrogated in the respective credits and has the right to be reimbursed for what it paid in accordance with Article 346, item III, of the Civil Code.

§ 2 The operations referred to in item II of the main text shall be contracted, preferably, with the objective of promoting:

I - the transfer of shareholding control, transformation, incorporation, merger, spin-off, or other forms of corporate reorganization of interest to the associated institutions; or

II - an organized exit from the market.

Art. 4 The operations referred to in item II of Article 3 are subject to the following provisions:

I - they may not exceed the projected value for the guaranteed financial instruments of responsibility of each associated institution or associated institutions of the same conglomerate, in the event of occurrence of the events provided for in item I of Article 3; and

II - they shall observe the following limits in relation to the net equity of the FGC, including therein the value resulting from advances of contributions due by the associated institutions, contained in the monthly balance sheet or the balance sheet of the FGC, minus the value of the Resolution Fund (FR) referred to in Article 5 of the FGC Bylaws:

a) up to 25% (twenty-five percent) for the set of operations carried out with each associated institution or with all associated institutions of the same financial conglomerate; and

b) up to 50% (fifty percent) for the set of operations referred to in this article.

§ 1 In the face of an adverse conjunctural situation, recognized by the Central Bank of Brazil, and considering the purposes set forth in items II and III of Article 2, the Board of Directors may, exceptionally:

I - authorize the exceeding of the risk limits provided for in item II of the main text; and

II - fix the charges of the operations referred to in this article on bases lower than the basic interest rate.

§ 2 The FGC shall keep the Central Bank of Brazil informed regarding negotiations aimed at the conclusion of the operations referred to in item II of Article 3.

Art. 5 Subject to the criteria, limits, diversification requirements, operational format, and contractual clauses established by the Board of Directors, the FGC may invest resources up to a global limit of 50% (fifty percent) of its net equity, minus the value of the FR, plus the passive obligations resulting from the advance of ordinary contributions by associated institutions, contained in the monthly balance sheet or the balance sheet of the FGC's fiscal year:

I - in the acquisition of credit rights of financial institutions and leasing companies;

II - in fixed-income securities issued by associated institutions, provided they are backed by credit rights constituted or to be constituted with the resources of their respective applications; and

III - in linked operations in the manner of Resolution No. 2,921 of January 17, 2002.

§ 1 The FGC may alienate assets acquired as a result of the operations referred to in items I, II, and III of the main text.

§ 2 Except for the hypotheses provided for in this Statute, it is prohibited for the FGC to invest resources in the acquisition of real estate, or in variable-income securities, except when received in liquidation of credits of its ownership or, with authorization from the Board of Directors, to enable the realization of an operation referred to in item II of Article 3.

§ 3 The real estate received in the manner of § 2 shall be alienated as soon as market conditions allow, according to an asset alienation policy approved by the Board of Directors.

§ 4 In the face of an adverse conjunctural situation, recognized by the Central Bank of Brazil, and considering the purposes set forth in items II and III of Article 2, the Board of Directors may, exceptionally, extend the limit stipulated in the main text to up to 75% (seventy-five percent) of the net equity of the FGC, minus the value of the FR.

Art. 6 The amount of resources used in the set of operations referred to in item II of Article 3 and Article 5 shall observe a limit of 75% (seventy-five percent) of the net equity of the FGC, minus the value of the FR, plus the obligations resulting from the advance of ordinary contributions by associated institutions, contained in the monthly balance sheet or the balance sheet of the Fund's fiscal year.

Art. 7 The FGC may not refuse payment of guarantees provided, in the manner of item I of Article 3, on the grounds of non-payment of contributions by the associated institution.

Sole Paragraph. If there are indications of the existence of procedures aimed at obtaining reimbursement beyond the individual limit established or of operations that reveal indications of fraud or attempt, by any means, to exceed the maximum coverage values, the payment of guarantees will be suspended, and may, after due analysis in an internal procedure of the FGC, be refused, with interested parties having the burden to demonstrate the integrity of the procedures.

Art. 8 The FGC has jurisdiction in the city of São Paulo (SP), and headquarters in said Municipality, at Avenida Brigadeiro Faria Lima, No. 201, 12th floor, CEP 05426-100.

Art. 9 The term of duration of the FGC is indefinite.

CHAPTER II

OF REVENUES AND EQUITY

Art. 10. The revenues of the FGC consist of:

I - ordinary and special contributions from associated institutions;

II - service fees resulting from the issuance of checks without sufficient funds;

III - recoveries of credit rights in which the FGC has been subrogated, due to payment of debts of associated institutions related to guaranteed credits;

IV - net result of services provided by the FGC and earnings from the investment of its resources;

V - remuneration and charges corresponding to the receipt of values due due to the realization of the operations referred to in item II of Article 3 and Article 5; and

VI - revenues from other sources.

