On May 29, the National Monetary Council (CMN) issued Resolution 4,820 establishing transitional requirements to be observed by financial institutions to ensure a resource cushion during the pandemic. Resolution 4,817 updates the rules on investments in affiliates, subsidiaries and co-owners maintained by financial institutions and consolidates the general criteria for drawing up financial reports.
Resolution 4,820 establishes temporary prohibitions on the remuneration of social capital, increases in remuneration of administrators, share repurchase and the reduction of social capital. These conditions must be observed by financial institutions in the context of the possible effects of the coronavirus pandemic on the National Financial System.
Secondly, Resolution 4,817 defines the criteria for the measurement and accounting recognition of investments in affiliates, subsidiaries and co-owners held by financial institutions. The new procedures are to be applied as of January 2022.
Finally, Resolution No. 4,818 consolidates the general criteria for the preparation and disclosure of individual and consolidated financial reports prepared by financial institutions in line with the rules of the International Accounting Standards Board (IASB).