Resolution CMN No. 4721

The Central Bank of Brazil, in accordance with Article 9 of Law No. 4,595 of December 31, 1964, makes it public that the National Monetary Council, in a session held on May 30, 2019, based on Article 1, item II, of Law No. 10,194 of February 14, 2001,

RESOLVES:

CHAPTER I

ON THE OBJECT AND SCOPE OF APPLICATION

Art. 1. This Resolution provides for the constitution, the authorization for operation, the operation, the corporate reorganizations, and the cancellation of the authorization for operation of Microentrepreneur and Small Business Credit Companies.

CHAPTER II

ON DEFINITIONS

Art. 2. For the purposes of this Resolution, the following are considered:

I - microenterprise and small business: entities defined in accordance with Article 3, items I and II, of Complementary Law No. 123 of December 14, 2006;

II - qualified participation: the direct or indirect participation held by natural or legal persons, equivalent to 15% (fifteen percent) or more of shares or quotas representing the total capital of the Microentrepreneur and Small Business Credit Company; and

III - control group: the person or group of persons linked by a voting agreement or under common control that holds, directly or indirectly, shareholder rights corresponding to the majority of the voting capital of a corporation or to 75% (seventy-five percent) of the social capital of a limited liability company.

CHAPTER III

ON THE MICROENTREPRENEUR AND SMALL BUSINESS CREDIT COMPANY

Section I

On the Corporate Purpose

Art. 3. The Microentrepreneur and Small Business Credit Company must have as its main activity the granting of financing to natural persons, microenterprises, or small businesses, with a view to enabling ventures of a professional, commercial, or industrial nature.

Art. 4. In addition to the provisions of Article 3 of this Resolution, the Microentrepreneur and Small Business Credit Company may carry out, exclusively, the following operations and activities:

I - provision of guarantees to microenterprises, small businesses, and natural persons, with a view to enabling ventures of a professional, commercial, or industrial nature;

II - application of cash availability in the financial market, observing the specific legal and regulatory restrictions of each type of application;

III - acquisition of credits granted in conformity with its corporate purpose;

IV - assignment of credits, including to financial credit securitization companies, in accordance with current regulation;

V - obtaining resources for the granting of credits in conformity with its corporate purpose in operations of transfers and loans originating from:

a) national and foreign financial institutions;

b) national and foreign entities focused on promotion and development actions; and

c) official funds;

VI - collection of interbank deposits linked to microfinance operations (DIM), in accordance with current regulation;

VII - issuance of electronic money, in accordance with current regulation, restricted to natural or legal persons eligible to receive financing under Article 3 of this Resolution;

VIII - provision of correspondent services in the country;

IX - credit analysis for third parties;

X - collection of third-party credit; and

XI - acting as an insurance representative in the distribution of insurance related to the operations mentioned in Article 3 of this Resolution, in accordance with the regulation of the National Council of Private Insurance (CNSP).

Section II

On Constitution

Art. 5. The Microentrepreneur and Small Business Credit Company must be constituted in the form of a closed corporation or in the form of a limited liability company, in accordance with current legislation.

Art. 6. The expression "Microentrepreneur and Small Business Credit Company" must appear in the corporate name of the institution, and the use of a corporate name or trade name containing terms characteristic of other institutions of the National Financial System or similar expressions in the vernacular or in a foreign language is prohibited.

Sole Paragraph. It is optional for Microentrepreneur and Small Business Credit Companies in operation on May 29, 2008, to maintain the corporate name used on that date.

Section III

On Social Capital

Art. 7. The Microentrepreneur and Small Business Credit Company must permanently observe the minimum limit of R$1,000,000.00 (one million reais) regarding paid-in social capital and net worth.

