Regulatory Alerts2020-04-29 | Carta Circular 4039Circular Letter No. 4039 - Amends Circular Letter No. 4,024 of April 9, 2020 Regarding Eligibility Criteria for Guarantees Linked to the Temporary Special Liquidity Line via Financial Letter Issuance
The Central Bank of Brazil, through the Head of the Financial System Monitoring Department, amends Circular Letter No. 4,024 to update procedures for verifying eligibility criteria for guarantees linked to the Temporary Special Liquidity Line. The revision mandates the segregation of specific financial assets at the registrant entity, clarifies calculation methods for grace periods and linked-party operations, and establishes a proportional reduction mechanism if a single debtor's guaranteed exposure exceeds 25% of the total portfolio. These changes aim to ensure stricter compliance with risk limits and data reporting standards for financial institutions participating in the liquidity facility.
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