Circular Letter No. 3173 — Discloses Procedures Regarding Payment Instruments, Interbank Settlement of Checks and Collection Slips, and the Centralizer of Check and Other Papers Clearing (Compe)

CIRCULAR LETTER NO. 003173

Discloses procedures regarding payment instruments, interbank settlement of checks and collection slips and the Centralizer of Check and Other Papers Clearing - Compe.

Taking into account the provisions of Circular 772, of April 8, 1983, and of Circulars 3,254 and 3,255, of August 31, 2004, we communicate that the provisions regarding payment instruments, interbank settlement of checks and collection slips and the Centralizer of Check and Other Papers (Compe) are amended, which shall enter into force in the form of sections 03-02-02, 03-02-03, 03-06-01, 03-06-03, 03-06-04, 03-06-06, 03-06-07, 03-06-08, 03-06-10, 03-06-11, 03-06-12, 03-07-01 and 03-07- 02, of the Manual of Norms and Instructions (MNI) attached.

2. This Circular Letter enters into force on the date of its
   publication.

3. Circular Letters 992, of February 13, 1984, 1,201, of April 8, 1985, 1,218, of May 31, 1985, 1,311, of November 27, 1985, 1,333, of January 8, 1986, 1,506, of November 18, 1986, 1,680, of July 23, 1987, 2,152, of March 5, 1991, 2,153, of March 5, 1991, 2,176, of June 6, 1991, 2,233, of November 12, 1991, 2,256, of February 19, 1992, 2,322, of October 1, 1992, 2,376, of June 24, 1993, 2,422, of December 9, 1993, 2,608, of December 29, 1995, 2,683, of September 12, 1996, 2,692, of October 18, 1996, 2,713, of January 13, 1997, 2,970, of August 15, 2001, 3,007, of April 19, 2002, 3,080, of January 17, 2003, 3,111, of December 11, 2003 and 3,119, of February 17, 2004, and Communications 3,327, of May 21, 1993 and 4,007, of June 30, 1994, are hereby repealed.

Brasília, February 28, 2005.

Department of Banking Operations and Payment System

Luiz Fernando Cardoso Maciel
Acting Chief

Annexes to Circular Letter 3,173, of February 28, 2005

Annex I

TITLE: BRAZILIAN PAYMENT SYSTEM (SPB) - 3
CHAPTER: Payment Instruments - 2
SECTION: Credit Document (DOC) - 2 (*)

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1 - The Credit Document (DOC) is an order for interbank fund transfer on behalf of or for the benefit of natural or legal persons who are clients of financial institutions, and can only be sent and received by commercial banks, multiple banks with commercial portfolios and Caixa Econômica Federal, participants of a clearing and settlement system approved by the Central Bank of Brazil, through which said document is processed. (Circ 3224 art 1º; Cta-Circ 3173 1)

2 - The DOC E is intended for the transfer of funds with the incidence of the Provisional Contribution on Movement or Transmission of Values and of Credits and Rights of a Financial Nature (CPMF), as provided for in section 2-1-25. (Circ 3224 art 2º I; Cta-Circ 3173 1)

3 - The DOC D is intended for the transfer of funds without the incidence of the Provisional Contribution on Movement or Transmission of Values and of Credits and Rights of a Financial Nature (CPMF), as provided for in section 2-1-25, and cannot be refused by a financial institution. (Circ 3137 art 1º I a 1, art 3º II a, art 4º I; Circ 3224 art 2º II; Cta-Circ 3173 1)

4 - The clearing and interbank settlement of the DOC is carried out in accordance with the procedures and routines defined by the settlement system to which it was submitted. (Circ 3224 art 2º § 2º; 3173 1)

5 - The following information must appear on the DOC: (Cta-Circ 3173 1) a) code of the sending and receiving financial institutions; (Cta-Circ 3173 1) b) code of the sending client's branch and the receiving client's branch; (Cta-Circ 3173 1) c) checking account number of the sending client, if an account holder, and of the receiving client's checking account; (Cta-Circ 3173 1) (NR) d) name of the sending client and the receiving client; (Cta-Circ 3173 1) e) CPF/CNPJ of the sending client and the receiving client; (Cta-Circ 3173 1) f) value of the transfer; and (Cta-Circ 3173 1) g) purpose of the transfer. (Cta-Circ 3173 1)

6 - It is the sole responsibility of the sending client to correctly fill out the DOC, noting that the inaccuracy of the data provided in the document exempts the sending and receiving banks from any responsibility for the delay or non-compliance with the requested transfer. (Cta-Circ 3173 1)

7 - Subject to the provisions of this section and provided that the transfer is made in cash, the commercial bank, the multiple bank with a commercial portfolio or the Caixa Econômica Federal cannot refuse the dispatch of the DOC. (Cta-Circ 3173 1)

8 - The acceptance of the DOC is not mandatory when issued for the purpose of transferring value for deposit into savings accounts, and it may be refused and returned to the sender. (Circ 1994 art 1º I; Cta-Circ 3173 1)

9 - The values related to DOCs that are not forwarded to the clearing and settlement system within the period established in the system's regulations must be passed on to the receiving banks via Electronic Available Transfer (TED), on the first business day following the issuance, with the sending bank bearing the burden resulting from the delay. No fee motivated by return or error attributable to the sending bank may be passed on to the client. (Cta-Circ 3173 1)

10 - In the event of a return of a transfer made by DOC, the sending bank must make the value available to the sending client on the settlement day and immediately inform them of the occurrence, aiming at the regularization of the transfer, with the sending bank being solely responsible for any damage caused to third parties by non-compliance with this determination. (Cta-Circ 3173 1)

11 - The following reasons apply for the return of a transfer made by DOC: (Cta-Circ 3173 1) 51 - Discrepancy in the received value; 52 - Receipt made outside the deadline; 53 - Improper presentation; 56 - Insufficient transfer for the indicated purpose; 57 - Discrepancy or non-completion of mandatory information; 58 - Deposit in savings account refused; 59 - Absence of the expression "International transfer in reais - Nature of the operation". Applied to DOCs intended for the international transfer of funds in national currency, issued without clearly and prominently stating the expression "International transfer in reais - Nature of the operation"; 62 - Absence or discrepancy in the indication of the CPF/CNPJ number; 66 - DOC D from individual account (single CPF) to joint account (two CPFs) and vice versa; 67 - DOC D without indication of the type of account debited or credited.

Annex II

TITLE: BRAZILIAN PAYMENT SYSTEM (SPB) - 3
CHAPTER: Payment Instruments - 2
SECTION: Collection Slip - 3 (*)

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1 - The Collection Slip must be used for the purpose of registering debts for collection at financial institutions, related to purchase and sale operations or the provision of services, including those related to collection instruments, such as bills of exchange, promissory notes, notes or insurance notes, in order to allow the payment of the debt-object at a financial institution distinct from the collecting one. (Circ 3255 art 1º)

2 - The Collection Slip must be issued in accordance with the model provided for in Cadoc 24044-4. (Circ 3255 art 1º § 1º)

3 - For the purposes of the provisions of this section, the parties to a collection slip are: (Circ 3255 art 1º § 2º I/IV) a) beneficiary: creditor of the debt-object, to whom the funds received for its payment must be directed; (Circ 3255 art 1º § 2º I) b) drawee: person from whom the debt-object is collected; (Circ 3255 art 1º § 2º II) c) receiving financial institution: financial institution that receives from the drawee, or from someone acting on his behalf, the payment of the debt-object; (Circ 3255 art 1º § 2º III) d) collecting financial institution: (Circ 3255 art 1º § 2º IV a,b) I - Financial institution contracted by the seller or service provider to receive, in the capacity of agent for collection, directly or through another financial institution, the amount due to it by the drawee; or (Circ 3255 art 1º § 2º IV a) II - financial institution assignee of the credit, if it has been assigned to it by the seller or service provider. (Circ 3255 art 1º § 2º IV b)

4 - If assignee, the collecting financial institution is at the same time the beneficiary. (Circ 3255 art 1º § 3º)

5 - If payment is made directly to it, the collecting financial institution is at the same time the receiving financial institution. (Circ 3255 art 1º § 4º)

6 - The following provisions apply to the parties to a collection slip: (Circ 3255 art 2º I,II) a) the beneficiary and the drawee may be natural or legal persons; (Circ 3255 art 2º I) b) only commercial banks, multiple banks with commercial portfolios and Caixa Econômica Federal may act as receiving financial institutions and collecting financial institutions. (Circ 3255 art 2º II)

7 - Credit cooperatives may also provide services related to collection slips, within the scope of agreements entered into with the institutions referred to in item 6, letter "b". (Circ 3255 art 2º sole paragraph)

8 - The rights and obligations related to the collection slip are governed, insofar as applicable: (Circ 3255 art 3º I,II) a) in the relationships between the seller or service provider and the drawee and the collecting financial institution, by contract between the parties; (Circ 3255 art 3º I) b) in the relationship between the collecting financial institution and the receiving financial institution, by this section and, insofar as it does not conflict with it: (Circ 3255 art 3º II a,b) I - by the document that records what was agreed upon between the financial institutions, in the situation referred to in item 3-7-2-1, letter "a"; (Circ 3255 art 3º II a) II - by the regulations of the clearing and settlement system through which interbank obligations related thereto are to be settled, in the situation referred to in item 3-7-2-1, letter "b". (Circ 3255 art 3º II b)

