Resolution CMN No. 2574 — Establishes the Constitution and Operation of Development Agencies

RESOLUTION NO. 2574

Establishes the constitution and operation of development agencies.

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 December 17, 1998, based on Article 4, item VIII, of the aforementioned Law and Article 1, paragraph 2, of Provisional Measure No. 1,773-32 of December 14, 1998,

RESOLVES:

Article 1. Establish that the constitution and operation of development agencies under shareholder control of a Federation Unit, whose corporate purpose is the granting of fixed and working capital financing associated with projects in the Country, depend on authorization from the Central Bank of Brazil.

Paragraph 1. Development agencies, subordinate to the supervision and inspection of the Central Bank of Brazil, cannot be transformed into any type of institution integrated into the National Financial System.

Paragraph 2. Development agencies must be constituted in the form of a closed-capital corporation under the terms of Law No. 6,404 of December 15, 1976.

Paragraph 3. The expression "Development Agency" must necessarily appear in the corporate name of the companies referred to in this article.

Paragraph 4. Each Federation Unit may only constitute one (1) development agency.

Article 2. Development agencies may only carry out resource transfer operations from resources captured in the Country and abroad originating from:

I - constitutional funds;

II - state and municipal budgets;

III - national and international development organizations and institutions.

Article 3. Development agencies are permitted:

I - to provide guarantees, to use fiduciary alienation as security and industrial and commercial credit certificates, and to charge fees in the manner practiced by financial institutions;

II - to provide consultancy services, financial agent services, and administration of development funds.

Paragraph 1. The Central Bank of Brazil will regulate the conditions for the provision of guarantees by development agencies.

Paragraph 2. In the provision of the services referred to in item II, the assumption of risk by development agencies is prohibited.

Article 4. Development agencies must observe minimum limits of paid-in capital and adjusted net worth of R$4,000,000.00 (four million reais).

Article 5. Development agencies are prohibited from:

I - accessing the Central Bank of Brazil's financial assistance lines;

II - accessing the Bank Reserves account at the Central Bank of Brazil;

III - capturing resources from the public;

IV - contracting interfinancial deposits, as depositor or depository.

Article 6. The liabilities of development agencies will not be covered by the Credit Guarantee Fund - FGC, with the agency responding with its own resources.

Article 7. Development agencies must constitute, with their own resources, a liquidity fund equivalent to at least the result of the weighting of their assets by the corresponding risk, under the terms of Resolution No. 2,099 of August 17, 1994, to be fully applied in federal public bonds.

Article 8. Development agencies must comply with the bookkeeping procedures, preparation, and submission of financial statements provided for in the Accounting Plan of the Institutions of the National Financial System - COSIF.

Article 9. The Central Bank of Brazil may issue norms and adopt measures deemed necessary for the execution of the provisions of this Resolution.

Article 10. This Resolution enters into force on the date of its publication.

Article 11. Resolution No. 2,347 of December 20, 1996, is hereby repealed.

Brasília, December 17, 1998

Gustavo H. B. Franco
President