Resolution CMN No. 980 - Regulation of Financial Leasing Operations

RESOLUTION NO. 000980

THE CENTRAL BANK OF BRAZIL, in accordance with Article 9 of Law No. 4,595, of December 31, 1964, makes public that the MONETARY COUNCIL, in a session held on this date, considering the provisions of Law No. 6,099, of September 12, 1974, with the amendments introduced by Law No. 7,132, of October 26, 1983,

RESOLVES:

I - Approve the attached Regulation, which governs financial leasing operations, defines competence, and regulates the activity of societies authorized to conduct such operations.

II - Maintain suspended the grants of new charters for the operation of financial leasing societies.

III - Prohibit the transfer of shareholding control of the financial leasing society to a financial conglomerate that already holds a society of this kind.

IV - The Central Bank may adopt measures deemed necessary for the execution of this Resolution, including determining specific audit and accounting standards applicable to the operations in question.

V - This Resolution shall enter into force on the date of its publication, with Resolutions Nos. 351, of November 17, 1975, 662, of December 17, 1980, 678, of January 22, 1981, and 908, of April 5, 1984, and items V, VI, VII, and VIII of Resolution No. 869, of December 20, 1983, being revoked.

Brasília-DF, December 13, 1984

Affonso Celso Pastore
President

ATTACHED REGULATION TO RESOLUTION NO. 980, OF DECEMBER 13, 1984

CHAPTER I
ON THE PRACTICE OF FINANCIAL LEASING

Art. 1. Financial leasing operations with the tax treatment provided for in Law No. 6,099, of September 12, 1974, with the amendments introduced by Law No. 7,132, of October 26, 1983, may only be carried out by legal entities whose main object of activity is the practice of financial leasing operations and by financial institutions that, under the terms of this Regulation, are authorized to contract leasing operations with the seller of the good itself or with legal entities affiliated with or interdependent with it.

CHAPTER II
ON CONSTITUTION AND OPERATION

Art. 2. The constitution and operation of legal entities for the practice of financial leasing operations, as referred to in this Regulation, depend on authorization from the Central Bank of Brazil, expressed in a charter, which has an indefinite validity period.

Art. 3. The legal entities referred to in Art. 1 must be constituted as joint-stock companies, and the same conditions established for the operation of financial institutions in Law No. 4,595, of December 31, 1964, and subsequent legislation relating to the National Financial System shall apply to them insofar as applicable, and their corporate name must obligatorily include the expression "FINANCIAL LEASING".

Sole Paragraph. The expression "FINANCIAL LEASING" in the corporate name or trade name is exclusive to the societies referred to in this Regulation.

Art. 4. For the conduct of the operations provided for in this Regulation, financial leasing societies and financial institutions referred to in Art. 15 must maintain a technical department properly structured and supervised directly by one of their directors.

CHAPTER III
ON CAPITAL

Art. 5. For the constitution and operation of financial leasing societies, paid-in capital and net equity equivalent to at least 136,000 (one hundred and thirty-six thousand) Redeemable Treasury Obligations - ORTN are required, which must be updated every 2 (two) years, according to the provisions of Art. 7 of this Regulation.

Art. 6. Based on the minimum capital and net equity levels provided for in the previous article, the financial leasing society may install up to 10 (ten) branches in the country, and the operation of a greater number of branches may be authorized, provided there is an additional capital contribution equivalent to 8,000 (eight thousand) ORTN for each new branch.

Art. 7. The adaptation to the minimum capital and net equity levels established in this chapter must be made by complying with the following update schedule:

a) by April 30, 1986, based on the nominal value of ORTN fixed for validity in December 1984;

b) by April 30, 1988, based on the nominal value of ORTN fixed for validity in December 1986, and so on, successively, every 2 (two) years.

Art. 8. In case of non-compliance with the provisions of Art. 5 of this Regulation within the prescribed deadlines, the Central Bank of Brazil may determine the immediate closure of the activities of the financial leasing society, which must enter into an ordinary liquidation regime.

