Bruno Fagali highlights on the Brazilian banking institutions compliance policy

The National Monetary Council, CMN, published a new Resolution 4,595 on August 30. This resolution was on, financial institutions and other organizations authorized by the Central bank of Brazil to operate. It is, however, important to note that the new rules are not applicable when it comes to consortium administrators and compensation organizations. This is because they are governed by strict bank regulations. Bruno Fagali, a member of Fagali Advocacy, enlightens on the subject matter.

Bruno Fagali mentions that Resolution 4,595 that has been established by the CMN is intended to update and strengthen compliance structures. Due to legal purposes, the compliance policy ought to be approved by the board of directors of the company. For the case of credit unions, the policy ought to be approved during the general meeting. The team that is responsible for ensuring the company is fully compliant ought not to be involved in the internal auditing exercise.

Bruno Fagali emphasizes on the minimum parameters that are defined in the conformity policy. These parameters are based on the aims and scope of the compliance function. There must be a set of defined responsibilities for the team that is involved in the compliance function. This is aimed at avoiding future conflicts of interest that may arise in coordinating the activities around the compliance function in the management and internal audit positions.

All companies that conform with the resolution of the compliance function must have their documentation approved by their board of directors. A copy of this resolution must be kept in a place that is accessible by the Central Bank of Brazil. If it happens there is no board of directors formed for this purpose in a period not exceeding five years, the company’s management is required to submit a report indicating the results of the compliance functions. This report must have a summary of the results, its conclusion, recommendations and actions taken.

Bruno Fagali is the co-founder of Fagali Advocacy. He is a Masters of Law holder from the Faculty of Law of USP. Bruno Fagali practices administrative law. He also works at the Brazilian Institute of Business Law and Ethics as the coordinator of operations in the Ethics and Advertising Agencies Commission. Read more:https://about.me/brunofagali