Resolution CMN No. 2107 — Prohibits financial institutions from trading fixed-income securities of their own or affiliated issuers before the minimum regulatory period elapses

RESOLUTION NO. 002107

Prohibits financial institutions from trading fixed-income securities of their own or affiliated issuers before the minimum regulatory period elapses.

The CENTRAL BANK OF BRAZIL, in accordance with Article 9 of Law No. 4.595 of December 31, 1964, makes public that the MONETARY COUNCIL, in a session held on August 31, 1994, considering the provisions of Article 4, item VIII, of the aforementioned Law,

RESOLVES:

Article 1. It is prohibited for financial institutions and other institutions authorized to operate by the Central Bank of Brazil to engage in the purchase or repurchase of securities issued or accepted by themselves or by affiliated institutions, before the minimum regulatory period has elapsed.

Paragraph 1. For the purposes of this article, the following are considered affiliated institutions:

I - those in which one participates with 10% (ten percent) or more of the capital of the other, directly or indirectly;

II - those in which administrators and their relatives up to the second degree of one participate, jointly or individually, with 10% (ten percent) or more of the capital of the other, directly or indirectly;

III - those in which shareholders with 10% (ten percent) or more of the capital of one participate with 10% (ten percent) or more of the capital of the other, directly or indirectly;

IV - those that have a common administrator.

Paragraph 2. Operations of this kind contracted prior to the date of publication of this Resolution shall proceed normally until their maturity, with their extension or renewal prohibited.

Article 2. Article 29 of the Regulation annexed to Resolution No. 1,088 of January 30, 1986, Article 9 of the Regulation annexed to Resolution No. 1,524 of September 21, 1988, Circular No. 1,592 of March 9, 1990, and Letter-Circular No. 2,123 of November 27, 1990 are hereby revoked.

Article 3. This Resolution enters into force on the date of its publication.

Brasília, August 31, 1994

Pedro Sampaio Malan
President