Circular Letter No. 3023 — Creates, Excludes, and Alters Subgroups, Subgroup Breakdowns, Titles, and Subtitles of the Cosif and Clarifies Procedures for Registration of Securities and Derivative Financial Instruments

CIRCULAR LETTER NO. 003023

Creates, excludes, and alters subgroup, subgroup breakdown, titles and subtitles of the Cosif and clarifies procedures for registration of securities and derivative financial instruments.

Having regard to the provisions of Circulars 3.068, of November 8, 2001, 3.082, of January 30, 2002, and 3.086, of February 15, 2002, and based on item 4 of Circular 1.540, of October 6, 1989, the following subgroups, subgroup breakdowns, and accounting titles and subtitles are created, effective from the April 2002 base date, in the Accounting Plan of the Institutions of the National Financial System - Cosif:

I - with attributes UBDKIFJACTSWEROLMNHZ and codes ESTBAN and publication 130 and 140, respectively:

1.3.3.15.00-5 SWAP OPERATIONS
1.3.3.15.10-8 Differential to Receive

1.3.3.35.00-9 FORWARD SALES TO RECEIVE
1.3.3.35.10-2 Share Operations
1.3.3.35.40-1 Operations with Financial Assets and Commodities

1.3.3.45.00-6 FUTURES MARKETS - DAILY ADJUSTMENTS - ASSET;

II - with attributes UBDIFACTSWEOLMNZ and code ESTBAN 300:

3.0.3.30.00-1 TRADING SECURITIES
3.0.3.30.02-5 Federal Public Securities - Negotiable Competitive 3.0.3.30.04-9 Federal Public Securities - Negotiable Non-Competitive 3.0.3.30.20-7 State and Municipal Public Securities 3.0.3.30.22-1 State and Municipal Public Securities - Debts Refinanced by the Union 3.0.3.30.60-9 Securities Issued by Financial Institutions - Fixed Income 3.0.3.30.70-2 Other Private Securities - Fixed Income 3.0.3.30.75-7 Private Securities - Variable Income 3.0.3.30.77-1 Investment Fund Shares 3.0.3.30.80-5 Securities and Securities Issued by Companies under Special Regime 3.0.3.30.85-0 Public Securities and Securities Abroad 3.0.3.30.90-8 Private Securities and Securities Abroad - Fixed Income 3.0.3.30.93-9 Private Securities and Securities Abroad - Variable Income;

III - with attributes UBDIFACTSWELMN and code ESTBAN 300:

3.0.3.40.00-8 AVAILABLE-FOR-SALE SECURITIES
3.0.3.40.02-2 Federal Public Securities - Negotiable Competitive 3.0.3.40.04-6 Federal Public Securities - Negotiable Non-Competitive 3.0.3.40.20-4 State and Municipal Public Securities 3.0.3.40.22-8 State and Municipal Public Securities - Debts Refinanced by the Union 3.0.3.40.60-6 Securities Issued by Financial Institutions - Fixed Income 3.0.3.40.70-9 Other Private Securities - Fixed Income 3.0.3.40.75-4 Private Securities - Variable Income 3.0.3.40.77-8 Investment Fund Shares 3.0.3.40.80-2 Securities and Securities Issued by Companies under Special Regime 3.0.3.40.85-7 Public Securities and Securities Abroad 3.0.3.40.90-5 Private Securities and Securities Abroad - Fixed Income 3.0.3.40.93-6 Private Securities and Securities Abroad - Variable Income;

IV - with attributes UBDIFACTSWEOLMN and code ESTBAN 300:

3.0.3.50.00-5 HELD-TO-MATURITY SECURITIES
3.0.3.50.02-9 Federal Public Securities - Negotiable Competitive 3.0.3.50.04-3 Federal Public Securities - Negotiable Non-Competitive 3.0.3.50.20-1 State and Municipal Public Securities 3.0.3.50.22-5 State and Municipal Public Securities - Debts Refinanced by the Union 3.0.3.50.60-3 Securities Issued by Financial Institutions - Fixed Income 3.0.3.50.70-6 Other Private Securities - Fixed Income 3.0.3.50.75-1 Private Securities - Variable Income 3.0.3.50.80-9 Securities and Securities Issued by Companies under Special Regime 3.0.3.50.85-4 Public Securities and Securities Abroad 3.0.3.50.90-2 Private Securities and Securities Abroad - Fixed Income 3.0.3.50.93-3 Private Securities and Securities Abroad - Variable Income;

V - with attributes UBDKIFJACTSWERLMNHZ and code ESTBAN 300:

3.0.6.60.00-1 MARKET RISK HEDGE - ASSET
3.0.6.60.10-4 Swap
3.0.6.60.20-7 Forward
3.0.6.60.30-0 Future
3.0.6.60.40-3 Options
3.0.6.60.90-8 Others

