BCB Normative Instruction No. 764 — Procedures for Selection of Accredited Dealers for Demab

The Head of the Open Market Operations Department (Demab), in the exercise of the attribution conferred upon him by art. 23, item I, subparagraph “a”, of the Internal Regulations of the Central Bank of Brazil, annexed to BCB Resolution No. 340, of September 21, 2023, and in view of the provisions of BCB Resolution No. 180, of January 19, 2022, R E S O L V E S:

CHAPTER I GENERAL PROVISIONS

Art. 1 This Normative Instruction establishes the procedures for the selection of institutions accredited to operate as dealers with the Open Market Operations Department (Demab) as provided for in BCB Resolution No. 180, of 2022.

CHAPTER II OF THE SET OF ACCREDITED INSTITUTIONS

Art. 2 The set of institutions accredited to operate as dealers with Demab is formed by up to 12 (twelve) financial institutions participating in the Special System for Settlement and Custody (Selic).

§ 1 Up to 2 (two) vacancies in this set are reserved for independent brokers or distributors, defined as those not belonging to a financial conglomerate with a banking institution.

§ 2 From the same financial conglomerate, only the institution that obtains the best performance evaluation may act as a dealer.

§ 3 A financial conglomerate is defined as such by the Information System on Entities of Interest to the Central Bank (Unicad).

CHAPTER III OF PERFORMANCE EVALUATION

SECTION I OF THE EVALUATION PERIOD

Art. 3 Institutions accredited to operate as dealers with Demab will be selected through a performance evaluation conducted every 6 (six) months.

Art. 4 Based on semi-annual performance, accreditations occur on the following dates:

I – February 10, relative to the evaluation period from August 10 of the previous year to January 31; and

II – August 10, relative to the evaluation period from February 10 to July 31.

Section II Of the Evaluation Factors

Art. 5 Institutions are selected, each semester, through performance evaluation based on the following factors:

I – candidate institution: outright and repurchase/resale agreement operations with market participants and operations conducted by Demab; and

II – accredited institution: relationship with Demab, in addition to the factors mentioned in the previous item.

Sole Paragraph. For the purposes of this Normative Instruction, the following are considered:

I – candidate institution: the institution as defined in § 2 of art. 11;

II – accredited institution: the institution already accredited to operate as a dealer with Demab;

III – outright operation: the purchase and sale of securities without assuming the commitments mentioned in item IV;

IV – repurchase/resale agreement operation: the purchase or sale of securities with the commitment to resell or repurchase;

V – operation conducted by Demab: the outright operation or the repurchase/resale agreement operation carried out with Demab or the constitution of a voluntary time deposit under the terms of item VIII;

VI – relationship with Demab: the institution's interaction with the Operations Division (Diope) and with the Economic and Financial Analysis Consultancy (Conef) of Demab, especially in compliance with the provisions of items II, III and IV of art. 9 of BCB Resolution No. 180, of 2022;

VII – security: the federal public security deposited in Selic; and

VIII – voluntary time deposit: the voluntary time deposit, subject of BCB Resolution No. 129, of August 19, 2021, constituted through an operation within Selic.

Art. 6 The evaluation factors, according to the institution's condition, have the following weights:

Evaluation Factor	Definition	Institution	Candidate	Accredited
1	Outright operations with market participants		25%	15%
2	Repurchase/resale agreement operations with market participants		50%	35%
3	Operations conducted by Demab		25%	15%
4	Relationship with Demab		0%	35%

Art. 7 The performance evaluation of each institution, as a candidate or accredited, will be calculated in points, according to the following formula:

n m AD = S [ ( VFTk,i) / S ( VFTk,i) ] x f x 10,000, where k =1 i =1 k

I - VFTk,i corresponds to the total financial value of the operations or the total score of the i-th institution referring to the k-th evaluation factor;

II - fk corresponds to the weight of the k-th evaluation factor;

III - n corresponds to the number of evaluation factors; and

IV - m corresponds to the total number of candidate or accredited institutions.

Sole Paragraph. The relationship with Demab factor will be evaluated through scores granted by Diope and Conef of Demab.