§ 1 The liability of associated institutions is limited to the contributions they are obligated to make, observing the conditions fixed in the FGC Bylaws, not responding subsidiarily for the social obligations of the Fund.

§ 2 If circumstances indicate, at any time, that the equity of the FGC needs additional revenues to meet its obligations, resources shall be used, observing current legislation, from:

I - extraordinary contributions from associated institutions, established in the manner of item II of Article 33;

II - advance by associated institutions of twelve to sixty monthly ordinary contributions;

III - credit operations with private, official, or multilateral institutions;

IV - issuance of credit titles; and

V - other sources of resources, upon proposal of the FGC administration and with prior authorization from the Central Bank of Brazil.

CHAPTER III

OF ASSOCIATED INSTITUTIONS

Art. 11. Associated institutions of the FGC are the Federal Savings Bank, multiple banks, commercial banks, investment banks, development banks, credit, financing and investment companies, real estate credit companies, mortgage companies, and savings and loan associations, operating in the Country.

Sole Paragraph. Association with the FGC implies that the associated institution authorizes, in the manner of item V of § 3 of Article 1 of Complementary Law No. 105 of January 10, 2001, the sharing of the following information about itself between the FGC and the Central Bank of Brazil, including those possibly protected by legal secrecy, but excluding those that allow the identification of holders of operations maintained with the associated institutions:

I - financial information contained in statements and periodic forms sent to the Central Bank of Brazil, necessary for the FGC to monitor the risk of associated institutions and calculate the sufficiency of liquidity of the FGC; and

II - when requesting operations referred to in item II of Article 3, other information about the requesting institution, necessary to evaluate the feasibility of the operation.

Art. 12. The Board of Directors may exclude from the list of associated institutions of the FGC, for just cause, the institution that:

I - is subject to a regime of intervention or extrajudicial liquidation;

II - changes its corporate object, ceasing to be classified as one of the institutions referred to in Article 11; or

III - has its authorization to operate cancelled or revoked by the Central Bank of Brazil.

§ 1 If any of the hypotheses referred to in the main text is configured, the FGC will notify the associated institution so that, within fifteen days, it presents its defense in the procedure aimed at its exclusion from the list of associated institutions, presenting the facts and documents it deems appropriate.

§ 2 After the period referred to in § 1 has elapsed, with or without presentation of defense, the Board of Directors will decide, within thirty days, regarding the exclusion of the associated institution.

§ 3 From the decision of the Board of Directors to exclude an associated institution in the manner of § 2, an appeal may be filed to the General Assembly, without suspensive effect, within fifteen days, counted from the notification of the decision.

Art. 13. The associated institution may withdraw from the list of associated institutions of the FGC, at any time, provided it proves:

I - having changed its corporate object and ceased to be classified as one of the institutions referred to in Article 11; and

II - not holding a balance of operations subject to ordinary or special guarantee provided by the FGC.

Art. 14. The duties of associated institutions are:

I - comply with and enforce the Statute and Internal Regulations;

II - attend and vote in the General Assemblies;

III - honor contributions punctually, according to established criteria; and

IV - make available to the FGC:

a) by April 30 and September 30 of each year, and whenever requested, copies of semi-annual financial statements and independent audit reports; and

b) consolidated information, for statistical purposes, on the financial instruments subject to guarantee by the FGC, prepared in accordance with current regulation; and

V - disclose to all its clients holding instruments covered by the guarantee by the FGC, in the month of June of each year, in a broad and comprehensive manner, through printed correspondence or electronic communication, a message informing that the balances of their respective deposits or applications are guaranteed by the FGC, up to the limit provided in its Bylaws.

Sole Paragraph. The text of the message to be disclosed in the manner of item V of the main text:

I - shall be limited to two hundred words;

II - shall be provided by the FGC to the associated institutions by the end of the month of April of each year; and

III - may be disclosed in the body of other communications sent by the associated institution to its clients, provided that with emphasis and font size at least equal to that of the rest of the text of the communication.

CHAPTER IV

OF THE GOVERNING BODIES OF THE FGC AND THE GENERAL ASSEMBLIES

Art. 15. The governing bodies of the FGC are:

I - the General Assembly;

II - the Board of Directors;

III - the Advisory Council;

IV - the Executive Board; and

V - the Fiscal Council.

Sole Paragraph. The members of the governing bodies of the FGC do not respond subsidiarily or jointly for the social obligations of the FGC, in accordance with item V of Article 46 of the Civil Code.

Art. 16. The General Assembly, the highest deliberative body of the FGC, is composed of all associated institutions, with them having the prerogative of exercising the right to vote, observing the following rules:

I - only those associated institutions that are up to date with the contributions due to the FGC may vote; and

II - the voting right of each associated institution shall correspond to the sum of the voting units of which they are holders.