3.0.6.70.00-8 CASH FLOW HEDGE - ASSET
3.0.6.70.10-1 Swap
3.0.6.70.20-4 Forward
3.0.6.70.30-7 Future
3.0.6.70.40-0 Options
3.0.6.70.90-5 Others

3.0.6.80.00-5 DERIVATIVES QUALIFIED AS HEDGE - LIABILITY POSITION

3.0.6.90.00-2 HEDGE OBJECT ITEMS - ASSET
3.0.6.90.30-1 Securities and Securities
3.0.6.90.60-0 Credit Operations
3.0.6.90.70-3 Leasing Operations
3.0.6.90.80-6 Other Credits with Characteristics of Credit Operations 3.0.6.90.85-1 External Investments 3.0.6.90.90-9 Other Assets

3.0.6.95.00-7 HEDGE OBJECT LIABILITIES;

VI - with attributes UBDKIFJACTSWEROLMNHZ and codes ESTBAN and publication 470 and 485, respectively:

4.7.0.00.00-1 DERIVATIVE FINANCIAL INSTRUMENTS 4.7.1.00.00-4 Derivative Financial Instruments 4.7.1.10.00-1 SWAP OPERATIONS 4.7.1.10.10-4 Differential to Pay

4.7.1.30.00-5 OBLIGATIONS FOR FORWARD PURCHASE TO PAY 4.7.1.30.10-8 Share Operations 4.7.1.30.40-7 Operations with Financial Assets and Commodities

4.7.1.40.00-2 OBLIGATIONS FOR FORWARD SALE TO DELIVER 4.7.1.40.10-5 Share Operations 4.7.1.40.40-4 Operations with Financial Assets and Commodities

4.7.1.50.00-9 FUTURES MARKETS - DAILY ADJUSTMENTS - LIABILITY

4.7.1.60.00-6 PREMIUMS ON LAUNCHED OPTIONS - SHARES 4.7.1.60.10-9 Sales of Call Options - Short Position 4.7.1.60.20-2 Sales of Put Options - Short Position

4.7.1.70.00-3 PREMIUMS ON LAUNCHED OPTIONS - FINANCIAL ASSETS AND COMMODITIES 4.7.1.70.10-6 Sales of Call Options - Short Position 4.7.1.70.20-9 Sales of Put Options - Short Position;

VII - with attributes UBDKIFJACTSWERLMNHZ and codes ESTBAN and publication 610 and 616, respectively:

6.1.6.00.00-9 Adjustment to Fair Value - FVTS and Derivative Financial Instruments 6.1.6.20.00-3 CASH FLOW HEDGE;

VIII - with attributes UBDIFACTSWELMNHZ and codes ESTBAN and publication 610 and 616, respectively:

6.1.6.10.00-6 AVAILABLE-FOR-SALE SECURITIES;

IX - with attributes UBDKIFJACTSWEROLMNZ and codes ESTBAN and publication 711 and 716, respectively:

7.1.5.80.11-9 Swap
7.1.5.80.21-2 Forward
7.1.5.80.31-5 Future
7.1.5.80.41-8 Options;

X - with attributes UBDIFACTSWELMNZ and codes ESTBAN and publication 711 and 715, respectively:

7.1.5.90.00-6 FVTS - POSITIVE FAIR VALUE ADJUSTMENT 7.1.5.90.20-2 Available-for-Sale Securities;

XI - with attributes UBDIFACTSWEOLMNZ and codes ESTBAN and publication 711 and 715, respectively:

7.1.5.90.10-9 Securities for Trading;

XII - with attributes UBDKIFJACTSWEROLMNZ and codes ESTBAN and publication 712 and 716, respectively:

8.1.5.50.11-5 Swap
8.1.5.50.21-8 Forward
8.1.5.50.31-1 Future
8.1.5.50.41-4 Options;

XIII - with attributes UBDIFACTSWELMNZ and codes ESTBAN and publication 712 and 715, respectively:

8.1.5.80.00-6 FVTS - NEGATIVE FAIR VALUE ADJUSTMENT 8.1.5.80.20-2 Available-for-Sale Securities;

XIV - with attributes UBDIFACTSWEOLMNZ and codes ESTBAN and publication 712 and 715, respectively:

8.1.5.80.10-9 Securities for Trading;
XV - with attributes UBDIFACTSWEOLMN and codes ESTBAN and publication 712 and 715, respectively:

8.1.5.95.00-8 PERMANENT LOSSES;

XVI - with attributes UBDIFACTSWEOLMNZ and code ESTBAN 800:

9.0.3.20.00-6 SECURITIES AND SECURITIES CLASSIFIED IN CATEGORIES;

XVII - with attributes UBDKIFJACTSWERLMNHZ and code ESTBAN 800:

9.0.6.60.00-3 MARKET RISK HEDGE - LIABILITY
9.0.6.60.10-6 Swap
9.0.6.60.20-9 Forward
9.0.6.60.30-2 Future
9.0.6.60.40-5 Options
9.0.6.60.90-0 Others