Annex III

TITLE: BRAZILIAN PAYMENT SYSTEM (SPB) - 3
CHAPTER: Centralizer of Check and Other Papers Clearing-6
SECTION: General Provisions - 1

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1 - The Centralizer of Check and Other Papers Clearing (Compe) is the current name of the Check and Other Papers Clearing Service (SCCOP). (Circ 772 1; Circ 3102 art 1º and sole paragraph)

2 - Compe is regulated by the Central Bank of Brazil and executed by Banco do Brasil S.A.. (Circ 772 1)

3 - The following participate in Compe: (Circ 772 1) a) the Central Bank of Brazil; (Circ 772 1) b) banking establishments authorized to receive deposits from the public, movable by check; (Circ 772 1) c) other financial institutions, at the discretion of the Central Bank of Brazil/Department of Banking Operations and Payment System (Deban). (Circ 772 1)

4 - For the purposes of this chapter, the following are defined: (Circ 772 1) a) Executor - Banco do Brasil S.A.; (Circ 772 1) b) Participant - all financial institutions admitted to Compe; (Circ 772 1) c) Sender - the Participant that forwards documents to Compe; (Circ 772 1) d) Recipient - the Participant receiving the documents. (Circ 772 1)

5 - Compe is composed of 3 (three) systems: (Circ 772 1) a) Local System: covers the premises of Participants located in any city where the Executor maintains a branch, admitting the participation of premises located in neighboring cities that are willing to attend the exchange and return sessions, at the determined times, at their exclusive cost and risk; (Circ 772 1) b) Regional Integrated System: covers the premises of Participants located in cities of the same region, previously determined by the Executor; (Circ 772 1) c) National System: covers all premises of Participants installed in the Country. (Circ 772 1)

6 - The admission of financial institutions to Compe depends on prior and express authorization from Deban, which assigns each Participant a code-number, valid in all cities in the Country, with the Executor responsible for communicating the fact to the other Participants. (Circ 772 1)

7 - Authorizations for the participation of a bank branch in Compe and for representation in clearing houses are granted by the Executor, who must maintain individualized records by clearing house, for its control and supervision by the Central Bank of Brazil. (Circ 2708 art 10)

8 - It is incumbent upon the Executor to disclose the procedures and routines necessary to comply with the provisions of the previous item. (Circ 2708 art 10 sole paragraph)

9 - The Local System can be installed whenever the Executor operates in the city and at least one other Participant. (Circ 772 1)

10 - If regional convenience advises it, the Executor may promote the installation of a Regional Integrated System, with communication to Deban. (Circ 772 1)

11 - Clearing sessions must be held in a closed room. In the home cities of the System, this room is called the clearing house. (Circ 772 1)

12 - The Executor must assign a code-number to the implemented clearing houses, regularly forwarding to the Participants a list of these clearing houses and their respective code-numbers. (Circ 772 1)

13 - Clearing houses must operate in an easily accessible location, in order to allow Participants to comply with the established operating hours. (Circ 2708 art 1º)

14 - Clearing houses must be sized with a view to achieving greater speed and security in the execution of services. (Circ 2708 art 1º sole paragraph)

15 - The quantity and dimensions of the counters in each clearing house are defined by the Executor, taking into account the volume of documents processed and the working conditions of the clearers. (Circ 2708 art 2º)

16 - The Executor and the bank associations with a seat on the Advisory Group for Clearing Matters have permanent counters, with the remaining ones intended for the other Participants, observing the classification provided for in item 17. (Circ 2708 art 2º §§ 1º,2º)

17 - In the event of the creation of a new bank association with the right to a seat on the Advisory Group for Clearing Matters, the number of banks with the right to a counter must be reduced, in order to allow the maintenance of the same number of counters and vice versa. (Circ 2708 art 2º § 3º)

18 - The classification of banks with the right to a counter in each clearing house is determined by the Executor, annually, in the month of January, based on the monthly average of the volume of documents received in the previous year, by institution, from statistics provided by the Participants, observing a descending order of volume, clarified that: (Circ 2708 art 3º § 1º I/III) a) it must be informed by the Executor to Deban by the 10th business day of the month of February; (Circ 2708 art 3º § 1º I) b) it must be disclosed by the Executor to the Participants by the last business day of the month of February; (Circ 2708 art 3º § 1º II) c) it enters into force from the first business day of the following month of April. (Circ 2708 art 3º § 1º III)

19 - The bank with the right to a counter that chooses to be represented and the bank association that waives the right to occupy a counter in the clearing house cedes its place to another bank, observing the descending order of classification. (Circ 2708 art 3º § 2º)

20 - The Executor may transfer the right to occupy a counter in the clearing houses to a bank not classified by the criterion mentioned in item 17 that, by any process, comes to incorporate the compensatory movement of an institution already classified under the terms of this section. (Circ 2708 art 3º § 3º)

21 - It is incumbent upon the Executor to represent the Central Bank of Brazil and BACEN/National Treasury (009) as Participants of Compe, whenever necessary. (Circ 772 1)

22 - Participants must indicate their accredited representatives to Compe, and the Executor may refuse the proposed name or request, at any time, the replacement of the indicated representatives. (Circ 772 1)

23 - The Participant that has a branch in a city covered by a clearing system and that does not have the right to a counter in the respective clearing house must be represented for the purpose of forwarding and receiving documents and/or magnetic or electronic media. (Circ 2708 art 5º)

24 - All Participants must be present or represented in the clearing house of the city of São Paulo (SP), with a view to the forwarding and receiving of documents and/or magnetic or electronic media, for the purpose of the National Clearing System. (Circ 2708 art 6º)

25 - The representations referred to in this section may be exercised by banks or bank associations with the right to a counter in the clearing houses, regardless of associative ties. (Circ 2708 art 7º)

26 - The represented bank is obliged, vis-à-vis its respective representative, to deliver and collect the documents and/or magnetic or electronic media under the conditions, locations and hours previously agreed upon in a convention, observing, furthermore, the provisions established for Compe. (Circ 2708 art 8ª)

27 - It is the responsibility of the representative, vis-à-vis his represented party, to receive and deliver the documents and/or magnetic or electronic media under the conditions, locations and hours previously agreed upon in a convention, observing, furthermore, the provisions established for Compe. (Circ 2708 art 9º)

28 - The forms and stamps used in Compe are manufactured by the Participants, observing the standards fixed by the Executor, the use of non-standardized models being prohibited. (Circ 772 1)

29 - The expenses with the manufacture of material for use by the Participants are reimbursed by them. (Circ 772 1)

30 - The definition of the cost-sharing system for the Shared Mailbag Transport System is the responsibility of the Executor, after hearing the Advisory Group for Clearing Matters and Deban. (Cta-Circ 2608 3)

31 - Participants are obliged to observe the norms of this chapter and the Compe routines determined by the Executor. (Circ 772 1)

32 - Any irregularity capable of affecting the concept and position of the Participants must be reported by the Executor to Deban, which, after issuing an opinion on the matter, forwards the subject to the Direct Supervision Department (DESUP) for examination and adoption of the appropriate measures. (Circ 772 1; Cta-Circ 1298 1)

33 - The Executor will provide, free of charge, to each Participant, on magnetic media, an updated copy of the Register of Issuers of Bounced Checks (CCF). (Res 1631 RA 17; Res 1682 art 1º)

34 - Any changes to the norms governing Compe will be incorporated into this chapter through a Circular Letter issued by Deban. (Circ 772 1)

35 - The procedures for interbank settlement of checks with a value equal to or greater than the VLB-Check are defined in section 3-7-1 of this Manual. (Circ 3254) (*)

36 - The procedures for settlement of collection slips are defined in section 3-7-2 of this Manual. (Circ 3255) (*)

Annex IV

TITLE: BRAZILIAN PAYMENT SYSTEM (SPB) - 3
CHAPTER: Centralizer of Check and Other Papers Clearing-6
SECTION: Documents in Clearing - 3 (*)

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1 - The Central Clearinghouse for Checks and Other Papers (Compe) may only compensate and settle the following papers:
(Circ 772 1; Circ 2315 art 3º,4º; Circ 3118 art 1º I,IV/VII; Circ 3224; Cta-Circ 3173 1)

a) checks: (Circ 3118 art 1º I; Cta-Circ 3173 1)

b) Difference Adjustment Document (DAD): (Circ 772 1; Circ 3118 art 1º IV § 2º; Cta-Circ 3173 1)

I - the DAD must be issued exclusively for the adjustment of financial differences related to compensated documents, identified in a day or night exchange or return session, regardless of the amount to be adjusted, observing the following deadlines: (Circ 772 1; Circ 3118 art 1º § 2º; Cta-Circ 3173 1)