§ 1 Each real disbursed in the last ordinary contribution before the respective General Assembly, disregarding cents, shall confer to the associated institution one voting unit.

§ 2 The voting right of associated institutions belonging to the same financial conglomerate shall take into account the amount of the ordinary contribution effectively disbursed in favor of the FGC by the set of institutions, admitting, however, the exercise of the voting right relative to the voting units of the entire conglomerate by the associated institution designated in writing by the leading institution of the conglomerate.

Art. 17. By April 30 of each year, associated institutions must meet in an Ordinary General Assembly to:

I - take the accounts of the administrators, examine, discuss, and vote on the financial statements, based on the opinions of independent auditors and the Fiscal Council;

II - elect the members of the Board of Directors, the Fiscal Council, and the Advisory Council;

III - designate the president and vice-president of the Board of Directors; and

IV - fix the global limit of remuneration of the Board of Directors, the Executive Board, and the Fiscal Council, to be distributed among its members according to the deliberation of the Board of Directors.

Art. 18. The Extraordinary General Assembly may be convened to deliberate on other matters of interest to the FGC, including to elect members of the Advisory Council, the Board of Directors, and the Fiscal Council in the event of vacancy of offices, in which case the elected shall complete the term of the vacant mandates.

Art. 19. The General Assembly shall be convened at least ten days in advance, through publication in the Official Gazette of the Union with the indication of the agenda, which shall remain, for the entire period between the convocation and the assembly, on the FGC's website on the internet:

I - by the president of the Board of Directors, on his own initiative or at the request of two or more of its members;

II - by two or more members of the Board of Directors signatories of the request to the president of the Board of Directors referred to in item I, in case this does not promote the publication of the convocation notice within ten days counted from the receipt of the request; or

III - on the initiative of associated institutions that represent together, at least, 1/5 (one fifth) of the total of voting units, observing the criteria of Article 16.

Art. 20. The General Assembly shall be installed and presided over by the president of the Board of Directors, who will invite one of those present to secretary the proceedings.

Sole Paragraph. In the absence of the president of the Board of Directors, the General Assembly shall be installed by any of the councilors, with the associated institutions present having the right to elect the president of the assembly.

Art. 21. The General Assembly shall be installed with any number of associated institutions present, and its deliberations shall be taken by simple majority of the voting units present at the assembly, observing the criteria of Article 16 of this Statute.

Art. 22. The following quorums apply to deliberations that have as their object the reform of the Statute or Bylaws of the FGC or the election of members of the Board of Directors:

I - installation in first convocation with the presence of, at least, 50% (fifty percent) plus one of the voting units of the associated institutions and, in subsequent convocations, until the presence of at least, 1/3 (one third) of the voting units of the associated institutions is reached; and

II - deliberation by means of, at least, 2/3 (two thirds) of the voting units of the associated institutions present at the assembly.

§ 1 Approved the reform of the Statute or Bylaws by the General Assembly, the respective proposal shall be forwarded to the Central Bank of Brazil, for examination and submission to the National Monetary Council.

§ 2 An associated institution may be represented by another, through a power of attorney with specific powers for each General Assembly.

Art. 23. For the removal of members of the Board of Directors or the Executive Board, a quorum for deliberation of 2/3 (two thirds) of the voting units of the associated institutions is necessary.

CHAPTER V

OF THE ADMINISTRATION OF THE FGC

Art. 24. The FGC shall be administered by the Board of Directors and the Executive Board, observing the following procedures for the election of the members of the Board of Directors:

I - the election of the members of the Board of Directors shall be made by voting on slates, containing the name of the candidates for full or alternate members for all positions in dispute, which shall be registered with the board as soon as the General Assembly announces the quantity of positions in dispute;

II - the name of each candidate for full or alternate member of the Board of Directors shall compose only one slate;

III - each associated institution may register only one slate;

IV - the slate that obtains the greatest number of votes from the associated institutions shall be considered the winner, according to the quorums established in Article 22; and

V - in the event of a tie in the voting, a new General Assembly shall be convened, reopening the period for the presentation of slates.

Sole Paragraph. As a way to ensure the governance practices and segregation of management referred to in items I and II of Article 25, the candidates for member of the Board of Directors shall have their names evaluated and presented, prior to the General Assembly convened to elect them, by an institution or company with notable specialization, experience, and reputation in the recruitment and selection of occupants for positions of this nature in the Country or abroad, contracted at the expense of the FGC.

