Presidential Decree No. 10,029/19, published on September 27, authorized the Central Bank of Brazil (BCB) to recognize the following as being in the interest of the Brazilian government: (i) installation in Brazil of new branches of financial institutions domiciled abroad; and (ii) increase in the percentage of equity in the capital of financial institutions headquartered in Brazil, held by individuals or legal entities resident or domiciled abroad.
Previously, the procedure for the participation of foreigners in the National Financial System (SFN) included a technical authorization proceeding before the BCB and, also later, the expression of interest by the Brazilian government through the issuance of a specific presidential decree signed by the President of Brazil.
With the issuance of Presidential Decree No. 10,029, BCB itself, upon completing the technical review proceeding for the request, will recognize the interest of the Brazilian government regarding the participation of foreigners in the SFN, making it unnecessary the issuance of a specific presidential decree for each case.
The change ends the uncertainty and the long waiting period for the President's response and allows expressions of interest based on objective requirements set forth in specific regulations to be issued by the National Monetary Council (CMN). The new rules should, where appropriate, provide for the same conditions as apply to local investors.
The need to issue specific presidential decrees resulted in delays for the entrance of foreign institutions into the SFN. Now, with a greater degree of security and agility given to authorization requests, the local market has become more attractive, which should result in the increase of competitiveness, higher quality of product offerings, and possibly a reduction in the cost of credit and service fees.
 According to article 52 of the Transitional Constitutional Provisions Act (ADCT), the following is prohibited: (i) to install in Brazil new branches of financial institutions domiciled abroad; and (ii) increase the percentage of equity in the capital of financial institutions headquartered in Brazil held by individuals or legal entities resident or domiciled abroad, except when there is expression of interest from the Brazilian government. This prohibition is linked to the sensitivity and importance of financial activities for the stability and growth of Brazil, as well as the need for protection of the SFN.
 Presidential Decree No. 10,029/19 contains no automatic recognition of the interest of the Brazilian government in the participation of foreigners in the SFN, but rather the transfer of the authority to recognize such an interest to the BCB itself.