BRASILIA (Reuters) -Brazil has established new rules raising the minimum capital required for financial institutions to operate in the country to 9.1 billion reais ($1.68 billion) from 5.2 billion reais, the Central Bank of Brazil said on Monday.
Around 500 firms could be affected, with the changes potentially triggering market exits, mergers or corporate restructuring, the bank said in a statement.
The new framework will base minimum capital and net worth requirements on the activities performed by institutions, rather than their classification.
Institutions that use the term “bank” or similar expressions in their name will be subject to an additional capital buffer, it added. The rules take effect immediately, with a phased implementation through January 2028.
Accounts opened by financial technology firms at traditional banks but with limited traceability of the actual fund holder must be closed if used for unauthorized financial services or to conceal third-party obligations, according to the regulation.
The move aims to close loopholes that obscure final beneficiaries following police investigations under Operation Hidden Carbon, which found fintechs were used for criminal activity.
It also addresses cybersecurity risks linked to technology service providers.
($1 = 5.4039 reais)
(Reporting by Bernardo Caram; Writing by Isabel Teles; Editing by Bill Berkrot)
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