• up to 15 days, in the case of a difference communicated by means of a Difference Communication Document (DCD), counted from the date of communication; and (Cta-Circ 3173 1)

• up to 30 days, in the case of a difference not communicated by means of a DCD, counted from the date of the exchange or return session in which the difference occurred. (Cta-Circ 3173 1)

II - any losses resulting from differences identified in Compe must be subject to reimbursement through an agreement between the parties, observing the remuneration limits currently in force in the market. (Cta-Circ 3173 1)

c) Interbank Receipt, which must be used exclusively for the settlement of obligations related to: (Circ 3118 art 1º V; Cta-Circ 3173 1)

I - tariffs within Compe; (Circ 3118 art 1º § 3º I; Cta-Circ 3173 1)

II - allocation of unified transport costs for compensable documents; and (Circ 3118 art 1º § 3º II; Cta-Circ 3173 1)

III - representation services provided in Compe. (Circ 3118 art 1º § 3º III; Cta-Circ 3173 1)

d) Remittance Communication (CR); (Circ 2315 art 4º; Circ 3118 art 1º VI; Cta-Circ 3173 1)

e) Return Communication (CD). (Circ 2315 art 3º; Circ 3118 art 1º VII; Cta-Circ 3173 1)

2 - A Compe participant may refrain from delivering, in exchange sessions, to the institution with which it maintains a bilateral truncation agreement, the documents it has accepted. (Circ 3118 art 2º; Cta-Circ 3173 1)

3 - The data regarding truncated documents must be forwarded to Compe, electronically, in the regulated manner. (Circ 3118 art 2º § 1º; Cta-Circ 3173 1)

4 - The bilateral agreement referred to in item 2 must:
(Circ 3118 art 2º § 2º; Cta-Circ 3173 1)

a) observe the legal and regulatory provisions related to the custody of documents and to the rights of their issuers and beneficiary correspondents, including with respect to the provision of copies of documents and related information; (Circ 3118 art 2º § 2º I; Cta-Circ 3173 1)

b) clearly establish the responsibilities of each of the contracting parties, including regarding: (Circ 3118 art 2º § 2º II; Cta-Circ 3173 1)

I - verification of aspects related to the standard of the check and its legal and regular completion; and (Circ 3118 art 2º § 2º II a; Cta-Circ 3173 1)

II - occurrence of frauds; (Circ 3118 art 2º § 2º II b; Cta-Circ 3173 1)

c) be informed to Banco do Brasil S.A., in the capacity of executor of the services of compensation of checks and other papers, with a minimum advance of five business days relative to the contract validity date, specifying the places and documents covered. (Circ 3118 art 2º § 2º III; Cta-Circ 3173 1)

5 - The CR aims solely and exclusively to allow the bank accepting the deposit to advance to the drawee bank, when the latter is not present or represented in the Regional Integrated Clearing System (SIRC) where the check was accepted, the data of the compensated checks with a value higher than the limit value established for checks exchanged in specific sessions, observed that:
(Circ 2315 art 4º § 1º/4º; Cta-Circ 3173 1)

a) it is the responsibility of the Executor to disclose to Compe participants the standardized model of the CR, the filling instructions, and the operational procedures to be observed by the institutions; (Circ 2315 art 4º § 1º; Cta-Circ 3173 1)

b) the CR is compensated in São Paulo (SP), in the night exchange session on the same date as the acceptance; (Circ 2315 art 4º § 2º; Cta-Circ 3173 1)

c) the check corresponding to the CR must be delivered in São Paulo (SP), in the night exchange session, observing the following deadlines: (Circ 2315 art 4º § 3º a,b; Cta-Circ 3173 1)

I - until the next business day after the delivery of the CR, when accepted in SIRC of state capitals, except São Paulo (SP), or in SIRC of the interior of São Paulo; (Circ 2315 art 4º § 3º a; Cta-Circ 3173 1)

II - until the second business day following the delivery of the CR, when accepted in SIRC of the interior of other states; (Circ 2315 art 4º § 3º b; Cta-Circ 3173 1)

d) in the event of eventual losses caused by the incorrect transcription of the check data in the CR, the financial adjustment must be made between the involved parties, through remuneration negotiable within the limits currently in force in the market; (Circ 2315 art 4º § 4º; Cta-Circ 3173 1)

6 - The following are compensable by means of the System: (Circ 772 1; Cta-Circ 3173 1)

a) Local: documents circulated over the System itself; (Circ 772 1; Cta-Circ 3173 1)

b) Regional Integrated: documents circulated over the places of the System itself, even if they have been forwarded by bank branches not participating in the System; (Circ 772 1; Cta-Circ 3173 1)

c) National: checks circulated over places participating in this System and not covered by the Local System or SIRC in which they are being exchanged. (Circ 772 1; Cta-Circ 3173 1)

7 - Interbank Receipts may only be exchanged in night sessions. (Cta-Circ 3173 1)

8 - It is prohibited, for the purpose of forwarding to Compe, to attach any documents to the compensable papers, except in the case of DAD. (Circ 772 1; Cta-Circ 3173 1)

9 - The documents forwarded to Compe must contain, obligatorily:
(Circ 772 1; Cta-Circ 3173 1)

a) on the back of all documents: a compensation stamp with the date of the exchange session, the name of the Sender, its code number, and the declaration "Settlement by means of the Compensation Service for Checks and Other Papers"; (Circ 772 1; Cta-Circ 3173 1)

b) on the face of the checks: a crossing stamp, which may be special (in black) or general (in white). (Cta-Circ 3173 1)

10 - The affixing of the compensation stamp substitutes the signature of the Sender for all legal purposes and effects. (Circ 772 1; Cta-Circ 3173 1)

11 - The cancellation of the compensation stamp is only valid when authenticated by the Sender, becoming unnecessary, however, in cases where the re-presentation of the document is made by the same Participant indicated in the first presentation. (Circ 772 1; Cta-Circ 3173 1)

12 - Until the respective compensation is considered perfect and complete, the Recipient is a faithful depositary of the documents forwarded to him by the Sender. (Circ 772 1; Cta-Circ 3173 1)

13 - With respect to checks, in particular, the following must also be observed: (Lei 7357 art 39; Circ 772 1; Circ 2313 art 2º,3º; Circ 2644 art 4º; Cta-Circ 3173 1)

a) the affixing of the compensation stamp also makes the Sender responsible, before the drawee establishment, for the regularity of the series of endorsements; (Lei 7357 art 39; Circ 772 1; Cta-Circ 3173 1)

b) only those that have been manufactured in accordance with the standards and requirements referred to in section 3-2-1 may transit through Compe; (Circ 772 1; Cta-Circ 3173 1)

c) only those presented or re-presented by another establishment, other than that indicated in the special crossing, when provided with an endorsement-mandate; (Circ 772 1; Cta-Circ 3173 1)

d) when of a value equal to or lower than the limit value, they may only transit in the specific sessions for the exchange of these documents if they contain a compensation stamp with the date of their acceptance and, consequently, with the date of the business day prior to the session in which they are being exchanged; (Circ 2644 art 4º; Cta-Circ 3173 1)

e) those payable by means of the National Compensation System may be exchanged together with the other checks in the normal and specific sessions, according to their value, in the capital of São Paulo (SP) and in any SIRC headquarters place and in the Local Systems of Manaus (AM), Porto Velho (RO) and Rio Branco (AC), provided that the drawee establishments are represented in the respective clearing chamber; (Cta-Circ 3173 1)

f) checks containing the expression "PAYABLE IN ANY BRANCH" and the special code 999-7, indicative of the National Chamber, are considered, in the Compensation System where they are presented, for the purposes of settlement by compensation, as checks of the place itself, provided that the drawee bank is present or represented in the System. (Circ 2313 art 2º,3º; Cta-Circ 3173 1)

14 - In the event of inoperability in SIRC, all documents accepted during this period may be exchanged in the session of the business day following the regularization of the situation that caused the inoperability. (Cta-Circ 3173 1)

15 - The limit value of checks to be exchanged in the specific sessions of Compe is occasionally altered by the Central Bank of Brazil/Banking Operations and Payment Systems Department (Deban) taking into account technological evolution, productivity gains, and the reliability and security of Compe. (Circ 3102 art 1º e parágrafo único; Circ 2644 art 2º; Cta-Circ 3173 1)

Annex V

TITLE: BRAZILIAN PAYMENT SYSTEM (SPB) - 3
CHAPTER: Central Clearinghouse for Checks and Other Papers-6
SECTION: Documents in Return - 4 (*)

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1 - In Regional Integrated Clearing Systems (SIRC) and Local Systems, documents are considered settled if they are not returned until the business day following the date contained in the compensation stamp or in the mechanical authentication, in the case of a Collection Slip Compensation Sheet, with the following exceptions:
(Law 8021 art 2º; Res 1631 Annex Regulation (RA) art 6º; Res 1682 art 1º; Circ 772 1; Circ 1584 art 7º II; Circ 2444 art 1º parágrafo único; Circ 2557 art 1º; Circ 2558 art 1º parágrafo único I,II; Cta-Circ 3173 1)

a) checks with a value equal to or lower than the limit value when exchanged in the specific sessions of these documents may be returned until the second business day following the date mentioned above: (Circ 772 1; Cta-Circ 3173 1)

b) Participants have one more business day of deadline for return, in the case of: (Circ 772 1; Cta-Circ 3173 1)