Art. 25. The Board of Directors shall be composed of five to nine full members and an equal number of alternates, natural persons residing in the Country, observing the following provisions:

I - the participation of controlling shareholders, administrators, or employees of financial institutions, administrators of third-party resources, other institutions authorized to operate by the Central Bank of Brazil, or companies integrated into their respective conglomerates is not permitted, as well as professionals from these institutions or companies who are formally licensed or temporarily absent; and

II - the participation of administrators or employees of class entities representing financial institutions or other institutions authorized to operate by the Central Bank of Brazil, as well as professionals from these entities who are formally licensed or temporarily absent, is not permitted; and

III - in the case of resignation or impediment of a council member, the Board of Directors shall indicate one of the alternates to assume the vacancy until the end of the mandate.

Art. 26. The mandate of the members of the Board of Directors shall be up to three years, allowing up to two re-elections, provided that the sum of consecutive mandates does not exceed six years.

§ 1 The management term of the Board of Directors shall extend until the investiture of the newly elected councilors.

§ 2 The members of the Board of Directors shall be exempt from providing management guarantee.

§ 3 At least one member of the Board of Directors shall have a mandate non-coincident with that of the others.

Art. 27. The Board of Directors must declare the position of member vacant that, without justified cause, fails to participate in three consecutive meetings.

Art. 28. The Board of Directors shall meet by convocation of the president, on his own initiative or at the request of two or more of its members.

§ 1 If the president, within seven days of receiving the request for convocation, does not issue the respective notice, the members of the Board of Directors who requested the meeting, in the manner of the main text, may issue it.

§ 2 The convocation notice must indicate the agenda and be delivered, with receipt, to the members of the Board of Directors, with at least ten days' advance notice.

§ 3 The advance notice referred to in § 2 is waived when the meeting has the presence or representation of the total number of members of the Board of Directors, or with a written statement from all members agreeing with the holding of the meeting.

§ 4 The meeting of the Board of Directors may only occur with the presence or representation of the absolute majority of its members, and the deliberations must be taken by majority of votes, with the president having the casting vote in case of a tie in the voting.

§ 5 Minutes of the meetings of the Board of Directors must be recorded in the appropriate book, signed by those present.

Art. 29. The FGC shall have an Advisory Council, without executive functions, composed of up to six full members and six alternates, elected by the General Assembly, upon indication of names made by the Board of Directors, with a mandate of three years, allowing re-election.

§ 1º The Advisory Council shall meet upon convocation by the Board of Directors, when the latter decides to consult it on:

I - ideas, suggestions, and proposals in the formulation of policies, guidelines, and strategies for the FGC's performance of its purposes;

II - operations and transactions in which the FGC is requested to participate and which require adequate assessment in terms of impact on the financial market; and

III - other matters, within the scope of the FGC's activities, that may impact the solidity and stability of the National Financial System.

§ 2º Members of the Advisory Council must be natural persons with recognized knowledge and experience in businesses, operations, and activities developed within the financial system, and the impediments provided for in items I and II of art. 25 shall not apply to them.

§ 3º Meetings of the Advisory Council shall:

I - be held upon free convocation by the Board of Directors, with its effectiveness permitted by telephone or electronic means, maintaining in a specific file a summary of the meetings; and

II - be installed with the presence of the majority of its members.

§ 4º Members of the Advisory Council shall sign a confidentiality commitment letter addressed to the Central Bank of Brazil, a commitment that shall extend to persons whom the councilor needs to consult for the formation of their opinion.

§ 5º Members of the Advisory Council shall not receive remuneration for the exercise of their office.

Art. 30. The Executive Board, composed of two to five directors, one of whom shall be the executive director and the others without specific designation, shall be elected by the Board of Directors for a term of three years, with reelection permitted, in an ordinary meeting immediately following the Ordinary General Assembly, provided that:

I - controllers, administrators, or employees of financial institutions, administrators of third-party resources, other institutions authorized to operate by the Central Bank of Brazil, or companies belonging to their respective conglomerates are not permitted to participate, nor are professionals from these institutions or companies who are formally licensed or temporarily absent; and

II - administrators or employees of class entities representing financial institutions or other institutions authorized to operate by the Central Bank of Brazil are not permitted to participate, nor are professionals from these entities who are formally licensed or temporarily absent.

Sole Paragraph. The management term of the Executive Board shall extend until the investiture of the newly elected directors.

Art. 31. The names of members elected to the Board of Directors and the Executive Board must be submitted to the Central Bank of Brazil, which shall approve them if they meet the requirements provided for in the current regulation for the exercise of offices in statutory bodies of financial institutions and other institutions authorized to operate by said Autarchy.

§ 1º Once the respective names are approved, the members of the Board of Directors and the Executive Board shall have their investiture conditioned upon the signing of the investiture term, the term of knowledge and agreement to the FGC Code of Ethics, and a confidentiality commitment letter addressed to the Central Bank of Brazil, which shall contemplate the provisions of § 7º.

§ 2º Members of the Board of Directors and the Executive Board shall be subject to a quiescence period of four months, counted from the end of their terms.

