2020-04-29 | Carta Circular 4039The 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.
The Head of the Department of Financial System Monitoring (Desig), in the exercise of the authority conferred by Article 23, item I, letter 'a', of the Internal Regulations of the Central Bank of Brazil, annexed to Ordinance No. 84,287 of February 27, 2015, based on Article 77, item III, and in view of the provisions set forth in Resolutions Nos. 4,571 of May 26, 2017, and 4,795 of April 2, 2020, Circulars Nos. 3,870 of December 19, 2017, 3,996 of April 6, 2020, 4,004 of April 16, 2020, 4,007 of April 24, 2020, and 4,011 of April 28, 2020, and Circular Letter No. 3,869 of March 19, 2018,
RESOLVES:
Article 1. Circular Letter No. 4,024 of April 9, 2020, shall be amended as follows:
“Article 2. ...............................................................
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§ 5. The financial assets referred to in items I, II, and III of Article 5 of Resolution No. 4,795 of 2020, for which the financial institution intends to use the prerogative of § 5 of Article 8 of Circular No. 3,996 of 2020, must be segregated from other assets at the registrant entity.” (New)
“Article 4. ...............................................................
I - ....................................................................
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g) operations that do not have payments scheduled in the next 6 (six) months: the difference between the date of the next installment due (field “DtaProxParcela”), from the “Basic Operation Information”, and the last day of the month to which document 3040 refers, exceeding 6 months. For operations of modalities where the information on the date of the next installment due (field “DtaProxParcela”) is not mandatory and is not provided, the grace period will be verified by the non-existence of value information in domains 110 to 140 of “Annex 1: Maturity Codes”.
h) operations that have values to be released: “Annex 1: Maturity Codes” - existence of balance in domains 60 and 80;
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q) operations with related parties, in accordance with Article 2 of Resolution No. 4,693 of October 29, 2018, except for the cases provided for in Article 8 of that Resolution: “Annex 8: Special Characteristics” - domain 20;
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“Article 6. ...............................................................
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§ 1. The provisions of item I of the main text shall apply in the case of linkage for the constitution of guarantees for interbank transfers carried out by cooperative banks, within the National Cooperative Credit System, as provided for in Article 2, § 4 of Circular 3,996 of 2020, also considering domain 1401 of “Annex 3: Operation Modalities”.
§ 2. For the purpose of complying with the limit set forth in the sole paragraph of Article 10 of Circular No. 3,996 of 2020, the financial institution must:
I - calculate the sum of the value of the active portfolio of financial assets and securities offered as guarantee for the same debtor or issuer;
II - divide the value calculated, according to item I, by the total active portfolio of financial assets and securities offered as guarantee;
III - if the percentage calculated in item II exceeds 25%, proportionally reduce the value of each financial asset and security of the same debtor or issuer, until the percentage is equal to or lower than the limit.” (New)
Article 2. Item I of Article 5 of Circular Letter No. 4,024 of April 9, 2020, is hereby repealed.
Article 3. This Circular Letter enters into force on the date of its publication.
Gilneu Francisco Astolfi Vivan