I - documents pertinent to the place where a holiday occurs, if accepted and exchanged on the business day prior to the event or if accepted by the other places on the day of the event; (Cta-Circ 3173 1) (NR)

II - documents forwarded, improperly, after the exchange session, to branches other than the drawee ones. In this case, the drawee bank must deliver to the sending bank, in the daytime return session of the first business day after the exchange, a written communication about the occurrence, accompanied by a photocopy (front and back) of the checks in question; (Cta-Circ 3173 1) (NR)

c) it is prohibited, in the Central Clearinghouse for Checks and Other Papers (Compe), to return a check due to a discrepancy between the value expressed in figures and by extenso, with any difference verified in the compensatory movement, as a consequence of the processing of the check in question by the value expressed in figures, being able to be regularized by means of a Difference Adjustment Document (DAD), issued in:
(Circ 2558 art 1º parágrafo único I,II; Cta-Circ 3173 1)

I - up to 15 (fifteen) days, in the case of a difference communicated by Difference Communication Document (DCD), counted from the date of its delivery; (Circ 2558 art 1º parágrafo único I; Cta-Circ 3173 1)

II - up to 60 (sixty) days, in the case of a difference not communicated by DCD, counted from the date of the movement in which the difference occurred. (Circ 2558 art 1º parágrafo único II; Cta-Circ 3173 1)

d) may be returned at any time: (Law 8021 art 2º; Circ 2444 art 1º parágrafo único; Cta-Circ 3173 1)

I - allowing re-presentation, checks with a value higher than R$100.00 (one hundred reais), issued without the identification of the beneficiary; (Law 8021 art 2º; Circ 2444 art 1º parágrafo único; Cta-Circ 3173 1)

II - documents returned for reason 40 - invalid currency; (Cta-Circ 3173 1)

III - checks returned for reasons 12, 13, 14, 25, 35, 43, 44 and 45 that have been re-presented. (Res 1682 RA art 6º; Circ 1584 art 7º II; Cta-Circ 3173 1)

e) any paper presented in Compe, whose transit is not authorized, must be returned in the same compensatory cycle, for reason 61 - "non-compensable paper". (Circ 2557 art 1º; Cta-Circ 3173 1)

2 - The deadlines for the return of checks settled by means of the National Compensation System, established in the table contained in section 3-6-9, must be counted:
(Circ 2315 art 2º I,II; Cta-Circ 3173 1)

a) from the date of the exchange, inclusive, for checks exchanged in the specific sessions (daytime sessions); (Circ 2315 art 2º I; Cta-Circ 3173 1)

b) from the business day following the date of the exchange, inclusive, for checks exchanged in the normal sessions (nighttime sessions). (Circ 2315 art 2º II; Cta-Circ 3173 1)

3 - The Remittance Communication (CR) may be returned by the drawee bank:
(Circ 2315 art 4º § 5º a/c; Cta-Circ 3173 1)

a) for the same reasons and deadlines established in this section for the return of checks, insofar as applicable; (Circ 2315 art 4º § 5º a; Cta-Circ 3173 1)

b) for absence or inconsistency of mandatory data; (Circ 2315 art 4º § 5º b; Cta-Circ 3173 1)

c) on the next business day, when the corresponding check is not delivered to the drawee bank according to the deadlines established in item 3-6-3-5. (Circ 2315 art 4º § 5º c; Cta-Circ 3173 1)

4 - The Return Communication (CD) aims to allow the drawee bank to advance the data of the returned checks to the bank accepting the deposit, when the latter is not present or represented in the SIRC of the drawee agency, observed that:
(Circ 2315 art 3º § 1º/4º; Cta-Circ 3173 1)

a) it is the responsibility of the Executor to disclose to Compe Participants the standardized model of the CD, the filling instructions, and the operational procedures to be observed by the institutions; (Circ 2315 art 3º § 1º; Cta-Circ 3173 1)

b) the drawee bank issues a CD, observing the provisions of the caput of this item, which is compensated in the SIRC where the check was exchanged until the nighttime return session, observing, for each situation, the deadlines contained in section 3-6-9; (Circ 2315 art 3º § 2º; Cta-Circ 3173 1)

c) the check corresponding to the CD must be delivered in the same SIRC where the same was compensated, observing the deadlines contained in section 3-6-9; (Circ 2315 art 3º § 3º; Cta-Circ 3173 1)

d) when a holiday occurs in the SIRC centralizer of São Paulo (SP), the CDs must be compensated in the specific exchange session of the business day following the event, in that centralizer; (Cta-Circ 3173 1)

e) in the event of eventual losses caused by the inconsistency of the data provided, the financial adjustment must be made between the involved parties, through remuneration negotiable within the limits currently in force in the market, clarified that:
(Circ 2315 art 3º § 4º a,b; Cta-Circ 3173 1)

I - the endorsing bank is responsible for the correct information of the branch code/account number on the back of the check; (Circ 2315 art 3º § 4º a; Cta-Circ 3173 1)

II - the bank issuing the CD is responsible for the exact transcription of the data contained in the returned checks. (Circ 2315 art 3º § 4º b; Cta-Circ 3173 1)

f) the drawee bank may issue a CD, within the scope of a Regional Integrated Clearing System (SIRC), of the Central Clearinghouse for Checks and Other Papers (Compe), to advance the data of the returned checks to the bank accepting the deposit, in situations of inoperability of transport of the route of the drawee agency, duly communicated by the Executor, and in the case of documents returned, not forwarded to the centralizer by the drawee agency within the normal return deadline, observed that:
(Cta-Circ 3173 1)

I - the bank issuing the CD must deliver the physical document to the recipient bank until the nighttime return session of the first business day following the issuance of the CD, or of the business day following the regularization of the inoperability; and (Cta-Circ 3173 1)

II - participants must also observe, for these cases, the other procedures related to the issuance of CD. (Cta-Circ 3.173 1)

5 - In the event of inoperability in SIRC:
(Cta-Circ 3173 1)

a) documents exchanged in accordance with the provisions of section 3-6-3 may be returned on the business day following the exchange; (Cta-Circ 3173 1)

b) documents, whose return deadline expires on the day of the inoperability, may be returned on the 1st (first) business day following the regularization of the situation that caused the inoperability, provided that:
(Cta-Circ 3173 1)

I - the Executor timely communicates to Participants the route with inoperability; (Cta-Circ 3172 1)

II - the drawee bank timely communicates to the sending bank the occurrence of the inoperability and identifies the document in return. (Cta-Circ 3173 1)

6 - The reasons determining the return must always be specified on the back of the documents, in a legible manner and without erasures. In the case of checks and compensation sheets, the reasons are indicated obligatorily by means of the return stamp. (Circ 772 1; Cta-Circ 3173 1)

7 - The check and the CR, this insofar as applicable, may be returned for one of the reasons classified below:
(Res 1631 RA art 6º; Res 1682 art 1º; Circ 1584 art 7º I,II; Circ 2313 art 4º; Circ 2315 art 3º § 5º a; Circ 2398 RA art 15; Circ 2444 art 1º; Circ 2558 art 3º; Circ 2655 arts 1º,3º; Circ 3050 art 1º; Cta-Circ 3173 1)

CHECK WITHOUT FUND COVERAGE
11 - Check without funds - 1st presentation;
12 - Check without funds - 2nd presentation;
13 - Account closed;
14 - Spurious practice;

PAYMENT IMPEDIMENT
20 - Check sheet cancelled by request of the account holder; 21 - Counter-order (or revocation) or opposition (or stay) to payment by the issuer or by the holder; 22 - Discrepancy or insufficiency of signature; 23 - Checks issued by entities and bodies of the direct and indirect federal public administration, in disagreement with the requirements contained in article 74, § 2º, of Decree-law nº 200, of 25/02/67; 24 - Judicial block or determination by the Central Bank of Brazil; 25 - Cancellation of checkbook by the drawee bank; 26 - Temporary transport inoperability; 27 - Unforeseen municipal holiday; 28 - Counter-order (or revocation) or opposition (or stay), caused by theft or robbery; 29 - Check blocked due to lack of confirmation of receipt of the checkbook by the account holder; 30 - Theft or robbery of mailbags - intended to cover the return of checks subject to theft or robbery of mailbags;

CHECK WITH IRREGULARITY
31 - Formal error (no issue date, month written numerically, absence of signature or no registration of the value by extenso); 32 - Absence or irregularity in the application of the compensation stamp; 33 - Discrepancy of endorsement; 34 - Check presented by a bank establishment that is not that indicated in the black crossing, without the endorsement-mandate; 35 - Fraudulent check, issued without prior control or responsibility of the bank establishment ("universal check"), or still with alteration of the drawee place, and checks containing the expression "PAYABLE IN ANY BRANCH" presented in disagreement with the provisions of section 3-2-1; 36 - Check issued with more than one endorsement - Law nº 9311/96; 37 - Inconsistent registration - electronic compensation;

IMPROPER PRESENTATION
40 - Invalid Currency;
41 - Check presented to a bank other than the drawee; 42 - Non-compensable check in the session or compensation system in which presented; 43 - Check, previously returned for reasons 21, 22, 23, 24, 31 and 34, not subject to re-presentation due to the persistence of the reason for return; 44 - Prescribed check; 45 - Check issued by an entity obliged to carry out movement and use of National Treasury financial resources through Bank Order; 46 - CR, when the corresponding check is not delivered to the drawee bank within the established deadlines; 47 - CR with absence or inconsistency of mandatory data regarding the corresponding check; 48 - Check with a value higher than R$100.00 (one hundred reais), issued without the identification of the beneficiary, if forwarded to Compe, must be returned at any time; 49 - Null Remittance, characterized by the re-presentation of a check returned for reasons 12, 13, 14, 20, 25, 35, 43, 44 and 45, its return may occur at any time.