§ 3º Members of the Board of Directors and the Executive Board, during the exercise of their term and the quiescence referred to in § 2º, are prohibited from exercising any remunerated activity in financial institutions, administrators of third-party resources, other institutions authorized to operate by the Central Bank of Brazil, companies belonging to their respective conglomerates, or class entities representing financial institutions or other institutions authorized to operate by the Central Bank of Brazil.

§ 4º Members of the Board of Directors and the Executive Board shall continue to receive the remuneration attributed to the office during the quiescence period referred to in § 2º.

§ 5º Members of the Board of Directors and the Executive Board of the FGC are prohibited from direct or indirect participation in any process of acquisition of assets alienated by the FGC or by affiliates, former affiliates, or companies belonging to their respective prudential conglomerates in the following situations:

I - during the proceedings referred to in item “a” of item I of art. 3º, extending the prohibition to spouses, partners, or relatives up to the third degree of the persons referred to in the caput;

II - during the operations referred to in item II of art. 3º, extending the prohibition to spouses, partners, or dependents included in the annual income tax return of the persons referred to in the caput.

§ 6º The prohibition referred to in § 5º must be maintained during the quiescence period referred to in § 2º.

§ 7º Members of the Board of Directors and the Executive Board with access to confidential information, including those received as a result of the provisions of the sole paragraph of art. 11, shall keep such information confidential, responding civilly and criminally in case of unauthorized disclosure.

Art. 32. Members elected to the Advisory Council shall take office at the first ordinary meeting of the Board of Directors that occurs after the General Assembly that elected them, with their investiture conditioned upon the signing of an investiture term and a confidentiality commitment letter as referred to in § 4º of art. 29.

Art. 33. It is the responsibility of the Board of Directors:

I - to set the percentage of the ordinary contribution of institutions associated with the FGC, submitting a specific, well-founded request to the Central Bank of Brazil for examination and submission to the prior authorization of the Monetary Council;

II - to set the conditions of the extraordinary contributions that associated institutions must make to finance the guarantee to be provided by the FGC in the case referred to in art. 10, § 2º, item I, observing that such contributions may not exceed 50% (fifty percent) of the rate in force for ordinary contributions;

III - to set the general orientation of the FGC's services, especially the policies and norms to be observed in fulfilling its social purposes and in the application of its resources, establishing the composition and risk diversification requirements of the portfolio and being able to hire third parties to manage it, observing the provisions of art. 5º;

IV - to approve the Internal Regulations and define competencies for deliberation and practice of acts included in the scope of the FGC;

V - to supervise and conduct, through its president, the recruitment and selection of the names of candidates for members of the Board of Directors and the Fiscal Council, for approval by the General Assembly;

VI - to indicate to the General Assembly the names of candidates for members of the Advisory Council;

VII - to elect the members of the Executive Board;

VIII - to approve the operating and investment budget of the FGC;

IX - to approve the remuneration levels of the members of the Board of Directors, the Executive Board, and the Fiscal Council, observing the global limit fixed by the General Assembly;

X - to deliberate on acts and operations that, according to this Statute or the Internal Regulations, are within its competence, including alienation of permanent asset goods;

XI - to deliberate on the hiring of independent auditors;

XII - to appoint the president of the Advisory Council;

XIII - to examine the monthly balance sheet and express an opinion on the report and financial statements of the FGC to be published;

XIV - to establish the form and fix the conditions of the operations provided for in item II of art. 3º of this Statute, in a general or specific manner, in terms of deadlines, charges, guarantees, and other conditions;

XV - to authorize, upon proposal of the Executive Board, the celebration of the operations provided for in item II of art. 3º that exceed the decision-making authority of the Executive Board established in the manner of item IV;

XVI - to establish the criteria, limits, diversification requirements, operational format, and contractual clauses of the operations provided for in art. 5º;

XVII - to deliberate on the hiring of insurance or other type of protection existing in the market to provide guarantee to members of FGC bodies referred to in items II, III, IV, and V of art. 15, against eventual claims formulated by third parties as a result of acts practiced in the exercise of the mandate, even if already concluded; and

XVIII - to deliberate on omitted cases.

Sole Paragraph. The quorum necessary for the deliberation of the exceptions provided for in § 1º of art. 4º and in § 4º of art. 5º and for the establishment of advance of ordinary monthly contributions, as referred to in item II of § 2º of art. 10, is 2/3 (two thirds) of the effective members of the Board of Directors.

