CMN Resolution No. 5043 — Regulates Shareholdings and Installation of Foreign Branches by Financial Institutions

CMN RESOLUTION NO. 5,043, OF NOVEMBER 25, 2022

Regulates shareholdings, in the country and abroad, and the installation of branches, abroad, by financial institutions and other institutions authorized to operate by the Central Bank of Brazil.

The Central Bank of Brazil, in accordance with art. 9 of Law No. 4,595, of December 31, 1964, makes public that the National Monetary Council, in a session held on November 24, 2022, based on arts. 4, item VIII, and 30 of the aforementioned Law and taking into account the provisions of art. 10, item X, letter “b”, of the aforementioned Law and Law No. 4,728, of July 14, 1965,

RESOLVES:

CHAPTER I
OF THE OBJECT AND SCOPE OF APPLICATION

Art. 1 This Resolution regulates shareholdings, in the country and abroad, and the installation of branches, abroad, by financial institutions and other institutions authorized to operate by the Central Bank of Brazil.

§ 1 The provisions of this Resolution do not apply to credit cooperatives.

§ 2 For the purposes of this Resolution, branches abroad are considered to be agencies and representative offices.

Art. 2 The provisions of Chapters II, III, IV, and VI of this Resolution do not apply:

I - to typical shareholdings of investment portfolios maintained by investment banks, development banks, development agencies, and by multiple banks with investment or development portfolios;

II - to temporary shareholdings in the country, not registered in permanent assets and not consolidated, in accordance with current regulation; and

III - to minority shareholdings in financial organizations and institutions, abroad, carried out exclusively for the purpose of obtaining access to export financing instruments and international transfer of resources.

CHAPTER II
OF SHAREHOLDINGS, IN THE COUNTRY AND ABROAD, AND OF THE INSTALLATION OF BRANCHES ABROAD

Art. 3 The requirements for shareholdings, in the country and abroad, and for the installation of branches abroad are:

I - the institutions referred to in art. 1 must meet operational limits and minimum capital and equity requirements;

II - the entity subject to the shareholding must carry out activities complementary or subsidiary to those of the institution holding the shareholding; and

III - the adequacy to the operational strategy of the institution, in the case of installing a branch abroad and of shareholdings in financial or similar institutions headquartered abroad that constitute control, as defined in the regulation that disciplines the authorization processes related to the operation of the institutions referred to in art. 1.

Art. 4 The institutions referred to in art. 1 must make available to the Central Bank of Brazil the information, data, and documents necessary for the evaluation of the active and passive operations corresponding to their investments abroad, including their shareholdings in financial and similar institutions and their branches installed abroad.

Art. 5 Shareholdings in companies headquartered in countries with favorable taxation, as defined in tax legislation, are only admitted in cases where direct or indirect control by the institution holding the shareholding is ensured.

§ 1 Control may be exercised individually or jointly with other partners as a result of the formation of a control group.

§ 2 Indirect control through an investment fund is admitted.

Art. 6 The following are prohibited:

I - reciprocal shareholdings, carried out directly or indirectly, between the institutions referred to in art. 1; and

II - the carrying out of any operations between an institution referred to in art. 1 and companies located abroad, in which there is shareholding held by the same controllers of that institution, when such controllers are residents or domiciled in the country, except in the cases:

a) in which the entity subject to the shareholding is consolidated;

b) of resource capture for a period of one day without the issuance of a certificate; and

c) of resource capture linked to export and import operations.

§ 1 For the purpose of the provisions of this article, only the shareholding corresponding to ten percent or more of the social capital of the entity subject to the shareholding is considered, when acquired:

I - by an institution referred to in art. 1;

II - by an administrator of an institution referred to in art. 1, by their respective spouse or partner, or by their relatives up to the second degree, jointly or individually; and

III - by a partner or shareholder who holds ten percent or more of the social capital of an institution referred to in art. 1.

§ 2 Shareholding is presumed when an institution referred to in art. 1 and another company have a common administrator.

Art. 7 The allocation of new resources to branches located abroad and capital increases in financial and similar institutions participated in abroad, not subject to authorization in the form of item II of art. 8 of this Resolution, which imply the remittance of new resources or absorption of previously remitted resources, are conditioned on meeting operational limits and minimum capital and equity requirements.

§ 1 The institution must notify the Central Bank of Brazil ninety days in advance of its intention to carry out the operations referred to in the main text.

§ 2 In the event that the communication provided for in § 1 is not made, the Central Bank of Brazil may determine the unwinding of the operation, without prejudice to other applicable measures.

