BRAZIL Law and Practice Contributed by: Thomas Gibello Gatti Magalhães, André Dágola Brostoline and Luisa Grespan Danhoni Neves, Magalhães & Zettel
• limitation or suspension of an increase in the compensation of administrators, payments of instalments of variable remuneration of administrators and distribution of results or, in the case of credit unions, of surpluses, in an amount higher than the minimum legal limits; • limitation or suspension of the practice of operational modalities or certain types of active or passive operations, the exploitation of new lines of business, the acquisition of interest, directly or indirectly, in the capital of other companies, financial or non-financial, and the opening of new premises; and • disposal of assets. Depending on the evolution and severity of the problem, BCB may intervene directly in the institution through an out-of-court liquidation, intervention or RAET. When a resolution regime is determined, the controllers lose the manage - ment power of the institution, which is then managed by a liquidator, intervenor or manag - ing board, appointed by BCB, according to the type of regime. The regime to be adopted is in accordance with the problem presented by the institution, the impact on the financial system and other situations analysed on a case-by-case basis. Resolution regimes are guided by public inter - est, the preservation of financial stability and the non-interruption of critical functions for the real economy. The following resolution regimes stand out. • Out-of-court liquidation is the insolvency regime that is intended to interrupt the operation of the institution and promote its withdrawal from SFN. It is adopted when the insolvency situation cannot be recovered and
the interruption of the institution’s operation does not compromise financial stability. • Intervention is adopted when there is any possibility of recovery. Activities are tempo - rarily suspended and the intervention lasts up to 12 months. As the case may be, the intervention will cease if there is a resumption of normality or, failing that, if there is a decree of out-of-court liquidation or bankruptcy. • RAET does not affect the normal activities of the institution and is adopted when the institution performs critical functions for the real economy, due to its size or operational complexity, or when the abrupt stoppage of its operation may cause risks to financial stability. RAET will end if activity is normalised or if there is a market solution for the institu- tion. If there is no market solution, the federal government may take control. If it is possible to adopt measures to preserve critical func - tions and financial stability, RAET may end by the decree of out-of-court liquidation. Within the scope of ESG regulation in Brazil, CMN Resolutions No 4,943/2021, No 4,944/2021 and No 4,945/2021 and BCB Resolutions No 139/2021 and No 151/2021 stand out. These rules have the common purpose of providing for social, environmental and climate risks. CMN Resolution No 4,943/2021 provides for the structure of risk management, capital manage - ment and information disclosure policy, and is directed at financial institutions authorised to operate by BCB that fall into the following seg - ments: 9. ESG 9.1 ESG Requirements
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