9.0.6.70.00-0 CASH FLOW HEDGE - LIABILITY
9.0.6.70.10-3 Swap
9.0.6.70.20-6 Forward
9.0.6.70.30-9 Future
9.0.6.70.40-2 Options
9.0.6.70.90-7 Others

9.0.6.80.00-7 DERIVATIVES QUALIFIED AS HEDGE - ASSET POSITION 9.0.6.90.00-4 ASSET ITEMS SUBJECT TO HEDGE

9.0.6.95.00-9 HEDGE OBJECT ITEMS - LIABILITY
9.0.6.95.15-7 Time Deposits
9.0.6.95.30-8 Resources from Exchange Acceptances, Real Estate Letters, Mortgage Letters and Debentures 9.0.6.95.60-7 Obligations for Loans and Transfers 9.0.6.95.90-6 Other Liabilities.

2. The following subgroup breakdowns, titles, and accounting subtitles are excluded from the Cosif:

1.3.1.99.35-5 Securities Issued by the National Treasury Abroad 1.3.1.99.70-2 Securities Issued by the Government of Other Countries 1.3.1.99.75-7 Securities Issued by Brazilian State-Owned Companies Abroad 1.3.1.99.95-3 Others Abroad

1.3.2.99.00-4 PROVISION FOR DEVALUATION OF SECURITIES LINKED TO COMMITTED OPERATIONS (-) 1.3.2.99.30-3 Federal Public Securities - National Treasury 1.3.2.99.40-6 Federal Public Securities - Central Bank 1.3.2.99.50-9 Federal Public Securities - Others 1.3.2.99.60-2 Securities Issued by Linked Financial Institutions 1.3.2.99.62-6 Real Estate Receivable Certificates 1.3.2.99.65-7 Securities Issued by Non-Linked Financial Institutions 1.3.2.99.70-5 State and Municipal Public Securities 1.3.2.99.99-4 Others

1.3.8.00.00-8 Held in Portfolio until Maturity 1.3.8.20.00-2 FEDERAL SECURITIES LINKED TO EXTERNAL FUNDING

1.8.4.50.00-6 FORWARD SALES TO RECEIVE
1.8.4.50.10-9 Share Operations
1.8.4.50.20-2 Operations with Financial Assets and Commodities

1.8.4.53.10-6 Swap
1.8.4.53.20-9 Swap Intermediation

3.0.6.50.20-0 Positive Market Value of Swap
3.0.6.50.30-3 Negative Market Value of Swap
4.9.5.35.00-0 PREMIUMS ON LAUNCHED OPTIONS - SHARES 4.9.5.35.10-3 Sales of Call Options - Short Position 4.9.5.35.20-6 Sales of Put Options - Short Position

4.9.5.37.00-8 PREMIUMS ON LAUNCHED OPTIONS - FINANCIAL ASSETS AND COMMODITIES 4.9.5.37.10-1 Sales of Call Options - Short Position 4.9.5.37.20-4 Sales of Put Options - Short Position

4.9.5.42.00-0 DAILY ADJUSTMENTS - FUTURES MARKET

4.9.5.50.00-9 OBLIGATIONS FOR FORWARD SALE TO DELIVER

4.9.5.53.00-6 SWAP OPERATIONS - DIFFERENTIAL TO PAY 4.9.5.65.00-1 OBLIGATIONS FOR FORWARD PURCHASE TO PAY 4.9.5.65.10-4 Share Operations 4.9.5.65.20-7 Operations with Financial Assets and Commodities

7.1.5.80.10-2 Interest Rate Hedge
7.1.5.80.20-5 Currency Hedge
7.1.5.80.30-8 Gold Hedge
7.1.5.80.40-1 Swap

8.1.5.50.10-8 Interest Rate Hedge
8.1.5.50.20-1 Currency Hedge
8.1.5.50.30-4 Gold Hedge
8.1.5.50.40-7 Swap.

3. The following titles and accounting subtitles are maintained in the Cosif:

1.3.3.30.00-4 FORWARD PURCHASES TO RECEIVE
1.3.3.30.10-7 Share Operations
1.3.3.30.40-6 Operations with Financial Assets and Commodities

1.3.3.60.00-5 PREMIUMS ON OPTIONS TO BE EXERCISED - SHARES 1.3.3.60.10-8 Purchases of Call Options - Long Position 1.3.3.60.20-1 Purchases of Put Options - Long Position

1.3.3.70.00-2 PREMIUMS ON OPTIONS TO BE EXERCISED - FINANCIAL ASSETS AND COMMODITIES 1.3.3.70.10-5 Purchases of Call Options - Long Position 1.3.3.70.20-8 Purchases of Put Options - Long Position

