Circular Letter No. 2783 — Clarification Regarding Information Required Under Article 2 of Circular 2,132 of February 6, 1992

CIRCULAR LETTER NO. 002783

Clarification Regarding Information Required Under Article 2 of Circular 2,132 of February 6, 1992.

For the purpose of transmitting the information required under Article 2 of Circular 2,132/92, we clarify that multiple banks, commercial banks, investment banks, development banks, and savings banks shall observe the following guidelines:

I - The daily rate mentioned in item IV of Article 2 of Circular 2,132/92 is the effective daily rate and must be calculated as follows:

D = 100 ((1 + P/100)^(1/u) - 1), where:

D = daily rate, in percentage form;
P = interest rate for the period, in percentage form; u = number of business days in the period;

II - For each of the four client groups and according to the type of instrument (pre-fixed or post-fixed), the average emission daily rate to be reported is equivalent to the weighted average effective daily rate by the day's collections and must be calculated as follows:

M_j = (Σ (D_i . C_i)) / (Σ (C_i)), where:

Σ = summation symbol;
M_j = average emission daily rate for a given group "j", in percentage form; D_i = emission daily rate of the i-th instrument, in percentage form; C_i = collection value of the i-th instrument;

III - The balance at the end of the day, referred to in item III of Article 2 of Circular 2,132, for each client group and type of instrument, must be the sum of the nominal collection values of all traded instruments that have not been redeemed up to that day. Each day, the balance must equal the previous day's balance plus the difference between collections and redemptions on that day;

IV - The redemption value on the day, referred to in item I of Article 2 of Circular 2,132, must be the sum of the nominal collection values of all instruments redeemed on that day, without the incorporation of earnings;

V - From the effective date of this regulation, titles eventually repurchased by institutions must have their redemption values computed on the very day the repurchase occurs;

VI - Titles that were repurchased prior to the effective date of this regulation must have their redemption values computed only on the originally scheduled maturity dates, in accordance with the rule previously in force;

VII - Time deposits issued by an institution in favor of itself, that is, for its own portfolio, should not be reported;

VIII - For the purpose of distributing clients into groups, institutional investors are investment funds, investment companies, investment clubs, insurance companies, open and closed private pension funds and entities, and capitalization societies;

IX - Regarding time deposits contracted at fluctuating interest rates:

a) they must be considered as pre-fixed; b) upon each rate revision (fluctuation of interest rates), one must proceed as if a total redemption had occurred, with immediate new application, which must incorporate the interest from the previous period, deducting any previously negotiated withdrawals.

2. This Circular Letter enters into force on February 2, 1998, when Circular Letter 2,356 of March 30, 1993, and Communication 2,720 of February 19, 1992, are hereby repealed.

Brasilia, January 29, 1998.

DEPARTMENT OF SPECIAL STUDIES AND
MONITORING OF THE FINANCIAL SYSTEM

Ronaldo Fonseca Paiva
Head