Brazil: The New Rules For Payment Institutions And Payment Arrangements In Brazil

Last Updated: 20 November 2013
Article by Walter Stuber

The Brazilian Monetary Council (Conselho Monetário Nacional - CMN) and the Central Bank of Brazil (Banco Central do Brasil – Bacen) issued, respectively, Resolutions Nos. 4,282 and 4,283, and Circulars Nos. 3,680, 3,681, 3,682 and 3,683, all dated as of November 4, 2013, and published in the Official Gazette of the Union (Diário Oficial da União – DOU) on November 6, 20131, instituting the initial regulatory framework which regulates the authorization and operation of payment institutions and payment arrangements, comprising the Brazilian Payment System (Sistema de Pagamentos Brasileiro - SPB) in accordance with the principles established in Law No. 12,865, of October 9, 2013. The main issues contained in these rules are outlined herein.

I. Introduction

CMN Res. 4,282/2013 establishes the guidelines to be observed in the regulation, monitoring and supervision of payment institutions and payment arrangements comprising the SPB.

CMN Res. 4,283/2013 amends CMN Resolution No. 3.694, of March 26, 2009, which provides for the prevention of risks in contracting transactions and the performance of services by financial institutions and other entities authorized to operate by Bacen.

Bacen Circular 3,680/2013 provides for the payment account used by payment institutions to record payment transactions of end users.

Bacen Circular 3,681/2013 provides for the management of risks, the minimum equity requirements, and governance of payment institutions, preservation of value and liquidity of balances in payment accounts and other measures.

Bacen Circular 3,682/2013 approves the regulations that govern the provision of payment service under the scope of payment arrangements integrating the SPB, establishes the criteria according to which payment arrangements will not comprise the SPB and provides other measures.

Bacen Circular 3,683/2013 establishes the requirements and procedures for organization, authorization for operation, changes in control and corporate restructuring, cancellation of the authorization for operation, conditions for the exercise of management positions of the payment institutions and authorization for provision of payment services by financial institutions and other entities authorized to operate by Bacen.

II. Scope

The new rules apply to payment institutions, as well as to financial institutions and other entities authorized to operate by Bacen, including credit card companies, that establish or participate in the payment arrangements, as determined by Bacen.

III. Definitions

The terms and related terms listed below are defined as follows:

  1. payer means any individual or legal entity that authorizes the payment transaction;
  2. payee means any individual or legal entity that is the final recipient of the funds from a payment transaction;
  3. payment transaction means the act of paying, contributing, transferring or withdrawing funds, irrespective of any underlying obligation between the payer and the payee;
  4. end user of payment services means any individual or legal entity that uses a payment service, as payer or payee;
  5. closed payment arrangement means a payment arrangement in which the management of electronic currency or, cumulatively, account management, issuance and accreditation of payment institutions shall be made only by one payment institution, whose entity is the same as the institution of the arrangement;
  6. payment transaction authorization means a process for confirmation of classification of a payment transaction to the requirements previously set out in the arrangement's regulations, particularly with regard to risk management, for approval of the transaction;
  7. interoperability between arrangements means a mechanism that makes possible, by rules, compatible procedures and technologies, the flow of resources between different payment arrangements;
  8. interoperability between participants of the same arrangement means a mechanism that makes possible, by compatible rules, procedures and technologies, that the different participants in the same arrangement are related in a non-discriminatory manner;
  9. network service provider means an entity that provides network infrastructure for capturing and directing payment transactions;
  10. active end user means the individual or legal entity who has used in the past 90 days, the payment service disciplined by the arrangement.