1.8.4.05.20-2 Operations with Financial Assets and Commodities

1.8.4.40.00-9 OPERATIONS WITH FINANCIAL ASSETS AND COMMODITIES TO SETTLE

3.0.6.10.00-6 SHARE, FINANCIAL ASSET AND COMMODITY CONTRACTS 3.0.6.10.40-8 Own 3.0.6.10.50-1 Third Parties

3.0.6.20.00-3 CUSTOMER MARGIN DEPOSITS

3.0.6.30.00-0 GUARANTEES AND OTHER GUARANTEES FOR EXCHANGE OPERATIONS 3.0.6.30.10-3 Share Operations 3.0.6.30.20-6 Operations with Financial Assets and Commodities

4.9.5.40.00-2 OPERATIONS WITH FINANCIAL ASSETS AND COMMODITIES TO SETTLE

9.0.6.10.00-8 SHARES, FINANCIAL ASSETS AND COMMODITIES CONTRACTED

9.0.6.20.00-5 CUSTOMERS - DEPOSITED MARGINS

9.0.6.30.00-2 LIABILITIES FOR GUARANTEES AND OTHER GUARANTEES FOR EXCHANGE OPERATIONS.

4. The nomenclature of the following subgroups, subgroup breakdowns, and accounting titles in the Cosif is altered to:

1.3.0.00.00-4 SECURITIES AND SECURITIES AND DERIVATIVE FINANCIAL INSTRUMENTS 1.3.3.00.00-3 Derivative Financial Instruments

1.8.4.53.00-3 SWAP INTERMEDIATION OPERATIONS

7.1.5.00.00-3 Income from Securities and Securities and Derivative Financial Instruments 7.1.5.80.00-9 INCOME FROM DERIVATIVE OPERATIONS

8.1.5.00.00-0 Expenses from Securities and Securities and Derivative Financial Instruments 8.1.5.50.00-5 EXPENSES FROM DERIVATIVE OPERATIONS.

5. The attributes of the following titles and accounting subtitles are altered:

I - to KJRH:

1.3.1.99.00-1 PROVISION FOR DEVALUATION OF FREE SECURITIES (-) 1.3.1.99.30-0 Federal Public Securities - National Treasury 1.3.1.99.40-3 Federal Public Securities - Central Bank 1.3.1.99.45-8 Federal Public Securities - Others 1.3.1.99.50-6 Securities Issued by Linked Financial Institutions 1.3.1.99.55-1 Securities Issued by Non-Linked Financial Institutions 1.3.1.99.60-9 State and Municipal Public Securities 1.3.1.99.62-3 Real Estate Receivable Certificates 1.3.1.99.65-4 Applications in Commodities 1.3.1.99.85-0 Shares 1.3.1.99.99-1 Others in the Country

1.3.6.99.00-6 PROVISION FOR DEVALUATION OF SECURITIES LINKED TO GUARANTEE PROVISION (-) 1.3.6.99.02-0 Federal Public Securities - National Treasury 1.3.6.99.04-4 Federal Public Securities - Central Bank 1.3.6.99.19-2 Federal Public Securities - Others 1.3.6.99.20-2 State and Municipal Securities 1.3.6.99.62-8 Real Estate Receivable Certificates 1.3.6.99.80-0 Variable Income Securities 1.3.6.99.99-6 Others;

II - to KJR:

1.3.3.99.00-7 PROVISION FOR DEVALUATION OF SECURITIES LINKED TO TRADING AND INTERMEDIATION OF SECURITIES (-);

III - to KRH:

1.3.5.99.00-3 PROVISION FOR DEVALUATION OF PRIVATIZATION CURRENCIES (-).

6. The functions of the following accounting titles are altered, which now become:
   I - the accounting title FORWARD PURCHASES TO RECEIVE, code 1.3.3.30.00-4, is intended for recording the spot price value of the asset subject to the forward purchase contract of shares, other financial assets, and commodities for the own portfolio, evaluated at fair value;

II - the accounting title PREMIUMS ON OPTIONS TO BE EXERCISED - SHARES, code 1.3.3.60.00-5, is intended for recording the value of premiums paid for the acquisition of call and put options on shares, until maturity or settlement of the operation, through an inverse operation, evaluated at fair value;

III - the accounting title PREMIUMS ON OPTIONS TO BE EXERCISED - FINANCIAL ASSETS AND COMMODITIES, code 1.3.3.70.00-2, is intended for recording the value of premiums paid for the acquisition of call and put options on financial assets and commodities, until maturity or settlement of the operation, through an inverse operation, evaluated at fair value;

IV - the accounting title SWAP INTERMEDIATION OPERATIONS, code 1.8.4.53.00-3, is intended for recording the amounts receivable related to income earned in swap intermediation operations;

V - the accounting title VALUES AT RISK OF SWAP OPERATIONS, code 3.0.6.50.00-4, is intended for recording the credit risk value of swap operations (RCD) calculated in accordance with the provisions of Art. 2 of the Regulation Annex IV to Resolution 2.099, of August 17, 1994, and subsequent amendments, with the corresponding title LIABILITIES FOR VALUES AT RISK OF SWAP OPERATIONS, code 9.0.6.50.00-6;

VI - the accounting title INCOME FROM DERIVATIVE OPERATIONS, code 7.1.5.80.00-9, is intended for recording income from operations with derivative financial instruments according to the modality, including positive fair value adjustments;

VII - the accounting title EXPENSES FROM DERIVATIVE OPERATIONS, code 8.1.5.50.00-5, is intended for recording expenses from operations with derivative financial instruments according to the modality, including negative fair value adjustments.