SECTION III OF THE EVALUATION OF OPERATIONS

Art. 8 Only outright and repurchase/resale agreement operations with market participants carried out under competitive conditions will be subject to evaluation, excluding, under any hypothesis, those that show signs of artificiality and those contracted with other institutions of the same financial conglomerate or with investment funds or similar entities managed by any institution belonging to the said conglomerate.

Sole Paragraph. For evaluation purposes, in intermediated operations, the participation of intermediary institutions is also considered.

Art. 9 Outright operations with Demab, the constitution of voluntary time deposits, and repurchase/resale agreement operations in general have their contracted financial values multiplied by the number of business days remaining until the security's maturity, by the number of business days remaining until the deposit release date, and by the number of business days remaining until the commitment date, respectively.

Sole Paragraph. In the calculation of the financial values of the repurchase/resale agreement operations mentioned in the caput, the multiplier corresponding to the number of business days remaining until the commitment date is limited to 252 (two hundred and fifty-two), even if the commitment period is longer.

CHAPTER IV OF ACCREDITATION AND DE-ACCREDITATION

Art. 10 In the selection of institutions:

I – the 3 (three) dealer institutions with the worst evaluation are de-accredited, one of which must be an independent broker or distributor; and

II – the best-ranked candidate institutions are accredited in a number that respects the set of dealer institutions defined in art. 2.

§ 1 If it does not wish to continue to be a dealer, the accredited institution must express its intention, on the last business day of the evaluation period, by electronic message (e-mail) to the address dealers.diger.demab@bcb.gov.br.

§ 2 A non-accredited financial institution participating in Selic is considered a candidate if it:

I – has not been de-accredited in the current evaluation by virtue of the provisions of item I of the caput of this article; and

II – meets the prerequisites for accreditation, established in art. 3 of BCB Resolution No. 180, of 2022.

Art. 11 In the event of an untimely de-accreditation, Demab will decide on the convenience of filling the resulting vacancy.

Sole Paragraph. Should it be decided to fill the vacancy, the accreditation will follow the rule of the best-ranked candidate in the last evaluation period.

Art. 12 For the purposes of arts. 10 and 11, the candidate institution must express, within 120 (one hundred and twenty) minutes following the receipt of an inquiry from Demab regarding the matter, by electronic message (e-mail), its interest in being accredited.

§ 1 The electronic message (e-mail) must be sent to the address informed in § 1 of art. 10.

§ 2 The untimely non-receipt of the message will be interpreted as a manifestation of the candidate institution's disinterest in being a dealer.

CHAPTER V OF THE DISCLOSURE OF RESULTS

Art. 13 Demab will inform, by electronic message (e-mail), monthly, the results of the performance evaluation of the dealer institutions.

CHAPTER VI OF FINAL PROVISIONS

Art. 14 The accreditation of August 10, 2026, will be carried out in accordance with the provisions of BCB Normative Instruction No. 451, of January 29, 2024.

Art. 15 This Normative Instruction enters into force on August 3, 2026, producing effects from August 10, 2026, at which time BCB Normative Instruction No. 451, of 2024, will be revoked.

André de Oliveira Amante

NOTE

1. The Central Bank of Brazil (BCB) relies on a group of financial institutions authorized to operate with the Open Market Operations Department (Demab) in open market operations and in the constitution of voluntary time deposits.

2. The BCB's action through a dealer system aims to favor the efficiency of operations conducted by Demab in the banking reserves market, benefiting the implementation and transmission of monetary policy.

3. This normative instruction establishes the procedures for the selection of institutions accredited to operate as dealers with Demab, in order to comply with the provisions of BCB Resolution No. 180, of January 19, 2022.

4. In this regard, the normative instruction addresses the following aspects: composition of the set of accredited institutions; periodicity of performance evaluation; accreditation and de-accreditation dates; evaluation factors and their respective weights; scoring formula; criteria for evaluating operations; procedures for communication with Demab during accreditation and de-accreditation; and disclosure of results.

5. Finally, in view of the provisions of Decree No. 10,411, of June 30, 2020, regarding regulatory impact analysis (AIR), it is understood that this normative instruction is exempt from conducting an AIR as it deals strictly with monetary policy, under the terms of art. 3, § 2, item IV, of the said decree.

André de Oliveira Amante Head of Demab