Art. 34. It is the responsibility of the Executive Board, in addition to the practice of ordinary management acts:

I - the active and passive representation of the FGC, in court or out of it;

II - the administration of the FGC, according to the Statute and the Internal Regulations;

III - the approval of the operations provided for in item II of art. 3º, respecting the authority, form, and conditions established by the policies approved by the Board of Directors;

IV - the proposal, to the Board of Directors, of the celebration of the operations provided for in item II of art. 3º that exceed the decision-making authority of the Executive Board; and

V - the approval of the operations provided for in art. 5º, respecting the criteria established in the Internal Regulations.

Sole Paragraph. Representation in court, to receive citation or notification, to give personal testimony, or analogous acts, shall be the responsibility of the executive director, who may indicate, to do so on their behalf, another director or attorney with special powers.

Art. 35. The FGC may only assume obligations through joint signature:

I - of two directors; or

II - of one director together with an attorney with a specific mandate.

Sole Paragraph. The FGC's powers of attorney shall be granted by two directors and must contain the specification of the powers conferred and the validity period, except in the granting of powers of attorney for judicial purposes, which may be issued with validity for an indefinite period.

CHAPTER VI

OF THE SOCIAL YEAR AND FINANCIAL STATEMENTS

Art. 36. The social year of the FGC coincides with the calendar year.

§ 1º At the end of each social year, the Executive Board must have a balance sheet and a statement of the result of the year prepared, as well as a report on the activities and result of the period and the situation of reserves at the end of the year, with a view to their respective appreciation by the Board of Directors.

§ 2º The semi-annual and annual financial statements of the FGC must be examined by independent auditors, published in the Official Gazette of the Union, and disseminated on the FGC's website on the internet.

§ 3º The FGC shall prepare a report, published together with the semi-annual and annual financial statements, to present the values and results resulting from the management of the Resolution Fund (FR).

Art. 37. The result annually determined by the FGC must be recorded in the reserves provided for in the Internal Regulations.

CHAPTER VII

OF THE FISCAL COUNCIL

Art. 38. The FGC shall have a Fiscal Council composed of three effective members and an equal number of alternates, elected by the General Assembly.

Art. 39. It is the responsibility of the Fiscal Council:

I - to examine the balance sheets and financial statements of the FGC, the reports of the administration and independent auditors, and the report referred to in § 3º of art. 36, issuing an opinion for appreciation by the Ordinary General Assembly;

II - to supervise the accounting practices of the FGC and the activities of internal audit; and

III - to monitor risk management and internal controls.

Art. 40. The term of office of the members of the Fiscal Council shall be up to three years, with reelection permitted.

Sole Paragraph. The provisions of the sole paragraph of art. 15 and items I and II of art. 25 shall apply to the members of the Fiscal Council.

CHAPTER VIII

OF LIQUIDATION

Art. 41. The FGC shall enter into liquidation in the cases provided for by law or by determination of the Monetary Council, through deliberation of the General Assembly, with the Board of Directors responsible for appointing the liquidator, after hearing the Central Bank of Brazil.

Art. 42. In the event of dissolution of the FGC, its assets shall be destined to a similar entity that succeeds it in its rights and obligations.

ANNEX II TO RESOLUTION NO. 4,688, OF SEPTEMBER 25, 2018

ANNEX II TO RESOLUTION NO. 4,222, OF MAY 23, 2013

BYLAWS OF THE FGC

CHAPTER I

OF ORDINARY GUARANTEE

Art. 1º The beneficiaries of the ordinary guarantee provided by the Credit Guarantee Fund (FGC) to associated institutions, referred to in art. 11 of the FGC Statute, are the investors and depositors of such institutions.

Art. 2º The object of the ordinary guarantee provided by the FGC is the credits represented by the following financial instruments:

I - demand deposits or withdrawable upon prior notice;

II - savings deposits;

III - time deposits, with or without the issuance of a certificate;

IV - deposits maintained in non-checkable accounts, intended for the recording and control of the flow of resources related to the provision of payment services for salaries, wages, pensions, and similar;

V - bills of exchange;

VI - mortgage notes;

VII - real estate credit notes;

VIII - agribusiness credit notes; and

IX - committed operations that have as their object titles issued after March 8, 2012, by a linked company.

§ 1º The following are not covered by the ordinary guarantee:

I - deposits, loans, or any other resources raised or withdrawn abroad;

II - operations related to programs of government interest established by law;

III - judicial deposits;

IV - any financial instrument that contains a subordination clause, authorized or not by the Central Bank of Brazil to integrate the reference equity of financial institutions and other institutions authorized to operate by said Autarchy; and

V - the credits:

a) owned by financial institutions and other institutions authorized to operate by the Central Bank of Brazil, pension entities and own social pension regimes established by the Union, States, Federal District, and Municipalities, insurance companies, capitalization societies, investment clubs, and investment funds and institutional investors resident or domiciled abroad; and

b) represented by shares of investment funds or that represent any participations in the entities referred to in item “a” or in the financial instruments owned by them.