7. The accounting title SWAP OPERATIONS, code 1.3.3.15.00-0, is intended for recording the amounts receivable, related to income earned, arising from swap operations, evaluated at fair value.

8. The accounting title FORWARD SALES TO RECEIVE, code 1.3.3.35.00-9, is intended for recording the amounts receivable arising from forward sales contracts of shares, other financial assets, and commodities, evaluated at fair value.

9. The accounting title FUTURES MARKET - DAILY ADJUSTMENTS - ASSET, code 1.3.3.45.00-6, is intended for recording the value of negative daily adjustments of operations with shares, other financial assets, and commodities, carried out in the futures market; this title must show a zero balance in monthly balance sheets, through transfer to the appropriate expense account.

10. The accounting title OPERATIONS WITH FINANCIAL ASSETS AND COMMODITIES TO SETTLE, code 1.8.4.40.00-9, is intended for recording the values related to operations carried out with commodities and financial assets on commodity and futures exchanges, for own and customer accounts, as well as the corresponding settlements.

11. The accounting title TRADING SECURITIES, code 3.0.3.30.00-1, is intended for recording the fair value of securities and securities acquired with the purpose of being actively and frequently traded, without prejudice to adequate recording in equity accounts, with the corresponding title SECURITIES AND SECURITIES CLASSIFIED IN CATEGORIES, code 9.0.3.20.00-6.

12. The accounting title AVAILABLE-FOR-SALE SECURITIES, code 3.0.3.40.00-8, is intended for recording the fair value of securities and securities that do not fit into the categories of trading securities and held-to-maturity securities, without prejudice to adequate recording in equity accounts, with the corresponding title SECURITIES AND SECURITIES CLASSIFIED IN CATEGORIES, code 9.0.3.20.00-6.

13. The accounting title HELD-TO-MATURITY SECURITIES, code 3.0.3.50.00-5, is intended for recording the cost value plus income earned and minus permanent losses with securities and securities, except non-redeemable shares, for which there is intention and financial capacity of the institution to hold them in portfolio until maturity, without prejudice to adequate recording in equity accounts, with the corresponding title SECURITIES AND SECURITIES CLASSIFIED IN CATEGORIES, code 9.0.3.20.00-6.

14. The accounting title SHARE, FINANCIAL ASSET AND COMMODITY CONTRACTS, code 3.0.6.10.00-6, is intended for recording the value of contracts for operations with shares, other financial assets, and commodities carried out in the forward, future, and options markets, with own and third-party resources, with the corresponding title SHARES, FINANCIAL ASSETS AND COMMODITIES CONTRACTED, code 9.0.6.10.00-8, observed that:
    I - the subtitle Swap, code 3.0.6.10.60-4, must always correspond to the value of the negotiation parameters, on the date of contract signing, of operations carried out in the over-the-counter market and within the scope of stock exchanges or commodity and futures exchanges, except those contracted with guarantee and on behalf of third parties;

II - the subtitle Swap with Guarantee, code 3.0.6.10.70-7, must always correspond to the value of the negotiation parameters, on the date of contract signing, of operations carried out in guarantee systems administered by stock exchanges or commodity and futures exchanges;

III - the subtitle Third-Party Swap, code 3.0.6.10.80-0, must always correspond to the value of the negotiation parameters, on the date of contract signing, of operations in which the institution acts exclusively as an intermediary, not assuming any rights or obligations with the counterparty.

15. The accounting title CUSTOMER MARGIN DEPOSITS, code 3.0.6.20.00-3, is intended for recording the value of margins, in current currency, securities, other assets, and other guarantees, given by customers as guarantee for their operations carried out in the forward, future, and options markets with shares, other financial assets, and commodities, with the corresponding title CUSTOMERS - DEPOSITED MARGINS, code 9.0.6.20.00-5.

16. The accounting title GUARANTEES AND OTHER GUARANTEES FOR EXCHANGE OPERATIONS, code 3.0.6.30.00-0, is intended for recording the value of guarantees, sureties, insurance policies, and other guarantees received and given as guarantee for operations carried out in the forward, future, and options markets, for own and third-party accounts, with shares, other financial assets, and commodities, with the corresponding title LIABILITIES FOR GUARANTEES AND OTHER GUARANTEES FOR EXCHANGE OPERATIONS, code 9.0.6.30.00-2.