CHAPTER IV
ON LEASING CONTRACTS

Art. 9. Financial leasing contracts must be formalized by public or private instrument, and must obligatorily contain, at a minimum, the specifications listed below:

a) the description of the goods that constitute the object of the contract, with all characteristics that allow for their perfect identification;

b) the term of the lease;

c) the value of the installments or the formula for calculating the installments, as well as the criterion for their adjustment;

d) the method of payment of the installments in determined periods, not exceeding 1 (one) semester, except in the case of operations that benefit rural activities, when payment may be fixed in periods not exceeding 1 (one) year;

e) the conditions for the lessee to exercise the right to opt, after the lease term has been fulfilled, for the renewal of the contract, for the return of the goods, or for the acquisition of the leased goods;

f) granting the lessee an option to purchase the leased good, with the price for its exercise or the criterion usable in its fixation to be established, which may even be the market value;

g) the expenses and additional charges that shall be borne by the lessee or the lessor entity, admitting:

I - the obligation of the lessee to pay, at the end of the lease term, a guaranteed residual value, whenever opting for not exercising the purchase option;

II - the adjustment of the price established for the purchase option or the guaranteed residual value, applying the provisions of the previous item "c";

h) conditions for the eventual substitution of the leased good by another of the same nature that better meets the convenience of the lessee;

i) the other additional responsibilities that may be agreed upon, resulting from:

I - improper or inappropriate use of the leased good;

II - insurance provided for covering risks of the leased goods;

III - damages caused to third parties by the use of the good;

IV - burdens arising from defects in the leased goods;

j) the right to inspect the goods subject to leasing and to demand from the lessee the adoption of measures indispensable to the preservation of the functionality and integrity of said goods;

l) the obligations of the lessee, in the cases of default, destruction, loss, or disappearance of the leased good;

m) the lessee's right to transfer to third parties in the country, provided there is express consent of the lessor entity, its rights and obligations arising from the contract, with or without joint and several liability of the assigning lessee.

Art. 10. Contracts must establish the following minimum lease terms:

a) 2 (two) years, comprised between the date of delivery of the goods to the lessee, embodied in the acceptance and receipt term of the goods, and the due date of the last installment, when it concerns the leasing of goods with a useful life equal to or less than 5 (five) years;

b) 3 (three) years, observing the definition of the term contained in the previous item, for the leasing of other goods.

Art. 11. The operation shall be considered as a sale and purchase on installments if the purchase option is exercised before the end of the validity of the leasing contract.

CHAPTER V
ON LEASING OPERATIONS

Art. 12. Only immovable and movable goods, of national production, acquired by the lessor entity according to specifications and for use by the lessee in its economic activity, may be the object of leasing, with the following exceptions for leasing of goods produced abroad:

a) in subleasing operations provided for in Art. 16 of this Regulation;

b) of accessories with an acquisition cost lower than 25% (twenty-five percent) of the acquisition cost of the good or set of goods that is the object of the leasing contract;

c) of goods entered into the country before the date of publication of this Regulation;

d) in operations of the National Program of Assistance to Agroindustry - PRONAGRI.

Art. 13. The lessor entity is permitted, in the cases of return or recovery of the leased goods:

a) to keep the goods in its fixed assets, for a maximum period of 2 (two) years;

b) to alienate or lease the said goods to third parties.

Art. 14. Lessor entities, in their operations with individuals, must also observe the following conditions:

a) only goods that serve the economic activity of the lessee may be the object of leasing; and

b) they must be restricted to:

I - the agricultural, agro-industrial, and other rural activities sectors;

II - individual firms;

III - liberal professionals and self-employed workers.

Art. 15. Financial leasing operations contracted with the seller of the good itself or with legal entities affiliated with or interdependent with it are subject to the same conditions fixed in this Regulation for the other modalities of leasing operations.

Paragraph 1. Investment banks, development banks, and savings banks may carry out the operations provided for in this article.

Paragraph 2. The National Housing Bank may authorize real estate credit societies to conduct the operations provided for in this article, when related to movable goods.

CHAPTER VI
ON SUBLEASING

Art. 16. Financial leasing societies, in the capacity of lessees, may conduct leasing operations with entities domiciled abroad, solely for the subsequent subleasing of the goods to sublessees in the country.

Paragraph 1. The operations referred to in this article may only be carried out with the object of capital goods without a national equivalent and with prior authorization from the Central Bank of Brazil.

Paragraph 2. In subleasing operations, financial leasing societies must pass on to sublessees domiciled in the country all the conditions agreed upon in the contract signed with the entities abroad, plus their remuneration, and the other provisions of this Regulation must also be observed.

Paragraph 3. The registration made by the Central Bank of Brazil must include the basic financial conditions of the financial leasing.

