BCB Issues Rules on Open Banking and Climate Risk Disclosures
The Central Bank of Brazil (BCB) published the Resolution No. 138 that sets out the scope of data and services for Phase 4 of open banking. The fourth stage, which covers data on exchange, accreditation, investment, insurance, and pensions, is scheduled to start on December 15, 2021. Participating institutions must make public the information about their products and services that are related to the disclosed scope. This Resolution entered into force on the date of its publication. Additionally, BCB published a set of regulations related to social, environmental, and climate-related risks and disclosures, following public consultations 82/2021, 85/2021, and 86/2021. BCB also published the first edition of a report on social, environmental, and climate-related risks and opportunities. The report provides an integrated view of the BCB actions implemented within the scope of the “BC# Agenda” on sustainability dimension.
BCB published the following on social, environmental, and climate-related risks and disclosures:
- CMN Resolution No. 4,943, which amends Resolution No. 4,557 and improves the rules for managing social, environmental, and climate risks applicable to institutions of the National Financial System—classified in Segments 1 (S1), 2 (S2), 3 (S3), and 4 (S4), pursuant to the regulations in force. This Resolution No. 4,943 shall enter into force on July 01, 2022.
- CMN Resolution No. 4,944, which amends Resolution No. 4,606 and improves the rules for managing social, environmental, and climate risks applicable to institutions of the National Financial System—classified in Segment 5 (S5). This Resolution No. 4,944 shall enter into force on December 01, 2022.
- CMN Resolution No. 4,945, which establishes new rules on the Social, Environmental, and Climate Responsibility Policy (PRSAC) and on actions for its effective implementation by the institutions of the National Financial System. The provisions will be in force on July 01, 2022 for institutions classified under S1 and S2 and on December 01, 2022 for institutions classified under S3, S4, and S5.
- BCB Resolution No. 139, which establishes requirements for disclosure of information in the report on social, environmental, and climate-related risks and opportunities (GRSAC report) by the institutions classified in S1, S2, S3, and S4, regarding information on the subject. The disclosure requirements will have a second phase of regulatory improvement, scheduled for 2022, which will address quantitative aspects like metrics and targets. This Resolution shall enter into force on December 01, 2022.
- Normative Instruction No. 153, which establishes the standardized tables for the dissemination of the report on social, environmental, and climate-related risks and opportunities (GRSAC report). This Normative Instruction shall enter into force on December 01, 2022.
- BCB Resolution No. 140, which provides for the creation of Section 9 on social, environmental, and climatic impediments, in Chapter 2 on basic conditions in the Rural Credit Manual (MCR). This Resolution enters into force on October 01, 2021.
S1 comprises universal banks, commercial banks, investment banks, foreign-exchange banks, and federal savings banks that have either the size of equal to or greater than 10% of the Gross Domestic Product (GDP) of Brazil, or the relevant international activity, regardless of the size of the institution. S2 comprises universal banks, commercial banks, investment banks, foreign-exchange banks, and federal savings banks whose size is less than 10% and equal to or greater than 1% of GDP as well as other types of institutions whose size is equal to or greater than 1% of GDP. S3 comprises institutions whose size is less than 1% and equal to or greater than 0.1% of GDP. S4 comprises institutions whose size is less than 0.1% of GDP. S5 includes institutions whose size is less than 0.1% of GDP and that use an optional simplified methodology to calculate the minimum requirements of regulatory capital, tier 1 capital, and core capital, except for multiple banks, commercial banks, investment banks, foreign-exchange banks, and federal savings banks.
Related Links (in Portuguese)
- Notice on Open Banking
- Press Release on Open Banking
- Resolution No. 138
- Notice on Climate Risk Rules
- Press Release on Climate Risk Rules
Effective Dates: October 01, 2021; July 01, 2022; December 01, 2022; Publication Date for Resolution on Open Banking
Keywords: Americas, Brazil, Banking, Open Banking, Fintech, Regtech, ESG, Climate Change Risk, Sustainable Finance, Disclosures, Reporting, BCB
Michael Denton, PhD, PE
Dr. Denton provides industry leadership in the quantification of sustainability issues, climate risk, trade credit and emerging lending risks. His deep foundations in market and credit risk provide critical perspectives on how climate/sustainability risks can be measured, communicated and used to drive commercial opportunities, policy, strategy, and compliance. He supports corporate clients and financial institutions in leveraging Moody’s tools and capabilities to improve decision-making and compliance capabilities, with particular focus on the energy, agriculture and physical commodities industries.
Credit analytics expert helping clients understand, develop, and implement credit models for origination, monitoring, and regulatory reporting.
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