IV. Payment Institutions

Payment institutions are classified in the following modalities, in accordance with the payment services they provide:

  1. issuer of electronic currency. It is a payment institution that manages payment accounts of end users of prepaid type and makes payment transactions available based on the electronic currency contributed in such account, with the possibility of registering its acceptance and converting such funds into physical or book-entry currency or vice-versa. In this context, electronic currency means the funds in Brazilian currency (Reais) stored in an electronic device or system that enable the end user to make a payment transaction;
  2. issuer of postpaid payment instrument. It is a payment institution that manages payment accounts of end users of postpaid type and makes payment transactions based on such account; and
  3. accrediting institution. It is a payment institution that, without managing payment accounts, accredits individual or legal entity receivers for acceptance of payment instruments issued by a payment institution or a financial institution participating in the same payment arrangement.

A payment institution may be classified under more than one of the modalities referred to above.

V. Payment Accounts

Payment accounts are used by payment institutions to record payment transactions of end users and must identity the end user holding such account. These accounts may be either prepaid2 or postpaid.3

The prepaid payment account is intended for the execution of payment transactions in electronic currency made based on previously contributed Real-denominated funds. Payment institutions issuing electronic money shall ensure the end user the possibility of full redemption, at any time, of outstanding balances in prepaid payment accounts.4

The postpaid payment account is intended for the execution of payment transactions that do not depend on the prior contribution of funds.

VI. Payment Arrangements

As for its purpose, a payment arrangement may be classified as a purchase or transfer, depending on whether the payment service governed by the arrangement is linked or not to the settlement of certain obligations. If it is linked, the payment arrangement is a purchase. If it is not linked, it is a transfer.

With regard to the relationship of end users with the participating institution, a payment arrangement can be classified as: (i) prepaid payment account; (ii) postpaid payment account; (iii) demand deposit account; or (iv) any relationship, when the payment service can be performed from or for the client that does not possess it, at the remitting institution or at the recipient institution, respectively, an account that can be moved by means of a payment instrument disciplined by the arrangement.

Regarding the territorial coverage, a payment arrangement can be classified as: (i) domestic (domestico), when the payment instrument governed by the arrangement can only be issued and used in the national territory; or (ii) border (transfronteiriço), when the payment instrument governed by the arrangement is issued in the country to be used in other countries or is issued outside the national territory to be used in the country.

Border arrangements that regulate rules and procedures related to the provision in the national territory of at least one of the activities indicated herein are deemed to comprise the SPB: (a) to make available the service of providing or withdrawing resources held in payment account; (b) to perform or facilitate the related payment instruction for a particular payment service, including transfer originated from or intended for payment account; (c) to manage payment account; (d) to issue payment instrument; (e) to accredit the acceptance of payment instrument; (f) to carry out remittance of funds; (g) to convert physical or book-entry currency into electronic currency or vice-versa and/or to accredit the acceptance or manage the use of electronic currency; and (h) other activities related to the provision of payment service designated by Bacen.

The arrangement payment regulations must be clear, objective and accessible by the public, and must enable the participants and the end users of the arrangement to have proper information about their rights, duties, costs and any risks incurred when participating in the arrangement. The arrangement will regulate the entire process of payment service provision, including, among other things, the availability of funds for free transaction by the receiver of the payment transaction. The payment arrangement settlor must disclose to all participants in due time any changes relating to the operation of the arrangement founded by it.

VII. Participation

Payment institutions, financial institutions and service providers of the network become participants to adhere to a payment arrangement. The participation criteria shall be public, objective, non-discriminatory, and compatible with the activities performed by the participant and with a focus on the security and efficiency of the arrangement and the market served by it.

The minimum conditions for participation in payment arrangements are: (i) to hold authorization granted by Bacen to operate a certain modality of payment service, in case of payment institutions and financial institutions; and (ii) to meet the participation requirements defined in the arrangement regulations.

This participation will be formalized by means of an agreement which, in the case of payment institution and financial institution, will identify the modalities of participation for which the authorization is being granted, provided that operating any modality not covered by the agreement is forbidden. The participation agreements shall be kept updated and available to Bacen.

