A recently issued presidential decree has authorised the Central Bank of Brazil to recognise the government's interest in establishing branches of foreign financial institutions in Brazil and increasing foreign equity participation in Brazilian financial institutions without the need for further presidential authorisation. Prior to the decree's enactment, these matters required the express approval of international treaties or presidential decrees recognising that investments were in the government's interest.
The National Monetary Council recently issued Resolution 4,656, regulating credit fintech companies. The resolution will allow direct credit companies and interpersonal loan companies to conduct loan and financial operations through electronic platforms. Although it is still uncertain how the market will react to the new rules, the industry is optimistic, considering the significant developments in this area that have been observed in other markets.
The Administrative Council for Economic Defence (CADE) and the Central Bank recently entered into a memorandum of understanding. This initiative strengthens the relationship between the two authorities and promotes greater cooperation among them for the analysis of merger cases and anti-competitive practices by financial institutions. It also represents an important step forward, signalling the end to the longstanding dispute between CADE and the Central Bank over jurisdictional conflicts.
Pursuant to Article 66-B(3) of Law 4.728/65, security can take the form of security bonds, a chattel mortgage of unfungible and fungible movables or a fiduciary cession of rights over movables. However, the legal system also accepts the establishment of atypical fiduciary legal business activities as security, such as the fiduciary cession of rights.
Including: Defining Trends and Challenges; Regulatory Agency and Legal Framework; Licensing; Universal Banks; International Banks; Ownership Restrictions; Equity Interests of Existing Investors; Additional Approvals for Transfers of Control to Non-Brazilian Buyers; Trends in Limitations on Non-Brazilian Shareholdings; Prudential Regulations; Capital Adequacy Ratios; Capital Requirements.
Due to the absence of specific regulations, financial institutions should exercise a degree of caution when providing online financial and banking services in Brazil. Certain requirements must be complied with, and foreign banks must take care that they do not need to seek authorization from or registration with the Brazilian authorities.
The applicability of the Brazilian Consumer Defence Code to the financial sector remains controversial following the filing of a lawsuit by several banks and the issuance of a resolution that establishes the regulatory provisions applicable to transactions and services rendered between financial institutions and their clients.
Including: Central Bank of Brazil; Preventative and Protective Regulation; Other Risk Management Measures; The New Brazilian Payment System.
The Central Bank is the governmental department responsible for controlling and registering foreign investments, as well as the repatriation of capital and the remittance of profits abroad.
Resolution 2,837 of May 30 2001 provides new criteria for tier one and tier two reference capital. The resolution also lists new conditions for hybrid instruments.
According to new Circular 3,027, cross-border financing by non-Brazilian entities to Brazilian entities is subject to electronic filing with the Central Bank, regardless of the currency that is used.
Resolution 2804 of the National Monetary Council concerns the implementation of liquidity control systems for all financial institutions. It is regarded as an important step towards the establishment of the new clearing system.
Resolution 2770 of the Central Bank of Brazil regulates cross-border loans between those domiciled in Brazil and abroad. It is hoped that the new system will facilitate the access of domestic private companies and financial institutions to international markets.
This update discusses the Central Bank's regulation of foreign investments and international transfers of currency, including provisions to combat money laundering.
Including: Central Bank of Brazil; Preventative and Protective Regulation; Other Risk Management Measures