Circular No. 1.217

CIRCULAR N. 001217 ------------------ We inform that the Board of Directors of the Central Bank of Brazil, in view of the provisions of item II of Resolution n. 1.199, of 10.10.86, and of paragraphs 1 of art. 1 and sole paragraph of art. 5 of the Regulation annexed to the aforementioned Resolution, decided: a) the investments of the Short-Term Investment Funds must be represented as follows: I - 80% (eighty percent), at minimum, in Central Bank Bills; II - the remaining resources, when any, individually or cumulatively, in: - federal and state public debt securities; - Bank Deposit Certificates and Bills of Exchange accepted by a credit, financing and investment company, duly registered with the Central Custody and Financial Settlement of Securities (CETIP), or maintained in book-entry form, provided they are linked to the nominal yield of the Central Bank Bills; - securities forming part of the portfolio of institutions authorized to carry out repurchase operations, linked to repurchase commitments assumed by them, for settlement within a maximum period of 28 (twenty-eight) days counted from the assumption of the commitments; b) for the purpose of meeting the minimum limit referred to in item I of the preceding letter, the Central Bank Bills linked to resale commitments assumed in the form of the Regulation annexed to Resolution n. 1.088, of 30.01.86, shall not be counted; c) the Short-Term Investment Funds may, regardless of the limit referred to in art. 10 of the aforementioned Regulation annexed to Resolution n. 1.199, of 10.10.86, and observing the provisions of letter "a" of this Circular, invest resources in securities issued, accepted or guaranteed by the managing institution or companies linked to it, provided that the conglomerate to which the managing institution belongs is perfectly identified through the name of the Fund; d) the redemption of shares of the aforementioned Funds shall be processed on the 1st (first) business day following the receipt of the request. 2. The provisions of this Circular shall be observed as from the date of its effectiveness, with the following clarifications: a) it shall be admitted that any insufficiency verified in meeting the limit referred to in item I of letter "a" of the previous item be eliminated gradually, with the respective adaptation being made in accordance with the scheme below: I - 70% (seventy percent), at minimum, until 15.09.87; II - 80% (eighty percent), at minimum, until 15.10.87; b) the resources arising from the redemption of private securities shall be allocated to the acquisition of Central Bank Bills, until the minimum proportion established for investment in such securities is reached. 3. This Circular shall enter into force on the date of its publication, and Circulars n. 1.077, of 13.10.86, and 1.109, of 14.01.87, and Letter-Circular n. 1.608, of 21.04.87, are hereby revoked. Brasília-DF, 13 August 1987 Alkimar Ribeiro Moura Wadico Waldir Bucchi Director Director