The payment arrangement settlor shall not subordinate the performance of a given activity to another one, except in the following events: (i) to manage a payment account and issue a payment instrument; (ii) to manage a payment account and convert physical or book-entry currency into electronic currency; and (iii) other activities to be defined on a case-by-case basis by Bacen, considering the need to promote the efficiency and security of the payment services provided under the payment arrangement.

The above-mentioned provisions are not applicable to activities which under closed arrangements will be solely performed by their payment arrangement settlor.

VII. Payment Arrangement Settlor

The payment arrangement settlor will be formed in the country as a legal entity with a purpose compatible with this type of institution.5 The payment arrangement settlor must have: (i) technical and operational, organizational, administrative and financial capacities to comply with the obligations listed below; and (ii) mechanisms for effective and transparent governance so as to also encompass the interests of participants and end users.

In order to comply with the obligations required by the regulations, the payment arrangement institution must establish procedures that address the following issues:

  1. management of risks that participants incur due to the rules and procedures governing the provision of payment services referred to in the arrangement;
  2. certain minimum operational aspects to be met by the participants;
  3. supply of information and minimal instructions to be provided by participating institutions to end users of the services offered;
  4. monitoring of fraud at each participating institution;
  5. settlement of transactions between the institutions participating in the arrangement;
  6. interoperability between the arrangement's participants; and
  7. interoperability with other payment arrangements, including the provision for transfer of funds to other payment arrangements.

The minimum operational aspects to be met by the participants, among others, are the following: (a) preventing illegal foreign exchange transactions, money laundering and combating the financing of terrorism, including with regard to the maintenance of information from end users of the payment service; (b) the management of business continuity, including disaster recovery plan; (c) information security; (d) the reconciliation of information between the participants; (e) availability of services; and (f) ability to provide the services.

Furthermore, the payment arrangement settlor will have to monitor and certify compliance by participants with the arrangement, of the above-mentioned requirements and to be able to conduct tests, audit participants or use other means deemed necessary to ensure compliance with the established procedures.

VIII. Authorization for Payment Arrangement Settlor

The request for authorization to operate as an arrangement institution settlor must be supported with the following documents and information6: (i) description of the main characteristics of the business, containing at least indication of the payment services to be provided, the target audience, the area of activity, short-term goals and long-term strategic goals, location of the principal place of business and of any facilities; (ii) the by-laws or articles of association of the payment arrangement settlor and any amendments thereto, in case of existing arrangements, or the drafts of the corporate instruments of organization, in the case of new arrangements; (iii) identification of the members of the control group of the institution and of the holders of qualified participation, with the respective equity interests; (iv) description of the governance structure of the payment arrangement settlor; (v) identification of the officers appointed for the statutory and contractual bodies; (vi) identification of the officer in charge of meeting the requirements of Bacen as regards issues relating to the arrangement; (vii) functional organization chart of the payment arrangement settlor, containing indication of the number of persons assigned to each area or function and the total number of employees; (viii) the regulations containing the operation rules of each arrangement; and (ix) the agreements forms of the different modalities of participation in the arrangement, as applicable.

