RESOLUTION No. 002607

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Establishes minimum limits of realized capital and net worth of financial institutions and other institutions authorized to operate by the Central Bank of Brazil, amends provisions of Resolution No. 2.212 of 16 November 1995, and modifies the regulation applicable to Banking Service Points (PAB).

The CENTRAL BANK OF BRAZIL, pursuant to art. 9 of Law No. 4,595 of 31 December 1964, makes public that the NATIONAL MONETARY COUNCIL, in session held on 27 May 1999, having regard to the provisions of art. 4, items VIII and XIII, of the said Law, Law No. 4,728 of 14 July 1965, art. 20, paragraph 1, of Law No. 4,864 of 29 November 1965, art. 6 of Decree‑Law No. 759 of 12 August 1969, and Law No. 6,099 of 12 September 1974, with the amendments introduced by Law No. 7,132 of 26 October 1983,

RESOLVES:

Art. 1 Alter the Annex II Regulation to Resolution No. 2,099 of 17 August 1994, which shall now read as follows:

ANNEX II REGULATION TO RESOLUTION No. 2,099 OF 17 AUGUST 1994, WHICH ESTABLISHES MINIMUM LIMITS OF REALIZED CAPITAL AND NET WORTH FOR FINANCIAL INSTITUTIONS AND OTHER INSTITUTIONS AUTHORIZED TO OPERATE BY THE CENTRAL BANK OF BRAZIL

Art. 1 The minimum limits of realized capital and net worth specified below must be permanently observed by financial institutions and other institutions authorized to operate by the Central Bank of Brazil:

I – R$17,500,000.00 (seventeen million five hundred thousand reais): commercial bank and commercial portfolio of a multiple bank;

II – R$12,500,000.00 (twelve million five hundred thousand reais): investment bank, development bank, multiple‑bank portfolio correspondents and savings bank;

III – R$7,000,000.00 (seven million reais): credit, financing and investment company, real‑estate credit company, leasing company and multiple‑bank portfolio correspondents;

IV – R$3,000,000.00 (three million reais): mortgage company;

V – R$1,500,000.00 (one million five hundred thousand reais): securities brokerage company and securities distribution company that manage investment funds in the modalities regulated by the Central Bank of Brazil – except investment funds in quotas of investment funds – or investment companies that are authorized to carry out committed operations, as well as to carry out firm guarantee operations of securities subscription for resale, margin account and/or swap in which any rights or obligations with counterparties are assumed;

VI – R$550,000.00 (five hundred fifty thousand reais): securities brokerage company and securities distribution company that carry out activities not included in the preceding item;

VII – R$350,000.00 (three hundred fifty thousand reais): foreign‑exchange brokerage company.

Paragraph 1 In the case of an institution whose head office or main office and at least 90 % (ninety percent) of its branches operate outside the States of Rio de Janeiro and/or São Paulo, the amounts of realized capital and net worth required under this article shall be reduced by 30 % (thirty percent).

Paragraph 2 For the purpose of calculating the 90 % (ninety percent) limit referred to in paragraph 1, only the branches for which capitalization is required, pursuant to this Regulation, shall be considered.

Paragraph 3 For the institution to operate in the free‑rate foreign‑exchange market, R$6,500,000.00 (six million five hundred thousand reais) shall be added to the amounts of realized capital and net worth established in this article.

Art. 2 Subject to the minimum limits of realized capital and net worth required under art. 1, the institutions referred to in this Regulation may request the installation, in the Country, of up to ten branches.

Paragraph 1 The head office or main office shall be counted among the branches for capitalization purposes.

Paragraph 2 It is permitted to install branches beyond the number provided in the “caput”, provided that, to the amount of the respective realized capital and net worth, except for pioneer branches, an addition of 2 % (two percent) for the States of Rio de Janeiro and/or São Paulo and 1 % (one percent) for the other states shall be applied per unit.

Paragraph 3 In the case of installing branches in a number exceeding that referred to in the “caput”, the capital calculation shall be performed giving priority, for the purpose of counting the ten branches exempt from capitalization, to those for which the addition of 1 % (one percent) is required.

Art. 3 For the purpose of verifying compliance with the minimum limits established in this Regulation, the amount of participations, in the Country, directly and indirectly, in the share capital of financial institutions and other institutions authorized to operate by the Central Bank of Brazil shall be deducted from the respective adjusted net worth in the manner provided by the regulation in force.

Art. 4 The adaptation of the institutions referred to in art. 1 to the minimum realized capital and net worth values fixed in this Regulation shall occur by 30 June 2001, with 50 % (fifty percent) by 30 June 2000.

Paragraph 1 The granting of any authorization provided for in Annex I, except those covered by items IV and V of its art. 4, as well as the qualification or habilitation for the exercise of activity for which a realized capital and net worth provision is foreseen, shall imply the need for immediate compliance with the limits set in this Regulation.

Paragraph 2 The provision of paragraph 1 shall not apply to requests filed with the Central Bank of Brazil up to 27 May 1999.

Paragraph 3 The requirement for institutions in operation to observe the minimum limits of realized capital and net worth in force at the time of publication of this Regulation shall remain, until the deadline set in the “caput” of this article is exhausted.

Art. 2 The paragraph 2 of art. 1 of Resolution No. 2,212 of 16 November 1995 is amended, with the modification introduced by Resolution No. 2,399 of 25 June 1997, so that the referred article shall now read as follows:

Art. 1 The institutions authorized to operate by the Central Bank of Brazil, as of 17 November 1995, must maintain an adjusted net worth compatible with the risk level of the structure of their assets, in accordance with the provisions of Annex IV Regulation to Resolution No. 2,099 of 17 August 1994, observing the following values for the factor (F) applicable to risk‑weighted active operations (Apr):

I – during the first two years: F = 0.32;

II – from two to four years: F = 0.24;

III – from four to six years: F = 0.16;

IV – from six years onward, the value attributed in art. 2 of Annex IV Regulation to Resolution No. 2,099 of 1994, as amended by Resolution No. 2,399 of 25 June 1997, and subsequent modifications.

Paragraph 1 The annual periods referred to in this article shall be counted from the start of the institution’s operation.

Paragraph 2 The provisions of this article shall not apply to the cases of:

I – authorization to operate a new institution resulting from a spin‑off or merger involving institutions operating on 17 November 1995;

II – transfer of corporate control of an institution operating on 17 November 1995;

III – the other cases provided for in art. 4 of Annex I to Resolution No. 2,099 of 17 August 1994, provided that they involve an institution operating on 17 November 1995.

Art. 3 The provision of art. 18 of Annex III Regulation to Resolution No. 2,099 of 1994 shall no longer apply to Banking Service Points (PAB).

Sole paragraph The PAB installed in an underserved municipality shall be subordinate to the head office or main office of the institution.

Art. 4 The Central Bank of Brazil may adopt the measures and issue the norms deemed necessary for the execution of the provisions of this Resolution.

Art. 5 This Resolution enters into force on the date of its publication.

Art. 6 The following are revoked: art. 6 of Resolution No. 2,122 of 30 November 1994, item I of art. 8 of Resolution No. 2,212 of 1995, and arts. 1 and 2 of Circular No. 2,500 and 16 of Circular No. 2,501, both of 26 October 1994.

Brasília, 27 May 1999

Arminio Fraga Neto
President