Resolution No. 5,007

RESOLUTION CMN NO. 5,007, OF MARCH 24, 2022

Establishes the conditions for the issuance of Financial Notes by the financial institutions 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 March 24, 2022, based on Articles 4, items VI and VIII, of the aforementioned Law, Article 10 of Law No. 4,728, of July 14, 1965, and Article 41 of Law No. 12,249, of June 11, 2010,

RESOLVES:

CHAPTER I

OF THE OBJECT AND SCOPE OF APPLICATION

Art. 1. This Resolution disciplines the conditions for the issuance of Financial Notes.

Art. 2. Financial Notes may be issued by multiple banks, commercial banks, development banks, investment banks, credit, financing and investment companies, savings banks, mortgage companies, real estate credit companies, credit cooperatives, and by the National Bank for Economic and Social Development (BNDES).

§ 1. The issuance of Financial Notes by development banks must comply with the conditions provided in this Resolution and in specific regulation.

§ 2. The issuance of Financial Notes by BNDES is subject to compliance with the limit corresponding to the value of Level I of the Reference Equity (PR) of the institution, defined in accordance with current regulation.

CHAPTER II

OF THE ISSUANCE CONDITIONS AND GENERAL CHARACTERISTICS OF THE FINANCIAL NOTE

Section I
Of the Issuance Values of the Financial Note

Art. 3. The Financial Note must be issued with a unit nominal value equal to or greater than:

I - R$300,000.00 (three hundred thousand reais), if it contains a subordination clause, in accordance with Article 40 of Law No. 12,249, of June 11, 2010; and

II - R$50,000.00 (fifty thousand reais), if it does not contain a subordination clause.

Section II
Of the Remuneration of the Financial Note

Art. 4. The remuneration of the Financial Note may be based on fixed or floating interest rates, combined or not, as well as on other rates, provided they are publicly known and regularly calculated.

§ 1. The issuance of Financial Notes with the following provisions is admitted:

I - periodic payment of earnings, provided that the intervals are not less than 180 days; and

II - adjustment of its nominal value based on a price index.

§ 2. The redemption value of the Financial Note may be lower than its issuance value, according to its remuneration criteria.

§ 3. The nominal value of a Financial Note cannot be adjusted based on exchange rate variation, except as provided in Article 6, item II, of this Resolution.

Section III
Of the Maturity Term and the Exchange of the Financial Note

Art. 5. The minimum maturity term of the Financial Note is 24 months, and redemption, total or partial, before the agreed term is prohibited.

§ 1. The prohibition referred to in the main text does not apply if the issuing institution performs early redemption for the purpose of immediately exchanging the instrument for another Financial Note issued by it.

§ 2. For the purposes of the provision in § 1, the following are prohibited:

I - the exchange of a Financial Note with a subordination clause for a Financial Note without a subordination clause; and

II - the exchange of a Financial Note issued less than twelve months ago.

§ 3. In the exchange of a Financial Note, early redemption must be carried out through an organized over-the-counter market.

§ 4. The Financial Note placed in substitution for the redeemed instrument must observe the following characteristics:

I - unit nominal value equal to or greater than the market value of the redeemed instrument, deducting tax obligations arising from the operation; and

II - maturity term greater than the remaining term of the redeemed instrument, observing the minimum term established in the main text.

§ 5. In compliance with the provision in § 4, item I, exchange for Financial Notes whose sum of respective unit nominal values is equal to or greater than the market value of the redeemed instrument, deducting tax obligations arising from the operation, is admitted.

§ 6. Early redemption of a Financial Note with a subordination clause is not subject to the authorization of the Central Bank of Brazil provided for in Articles 15, item IX, and 20, item V, of Resolution CMN No. 4,955, of October 21, 2021, provided that the Financial Note placed in substitution for the redeemed instrument:

I - presents an interest rate equal to or lower than that of the redeemed Financial Note; and

II - maintains the other characteristics of the redeemed Financial Note, respecting the requirements provided in this article for its exchange.

§ 7. In issuances intended exclusively for operations with the Central Bank of Brazil aimed at meeting the liquidity needs of the issuing institution, the minimum maturity term of the Financial Note must observe the specific regulation of the operation, and the prohibition referred to in the main text does not apply.

CHAPTER III

OF THE FINANCIAL NOTE ISSUED WITH A SUBORDINATION CLAUSE

Art. 6. Exclusively when issued with a subordination clause, the Financial Note may provide for:

I - maturity conditioned solely on the occurrence of the dissolution of the issuing institution or the default of the obligation to pay the stipulated remuneration, in which case both conditions must be stated in the instrument; and

II - correction by exchange rate variation.

Art. 7. Exclusively for the purposes of composing Reference Equity, it is admitted that the Financial Note referred to in Article 6 of this Resolution be issued with the following provisions:

I - suspension of payment of the stipulated remuneration; and

II - permanent extinction of the credit right it represents or, alternatively, conversion of that right into shares eligible for the Main Capital of the issuing institution.

§ 1. The effectiveness of the clauses mentioned in the main text must be conditioned on the validity of the authorization referred to in Article 25 of Resolution CMN No. 4,955, of 2021.

