Regulatory Alerts2020-04-16 | Circular 4004Circular No. 4004 Amending Circular No. 3,996 Regarding LTEL-LFG Financial Loan Operations
The Board of Directors of the Central Bank of Brazil issued Circular No. 4004 to amend Circular No. 3,996, establishing updated regulations for temporary special liquidity line loans for acquiring financial letters backed by financial assets. The amendment introduces strict eligibility criteria, prohibiting related-party operations and foreign exchange advances, while defining precise calculation methods for prudential conglomerate net worth and adjusted net equity limits. Furthermore, it mandates a phased rollout schedule for authorization limits throughout 2020 and imposes rigorous monthly and event-driven data update requirements on financial institutions.
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