The regulations containing the operation rules of each arrangement referred to by item (viii) above shall contain, in a clear and objective manner, the detailed description of all operation rules of the arrangement, including the following information, as applicable: (a) the purpose of the arrangement; (b) the modality of relationship of the end users with the participant institution; (c) the territory coverage of the arrangement; (d) the detailed description of the characteristics of the payment instrument issued under the arrangement; (e) the rules of use of the payment account; (f) the types of payment transaction made available; (g) the rules for use of the trademark; (h) the expected modalities of participants, specifying the criteria and requirements of participation, suspension and exclusion of participants; (i) the detailed description of the authorization process of the payment transaction, encompassing the applicable criteria, the attribution of liabilities among participants and the definition of the time when the transaction is deemed authorized under the arrangement; (j) the identification of the reasons for return of the payment transactions; (k) the definition of the clearance and settlement system used for settlement among different institutions participating in the arrangement; (l) the definition of the maximum terms for submission of the payment transaction to the clearance and settlement system and for availability of funds for free transaction by the payment transaction receiver; (m) the identification of the risks incurred by the participants in view of the rules and procedures that govern the provision of the payment services relating to the arrangement and the mechanisms used for the management thereof; (n) the structure of the tariffs and other forms of remuneration, including those charged by the arrangement institution and the tariffs charged among participants; (o) the delimitation of liabilities among the arrangement institution and its participants; (p) the delimitation of liabilities among the participants of the arrangement; (q) the governance of the decision-making processes under the arrangement; (r) the rules for resolution of disputes; (s) the penalties applicable upon breach of the business contractual rules; (t) the criteria and conditions for outsourcing activities; (u) the minimum standards relating to operating requirements to be adopted by the institutions participating in the arrangement; (v) the mechanisms of interoperability among the arrangement participants; and (w) the mechanisms of interoperability with other arrangements, including the provision of funds transfer among them.

Any changes to the documents and information required in the request for authorization must be submitted to the previous authorization of Bacen, when they concern aspects relating to: (i) the purpose, modality and territory coverage of the arrangement; (ii) the characteristics of the instrument offered under the arrangement; (iii) the conditions of participation with the potential to restrict competition in the provision of payment services by different participants of the arrangement; (iv) the governance of the decision-making processes under the arrangement; (v) the mechanism of management of risks incurred by the participants; and (vi) the settlement of transactions and availability of funds to the receiver. Any changes to the other documents and information will have to be notified to Bacen within at least 30 days before they generate their effects.

The institution shall be exempted from the request for authorization when its arrangement can be classified under at least one of the following situations: (i) it is founded by a government entity; (ii) its participants are exclusively financial institutions of a bank nature; or (iii) it presents an annual amount of payment transactions smaller than R$ 100 million and an annual quantity of transactions smaller than R$ 5 million.

The following arrangements do not integrate the SPB: (i) arrangements with limited purpose; and (ii) arrangements in which the participants present on a consolidated basis certain volumes established by Bacen.

Examples of arrangements with limited purpose are those whose payment instruments are: (a) accepted only on the network of establishments that clearly present the same visual identity as the issuer, such as franchisees and other establishments that maintain a license to use the brand of the issuer; or (b) intended for the payment of specific public services such as public transportation and public telephony.

If the set of participants on a certain payment arrangement present on a consolidated basis the volumes and parameters indicated herein, the arrangement does not integrate the SPB: (a) R$ 20 million of the total value of transactions, accumulated in the last 12 months; (b) one million transactions, accumulated over the past 12 months; (c) R$ 2 million in funds deposited in a payment account within 30 days, in the last 12 months; and (d) 100 thousand active end users in the last 30 days, in the last 12 months.

IX. Conditions for Operation of Payment Institutions

In order to operate in Brazil, the payment institution must meet the following requirements7:

  1. to be duly organized in accordance with the applicable legal and regulatory rules. In Brazil it can be organized either as a limited business company (sociedade empresária limitada) or as a joint-stock company (sociedade por ações) and its principal business purpose must be the performance of payment transactions, which comprise: (i) payment; (ii) contribution; (iii) transfer; or (iv) withdrawal of funds (at least one of the these activities). In addition, the payment institution is authorized to carry out other activities that are intended to render the provision of payment service feasible or to add value to the serviced provided to the user, at Bacen's discretion;
  2. to be licensed by a payment arrangement settlor. This license will permit the applicant to form part of one or more payment arrangements previously authorized by Bacen;
  3. to be authorized to operate by Bacen in one or more of the modalities, in accordance with the payment services to be provided (issuer of electronic currency, issuer of postpaid payment instrument or accrediting institution); and
  4. comply with the minimum limits of realized capital. It shall have an initial capital stock in the amount of R$ 2 million for each of the modalities, duly paid-in in Reais.