8 - Reason 12 is characterized when the re-presentation of the check occurs on a date different from the occurrence of reason 11, unless in this time interval there are occurrences that fall under reason 21 or reason 25. (Res 1631 RA art 7º; Res 1682 art 1º; Circ 1994 art 1º IV; Cta-Circ 3173 1)

9 - Reason 14 will be used exclusively by banks that assume the "Commitment of Prompt Acceptance". (Res 1631 RA arts 8º,13; Res 1682 art 1º; Circ 2193 art 2º; Cta-Circ 3173 1)

10 - The return of administrative checks for reason "21 - counter-order (or revocation) or opposition (or stay) to payment by the issuer or by the holder", initiated by the issuing institution itself, is prohibited. (Cta-Circ 3173 1)

11 - The use of reason 28 is conditioned upon the presentation, by the issuer, in the case of counter-order (or revocation) as well as in the case of opposition (or stay), or by the legitimate holder, in the case of opposition (or stay), of the respective police report. (Circ 2655 art 1º; Cta-Circ 3173 1)

12 - The return of a check for reason 29 is prohibited when the authenticity of the account holder's signature is confirmed by the drawee bank in any check from the checkbook, in which case the receipt of the checkbook is considered confirmed. (Circ 2655 art 3º parágrafo único; Cta-Circ 3173 1)

13 - Reason 41 does not support the return of checks that, drawn on places participating in the system in which they were presented, were inappropriately forwarded, after the exchange session, to branches other than those on which they were drawn. (Circ 1584 art 6º; Cta-Circ 3173 1)

14 - The check is payable on demand, considering any mention to the contrary as unwritten, and must be presented for payment, starting from the day of issuance, within a period of 30 (thirty) days, when issued in the place where the drawee establishment is located, and of 60 (sixty) days, when issued in a different place. (Res 1631 RA art 11; Res 1682 art 1º; Cta-Circ 3173 1)

15 - After 6 (six) months from the period provided for in item 14, the check is returned for reason 44. (Res 1631 RA art 12; Res 1682 art 1º; Cta-Circ 3173 1)

16 - In returns for reasons 12, 13, and 14, banks are responsible for including the account holder in the Register of Issuers of Checks Without Funds (CCF). (Res 1631 RA art 10; Res 1682 art 1º; Cta-Circ 3173 1)

17 - In the return of checks forwarded to the National System, documents printed in a currency different from the current monetary standard, reason 40 prevails over those related to insufficient funds. (Cta-Circ 3173 1)

18 - In the return of checks forwarded to the National System, the following must also be observed: (Circ 772 1; Circ 2315 art 2º parágrafo único a,b; Cta-Circ 3173 1) a) returns must occur: (Circ 2315 art 2º parágrafo único a,b; Cta-Circ 3173 1) I - in the same SIRC where exchanged; (Circ 2315 art 2º parágrafo único a; Cta-Circ 3173 1) II - in the SIRC of the drawee agency, when the endorsing bank is present or represented therein; (Circ 2315 art 2º parágrafo único b; Cta-Circ 3173 1) b) they must always be indicated by means of the normal return stamp, in a legible manner and without erasures, the reason determining the return and the date on which the check is being challenged by the drawee bank branch; (Circ 772 1; Cta-Circ 3173 1) c) on the upper external part of the return stamp, the date of the session in which the check is effectively being returned must be indicated by stamp. This measure is the exclusive responsibility of the bank branches participating in Compe in their respective SIRC centralizers; (Circ 772 1; Cta-Circ 3173 1) d) for the purpose of counting the return period, a check without indication of the State Federation in which the drawee agency is located is considered drawn on the place in the interior of the State in which it was accepted for deposit; (Circ 772 1; Cta-Circ 3173 1) e) Participants cannot challenge, during the session, the return of checks whose periods, established for this purpose, have expired. The challenge of a return thus effected is only admitted in the subsequent return session; (Circ 772 1; Cta-Circ 3173 1) f) returns of documents effected irregularly may be challenged by participants until the night return session of the next business day; (Cta-Circ 3173 1) g) challenges effected inappropriately must be regularized by returning the documents until the night return session of the next business day. (Cta-Circ 3173 1)

19 - Any paper presented for clearing whose transit through Compe is not authorized must be returned, in the same clearing cycle, for reason: 61 - Non-clearable Paper. (Circ 1584 art 2º; Circ 2557 art 1º; Cta-Circ 3173 1)

20 - Interbank Receipts may also be returned for reason 61 when their purposes diverge from those defined in section 3-6-3, or when they do not contain the signature and identification of the issuer, name, and CNPJ; and for reason 42, when exchanged in the session other than that indicated in section 3-6-3. (Cta-Circ 3173 1)

21 - In the electronic clearing of collection slips, the inconsistency of the informed data allows the recipient bank to return the cleared value for reason 63 - Inconsistent Registration; except in the case of data reproduction errors, regarding collection slips issued from 2/5/1995, without the self-check digit, which is the responsibility of the issuing bank. (Circ 2398 RA art 22; Cta-Circ 3173 1)

22 - In the impossibility of total or partial processing of the file, with responsibility of the sending bank, or also, in the case of forwarding documents in conventional form, the recipient bank is allowed to return the papers possibly in its possession and not to accept the respective debits and/or credits, if applicable, with the papers being returned for reason 64 - Logical file not processed/partially processed. (Circ 2398 RA art 10; Cta-Circ 3173 1)

23 - The return of any document for adjustment of differences found in the forwarding of clearable papers from Participant to Participant is prohibited. (Circ 772 1; Cta-Circ 3173 1)

24 - The adjustment of differences verified in the clearing movement must be effected as follows: (Circ 772 1; Cta-Circ 3173 1) a) when it concerns payments, it is always initiated by the Participant who is financially prejudiced. The favored Participant must communicate the fact to the prejudiced establishment, immediately after the discovery of the difference, by means of the form called Difference Communication Document (DCD); (Circ 772 1; Cta-Circ 3173 1) b) in the case of receipts, it is always initiated by the recipient bank of the respective clearing slips, regardless of whether it is financially favored or prejudiced. (Cta-Circ 3173 1)

25 - In the case of difference adjustment effected by means of the issuance of DAD, the adjustment of eventual losses is made between the parties, provided that the sending bank is not the prejudiced one, through remuneration negotiable within the limits current in the market. (Cta-Circ 3173 1)

26 - The DAD must be issued within the following periods: (Circ 2558 art 1º parágrafo único I,II; Cta-Circ 3173 1) a) up to 15 (fifteen) days, in the case of difference communicated by DCD, counted from the date of its delivery; (Circ 2558 art 1º parágrafo único I; Cta-Circ 3173 1) b) up to 30 (thirty) days in the case of difference not communicated by means of DCD, counted from the date of the exchange session or return session in which the difference occurred; (Cta-Circ 3173 1) c) up to 60 (sixty) days, in the case of difference not communicated by DCD, counted from the movement where the difference occurred, caused by divergence between the value expressed in figures and in words. (Circ 2558 art 1º parágrafo único II; Cta-Circ 3173 1)

27 - The DAD may be challenged, at the time of delivery or during the subsequent return session, if the documentation attached to it is not sufficient to prove the difference. (Circ 772 1; Cta-Circ 3173 1)

28 - The DAD referring to a difference already cleared must be returned for reason 53 - Inappropriate Presentation. (Cta-Circ 3173 1)

29 - The return of documents to the clearing house is subject to the payment of a service fee to the Operator, reversed in favor of Compe, in the amount of R$0.35 (thirty-five cents of a real). The service fee collected on a document whose return is challenged in the manner provided for in section 3-6-7 will not be refunded by the Operator. (Res 1631 RA art 14 a,b; Res 1682 art 1º; Circ 1584 art 4º; Circ 2557 art 1º; Cta-Circ 3173 1)

30 - The return of the DAD is exempt from the payment of the service fee mentioned in the previous item. (Circ 772 1; Cta-Circ 3173 1)

