Circular No. 1024 — Interbank Deposits - Brokers and Distributors - Intermediation in Fixed-Term Deposit Operations - Registration with the Central Custody and Financial Settlement of Securities (CETIP)

CIRCULAR N. 001024

We hereby communicate that the Board of the Central Bank of Brazil, in view of the provisions of paragraph "d" of item IV of Resolution No. 1.102 of 02.28.86, decided to issue the following rules:

a) brokerage firms and distributors of securities and negotiable instruments are authorized to intermediate the fixed-term deposit operations dealt with in item III of the aforementioned Resolution and Resolution No. 1.111 of 03.19.86, subject to the following:

I - the deposit shall be made by the aforementioned institutions, with the simultaneous transfer of the respective credit rights, through assignment, to one of the companies cited in paragraph "c" of the aforementioned item III, with the former being liable, in the capacity of assignors, for the existence of the credit, but not for its payment;

II - the redemption value of the deposit that is the object of the assignment, to be released in favor of the assignee on the respective maturity date, shall correspond to the exact value - principal plus interest - agreed by the assignor with the depositary institution; and

III - no more than one intermediation of the same deposit shall be permitted;

b) the operations carried out in the form of the preceding paragraph shall be counted for the purpose of observance, by the assignee institutions, of the limits set in paragraph "a" of Circular No. 1.008 of 03.19.86; and

c) the deposit operations shall be registered and financially settled through the Central Custody and Financial Settlement of Securities (CETIP).

2. This Circular shall enter into force on the date of its publication in the Official Gazette.

Brasília-DF, April 16, 1986

Luiz Carlos Mendonça de Barros
Director