Resolution CMN No. 2451 — Provisions on the Segregation of Third-Party Resource Administration from Other Institutional Activities

RESOLUTION NO. 002451

Provisions on the segregation of the administration of third-party resources from the other activities of the institution.

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 NATIONAL, in a session held on November 27, 1997, having regard to the provisions of Article 4, item VIII, of the aforementioned Law, in Articles 9 and 10 of Law No. 4,728 of July 14, 1965, and in Articles 3 and 4 of Law No. 6,385 of December 7, 1976,

RESOLVES:

Article 1. Establish the obligation for financial institutions and other institutions authorized to operate by the Central Bank of Brazil to promote the segregation of the administration of third-party resources from the other activities of the institution.

Sole Paragraph. The segregation of activities referred to in this article may be carried out through the hiring of a specialized company providing third-party resource management services.

Article 2. For the purposes of Article 1, the institutions referred to therein must designate a technically qualified member of the board of directors or, if applicable, a managing partner, to be held civilly, criminally, and administratively responsible for the management and supervision of third-party resources, as well as for the provision of information related thereto.

Sole Paragraph. The designation of a member of the board of directors or managing partner to be responsible for the management of third-party resources must fall upon a person who does not have any ties to the other activities of the institution.

Article 3. The designation referred to in the preceding article must be immediately communicated in writing to the Regional Branch of the Central Bank of Brazil to which the institution is subject, and, where applicable, to the Securities and Exchange Commission (CVM).

Sole Paragraph. The communication referred to in this article must be accompanied by a declaration signed by the administrator designated by the institution stating that:

I - they are aware of their obligations towards the holders of the resources under the administration of the institution, as well as of the requirement set forth in Article 2, sole paragraph;

II - they are responsible, primarily, under the legislation in force, for situations indicating fraud, negligence, imprudence, or incompetence in the administration of third-party resources, subjecting themselves, furthermore, to the application of applicable penalties.

Article 4. Financial institutions and other institutions authorized to operate by the Central Bank of Brazil that administer third-party resources must comply with the provisions of this Resolution by March 31, 1998.

Article 5. The Central Bank of Brazil and the Securities and Exchange Commission (CVM) are authorized, each within their respective spheres of competence, to adopt measures and issue complementary norms necessary for the execution of the provisions of this Resolution.

Article 6. This Resolution enters into force on the date of its publication.

Brasília, November 27, 1997

Gustavo H. B. Franco
President