31 - The service fee is the responsibility of: (Res 1631 RA art 14 a,b; Res 1682 art 1º; Circ 1584 art 2º; Circ 2398 RA art 10 II,III, 15; Circ 2557 art 1º; Cta-Circ 3173 1) a) the recipient bank, in the case of check return caused by any of the reasons from 11 to 25, its transfer to the account holder permitted when reasons 11 to 24 are configured; (Res 1631 RA art 14 a; Res 1682 art 1º; Cta-Circ 3173 1) b) the sending bank, with its transfer to the depositor prohibited, in the occurrence of return of: (Res 1631 art 14; b; Res 1682 art 1º; Circ 1584 art 3º parágrafo único; Circ 2398 RA art 10 II, 15; Circ 2557 art 1º; Cta-Circ 3173 1) I - check, for any of the reasons from 32 to 49; (Res 1631 art 14; b; Res 1682 art 1º; Circ 2398 RA art 15; Cta-Circ 3173 1) II - non-clearable paper, for reason 61; (Circ 1584 art 2º; Circ 2557 art 1º; Cta-Circ 3173 1) c) the sending bank, with its transfer to the depositor permitted, in the occurrence of check return, for reason 31. (Res 1631 RA art 14 b; Res 1682 art 1º; Cta-Circ 3173 1)

32 - The return of CR may only occur in the daytime session. (Cta-Circ 3173 1)

33 - The endorsing bank of the check is obliged to accept the return of CR for reason "47 - absence or inconsistency of mandatory data". (Cta-Circ 3173 1)

34 - Any inappropriate return of the CR confers upon the sending bank the right to promote the financial adjustment with the drawee, through remuneration negotiable within the limits current in the market. (Cta-Circ 3173 1)

35 - The physical delivery of the check corresponding to CD occurs obligatorily in the night session. (Cta-Circ 3173 1)

36 - Any losses resulting from differences identified in Compe must be subject to reimbursement through agreement between the parties, observing the remuneration limits current in the market. (Cta-Circ 3173 1)

Annex VI

TITLE: BRAZILIAN PAYMENT SYSTEM (SPB) - 3
CHAPTER: Central Clearing House for Checks and Other Papers-6
SECTION: Clearing Sessions - Exchange - 6 (*)

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1 - The exchange is processed by means of direct delivery, to each Recipient, of closed envelopes, containing the documents to be cleared to debit and credit, with the respective sum tapes duly authenticated. The Sender expressly declares the quantity and total value of the documents contained in each envelope, assuming full responsibility for them. (Circ 772 1; Cta-Circ 3173 1)

2 - According to local needs and conveniences, the exchange session may be divided into 2 (two) or more time slots. (Circ 772 1; Cta-Circ 3173 1)

3 - The opening of envelopes by Participants during exchange sessions is prohibited. (Circ 772 1; Cta-Circ 3173 1)

4 - In each exchange session, in the presence of representatives of the Sender and Recipient establishments, the Operator must open at least one envelope to verify its content, or as many as requested by a duly accredited employee of the Central Bank of Brazil, recording the occurrence. The irregularities eventually found are the responsibility of: (Res 885; Circ 772 1; Cta-Circ 3173 1) a) the Sender, when applicable to the following hypotheses: (Circ 772 1; Cta-Circ 3173 1) I - absence of sum tape; (Circ 772 1; Cta-Circ 3173 1) II - sum error; (Circ 772 1; Cta-Circ 3173 1) III - sum tape devoid of authentication; (Circ 772 1; Cta-Circ 3173 1) IV - lack of indication or incorrect indication of the quantity of documents; (Circ 772 1; Cta-Circ 3173 1) V - documents devoid of the clearing or crossing stamp; (Circ 772 1; Cta-Circ 3173 1) VI - papers not provided for in section 3-6-3 or accompanied by other documents; (Circ 772 1; Cta-Circ 3173 1) VII - forwarding of documents in a quantity higher than that established for each batch; (Cta-Circ 3173 1) VIII - the use of staples on documents; (Cta-Circ 3173 1) b) the Recipient, when related to the transit of checks made in disagreement with the standards established in section 2-1-18, contained in Cadoc as model 38058-0; (Res 885; Circ 772 1; Cta-Circ 3173 1)

5 - The time of the sessions must be fixed by consensus of the Participants, observed that: (Circ 772 1; Cta-Circ 3173 1) a) the start of the exchange session must occur at least two hours after the closing of external business hours of the majority of Participants in the place, in order to allow the forwarding to Compe of all documents on the same day they are accepted; (Circ 772 1; Cta-Circ 3173 1) b) only when duly justified, an interval lower than that provided for in clause "a" is admitted, and provided that the Participants, in a meeting especially convened by the Operator, assume the commitment to forward to Compe the total quantity of documents on the same day they are accepted; (Circ 772 1; Cta-Circ 3173 1) c) the change of session time is subject to the authorization of the Superior Administration of the Operator, who will previously hear the Central Bank of Brazil/Banking Operations and Payment Systems Department (Deban). (Circ 772 1; Cta-Circ 3173 1)

6 - In centralizing places of Integrated Regional Systems, the Operator will fix 1 (one) or more time slots for the specific exchange of checks of value equal to or lower than the limit value. (Circ 772 1; Cta-Circ 3173 1)

7 - In the event of a municipal or state holiday in a centralizing place of an Integrated Regional System (SIRC), the exchange and return sessions of documents pertinent to the centralizing places with normal business hours on that date are normally carried out. (Cta-Circ 3173 1)

8 - In the event of a municipal or state holiday in the city of São Paulo (SP), the documents related to national clearing, pertinent to the other places with normal business hours on that date, will have normal course. (Cta-Circ 3173 1)

Annex VII

TITLE: BRAZILIAN PAYMENT SYSTEM (SPB) - 3
CHAPTER: Central Clearing House for Checks and Other Papers-6
SECTION: Clearing Sessions - Return - 7

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1 - The return session is carried out, obligatorily, on the next business day after the exchange, dispensing with the use of envelopes. (Circ 772 1)

2 - The Operator must examine the movement of at least one Participant, in each return session, verifying the calculation of the service fees due, the existence of declaration on the back of the documents, and the reasons that determined the return, making the appropriate adjustments immediately. (Circ 772 1)

3 - Returns of documents effected irregularly may be challenged by Participants: (Cta-Circ 3173 1) (*) a) until the subsequent return session which may occur on the same day; (Cta-Circ 3173 1) b) within a period of 60 (sixty) days when, demonstrably, any type of fraud related to endorsement on documents is detected; (Cta-Circ 3173 1) c) at any time, when the papers are returned outside the established periods. (Cta-Circ 3173 1)

4 - Adjustments resulting from challenges must be effected in the same session in which the challenge occurred. (Cta-Circ 3173 1) (*)

5 - Except for adjustments resulting from the challenges provided for in the previous item, divergences, if any, must be eliminated after the closing of the work, through understanding between the Participants involved. (Circ 772 1)

6 - In Integrated Regional Systems, the return session is divided into two stages: (Circ 772 1; Cta-Circ 3173 1) (*) a) in the first stage, to be carried out in the afternoon, the following are returned: (Circ 772 1; Cta-Circ 3173 1) I - the documents challenged by bank branches located in the headquarters places of the Systems; (Circ 772 1; Cta-Circ 3173 1) (NR) II - facultatively, any documents challenged by bank branches located in the centralizing places; (Circ 772 1; Cta-Circ 3173 1) b) in the second stage, to be carried out at night, the following are returned: (NR) I - the documents challenged by bank branches located in the centralizing places: (Circ 772 1; Cta-Circ 3173 1) (NR) II - facultatively, any documents challenged by bank branches located in the headquarters places of the systems. (Circ 772 1; Cta-Circ 3173 1) (NR)

7 - The Return Communication (CD) may be challenged by the deposit-accepting bank: (Circ 2315 art 3º § 5º a/c; Cta-Circ 3173 1) (*) a) for the same reasons and periods established in item 3 for challenging the return of checks, insofar as applicable, both in the presentation session and in the preceding daytime sessions before the physical delivery of the check; (Circ 2315 art 3º § 5º a; Cta-Circ 3173 1) b) for absence or inconsistency of mandatory data; (Circ 2315 art 3º § 5º b) c) on the next business day after the periods provided for in item 2 of section 3-6-9, when the corresponding check is not delivered to the deposit-accepting bank. (Circ 2315 art 3º § 5º c)

8 - The inappropriate challenge of CD confers upon the drawee bank the right to effect the return of the check, within the period established for its physical delivery, as well as the right to promote the financial adjustment with the endorsing bank, through remuneration negotiable within the limits current in the market. (Cta-Circ 3173 1) (*)

Annex VIII

TITLE: BRAZILIAN PAYMENT SYSTEM (SPB) - 3
CHAPTER: Central Clearing House for Checks and Other Papers-6
SECTION: Closing of Clearing - 8

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1 - After the completion of the exchange and return sessions, the Operator records the result, which each participant has obtained, in the respective DEPOSITS OF FINANCIAL INSTITUTIONS account, code 4 1 1 30 00-1, of Cosif. (Circ 772 1; Cta-Circ 3173 1) (*)

