Minimum Capital Amount Established for Certain Payment Institutions as a Requirement to Participate in PIX System

On September 18, 2020, the Central Bank of Brazil (Banco Central do Brazil – “BCB” or “BACEN”) approved Rule No. 16 (“BCB Rule 16”), which regulates the payment and maintenance of the minimum share capital in payment institutions (“PI”) that are not subject to BACEN’s authorization to operate or that are in the process of obtaining such authorization, as a requirement to participate in the PIX (newly introduced instant payment system) payment arrangement.

In accordance with Article 24, paragraph 1, of the PIX regulation, approved under the terms of BCB Resolution No. 1, of August 12, 2020, the PIs that are not subject to BACEN’s authorization to operate or that are in the process of obtaining such authorization must: (i) have an agreement entered into with an institution participating in PIX (“Participating Institution”); and (ii) evidence the payment (in the PI) and maintenance of, at minimum, share capital in the amount of BRL1,000,000.00  (one million Brazilian Reais).

The BCB Rule 16 establishes that the payment of the corporate capital in the PI must be made in local currency and up to October 16, 2020, and that any other way of capital contribution will not be considered for the purposes of fulfilling such requirement.

Additionally, the BCB Rule 16 establishes that the Participating Institution must check for compliance with the minimum capital requirement by the PIs that are not subject to BACEN’s authorization to operate or that are in the process of obtaining such authorization. Such verification can be carried out in the following ways:

1. publication of the corporate act that approved the corporate capital payment together with evidence of the financial movement of the funds for such corporate capital payment;
2. the financial statements for the last fiscal year audited by independent auditor registered with the Brazilian Securities Exchange Commission (Comissão de Valores Mobiliários – CVM), or equivalent documentation;
3. other forms that, at the Participating Institution’s discretion, unequivocally assure that the required minimum capital has been paid-in or is maintained.

Finally, in the case that there is no evidence of payment of the required minimum capital in the PI, the Participating Institution may not enter into an agreement for the rendering of services as a participating institution responsible for the PIX with a PI that is not subject to BACEN’s authorization to operate or that is in the process of obtaining such authorization. And in the case that there is no evidence of maintenance of such minimum corporate capital, the Participating Institution must terminate the agreement with the PI and inform BACEN of this matter.

BCB Rule 16 came into force on September 21, 2020.

Demarest’s Banking and Finance team is closely monitoring these and other measures and is ready to assist you in any matters regarding this topic. For more information, please feel free to contact us.