For the purposes of obtaining the authorization to operate from Bacen it is paramount to identify the person technically qualified and in charge for conducting the project and the group organizing the payment institution. Among the various documents to be submitted to Bacen, the parties must file an executive summary of the business plan, containing at least the modality(ies) of classification of the payment institution, business description, payment arrangement(s) of which they shall be a party, indication of the services to be provided, target audience, area of activity, location of the principal place of business and of any facilities, short-term goals and strategic long-term goals, capital structure and financing sources, market opportunities that justify the venture and competitive differentials of the institution to be organized. It is also important to identify the members of the control group of the payment institution and of the holders of qualified equity interest in the institution, with the respective equity interests, as well as to present an organization chart of the economic group to which the institution shall be a party, or a statement that the institution shall not be a party to any group, and identification of the direct and indirect controlling shareholders, together with statements and documents demonstrating that the members of the control group have knowledge about the business field and about the segment in which the institution intends to operate, including in relation to the aspects concerning the market dynamics, the sources of operating funds, the management and the risks associated with the operations, and a document identifying the origin of the funds to be used in the venture by all members of the control group and by all holders of qualified equity interests, and another document identifying any foreign authorities that oversee the direct or indirect controlling shareholders. Furthermore, an additional required document is an authorization, executed by all members of the control group and by all holders of qualified equity interests: (a) to the Brazilian Internal Revenue Office, for supply to Bacen of a copy of the statement of returns, assets and rights and debts and property liens relating to the last three fiscal years; and (b) to Bacen, for access to personal information contained in any public or private record date system, including those of police investigations, legal or administrative proceedings and procedures.

A "control group" is a person or group of persons bound by an agreement of votes or under common control who hold equity rights corresponding to the majority of the voting capital of a joint stock company or at least 75 % of the quota capital of a limited liability company.

"Qualified shareholding" is the direct or indirect interest held by individuals or legal entities, equivalent to 15% or more of the shares or quotas of the total capital stock.

In the events in which the corporate control is not identified in accordance with the criteria referred to herein, Bacen may use any other elements in order to identify the control group.

Upon indetermination of control by equity interest, which is represented by the absence of a single shareholder holding more than 50% of the voting capital stock for a joint stock company, or a single quotaholder with 75% or more of the quota capital for a limited liability company, the members of the control group must submit a draft shareholders agreement or quotaholders agreement encompassing all levels of equity interest, with aims at defining the exercise of controlling power, which will comprise a clause of prevalence of said agreement over any other agreement not submitted to analysis by Bacen.

X. Risk Management Structure

Payment institutions must implement an operational, liquidity and credit risk management structure. This structure must: (i) be compatible with the nature of the activities of the institution and the complexity of products and services offered and commensurate with the size of exposures to such risks; (ii) be segregated from the unit conducting the internal audit of the institution; (iii) allow the identification, measurement, monitoring, control, mitigation and ongoing and integrated management of operational, liquidity and credit risks; (iv) provide policies and strategies approved and reviewed at least annually by the executive board and the board of directors, if any, to determine their compatibility with the objectives of the institution and market conditions; and (v) maintain documentation on policies, strategies, risk management and governance available to Bacen.

Operational risk is the possibility of losses resulting from the following events: (a) failure in the protection and security of sensitive data related both to the end-user credentials as well as other information exchanged with the purpose of making payment transactions; (b) failure to identify and authenticate the end user; (c) failure in the authorization of payment transactions; (d) internal fraud; (e) external fraud; (f) labor claims and poor security at the workplace; (g) inadequate practices related to end users, products and payment services; (h) damage to physical assets owned or in use by the institution; (i) events that lead to the disruption of payment institution activities or discontinuation of payment services; (j) failure in information technology systems; and (k) failure to execute, comply with deadlines and manage activities involved in payment arrangements. This definition also includes the legal risk associated with inadequate or deficient contracts signed by the payment institution, sanctions for noncompliance with legal provisions and compensation for damage to third parties from the activities involved in arranging payment.