2 - Participants must book the daily movement according to the norms issued by the Central Bank of Brazil. (Circ 772 1)

3 - Only after the closing of the return session, with all balances regularized, is the clearing considered perfect and concluded. (Circ 772 1)

Annex IX

TITLE: BRAZILIAN PAYMENT SYSTEM (SPB) - 3
CHAPTER: Central Clearing House for Checks and Other Papers-6
SECTION: Penalties - 10

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1 - Participants, in addition to the penalties provided for in section 3-6-9, are subject to fines. (Circ 772 1)

2 - The fine, in the amount of R$16.25 (sixteen reais and twenty-five cents), is reversed in favor of the Central Clearing House for Checks and Other Papers (Compe) and is applied directly by the Operator. (Cta-Circ 3173 1) (*)

3 - The Participant who: (Circ 772 1; Cta-Circ 3173 1) (*) a) does not appear, at the appointed time, to the exchange or return sessions; (Circ 772 1) b) delays, due to their own fault, the normal closing of the work; (Circ 772 1) c) is responsible for any irregularity found in the opening of envelopes mentioned in section 6 of this chapter; (Circ 772 1) d) opens an envelope in the clearing house premises; (Cta-Circ 3173 1) e) does not provide the Compe operator with statistical data by the 5th (fifth) business day after the closing of the month, or provides it with errors; (Cta-Circ 3173 1) f) leaves the clearing house before the closing of the session. (Cta-Circ 3173 1) incurs a fine.

4 - Suspension or exclusion from Compe, at the discretion of the Central Bank of Brazil, is subject to the Participant who infringes the norms of good banking practice and the legal and regulatory provisions to which financial institutions are subject. (Circ 772 1)

5 - Within a period of 10 (ten) days, counting from the date of the notice of suspension or exclusion, the establishment may file an appeal, without suspensive effect, to the National Monetary Council. (Circ 772 1)

6 - A minimum waiting period of 3 (three) months will be observed so that, if the appeal filed is denied, the excluded establishment may have any readmission request to Compe examined again. (Circ 772 1)

7 - Return or readmission to Compe will only be processed by express communication from the Central Bank of Brazil/Banking Operations and Payment Systems Department (Deban). (Circ 772 1)

Annex X

TITLE: BRAZILIAN PAYMENT SYSTEM (SPB) - 3
CHAPTER: Central Clearing House for Checks and Other Papers-6
SECTION: Special Procedures - 11 (*)

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1 - December 24, when a business day, and Ash Wednesday are considered normal days for the purpose of the functioning of the Central Clearing House for Checks and Other Papers (Compe). (Cta-Circ 3173 1)

2 - Documents exchanged on the penultimate business day of the year, drawn on centralizing places, may be returned until the first business day of the following year. (Cta-Circ 3173 1)

3 - The Executant is responsible for disclosing the schedules, established by mutual agreement with the participants, for the realization: (Cta-Circ 3173 1) a) on December 24 and Ash Wednesday, of the exchange and return sessions; (Cta-Circ 3173 1) b) on the last business day of the year, of the specific exchange session for checks with a value equal to or lower than the limit value, received on the previous business day. (Cta-Circ 3173 1)

4 - The documents exchanged in the session referred to in item "b" of item 3 of this section may be returned until the second business day following. (Cta-Circ 3173 1)

Annex XI

TITLE: BRAZILIAN PAYMENTS SYSTEM (SPB) - 3
CHAPTER: Check and Other Papers Clearing Centralizer (Compe) - 6
SECTION: Electronic Clearing (CEL) - 12 (*)

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1 - Electronic Clearing (CEL) aims to replace the flow of paper with electronic information, in clearing houses, both in exchange and in return, and must cover all documents that transit through the Check and Other Papers Clearing Centralizer (Compe). (Cta-Circ 3173 1)

2 - The CEL is carried out from the transmission of information regarding the documents to be cleared, to the official and contingency processing centers of the Executant, according to the norms and routines established by it. (Cta-Circ 3173 1)

3 - The Executant provides participants with the movement intended for them through the same channel used for the remittance, which, through prior understanding between the Executant and the participants, can be made by means of magnetic files. (Cta-Circ 3173 1)

4 - The financial result of the CEL, calculated by the Executant of Compe, is informed to the participants and transmitted to the Central Bank of Brazil. (Cta-Circ 3.173 1)

5 - The Executant must communicate to all system participants, by means of a Compe Circular, the previously agreed-upon schedules and locations for:
(a) transmission, by the participants, of the data corresponding to the documents to be cleared; (Cta-Circ 3.173 1) (b) transmission of the return and communication files, by the Executant, of the financial result to the participants. (Cta-Circ 3.173 1)

6 - The issuing bank of the document is responsible for errors resulting from the poor quality of the material used in its manufacture or from non-observance of the specifications and instructions. (Cta-Circ 3.173 1)

7 - The sending bank is responsible for the exact reproduction of the data contained in the documents to be cleared, as well as for the consequences that may arise from any errors in this reproduction. (Cta-Circ 3173 1)

8 - The receiving bank, when prejudiced, may promote the adjustment with the sending bank, through remuneration negotiable between the parties. (Cta-Circ 3173 1)

9 - The documents included in the transmitted files, whose physical remittance is due, must be forwarded to the receiving banks in the form and schedules previously agreed upon between the Executant and participants, and disclosed to the entire system by means of a Compe Circular, issued by the Executant. (Cta-Circ 3173 1)

10 - In the impossibility of total or partial processing of the file, due to the responsibility of the sending bank, or even in the case of forwarding documents in the conventional form, it is up to the receiving bank to return the papers possibly in its possession and the non-acceptance of the respective debits and/or credits, if applicable, clarified that:
(a) the papers must be returned for reason 64 - logical file not processed/partially processed; (Cta-Circ 3173 1) (b) the service fee related to the return of the documents in question is the responsibility of the sending bank. (Cta-Circ 3173 1)

11 - The Executant of Compe is responsible:
(a) for the faithful reproduction of the transmitted data; (Cta-Circ 3173 1) (b) for informing the financial result of the clearing to sensitize the Bank Reserves accounts with the Central Bank of Brazil; (Cta-Circ 3173 1) (c) for transmitting the data related to the movement intended for each participant, at the determined time, except in case of declared contingency and/or system inoperability; (Cta-Circ 3173 1) (d) for reimbursing the prejudiced participant in view of non-compliance with the provisions contained in this item, through remuneration negotiable between the parties. (Cta-Circ 3173 1)

12 - It is up to the Executant to supervise and ensure the faithful compliance with this regulation, being obliged to immediately communicate to the Department of Banking Operations and Payment Systems (Deban) any irregularity deemed relevant. (Cta-Circ 3173 1)

13 - Institutions that do not forward the entirety of their documents through the CEL are subject to the sanctions provided for in Law 4.595, of 12/31/1964, at the exclusive discretion of the Central Bank of Brazil. (Cta-Circ 3173 1)

Electronic Clearing of Checks

14 - The sending bank, while keeping custody of the documents included in the logical file, will be the bailee and responsible:
(a) for the custody of the documents during the legal periods; (Cta-Circ 3173 1) (b) for the integrity of the documents; (Cta-Circ 3173 1) (c) for providing the documents, or copies, whenever requested by the receiving bank, in the form agreed upon between the participants and disclosed by means of a Compe Circular by the Executant, clarified that, in the case of a judicial petition or administrative process, the request must be attended to within the period determined by the requesting authority; (Cta-Circ 3173 1) (d) for the implications resulting from:
I - improper return, due to incorrectly forwarded information, including in cases of improper records in the Register of Issuers of Checks without Funds (CCF); (Cta-Circ 3173 1) II - incorrect transcription, in the document, of the return reason informed by the drawn bank. (Cta-Circ 3173 1)

15 - The incorrect reproduction of the check data, by the sending bank, which prevents the sensitization of the current account, allows the drawn bank to return it for reason "37 - Inconsistent Record", with the sending bank being responsible for the service fee related to the return, which cannot be transferred to the depositor. (Cta-Circ 3173 1)

16 - In the case of a document subject to return:
(a) the drawn bank may pass the debit to the sending bank, within the regulatory period, via the return of the exchange record plus the reason for return and the State of Origin (UF); (Cta-Circ 3173 1) (b) the sending bank must apply, based on the information provided by the drawn bank, a specific return stamp, containing the expression "RETURNED BY THE DRAWN BANK FOR REASON nn". (Cta-Circ 3173 1)

17 - The drawn bank is responsible:
(a) for including the client in the CCF, based on the information provided by the sending bank; (Cta-Circ 3173 1) (b) for correctly informing the reason for return and reproducing the other information of the original record. (Cta-Circ 3173 1)

Annex XII

TITLE: BRAZILIAN PAYMENTS SYSTEM (SPB) - 3
CHAPTER: Financial Settlement - 7
SECTION: Bilateral Settlement of Checks - 1