Section IV

On Control and Shareholding

Art. 8. Direct shareholding that implies control of the Microentrepreneur and Small Business Credit Company may only be held by:

I - natural persons;

II - financial institutions headquartered in the country or abroad and other institutions authorized to operate by the Central Bank of Brazil; and

III - other legal entities headquartered in the country whose exclusive corporate purpose is shareholding in institutions authorized to operate by the Central Bank of Brazil.

Sole Paragraph. The participation of a financial institution headquartered abroad in the control group of a Microentrepreneur and Small Business Credit Company is conditioned on the absence of objection by the supervisory authority of the country of origin.

Art. 9. The Central Bank of Brazil may require the execution of a shareholders' or partners' agreement, including the express definition of direct or indirect corporate control, in cases it deems necessary.

Art. 10. It is prohibited for the Microentrepreneur and Small Business Credit Company to hold direct or indirect shareholding in institutions authorized to operate by the Central Bank of Brazil.

Art. 11. It is prohibited for any body or entity belonging to the public sector to hold direct or indirect shareholding in the capital of a Microentrepreneur and Small Business Credit Company.

CHAPTER IV

ON AUTHORIZATIONS

Section I

General Provisions

Art. 12. The following require prior authorization from the Central Bank of Brazil:

I - the operation of the Microentrepreneur and Small Business Credit Company;

II - the alteration of corporate control and any change, direct or indirect, in the control group, which may imply a change in the effective management of the institution's business;

III - acts of merger, spin-off, or incorporation;

IV - the change of corporate purpose; and

V - corporate transformation.

Sole Paragraph. In the case of item II, prior authorization is waived in transfers of corporate control to legal entities when there is no entry or exit of natural persons in the final controllers' roster of the Microentrepreneur and Small Business Credit Company.

Art. 13. The granting of the authorizations referred to in Article 12 of this Resolution is subject to compliance with the following conditions, according to the regulation of the Central Bank of Brazil:

I - knowledge by members of the control group regarding the business sector, the segment in which the institution intends to operate, market dynamics, sources of operational resources, management, and risks associated with operations;

II - economic-financial capacity of the members of the control group compatible with the capital contribution necessary for the structuring and operation of the institution and sufficient to meet contingencies arising from market dynamics;

III - lawful origin of the resources used in the paid-in capital, in the acquisition and expansion of direct or indirect control and qualified participation;

IV - market, financial, and operational sustainability of the business;

V - unblemished reputation of members of statutory or contractual bodies, controllers, and holders of qualified participation;

VI - technical qualification of members of statutory or contractual bodies compatible with the functions to be exercised during the term of office; and

VII - compliance with current legislation and regulation.

Art. 14. The Central Bank of Brazil may, during the examination of requests and in communications referred to in this Resolution:

I - request any additional documents and information it deems necessary for the decision regarding the request, including from authorities abroad; and

II - summon controllers and administrators to provide clarifications and additional information.

Art. 15. The Central Bank of Brazil may, during the examination, deny the requests referred to in this Resolution if it verifies:

I - circumstances that affect the reputation of administrators, members of the control group, or holders of qualified participation;

II - omissions or provision of documents, data, or information incorrect or in disagreement with legal or regulatory norms, considering the circumstances of each concrete case and the context of the facts; or

III - evidence that allows concluding the economic or technical unfeasibility of the venture.

Sole Paragraph. In the cases referred to in this article, the Central Bank of Brazil will grant a period for interested parties to contest.

Art. 16. The Central Bank of Brazil may archive the requests referred to in this Resolution when requests for the presentation of additional documents, provision of information, appearance for interviews, or other requests related to the process are not met within the specified deadline.

Section II

On Authorization for Operation

Art. 17. Prior to formalizing the request for authorization for operation, the interested party in the constitution of a Microentrepreneur and Small Business Credit Company must:

I - carry out a corporate constitution act, in the form of current legislation;

II - pay to the Central Bank of Brazil the amount related to the paid-in social capital, in accordance with Law No. 4,595 of December 31, 1964; and

III - elect or appoint members of the statutory bodies, observing current regulation.

