Circular Letter No. 198 — Prohibits Operations Known as "Carteirões" and Similar Fixed-Income Portfolios

Circular Letter No. 198 of November 16, 1976.

CIRCULAR LETTER NO. 198

To Investment Banks, Securities Brokerage Firms, and Securities Distribution Companies

We communicate that this Central Bank does not permit operations commonly known as "CARTEIRÕES", "PARTICULAR FIXED-INCOME PORTFOLIO", "NON-INDIVIDUALIZED SECURITIES PORTFOLIO" and other similar expressions, understood as fund-raising that involve guarantees of liquidity and profitability, backed by a portfolio of fixed-income securities with or without individualization of clients.

2. The operations of this kind, previously contracted, if applicable, shall be equated to "fixed-price operations", as defined in the Regulation attached to Resolution No. 366, of 09.04.76, observed, temporarily, until their total extinction, the following accounting procedures:

a) registration of the resources raised under such modality in the Required Liabilities, under the heading "Resources for Application in the Capital Market";

b) registration, in the Realizable Assets, of the fixed-income securities acquired in the "Administered Portfolio" account;

c) the institution's responsibilities for the raised funds and profitability guarantees contracted shall be registered in the credit of the account "Obligations Assumed by Repurchases or Purchases" in counterpart with the account "Commitments of Resales or Sales", of the Clearing System, in the manner of Circular Letter-76/175, of 27.05.76.

3. The inclusion of the operations in question in the annexes required by Resolution No. 366, together with the other fixed-price operations, shall be done as follows:

a) in annex 1, they shall be inscribed in lines 01, 03 and 05;

b) in annex 2, they shall be inscribed in a specific demonstrative map, obeying the following classification: code 95; type: Others — Particular Fixed-Income Portfolio;

c) an identical map to that of annex 3 shall be prepared for the securities that make up the Administered Portfolio, independently of the dispatch of said demonstrative, for the securities of the own portfolio;

d) in the demonstrative referred to in Circular No. 309, of 06.10.76, of this Central Bank, they shall be inscribed as "Other Papers".

4. It is worth remembering that the operations in question, by being equated to fixed-price agreements, will also be subject to the regulatory limitations of these, particularly to the minimum reductions required by article 15 of the aforementioned Regulation issued by Resolution No. 366.

5. Finally, we ask to make our letter ISMEC/DIBIN 76/0233, of

Circular Letter No. 198 of November 16, 1976.
18.05.76.

Brasília (DF), November 16, 1976

CAPITAL MARKET DEPARTMENT
Antonio Marsillac de Oliveira — Head

CAPITAL MARKET REGULATION DEPARTMENT
Evaristo Soares Confort — Head

This text does not replace the published version in the DOU and in Sisbacen.