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1 - Checks with an individual value equal to or higher than the Reference Value for Bilateral Settlement of Checks (VLB-Cheque), received in deposit, must be paid directly by the drawn financial institution to the receiving financial institution, for the aggregated value, until 12:30 on the business day following their presentation, except as provided in item 10 of this section. (Circ 3254 art 1º)

2 - The payment referred to in item 1 must be effected through the Reserve Transfer System (STR), in an irrevocable and unconditional manner. (Circ 3254 art 1º § 1º)

3 - The presentation of checks to the drawn financial institution, characterized by their physical delivery or the remittance of the corresponding electronic records, whichever occurs first, must be effected on the day of their receipt in deposit, except as provided in item 10 of this section. (Circ 3254 art 1º § 2º)

4 - Checks with a value equal to or higher than the VLB-Cheque are not subject to interbank settlement of checks:
(a) checks subject to a Remittance Communication (CR), as provided for in the regulation of the Check and Other Papers Clearing Centralizer (Compe); and (Circ 3254 art 1º § 3º I) (b) checks related to locations whose location makes it impossible to meet the deadlines established in this section. (Circ 3254 art 1º § 3º II)

5 - In the event of deciding not to pay the check presented to it in the form of item 3, the drawn financial institution must provide this information to the receiving bank, with the indication of the reason for non-payment, until the time scheduled in item 1, and, when applicable, effect the physical return of the check, observing, for this, the procedures and time that may be agreed upon in the form of item 12. (Circ 3254 art 2º)

6 - To indicate the reason for non-payment, the coding provided for in the Compe regulation for the return of checks must be used, where applicable. (Circ 3254 art 2º § 1º)

7 - On the back of the check, to indicate the reason for non-payment, a stamp must be applied:
(a) by the drawn financial institution, if the check was presented physically to it; (Circ 3254 art 2º § 1º I) (b) by the receiving financial institution, in the event of no physical remittance of the check under the provisions of section 3-6-3. (Circ 3254 art 2º § 1º II)

8 - Except as provided in item 10, the blocking period of the deposit of the check with a value equal to or higher than the VLB-Cheque may extend, at most, until the closing of the business day following its receipt. (Circ 3254 art 3º)

9 - Until interbank settlement or its physical return occurs, the drawn financial institution is responsible for the custody and preservation of the check referred to in item 1 presented physically by the receiving financial institution. (Circ 3254 art 4º)

10 - The presentation and payment deadlines and the blocking period, referred to in items 1 and 8, are subject to extension in situations related to holidays and contingencies. (Circ 3254 art 5º)

11 - Except as provided in item 10, they are responsible for any damages caused to clients, depositor or issuer, or to the counterparty financial institution:
(a) the receiving financial institution, in the event of delay:
I - in the presentation of the check to the drawn financial institution; (Circ 3254 art 6º I a) II - in the credit to the client-depositor account, if there was timely settlement by the drawn financial institution; and (Circ 3254 art 6º I b) (b) the drawn financial institution, in the event of delay:
I - in the payment of the check presented timely; (Circ 3254 art 6º II a) II - in informing the receiving financial institution of the non-payment of the check; (Circ 3254 art 6º II b) III - in its physical return, when applicable. (Circ 3254 art 6º II c)

12 - Regarding the checks referred to in item 1, commercial banks, multiple banks with commercial portfolio, and the Federal Savings Bank (Caixa Econômica Federal), must agree among themselves, through their associations with a seat on the Advisory Group for Clearing Matters, for uniform observation by all of them, among other aspects they deem necessary:
(a) the procedures and time for their presentation and, when applicable, return; (Circ 3254 art 7º I) (b) the locations referred to in item "b" of item 4; (Circ 3254 art 7º II) (c) the situations referred to in item 10; and (Circ 3254 art 7º III) (d) the manner in which proof of the physical delivery of the check is made, whether regarding its presentation by the receiving financial institution or regarding its return by the drawn financial institution. (Circ 3254 art 7º IV)

13 - The operational structure of Compe may be used for the presentation and return of checks. (Circ 3254 art 7º § 1º)

14 - Whatever is decided regarding the aspects referred to in item 10 must be submitted for approval by the Central Bank of Brazil, within 30 (thirty) business days counted from 9/2/2004, the date of publication of Circular 3254, of 8/31/2004. (Circ 3254 art 7º § 2º)

15 - The settlement system referred to in this section also applies to balance adjustments related:
(a) to the checks referred to in item 1, regardless of the value of the adjustment; and (Circ 3254 art 8º I) (b) to checks settled through Compe, if the value of the adjustment is equal to or higher than the VLB-Cheque. (Circ 3254 art 8º II)

16 - The VLB-Cheque referred to in item 1 is set at R$250,000.00 (two hundred and fifty thousand reais). (Circ 3254 art 9º)

17 - Non-observance of the provisions of this section subjects the financial institution to the provisions of item 3-5-3-3, without prejudice to other applicable legal and regulatory provisions. (Circ 3254 art 10)

Annex XIII

TITLE: BRAZILIAN PAYMENTS SYSTEM (SPB) - 3
CHAPTER: Financial Settlement - 7
SECTION: Interbank Settlement of Collection Bloquets - 2

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1 - Interbank obligations related to collection bloquets must be settled according to the following system:
(a) collection bloquets with a value equal to or higher than the Reference Value for Bilateral Settlement of Collection Bloquets (VLB-Cobrança): the values received in payment must be transferred, for the aggregated value, directly by the receiving financial institution to the collecting financial institution, until 9:00 on the business day following the collection; (Circ 3255 art 4º I) (b) collection bloquets with a value lower than the VLB-Cobrança: the values received in payment must be settled with multilateral compensation through the settlement system approved by the Central Bank of Brazil, the Interbank Credit Transfer Deferred Settlement System (SILOC), of the Interbank Payments Chamber (CIP). (Circ 3255 art 4º II, Com 12996)

2 - The fund transfer referred to in item "a" of item 1 must be effected through the Reserve Transfer System (STR), in an irrevocable and unconditional manner. (Circ 3255 art 4º sole paragraph)

3 - The return of funds by the collecting financial institution to the receiving financial institution, if applicable, must be effected:
(a) in the situation referred to in item "a" of item 1 through the STR, until 9:00 on the business day following when the funds were transferred by the receiving financial institution; and (Circ 3255 art 5º I) (b) in the situation referred to in item "b" of item 1 according to procedures and schedules defined in the regulation of the compensation and settlement system through which the remittance of funds was settled. (Circ 3255 art 5º II)

4 - The communication of payments received, made by the receiving financial institution to the collecting financial institution, and, when applicable, the communication of the return of payments, made by the collecting financial institution to the receiving financial institution, must be effected:
(a) in the situation referred to in item "a" of item 1 according to the procedures and schedules agreed upon between the financial institutions; and (Circ 3255 art 6º I) (b) in the situation referred to in item "b" of item 1 in the form of procedures and schedules defined in the regulation of the settlement system in which the obligations involved are to be settled. (Circ 3255 art 6º II)

5 - The deadlines for fund transfers, referred to in items "a" of items 1 and 3, are subject to extension in situations related to holidays and contingencies. (Circ 3255 art 7º)

6 - In the case of settlement in the form of item "a" of item 1, the financial institutions referred to in item "b" of item 3-2-3-6 must agree among themselves through their associations with a seat on the Advisory Group for Clearing Matters, for uniform observation by all of them, among other aspects they deem necessary:
(a) the procedures and schedules to be observed for the transmission of data related to collection bloquets; (Circ 3255 art 8º I) (b) the rights and obligations referred to in item I of item "b" of item 3-2-3-8l, including regarding the situations:
I - in which the receiving institution may refuse the receipt of payment of a collection bloquet; (Circ 3255 art 8º II a) II - that justify the return of payment by the collecting financial institution to the receiving financial institution; and (Circ 3255 art 8º II b) (c) the situations referred to in item 5. (Circ 3255 art 8º III)

7 - Whatever is decided regarding the aspects referred to in this section must be submitted for approval by the Central Bank of Brazil, within 30 (thirty) business days counted from 9/2/2004, the date of publication of Circular 3255, of 8/31/2004. (Circ 3255 art 8º sole paragraph)

8 - The settlement system referred to in item "a" of item 1 also applies to balance adjustments related:
(a) to collection bloquets with a value higher than the VLB-Cobrança, regardless of the adjustment value; and (Circ 3255 art 9º I) (b) to collection bloquets settled in the form of item "b" of item 1 if the global value of the adjustment is equal to or higher than the VLB-Cheque defined by the Central Bank of Brazil. (Circ 3255 art 9º II)

9 - When applicable, the receiving financial institution is responsible for the custody of the collection bloquet, for a period of 60 (sixty) days counted from the date of receipt. (Circ 3255 art 10)

10 - The VLB-Cobrança referred to in items "a" and "b" of item 1 is fixed at R$5,000.00 (five thousand reais). (Circ 3255 art 11)

11 - Non-observance of the provisions of this section subjects the financial institution to the provisions of item 3-5-3-3, without prejudice to other applicable legal and regulatory provisions. (Circ 3255 art 12)