17. The accounting title MARKET RISK HEDGE - ASSET, code 3.0.6.60.00-1, is intended for recording the fair value of derivative financial instruments accounted for in the asset that are intended to compensate risks arising from exposure to variation in the fair value of the hedge object item, without prejudice to adequate recording in equity accounts, with the corresponding title DERIVATIVES QUALIFIED AS HEDGE - ASSET POSITION, code 9.0.6.80.00-7.

18. The accounting title CASH FLOW HEDGE - ASSET, code 3.0.6.70.00-8, is intended for recording the fair value of derivative financial instruments accounted for in the asset that are intended to compensate variation in the estimated future cash flow of the institution, without prejudice to adequate recording in equity accounts, with the corresponding title DERIVATIVES QUALIFIED AS HEDGE - ASSET POSITION, code 9.0.6.80.00-7.

19. The accounting title DERIVATIVES QUALIFIED AS HEDGE - LIABILITY POSITION, code 3.0.6.80.00-5, is intended for recording the counterpart to the value of derivative financial instruments accounted for in the liability section qualified as hedge, registered in the titles MARKET RISK HEDGE - LIABILITY, code 9.0.6.60.00-3, and CASH FLOW HEDGE - LIABILITY, code 9.0.6.70.00-0.

20. The accounting title ITEMS SUBJECT TO HEDGE - ASSET, code 3.0.6.90.00-2, is intended for recording the value of assets subject to hedge, without prejudice to adequate recording in equity accounts, having as counterpart the title ASSETS SUBJECT TO HEDGE, code 9.0.6.90.00-4.

21. The accounting title LIABILITIES SUBJECT TO HEDGE, code 3.0.6.95.00-7, is intended for recording the counterpart to the value of liabilities subject to hedge accounted for in the title ITEMS SUBJECT TO HEDGE - LIABILITY, code 9.0.6.95.00-9.

22. The accounting title SWAP OPERATIONS, code 4.7.1.10.00-1, is intended for recording amounts payable, relating to expenses incurred, arising from swap operations, valued at market value.

23. The accounting title FORWARD PURCHASE OBLIGATIONS PAYABLE, code 4.7.1.30.00-5, is intended for recording the value of forward purchase contracts, on own account, of shares, other financial assets, and commodities, pending payment, valued at market value.

24. The accounting title FORWARD SALE OBLIGATIONS DELIVERABLE, code 4.7.1.40.00-2, is intended for recording the value of the spot price of the good subject to the forward sale contract, short and on own account, of shares, other financial assets, and commodities, valued at market value.

25. The accounting title FUTURES MARKETS - DAILY ADJUSTMENTS - LIABILITY, code 4.7.1.50.00-9, is intended for recording the value of positive daily adjustments of operations with shares, other financial assets, and commodities, carried out in the futures market; this title must show a zero balance in monthly balance sheets, through transfer to the appropriate revenue account.

26. The accounting title PREMIUMS ON LAUNCHED OPTIONS - SHARES, code 4.7.1.60.00-6, is intended for recording the value of premiums received upon the launch of call or put options on shares, until maturity or settlement of the operation, through an inverse operation, valued at market value.

27. The accounting title PREMIUMS ON LAUNCHED OPTIONS - FINANCIAL ASSETS AND COMMODITIES, code 4.7.1.70.00-3, is intended for recording the value of premiums received upon the launch of call or put options on financial assets and commodities, until maturity or settlement of the operation, through an inverse operation, valued at market value.

28. The accounting title OPERATIONS WITH FINANCIAL ASSETS AND COMMODITIES TO BE SETTLED, code 4.9.5.40.00-2, is intended for recording values related to operations carried out with commodities and financial assets on commodity and futures exchanges, on own account and for clients, as well as the corresponding settlements.

29. The accounting title SECURITIES AVAILABLE FOR SALE, code 6.1.6.10.00-6, is intended for recording the appreciation or depreciation resulting from adjustment to market value, net of tax effects, of securities classified in the category securities available for sale, having as counterpart the appropriate equity account.

30. The accounting title CASH FLOW HEDGE, code 6.1.6.20.00-3, is intended for recording the effective portion of the appreciation or depreciation resulting from adjustment to market value, net of tax effects, of derivative financial instruments classified as cash flow hedge, having as counterpart the appropriate equity account.

31. The accounting title TVM - POSITIVE ADJUSTMENT TO MARKET VALUE, code 7.1.5.90.00-6, is intended for recording appreciations resulting from adjustment to market value of securities and securities classified in the category securities for trading, as well as positive values transferred to the period result of those classified in the category securities available for sale upon final sale, having as counterpart the appropriate equity account.