In relation to the operational risk, the risk management structure must provide at least: (i) a contingency plan and other mechanisms to ensure continuity of the payment services provided; (ii) mechanisms of protection and security of data stored, processed or transmitted; (iii) network protection and security mechanisms, electronic sites, servers and communication channels in order to reduce vulnerability to attacks; (iv) procedures to monitor, track and restrict access to sensitive data, networks, systems, databases and security modules; (v) monitoring of failures in data security and end-user complaints regarding such failures; (vi) review of security measures and confidentiality of data, especially after the occurrence of failures and prior to changes in infrastructure or procedures; (vii) preparation of reports that indicate procedures to correct the deficiencies identified; (viii) performance of tests that ensure robustness and effectiveness of the data security measures adopted; (ix) segregation of functions in the environments of information technology for development, testing and production; (x) proper identification of the end user; (xi) mechanisms for authenticating end users and authorizing payment transactions; (xii) processes to ensure that all payment transactions can be properly tracked; (xiii) mechanisms for monitoring and authorization of payment transactions, in order to prevent fraud, detect and block suspicious transactions in a timely manner; (xiv) specific reviews and filters to identify specific high risk transactions; (xv) notification to the end user about any non-execution of a transaction; and (xvi) mechanisms that allow the end user to verify that the transaction was executed correctly. If payment institutions outsource functions related to security services offered, their agreement to provide services will provide that the contractor must comply with all the obligations contained herein.

Liquidity risk is the possibility of a payment institution: (a) not be able to honor efficiently its expected and unexpected current and future obligations without affecting its daily operations and without incurring significant losses; and (b) not being able to convert electronic currency into physical or book entry currency at the time of the user's request.

Regarding the liquidity risk, the risk management structure must provide at least: (i) processes to identify, assess, monitor and control exposure to liquidity risk in different time horizons, including intraday; and (ii) liquidity contingency plan that establishes responsibilities and procedures to address situations of liquidity stress. The payment institutions issuing electronic money must evidence the liquidity risk management structure in the public access report, at least annually. The board of directors or, in its absence, the executive board of the institution, will include in this report its responsibility for the information disclosed. The institution must disclose, together with the published financial statements, the summary description of its liquidity risk management structure, indicating the address for public access to this report.

Credit risk is the possibility of losses associated with the noncompliance by the counterparty of their respective financial obligations under the agreed terms, the reduction in earnings or remuneration, the advantages conferred in renegotiation and recovery costs, including the default: (a) the end user to the postpaid payment instrument issuer; (b) the issuer to the postpaid payment instrument certifier; and (c) the debtor payment institution of another payment institution due to the interoperability agreement among different arrangements.

The risk management structure shall provide, in relation to credit risk, at least: (i) limits for carrying out transactions subject to credit risk; (ii) procedures to identify, assess, monitor and control exposure to credit risk; and (iii) procedures for recovery of credits.

Payment institutions must observe governance policy, approved by the executive board and the board of directors, if any, that address the issues related to risk management, asset management and, if applicable, to preserve the value and liquidity of the electronic currency issued. This policy shall: (i) be properly documented and subject to annual review, with documentation kept at the disposal of Bacen; (ii) define duties and responsibilities; and (iii) ensure the independence of risk management activities, including through segregation between operational and the risk management area.

With respect to the minimum equity requirements, the following parameters will have to be complied with: (a) the issuers or certifiers of postpaid payment instruments will permanently maintain adjusted stockholders' equity adjusted by income statement accounts in the amount equal to at least 2% of the average monthly value of transactions executed by the institution in the last 12 months; (b) payment institutions issuing electronic currency will permanently maintain stockholders' equity adjusted for income statement accounts corresponding to at least the greater between 2% of the monthly average of payment transactions executed by the institution in the last 12 months or the balance of electronic currencies issued by it, calculated daily; and (c) payment institutions will use the projections presented in their respective business plans while the value of payment transactions or balance of electronic currency issued by them and referred to items (a) and (b) herein are not available.