§ 2. The condition referred to in § 1 must be stated in the instrument.

§ 3. In the event of liquidation or bankruptcy of the issuing institution, payment to holders of Financial Notes issued with the characteristics established in current regulation for the composition of Level II of PR must take precedence over payment to holders of Financial Notes issued with the characteristics of the Supplementary Capital of PR.

Art. 8. For the purposes of the provision in Article 25 of Resolution CMN No. 4,955, of 2021, the Central Bank of Brazil may regulate authorization, on a general basis, for the use of resources raised through Financial Notes in the composition of PR.

Sole Paragraph. The general authorization referred to in the main text does not apply to Financial Notes issued with a clause converting the credit right it represents into shares eligible for the Main Capital of the issuing institution.

CHAPTER IV

OF THE FINANCIAL NOTE ISSUED WITH A REPO OR RESALE OPTION CLAUSE

Art. 9. Financial Notes with a maturity equal to or greater than 36 months may be issued with a clause providing for a repurchase option by the issuing institution or a resale option to the issuing institution, combined or not with a clause modifying remuneration, in case the option is not exercised.

§ 1. The first exercise date of the repurchase and resale options must observe the minimum term referred to in the main text of Article 5.

§ 2. The interval between the exercise dates of the options must be at least 180 days.

§ 3. The exercise of the repurchase option by the issuing institution of the Financial Note subject to public offering must observe equitable criteria, in accordance with current regulation.

§ 4. The exercise of the repurchase or resale option referred to in this article:

I - is not subject to compliance with the limits established in the main text of Article 10 of this Resolution; and

II - implies the extinction of the Financial Note from the date of its respective exercise.

Art. 10. Financial Notes may be repurchased by the issuing institution, at any time, provided that through stock exchanges or an organized over-the-counter market, for retention in treasury and subsequent sale, up to the limit of:

I - 5% (five percent) of the book value of the Financial Notes issued by it without a subordination clause; and

II - 3% (three percent) of the book value of the Financial Notes issued by it with a subordination clause.

§ 1. For the purposes of the provision in the main text, the book value must be determined on the date of repurchase without deduction of the balance of Financial Notes in treasury.

§ 2. For the purposes of verifying compliance with the limits referred to in the main text, Financial Notes acquired by the following must be considered:

I - entities part of the prudential conglomerate, in accordance with Resolution CMN No. 4,950, of September 30, 2021; and

II - other entities subject to direct or indirect control of the issuing institution, characterized by:

a) shareholdings in companies located in the country or abroad in which the institution holds, directly or indirectly, alone or together with other partners, including due to the existence of voting agreements, partner rights that ensure preponderance in social deliberations or power to elect or remove the majority of administrators; or

b) effective operational control, configured by common administration or management or by market activity under the same brand or trade name.

§ 3. The provisions of § 2 do not apply to Financial Notes acquired in primary placement.

§ 4. Up to the limit referred to in item II of the main text, the following requirements established by Resolution CMN No. 4,955, of 2021, do not apply to the repurchase of Financial Notes with a subordination clause, including as a result of the exercise of the option referred to in Article 9 of this Resolution:

I - the authorizations of the Central Bank of Brazil referred to in Articles 15, item IX, and 20, item V;

II - compliance with the minimum term of five years between the issuance date and the first exercise date of the repurchase option, provided for in Articles 16, item I, and 21, item I;

III - compliance with the minimum term of five years between the relending date and the maturity date of the instrument, provided for in Article 7, § 4; and

IV - the communications to the Central Bank of Brazil referred to in Articles 6, § 3, and 7, § 4.

§ 5. In the issuances referred to in Article 5, § 7, of this Resolution, all Financial Notes issued may be repurchased at any time, and the limits and repurchase conditions referred to in the main text do not apply.

§ 6. Financial Notes repurchased in accordance with § 5 may be extinguished, at the discretion of the issuing institution, from the date of repurchase.

CHAPTER V

OF INFORMATION PROVISION TO THE INVESTOR

Art. 11. The issuing institution and the institutions participating in the distribution, placement, or negotiation process of Financial Notes must adopt procedures that ensure:

I - the suitability of the instrument to the investor's profile; and

II - the investor's access to information necessary for investment decision-making.

Sole Paragraph. For the purposes of the provision in the main text, the following information regarding the Financial Note must be provided to the investor at a minimum:

I - impossibility of redemption before the agreed maturity;

II - conditions for exercising the repurchase option by the issuing institution or the resale option to the issuing institution, if applicable;

III - criteria used for its exchange;

IV - conditions for repurchase by the issuing institution;

V - possibility of redemption lower than its issuance value, due to remuneration criteria; and

VI - conditions regarding coverage by the Credit Guarantee Fund (FGC) or the Credit Cooperativism Guarantee Fund (FGCoop).

CHAPTER VI

FINAL PROVISIONS

Art. 12. The following are revoked:

I - Resolution No. 4,733, of June 27, 2019;

II - Resolution No. 4,749, of August 29, 2019; and

III - Resolution No. 4,788, of March 23, 2020.

Art. 13. This Resolution enters into force on May 2, 2022.

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