Art. 18. The request for authorization for operation of the Microentrepreneur and Small Business Credit Company must be accompanied by a business project and other information related to the conditions established in Article 13 of this Resolution, with supporting documentation.

Sole Paragraph. The Central Bank of Brazil will define:

I - the content of the business project, which must contain, at a minimum, information on compliance with the conditions provided for in item IV of Article 13 of this Resolution; and

II - the form of presentation, the period of coverage of the business project, and other information.

Section III

On Cancellation

Art. 19. The cancellation of the authorization for operation of the Microentrepreneur and Small Business Credit Company will occur in the following scenarios:

I - dissolution of the company;

II - change of corporate purpose of the company that results in its decharacterization as part of the financial system;

III - at the request of the institution; or

IV - ex officio, by the Central Bank of Brazil.

§ 1. The Central Bank of Brazil will provide for the procedures related to the cancellation referred to in item III of the main text.

§ 2. In the event of the extinction of the Microentrepreneur and Small Business Credit Company resulting from merger, total spin-off, or incorporation, the procedures referred to in § 1 are waived, provided that the resulting or successor company is an institution authorized to operate by the Central Bank of Brazil.

Art. 20. The Central Bank of Brazil may condition the cancellation referred to in item III of the main text of Article 19 of this Resolution to:

I - publication of a statement of purpose, in the terms and conditions it specifies; and

II - liquidation of the operations permitted in Article 4, items V to VII, of this Resolution.

Art. 21. The Central Bank of Brazil may carry out the cancellation referred to in item IV of the main text of Article 19 of this Resolution when one or more of the following situations are found at any time:

I - lack of habitual practice of the main activity referred to in Article 3 of this Resolution;

II - non-location of the institution at the address informed to the Central Bank of Brazil;

III - interruption, for more than four months, without justified reason, of the sending to the Central Bank of Brazil of the statements required by current regulation; and

IV - non-compliance with the provisions contained in the business project mentioned in Article 18 of this Resolution.

CHAPTER V

FINAL AND TRANSITORY PROVISIONS

Art. 22. The Central Bank of Brazil is authorized to issue norms and adopt measures necessary for the execution of the provisions of this Resolution.

Art. 23. Microentrepreneur and Small Business Credit Companies in operation on the date of this Resolution must comply with the minimum limit mentioned in Article 7 of this Resolution observing the following schedule:

I - R$400,000.00 (four hundred thousand reais), from June 1, 2020;

II - R$600,000.00 (six hundred thousand reais), from June 1, 2021;

III - R$800,000.00 (eight hundred thousand reais), from June 1, 2022; and

IV - R$1,000,000.00 (one million reais), from June 1, 2023.

Art. 24. The provisions of Resolution No. 3,567 of May 29, 2008, apply to authorization processes filed with the Central Bank before the date of entry into force of this Resolution, except regarding the minimum limits of paid-in capital and net worth referred to in Article 4, item I, of said Resolution No. 3,567 of 2008.

Art. 25. Microentrepreneur and Small Business Credit Companies that do not opt for the optional simplified methodology for calculating the minimum requirement for Simplified Reference Equity (PRS5), as provided in Resolution No. 4,606 of October 19, 2017, will have up to 90 days, counted from the effectiveness of this Resolution, to observe the provisions applicable to other segments in the regulation.

Art. 26. The following are revoked:

I - Resolution No. 3,567 of 2008;

II - item II of the sole paragraph of Article 1 of Resolution No. 4,192 of March 1, 2013;

III - item II of § 5 of Article 2 of Resolution No. 4,553 of January 30, 2017;

IV - § 3 of Article 2 of Resolution No. 4,606 of 2017; and

V - item I of § 1 of Article 2 of Resolution No. 4,677 of July 31, 2018.

Art. 27. This Resolution enters into force on the date of its publication.

Roberto de Oliveira Campos Neto
President of the Central Bank of Brazil