§ 2º The total of credits of each person against the same associated institution, or against all associated institutions of the same financial conglomerate, shall be guaranteed up to the value of R$250,000.00 (two hundred and fifty thousand reais).

§ 3º The total of credits of each creditor against the set of all associated institutions shall be guaranteed up to the value of R$1,000,000.00 (one million reais) for each period of four consecutive years.

§ 4º For the purpose of determining the guaranteed value of each person's credits, the following criteria must be observed:

I - the holder of the credit is the one in whose name the financial instrument is registered in the accounting of the associated institution or the one designated in a title issued or accepted by it;

II - the credits of each creditor identified by their respective registration number in the Individual Taxpayer Registry (CPF) or in the National Registry of Legal Entities (CNPJ) against all associated institutions of the same financial conglomerate must be added;

III - in the case of application in a financial instrument listed in the items of the caput whose negotiation is intermediated by an institution belonging to the National Financial System (SFN), the ownership of the credits against the institutions associated with the FGC must be proven, by the client of the intermediary institution in the operation, through the presentation of the operation's trade note, in accordance with applicable legislation;

IV - titled credits by associations, condominiums, and similar entities, without legal personality, when covered under these Bylaws, shall be guaranteed up to the value referred to in § 2º of this article, in their entirety, in the same financial conglomerate;

V - in joint accounts, the guarantee is limited to the value referred to in § 2º of this article, or to the account balance, when lower than this limit, divided by the number of holders, with the credit of the guaranteed value being made individually;

VI - in foreign currency accounts, the value shall be converted into reais based on the average of the official buy and sell quotes of the foreign currency on the date of the decree of the resolution regime, as disclosed on the Central Bank of Brazil's website on the internet;

VII - the limit established in § 3º applies to operations contracted or renegotiated from December 22, 2017; and

VIII - the initial term of the period of four consecutive years referred to in § 3º shall be counted from the day of occurrence of the first event referred to in item I of art. 3º of the FGC Statute, including such day, for each creditor covered by the ordinary guarantee provided by the FGC.

§ 5º In the case provided for in § 4º, item III, the intermediary institution of the operation must present to the interventor or liquidator the list of its clients containing the applied values, the date, and the other characteristics of the application in financial instruments of responsibility of an issuer under intervention or extrajudicial liquidation.

§ 6º In the case of the credits referred to in § 4º, item IV, the FGC guarantee does not extend to the associates, condominium owners, or any participants of those entities.

§ 7º In the cases of acquisition or incorporation of an associated institution by another, or of a merger between two associated institutions, where the same investor or depositor is the holder of covered financial instruments issued by both, their right to the ordinary guarantee on the financial instruments of issuance of the acquired, incorporated, or merged institution shall coexist with the right to the ordinary guarantee on financial instruments of issuance of the acquirer, under the following terms:

I - regarding the financial instruments indicated in items I, II, and IV of the caput, until the first business day of the second month subsequent to the approval of the acquisition, incorporation, or merger operation by the competent regulatory bodies; and

II - regarding the financial instruments indicated in items III and V to IX of the caput, until the first date, after the date referred to in item I, on which the balance of the financial instruments can be withdrawn or redeemed.

§ 8º The acquiring or incorporating institution shall inform the FGC of the date of approval of the operation referred to in item I of § 7º, within ten days of its occurrence.

§ 9º The exclusion of any financial instruments from the list provided in the caput shall enter into force from the first business day following the date of publication of the resolution of the Monetary Council that approves it, with the guarantee relative to the financial instruments issued before the entry into force of the exclusion being maintained until their original maturity.

Art. 3º Occurring the situations provided for in items “a” and “b” of item I of the caput of art. 3º of the FGC Statute, the information regarding the values corresponding to the payment of the guarantee shall be provided directly to the FGC by the legal representative of the associated institution, with the FGC responsible for designating the financial institution in charge of the payments.

CHAPTER II

OF THE LIQUIDITY TARGET

Art. 4º The FGC shall have as its target the maintenance of its liquidity in an amount equivalent to 2.5% (two and five-tenths percent) of the total of the balances of the accounts covered by the guarantee, in the set of associated institutions, referred to as the average index, observing the possibility of variation between the minimum index of 2.3% (two and three-tenths percent) and the maximum index of 2.7% (two and seven-tenths percent).

§ 1º For the purpose of quantifying the FGC's liquidity, the balances available in cash, in liquid financial applications, and in federal public securities must be considered, minus the value of the reserve referred to in art. 5º.

§ 2º Liquid financial applications, for the purpose of § 1º, are those registered in the current assets of the balance sheet and monthly balance sheets, provided they are not linked to assistance operations referred to in art. 4º of the FGC Statute.