CHAPTER III
OF AUTHORIZATIONS

Art. 8 The institutions referred to in art. 1 must request authorization from the Central Bank of Brazil to:

I - participate, directly or indirectly, in the social capital of any companies headquartered in the country or abroad;

II - increase, directly or indirectly, the percentage of participation in the social capital of any companies headquartered in the country or abroad; and

III - install a branch abroad.

Art. 9 The Central Bank of Brazil, before or after the issuance of the authorizations provided for in art. 8, may:

I - request additional documents and information, as well as request them from other bodies of the public administration in the country and from authorities abroad;

II - summon for an interview the administrators of the institution holding the shareholding; and

III - require the implementation of adjustment measures considered appropriate.

CHAPTER IV
OF ARCHIVING, DENIAL, AND REVIEW OF AUTHORIZATIONS

Art. 10. With regard to authorization requests referred to in this Resolution, the Central Bank of Brazil may:

I - archive, without assessing the merits of the request, when:

a) it verifies that the object or elements serving as the basis for the request were altered during the process;

b) there is non-compliance with the deadlines provided for in current regulation;

c) it identifies that the requirements to complement the process documentation within the established deadline were not met;

d) the administrators fail to attend the Central Bank of Brazil's summons for an interview; or

e) the documentation is not in accordance with the format required by current regulation;

II - deny, if it finds:

a) falsity or omission in the declarations or documents presented in the process documentation or discrepancy between them and the facts or data found in the analysis; or

b) non-compliance with the requirements established in this Resolution or failure to prove compliance by the interested parties.

Sole paragraph. In the cases referred to in item II of the main text, the Central Bank of Brazil, before the decision, may grant a deadline to the interested parties to manifest themselves.

Art. 11. The Central Bank of Brazil may review the authorization decision, considering the relevance of the facts, based on the circumstances of each case and the public interest, if it finds:

I - falsity or omission in the declarations or documents presented in the process documentation or discrepancy between them and the facts or data found; or

II - pre-existing circumstances capable of affecting the evaluation regarding compliance with the requirements for authorizations.

Sole paragraph. In the hypotheses described in the main text, the Central Bank of Brazil must notify the institution to manifest itself.

CHAPTER V
OF THE PROVISION OF INFORMATION TO THE CENTRAL BANK OF BRAZIL

Art. 12. The institutions mentioned in art. 1 must provide the Central Bank of Brazil, regardless of the need for authorization, information on shareholdings, direct or indirect, in the country and abroad.

Sole paragraph. The Central Bank of Brazil will define the scope, form, and deadlines to be observed in the transmission of the information referred to in the main text.

Art. 13. The institutions referred to in art. 1, which have a branch or shareholding in entities abroad, must send to the Central Bank of Brazil the requests for reports, interpellations, or questions directed to these branches and entities, as well as the respective responses, due to requests or requisitions formulated by foreign regulatory or supervisory bodies in the exercise of their duties.

Sole paragraph. The provisions of this article apply to control or shareholding equal to or greater than twenty percent of the voting or total social capital of the entity subject to shareholding abroad.

CHAPTER VI
OF FINAL PROVISIONS

Art. 14. The institution requesting authorization provided for in this Resolution will have a maximum period of one hundred and eighty days, counted from the date of the authorization granted by the Central Bank of Brazil, to file the request for installation of a branch or shareholding with the competent authority abroad, provided that the deadline for the effective start of operations of the branch abroad will be one year, counted from the date of the authorization for its operation granted by the local authority.

Sole paragraph. Non-compliance with the deadlines provided for in this article must be justified to the Central Bank of Brazil, which, at its discretion, may review the authorization granted.

Art. 15. The Central Bank of Brazil, in the performance of its legal duties, will establish the procedures, documents, and information necessary and the deadlines to be observed in the documentation of the authorization processes referred to in this Resolution, taking into account compliance with the requirements established for each authorization process.

Sole paragraph. In exercising the competence provided for in the main text, the Central Bank of Brazil will consider:

I - the object of the authorization;

II - the nature and size of the holding institution and the institution subject to the shareholding; and

III - the relevance of the shareholdings.

Art. 16. The Central Bank of Brazil will adopt, within the scope of its legal duties, the necessary measures for the execution of the provisions of this Resolution.

Art. 17. The following are revoked:

I - Resolution No. 2,723, of May 31, 2000;

II - Resolution No. 4,062, of March 29, 2012;

III - Resolution No. 4,403, of March 26, 2015; and

IV - Resolution No. 4,777, of January 29, 2020.

Art. 18. This Resolution enters into force on January 1, 2023.

Roberto de Oliveira Campos Neto
President of the Central Bank of Brazil