Resolution CMN No. 4033 — Governs the application abroad of foreign currency holdings of banks authorized to operate in the foreign exchange market and the raising of external resources for specified purposes

RESOLUTION No. 4033

Governs the application abroad of foreign currency holdings of banks authorized to operate in the foreign exchange market and the raising of external resources for the purposes it specifies.

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 November 29, 2011, based on Article 4, items V, VIII, and XXXI, of the aforementioned Law,

RESOLVES:

Article 1. The application abroad of foreign currency holdings of banks authorized to operate in the foreign exchange market must be limited to the following modalities:

I - securities issued by the Brazilian government;

II - sovereign debt securities issued by foreign governments;

III - securities issued or guaranteed by financial institutions;

IV - time deposits in financial institutions.

Sole Paragraph. For the purposes of this article, foreign currency holdings are considered:

I - the institution's own foreign exchange position;

II - balances observed in current accounts in foreign currency in the country, opened and operated in accordance with the legislation and regulations in force;

III - other foreign currency resources in an account abroad of the institution itself, including those received as payment for Brazilian exports.

Article 2. Banks authorized to operate in the foreign exchange market with a Reference Equity (PR) greater than BRL 5,000,000,000.00 (five billion reais) may use resources raised in the external market to grant credit, abroad, to Brazilian companies, subsidiaries of Brazilian companies, and foreign companies whose shareholder with the largest voting capital is, directly or indirectly, a natural or legal person domiciled in Brazil, as well as to acquire, in the primary market, securities issued or guaranteed by the aforementioned companies.

Article 3. In the application of the provisions of this Resolution, banks must adequately manage the assets, liquidity, and risks associated with the operations, as well as fulfill their commitments and attend to the interest of clients.

Article 4. The Central Bank of Brazil will regulate the provisions of this Resolution, including providing for:

I - limits, provision of information, and credit history of those involved in the operations;

II - registration of information in a system for registration and financial settlement of assets;

III - realization of simultaneous foreign exchange operations, with a view to the registration of foreign capital, in the case of Article 2.

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

Article 6. Resolution No. 3,443 of February 28, 2007, is hereby revoked.

Brasília, November 30, 2011.

Alexandre Antonio Tombini
President of the Central Bank of Brazil