CHAPTER VII
ON SOURCES OF RESOURCES

Art. 17. Financial leasing societies may employ in their activities, in addition to their own resources, resources derived from:

a) loans contracted directly abroad;

b) loans, financing, or refinancing from national financial institutions, including the transfer of external resources;

c) official financial institutions, intended for transfer within specific programs;

d) placement of debentures of public or private issuance;

e) assignment of credit rights from financial leasing contracts to other financial leasing societies and to institutions cited in Art. 21;

f) assignment of financial leasing contracts to other financial leasing societies;

g) assignment of financial leasing contracts, as well as the credit rights arising from them, to entities domiciled abroad;

h) other forms of resource collection, authorized by the Central Bank of Brazil.

Art. 18. Financial leasing societies and financial institutions authorized to conduct the operations provided for in this Regulation may contract loans abroad for the following purposes:

a) obtaining resources for the acquisition of goods for leasing purposes;

b) acquisition of credit rights arising from financial leasing contracts, observing the norms provided for in Art. 21;

c) acquisition of financial leasing contracts, in accordance with the provisions of Art. 22.

Art. 19. Financial institutions, in their operations with affiliated or interdependent financial leasing societies, relating to loans, financing, resource transfers, and provision of guarantees, as well as the acquisition of credit rights with co-obligation of assignors, must comply, cumulatively, with the following conditions:

a) the charges must be those normally charged in operations of the kind carried out with third parties;

b) for the financing institution, these operations cannot represent more than 50% (fifty percent) of its respective net equity nor exceed 10% (ten percent) of the total of its applications.

Art. 20. The issuance of debentures by financial leasing societies depends on prior authorization from the Central Bank of Brazil before obtaining approval from the Securities and Exchange Commission.

Art. 21. It is optional for institutions authorized to conduct the operations provided for in this Regulation to assign, in the domestic market, credit rights from their financial leasing contracts.

Paragraph 1. Credit rights assignment operations, when carried out by financial leasing societies, may have as assignee exclusively societies of the same kind, investment banks, development banks, savings banks, credit societies, financing and investment societies, and real estate credit societies.

Paragraph 2. The assignment of credit rights from financial leasing contracts, when carried out by financial institutions, may only have as assignee another lessor entity authorized under the terms of this Regulation.

Paragraph 3. The acquisition of credit rights by a real estate credit society depends on authorization from the National Housing Bank and is restricted to immovable goods leasing.

Paragraph 4. The acquisition of credit rights from financial leasing contracts by financing, credit, and investment societies is limited to the value of the net equity of the assigning institution, and the use of resources originating from foreign exchange acceptances is not admitted.

Art. 22. The operations of assignment and acquisition of leasing contracts in the domestic market are restricted to financial leasing societies.

Art. 23. The acquisition of financial leasing contracts whose leased goods were acquired with resources from external loans or that contain a currency parity clause, as well as the credit rights arising from them, may only be carried out using resources from loans obtained abroad.

Art. 24. In the assignment of credit rights, the assignor that assumes responsibility for the settlement of the credit has its respective co-obligation computed in the calculation of the operational limit established in Art. 28 of this Regulation.

Art. 25. Financial leasing societies may offer, as collateral for loans they contract in the domestic or external markets, the pledge of credit rights from financial leasing contracts.

Art. 26. The assignment of financial leasing contracts, as well as the credit rights arising from them, to entities domiciled abroad depends on prior authorization from the Central Bank of Brazil.

CHAPTER VIII
ON OPERATIONAL LIMITS

Art. 27. Financial leasing societies must allocate at least 70% (seventy percent) of the global value of their leasing operations to legal entities controlled by national private capital, national individual firms, and individuals domiciled in the country.

Sole Paragraph. The following operations are excluded from the allocation referred to in this article:

a) contracted with lessees from abroad, provided the leased good is produced in the country;

b) whose financial leasing contracts have as object goods acquired with resources originating from loans contracted directly or indirectly abroad;

c) of subleasing, provided for in Art. 16.

Art. 28. The passive operations of financial leasing societies, considering all their exigibilities, including those arising from transfers of official resources, from any credits of affiliated and interdependent entities, and from eventual co-obligations in credit assignments, cannot be greater than 15 (fifteen) times the amount of their respective net equity.

Sole Paragraph. For the computation of the limit of passive operations provided for in this article, obligations are considered at their current value, understood as the value of the principal plus charges accrued due to the passage of time for their due dates.