32. The accounting title TVM - NEGATIVE ADJUSTMENT TO MARKET VALUE, code 8.1.5.80.00-6, is intended for recording depreciations resulting from adjustment to market value of securities and securities classified in the category securities for trading, as well as negative values transferred to the period result of those classified in the category securities available for sale upon final sale, having as counterpart the appropriate equity account.

33. The accounting title PERMANENT LOSSES, code 8.1.5.95.00-8, is intended for recording permanent losses in securities and securities classified in the categories securities available for sale and securities held to maturity, having as counterpart the account of the corresponding title or security.

34. The accounting title SECURITIES AND SECURITIES CLASSIFIED IN CATEGORIES, code 9.0.3.20.00-6, is intended for recording the counterpart to the accounting values of securities and securities classified in the categories securities for trading, securities available for sale, and securities held to maturity, having as counterpart SECURITIES FOR TRADING, code 3.0.3.30.00-1, SECURITIES AVAILABLE FOR SALE, code 3.0.3.40.00-8, or SECURITIES HELD TO MATURITY, code 3.0.3.50.00-5.

35. The accounting title SHARES, FINANCIAL ASSETS, AND COMMODITIES CONTRACTED, code 9.0.6.10.00-8, is intended for recording the value of contracts for operations with shares, other financial assets, and commodities carried out in the forward, futures, and options markets, with own and third-party resources, having as counterpart the title CONTRACTS OF SHARES, FINANCIAL ASSETS, AND COMMODITIES, code 3.0.6.10.00-6.

36. The accounting title CLIENTS - DEPOSITED MARGINS, code 9.0.6.20.00-5, is intended for recording the value of margins, in current currency, securities, securities, other assets, and other guarantees, provided by clients as guarantee for their operations carried out in the forward, futures, and options markets with shares, other financial assets, and commodities, having as counterpart the title CLIENT MARGIN DEPOSITS, code 3.0.6.20.00-3.

37. The accounting title LIABILITIES FOR GUARANTEES AND OTHER GUARANTEES FOR EXCHANGE OPERATIONS, code 9.0.6.30.00-2, is intended for recording the value of guarantees, sureties, insurance policies, and other guarantees received and provided as guarantee for operations carried out in the forward, futures, and options markets, on own account and for third parties, with shares, other financial assets, and commodities, having as counterpart the title GUARANTEES AND OTHER GUARANTEES FOR EXCHANGE OPERATIONS, code 3.0.6.30.00-0.

38. The accounting title MARKET RISK HEDGE - LIABILITY, code 9.0.6.60.00-3, is intended for recording the market value of derivative financial instruments accounted for in the liability section intended to compensate risks arising from exposure to variation in market value of the item subject to hedge, without prejudice to adequate recording in equity accounts, having as counterpart the title DERIVATIVES QUALIFIED AS HEDGE - LIABILITY POSITION, code 3.0.6.80.00-5.

39. The accounting title CASH FLOW HEDGE - LIABILITY, code 9.0.6.70.00-0, is intended for recording the market value of derivative financial instruments accounted for in the liability section intended to compensate variation in the estimated future cash flow of the institution, without prejudice to adequate recording in equity accounts, having as counterpart the title DERIVATIVES QUALIFIED AS HEDGE - LIABILITY POSITION, code 3.0.6.80.00-5.

40. The accounting title DERIVATIVES QUALIFIED AS HEDGE - ASSET POSITION, code 9.0.6.80.00-7, is intended for recording the counterpart to the value of derivative financial instruments accounted for in the asset section qualified as hedge, registered in the titles MARKET RISK HEDGE - ASSET, code 3.0.6.60.00-1, and CASH FLOW HEDGE - ASSET, code 3.0.6.70.00-8.

41. The accounting title ASSETS SUBJECT TO HEDGE, code 9.0.6.90.00-4, is intended for recording the counterpart to the value of assets subject to hedge accounted for in the title ITEMS SUBJECT TO HEDGE - ASSET, code 3.0.6.90.00-2.

42. The accounting title ITEMS SUBJECT TO HEDGE - LIABILITY, code 9.0.6.95.00-9, is intended for recording the value of liabilities subject to hedge, without prejudice to adequate recording in equity accounts, having as counterpart the title LIABILITIES SUBJECT TO HEDGE, code 3.0.6.95.00-7.

43. The balances existing in the subgroup breakdowns, titles, and subtitles of accounts excluded in item 2 must be reclassified to the appropriate asset or liability accounts, as applicable.

44. The sum of the balances of the items SECURITIES FOR TRADING, code 3.0.3.30.00-1, SECURITIES AVAILABLE FOR SALE, code 3.0.3.40.00-8, and SECURITIES HELD TO MATURITY, code 3.0.3.50.00-5, must correspond to the balance of the subgroup SECURITIES AND SECURITIES AND DERIVATIVE FINANCIAL INSTRUMENTS, code 1.3.0.00.00-4, subtracted from the balance of the subgroup breakdown Derivative Financial Instruments, code 1.3.3.00.00-3.