The issuers of electronic currency will maintain liquid funds corresponding to the value of the balance of electronic currency kept in the payment account. Until the closing time established for the operation of the Reserve Transfer System (Sistema de Transferência de Reservas - STR) of Bacen, these funds must be allocated exclusively in: (i) cash, by credit transfer to a specific account in Bacen; or (ii) federal government securities, registered in the Special System for Settlement and Custody (Sistema Especial de Liquidação e de Custódia - Selic), including through repurchase agreements8, held in custody in a specific account in that system9. The federal government securities shall: (i) be denominated in Reais and purchased in the secondary market; (ii) have a maximum term of 540 days until maturity; and (iii) not be referenced in foreign currency.

The credit transfer from the specific account shall be ordered exclusively by the holder of a Bank Reserve Account or Settlement Account. The issuer institution of electronic currency that does not hold an account at STR may make a debit transfer from a specific account, exclusively as credit from a Bank Reserve account of its free choice, for each operation. The issuer institution of electronic currency holder of a Settlement Account may make a debit transfer from this specific account, exclusively as credit from its account, for each operation.

These provisions regarding investment of funds held in payment accounts do not apply in the case of issuance of electronic currency for use exclusively to pay for services and products of a specific segment, such as food, independent carriers and cultivation.

Footnote

1 These rules shall become effective 180 days following the date of their publication.

2 The prepaid payment account may be limited or unlimited. If the prepaid payment account is limited, the balance is limited to R$1,500.00 and in the sum of the contributions made in each month is limited to the same amount. In this case, the identification will be made with at least the following information: (i) individuals: (a) full name; and (b) National Individual Taxpayers Register (CPF/MF) enrollment number; and (ii) legal entities: (a) name or corporate name; (b) National Corporate Taxpayers Register (CNPJ) enrollment number; and (c) CPF/MF and full name of the representatives, agents, or attorneys-in-fact authorized to execute payment instructions.

3 In the case of the prepayment account paid to execute payment transactions without the limitations referred to above and the postpaid payment account, the identification shall be made with at least the following information: (i) individuals: (a) complete name; (b) filiation; (c) nationality; (d) date and place of birth; (e) number of official identification document legally issued by a public organ or entity (type, number, issue date and issuing body); (f) CPF/MF; (g) complete commercial and residential address; and (h) phone number and Direct Distance Dialing (DDD) code; and (ii) legal entities: (a) name or corporate name; (b) core activity; (c) the form and date of formation; (d) information listed in item (i) above, relating to managers, representatives or agents authorized to execute payment instructions; and (e) CNPJ.

4 The redemption of balances from social benefit programs established at the municipal, state or federal level, deposited in payment accounts shall comply with the conditions established in the laws and regulations themselves.

5 The existing arrangement payment settlors already operating at the time of the publication of Bacen Circular 3,682/2013 must submit to Bacen their request for authorization to operate within 180 days as from the date of its publication.

6 During the authorization process Bacen may call technical interviews, carry out inspections or request any additional documents and information that it may deem necessary for demonstration of the arrangement institution's ability to comply with its business purpose, considering the technical-operating, organizational, administrative and financial aspects.

7 The existing payment institutions already operating at the time of the publication of Bacen Circular 3,683/2013 must submit to Bacen their request for authorization to operate within 90 days as from the date of its publication.

8 In the repurchase agreements, one of the contracting parties shall be a multiple bank, commercial bank or savings bank qualified to execute these transactions. It is forbidden to make an agreement for free operation of instruments subject of a resale commitment in the repurchase agreements.

9 It is forbidden to allocate the balance of funds in government securities, when the issuance of electronic currency is made by a multiple bank with commercial portfolio, commercial bank or savings bank.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Authors
Walter Stuber
 
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Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.