Resolution CMN No. 2921 on Linked Active Operations by Financial Institutions

RESOLUTION NO. 2921

Provides for the carrying out of linked active operations by the financial institutions specified herein, based on resources delivered or made available to the institution by third parties.

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 January 17, 2002, based on Article 4, items VI and X, of the aforementioned law,

RESOLVES:

Article 1. It is permitted for multiple banks, commercial banks, Caixa Econômica Federal, investment banks, credit financing and investment societies, and leasing societies to carry out linked active operations, based on resources delivered or made available to the contracting financial institution by third parties, with the following conditions to be explicitly stated in the fundraising instrument at a minimum:

I - linkage between the raised resources and the corresponding linked active operation;

II - subordination of the exigibility of the raised resources to the payment flow of the linked active operation;

III - remuneration of the linked active operation sufficient to cover the costs of the fundraising operation;

IV - compatibility between the cash flows of the linked active operation and the fundraising operation;

V - term of the fundraising operation equal to or greater than that of the linked active operation;

VI - postponement of any payment to the creditor, including for charges or amortization, in the event of default in the linked active operation;

VII - non-payment, total or partial, of the principal and charges to the creditor, in the event that the enforcement of guarantees is insufficient for the settlement of the linked active operation, or in other situations of non-settlement of that operation.

Paragraph 1. In the raising of resources for the carrying out of linked active operations, no type of guarantee may be provided by the contracting financial institution or by a natural or legal person linked to it that comprises the economic-financial consolidated group, as defined in Article 3 of Resolution No. 2,723 of May 31, 2000, with the wording given by Resolution No. 2,743 of June 28, 2000.

Paragraph 2. The documentation proving the carrying out of linked active operations must remain available to the Central Bank of Brazil at the institution's headquarters, observing the document retention periods established in the current regulation.

Paragraph 3. The classification of already contracted operations under the provisions of this resolution is admitted, provided that the conditions established in this article are met.

Article 2. The linked active operations carried out in the manner of the preceding article:

I - are not included in the calculation of client exposure limits established in Resolution No. 2,844 of June 29, 2001;

II - are subject to other operational limits and conditions established in the legislation and regulation in force, including with respect to the criteria for their respective risk classification and for the constitution of provisions, as well as to the obligation to provide information to the Credit Risk Central, as provided for, respectively, in Resolutions No. 2,682 of December 21, 1999, and No. 2,724 of May 31, 2000, and complementary norms.

Article 3. The resources raised in the manner of this resolution by the financial institutions referred to in Article 1 are not eligible as hybrid capital and debt instruments or subordinated debts to integrate Level II of Reference Equity (PR), as provided for in Article 1, item II, of Resolution No. 2,837 of May 30, 2001.

Article 4. The treatment provided for in Article 2 may be applied to active operations that have federal public securities as guarantee, observing, where applicable, the conditions established in Article 1.

Article 5. The Central Bank of Brazil is authorized to issue norms and adopt measures deemed necessary for the execution of the provisions of this resolution.

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

Brasília, January 17, 2002

Arminio Fraga Neto
President