CHAPTER III

OF THE RESOLUTION FUND

Art. 5º When the FGC's liquidity reaches the minimum index established in art. 4º, the FGC shall constitute a specific accounting reserve of resources, referred to as the Resolution Fund (FR), intended exclusively to finance the assistance or financial support operations, referred to in art. 4º of the FGC Statute, with the following associated institutions:

I - financial institutions classified in segment S1 provided for in Resolution No. 4,553, of January 30, 2017; and

II - other institutions considered systemically important by the Central Bank of Brazil.

Sole Paragraph. The use of FR resources is conditioned upon the decree of a resolution regime in the institutions referred to in the caput, provided that the regime does not trigger the payment of the guarantee.

Art. 6º The FR shall have as its target the amount equivalent to, at least, 1% (one percent) of the total of the balances of the accounts covered by the guarantee, in the set of associated institutions.

§ 1º When the FGC's liquidity is located between the indices established in art. 4º as minimum and average, the resources originating from the following shall be used for the formation of the FR:

I - 80% (eighty percent) of the ordinary and special contributions of associated institutions;

II - reimbursement to the FGC of the liquidity assistance and structural assistance operations to associated financial institutions; and

III - recovery by the FGC, in the capacity of subrogated creditor, of the resources expended as a result of the payment of ordinary and special guarantees.

§ 2º When the FGC's liquidity is located between the indices established in art. 4º as average and maximum, the percentage referred to in item I of § 1º shall be 90% (ninety percent).

§ 3º Whenever the FGC's liquidity reaches the maximum limit established in art. 4º and the FR has not reached the target established in the caput, 100% (one hundred percent) of the FGC's revenues, minus the values for funding the Fund, shall be destined to the FR.

§ 4º The provisions of §§ 1º to 3º do not apply if the FR is meeting the target established in the caput.

Art. 7º The Board of Directors, upon a substantiated proposal from the Executive Board, may submit to the Central Bank of Brazil a proposal for the reduction of contributions by associated institutions to the fund, for examination and submission to the Monetary National Council for authorization, when, for at least twelve consecutive months, the calculated liquidity of the FGC is equal to or greater than the average index established in art. 4º and the value of the FR is equal to or greater than the target established in art. 6º.

Art. 8º The liquidity targets of the FGC and the FR shall be reviewed every four years.

CHAPTER IV

OF THE SPECIAL GUARANTEE

Art. 9º The object of the special guarantee provided by the FGC are time deposits, without the issuance of a certificate, under the conditions and limits established by the Monetary National Council, raised by authorized institutions.

§ 1º The deposits referred to in the caput shall be known as "Time Deposits with Special Guarantee of the FGC (DPGE)" and must be specified as such in the contracts.

§ 2º The FGC coverage for DPGE shall only be demanded in the situations referred to in item I of art. 3º of the FGC Statute, and must be paid within three business days after the decree of intervention or extrajudicial liquidation, with the FGC responsible for designating a financial institution to execute the payment of the guaranteed investments.

§ 3º The period of up to three days for liquidation shall be extended, in the event of divergence or delay in the delivery of information and documents, until the procedures published by the FGC on its website are met.

§ 4º The deposits referred to in the caput must be entered into with a single holder, to be identified by their respective CPF or CNPJ number, and the maintenance of deposits in joint account mode is prohibited.

§ 5º The FGC coverage for DPGE shall be corrected by the contractual indices of the respective instruments until the date of the decree of intervention or extrajudicial liquidation of an associated institution.

Art. 10. The total credits of each person against the same institution associated with the FGC, or against all institutions associated with the same financial conglomerate, relating to DPGE, shall be guaranteed up to a maximum value of R$20,000,000.00 (twenty million reais).

Sole Paragraph. For the purpose of determining the guaranteed value of each depositor's credits, the following criteria shall be observed:

I - the holder of the credit is the one in whose name the credit is registered in the records of the associated institution or the one designated in a title issued or accepted by it;

II - the credits of each creditor identified by their respective CPF or CNPJ against all institutions associated with the same financial conglomerate must be summed; and

III - credits titled by associations, condominiums, cooperatives, groups or consortium administrators, complementary pension entities, insurance companies, capitalization societies and other societies and associations without legal personality and similar entities shall be guaranteed up to the value of R$20,000,000.00 (twenty million reais) in the totality of their assets in the same financial conglomerate.

Art. 11. The limit for raising deposits, for the purpose of art. 9º, is that established by the Monetary National Council.

Art. 12. Institutions authorized to raise DPGE must provide holders of these deposits with proof of specific deposit registration, issued by the registering entity.

Sole Paragraph. The specific registration certificate referred to in the caput must be sent to the depositor within five business days after the operation is contracted.

CHAPTER III

OF GENERAL PROVISIONS

Art. 13. The receipt of credits against associated institutions through proxies must be previously justified and approved by the FGC.