Resolution CMN No. 2743 — Amends Procedures for Direct or Indirect Equity Participation by Financial Institutions

RESOLUTION NO. 2743

Amends procedures for direct or indirect equity participation, in the country and abroad, by financial institutions and other institutions authorized to operate by the Central Bank of Brazil.

THE CENTRAL BANK OF BRAZIL, in accordance with Article 9 of Law No. 4,595 of December 31, 1964, makes public that the MONETARY POLICY COUNCIL, in a session held on June 28, 2000, based on Articles 4, items VIII, XI, XII, and XIII, 10, paragraph 1, and 30 of the aforementioned Law and Law No. 4,728 of July 14, 1965, and considering the provisions of Articles 22 and 26 of Law No. 6,385 of December 7, 1976, with the amendments introduced by Article 14 of Law No. 9,447 of March 14, 1997,

RESOLVES:

Article 1. Amend Article 3 of Resolution No. 2,723 of May 31, 2000, which shall henceforth read as follows:

"Article 3. The institutions referred to in Article 1, except for credit cooperatives, must prepare their financial statements on a consolidated basis, including participations in companies located in the country and abroad in which they hold, directly or indirectly, individually or jointly with other partners, including due to the existence of voting agreements, partner rights that ensure them, individually or cumulatively:

I - preponderance in social deliberations;

II - power to elect or dismiss the majority of administrators;

III - effective operational control, characterized by common administration or management; (NR)

IV - corporate control represented by the sum of the participations held by the institution, regardless of the percentage, with those held by its administrators, controllers, and affiliated companies, as well as those acquired, directly or indirectly, through investment funds.

Paragraph 1. In the preparation of the consolidated statements referred to in the "caput", financial institutions and other institutions authorized to operate by the Central Bank of Brazil linked by effective operational control, characterized by common administration or management or by acting in the market under the same brand or trade name, must also be included, even if there is no equity participation. (NR)

Paragraph 2. Investments in shares made indirectly, through investment funds, must be treated as equity participations for the purposes of this Resolution.

Paragraph 3. The equity participations of the institutions referred to in the "caput" must be proportionally consolidated:

I - in companies located in the country, except for the institutions referred to in Article 1:

a) where there is shared control with other conglomerates, financial or otherwise;

b) belonging to the public sector;

II - in institutions referred to in Article 1, where there is shared control with institutions belonging to distinct financial conglomerates, subject to supervision by the Central Bank of Brazil;

III - in companies located abroad, where there is shared control with other conglomerates, financial or otherwise."

Article 2. The consolidated financial statements provided for in Article 3 of Resolution No. 2,723 of 2000 must be audited by an independent auditor, observing the provisions of Resolution No. 2,267 of March 29, 1996, and complementary regulation.

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

Brasilia, June 28, 2000

Luiz Fernando Figueiredo
Substitute President