45. Institutions must maintain sufficient off-balance sheet controls available to the Central Bank of Brazil and independent auditors containing, at a minimum, the following information for each title or security:

     I - book value, broken down into:
    
     a) acquisition cost;
    
     b) premium or discount;
    
     c) income earned;
    
     d) adjustment to market value;
    
     e) permanent losses;
    
     II - period result, broken down into:
    
     a) income earned;
    
     b) adjustment to market value;
    
     c) permanent losses.
    

46. Institutions must maintain sufficient off-balance sheet controls available to the Central Bank of Brazil and independent auditors containing, at a minimum, the following information for each derivative financial instrument:

     I - book value, broken down into:
    
     a) acquisition cost, plus income earned;
    
     b) adjustment to market value;
    
     II - result, broken down into:
    
     a) income earned;
    
     b) adjustment to market value.
    

47. The appreciation and depreciation computed in the period result or in a separate equity account, in the latter case for securities classified in the category available for sale, resulting from adjustment to market value, must be offset, provided that within the same semester and relating to the same title or security or derivative financial instrument.

48. Companies in extrajudicial liquidation must classify their securities and securities in the category securities for trading.

49. The adjustment to market value of the item subject to hedge must be recorded in the result account in which other income or expenses related to that item are recognized.

50. The following aggregation codes are included in document 2 of Cosif, Balance Sheet/Financial Statement:

140 - Derivative Financial Instruments

DERIVATIVE FINANCIAL INSTRUMENTS

485 - Derivative Financial Instruments

616 - Adjustment to Market Value - TVM and Derivatives.

51. The aggregation code 716 - Result with Derivative Financial Instruments is included in document 8 of Cosif, Income Statement.

52. The code 470 - Derivative Financial Instruments is included in document 13 of Cosif, Monthly Banking Statistics/Global Banking Statistics.

53. The following titles are included in the Asset Classification Table referred to in art. 2, Paragraph 1, of the Regulation Annex IV to Resolution 2,099, of 1994, and subsequent amendments, as NORMAL RISK, with a weighting factor of 100% (one hundred percent):

1.3.3.15.00-5 SWAP OPERATIONS

1.3.3.35.00-9 FORWARD SALES PAYABLE.

54. The following changes must be made to the Consolidated Economic-Financial - Conef, document 5 of Cosif:

      I - the following subgroup and subgroup breakdown are created:
    

40.7.0.00.00-5 DERIVATIVE FINANCIAL INSTRUMENTS

60.1.6.00.00-5 Adjustment to Market Value - TVM and Derivative Financial Instruments;

     II - the following titles and subtitles are excluded:

10.3.1.99.70-8 Securities Issued by Governments of Other Countries

10.3.1.99.75-3 Securities Issued by Brazilian State-Owned Companies Abroad

10.3.1.99.95-9 Others Abroad

10.3.2.99.00-0 PROVISION FOR DEVALUATION OF SECURITIES LINKED TO COMMITTED OPERATIONS (-)

10.3.2.99.10-3 Federal Public Securities

10.3.2.99.30-9 Securities Issued by Financial Institutions

10.3.2.99.62-2 Real Estate Receivable Certificates

10.3.2.99.70-1 State and Municipal Public Securities

10.3.2.99.99-9 Others

10.3.8.00.00-4 Held in Portfolio Until Maturity

10.3.8.20.00-8 FEDERAL SECURITIES LINKED TO EXTERNAL LIABILITIES;

      III - the nomenclatures of the following subgroups and subgroup breakdowns are altered, which now become:

10.3.3.00.00-9 Derivative Financial Instruments

10.9.4.53.00-8 SWAP INTERMEDIATION OPERATIONS.

55. The following aggregations must be performed in the document Annex II to Circular Letter 2,918, of June 15, 2000:

      I - the titles 1.3.3.15.00-5, 1.3.3.35.00-9, and 1.3.3.45.00-6 in the subgroup breakdown 10.3.3.00.00-9;
    
     II - the titles 3.0.3.30.00-1, 3.0.3.40.00-8, 3.0.3.50.00-5, 3.0.6.60.00-1, 3.0.6.70.00-8, 3.0.6.80.00-5, 3.0.6.90.00-2, and 3.0.6.95.00-7 in the subgroup breakdown 30.9.9.00.00-7;
    
     III - the subgroup 4.7.0.00.00-1 in 40.7.0.00.00-5;
    
       IV - the subgroup breakdown 6.1.6.00.00-9 in 60.1.6.00.00-5.
    

56. This circular letter enters into force on the date of its publication.

57. Circular Letter 2,379, of July 12, 1993, is revoked.

                                   Brasília, June 11, 2002.
    
                               Department of Norms of the Financial System
    
                               Carlos Eduardo Sampaio Lofrano Chief --------------------------------------------------------------------- Obs.: Re-transmitted due to alteration in the caput of item 1.