Art. 29. Financial leasing operations must be diversified, so that no single client is responsible for more than 10% (ten percent) of the total applications of the financial leasing society.

Sole Paragraph. The Central Bank of Brazil may establish a risk limit different from the limit fixed in this article for societies that are in the beginning of activities or in a phase of operational reactivation.

Art. 30. The assets of the fixed assets for own use of the financial leasing society, added to permanent participations, cannot represent more than 30% (thirty percent) of its net equity.

Art. 31. The goods acquired by financial institutions for the practice of financial leasing operations provided for in Art. 15 of this Regulation are not computed for the purpose of calculating the immobilization limits of the institution.

CHAPTER IX
ON AFFILIATION AND INTERDEPENDENCE

Art. 32. For the purposes of Art. 2, Paragraph 1, of Law No. 6,099, of September 12, 1974, and of this Regulation, a legal entity is considered affiliated or interdependent:

a) in which the lessor entity participates, directly or indirectly, with more than 10% (ten percent) of the capital;

b) in which administrators of the lessor entity, their spouses, and respective relatives up to the 2nd (second) degree participate, jointly or individually, with more than 10% (ten percent) of the capital, directly or indirectly;

c) in which shareholders with more than 10% (ten percent) of the capital of the lessor entity participate with more than 10% (ten percent) of the capital, directly or indirectly;

d) that participates with more than 10% (ten percent) of the capital of the lessor entity, directly or indirectly;

e) whose administrators, their spouses, and respective relatives up to the 2nd degree participate, jointly or individually, with more than 10% (ten percent) of the capital of the lessor entity, directly or indirectly;

f) whose shareholders with more than 10% (ten percent) of the capital also participate in the capital of the lessor entity with 10% (ten percent) or more of its capital, directly or indirectly;

g) whose administrators, in whole or in part, are the same as those of the lessor entity.

CHAPTER X
PROHIBITIONS

Art. 33. It is prohibited for financial leasing societies and financial institutions referred to in Art. 15 of this Regulation to contract financial leasing operations with:

a) affiliated or interdependent legal entities;

b) shareholders who participate with 10% (ten percent) or more of their capital;

c) administrators of the entity and their respective spouses and relatives up to the 2nd degree;

d) the manufacturer of the leased good itself.

Art. 34. It is prohibited for financial leasing societies to assume co-obligations for acceptance, guarantee, surety, or any other form of guarantee, except for eventual co-obligations arising from credit assignments admitted in this Regulation and other obligations linked to operations signed with financing, credit, and investment societies intended for the refinancing of financial leasing contracts.

Art. 35. Subleasing operations, provided for in Art. 16 of this Regulation, cannot be carried out where there is affiliation or interdependence between the lessor domiciled abroad and the sublessee domiciled in the country.

CHAPTER XI
FINAL PROVISIONS

Art. 36. The Central Bank of Brazil may establish criteria for the distribution of lease payments during the contractual term, with a view to the adequate compliance with the minimum periods set forth in Art. 10 of this Regulation.

Art. 37. Mercantile leasing companies and financial institutions mentioned in Art. 15 may make deposits in foreign currency with the Central Bank of Brazil, under the conditions established by the same.

Art. 38. Mercantile leasing companies and financial institutions authorized to carry out mercantile leasing operations may only transfer to the lessees the responsibility for exchange rate parity, in the case where the leased assets are acquired with resources from loans contracted, directly or indirectly, abroad.

Art. 39. The available funds of mercantile leasing companies, when not held in cash, may be invested in public debt securities, acceptance bills of financial institutions, debentures, real estate letters, time deposits, with or without the issuance of a certificate, or, up to the amount established in specific regulation, in deposits in foreign currencies at the Central Bank of Brazil.

Art. 40. The rules in force for financial institutions in general apply to mercantile leasing companies, with respect to the exclusive competence of the Central Bank of Brazil for granting the authorizations provided for in item IX of Art. 10 of Law No. 4,595, of December 31, 1964, as well as for approving the assumption and exercise of any positions in the administration of the aforementioned companies, including in advisory, supervisory, or similar bodies, in accordance with the aforementioned legislation and subsequent regulation.

Art. 41. Operations carried out in disagreement with the provisions of this Regulation may be disqualified as mercantile leasing, in accordance with complementary rules to be issued by the Central Bank of Brazil.