Circular No. 1.234

CIRCULAR No. 001234 ------------------ We inform that the Board of the Central Bank of Brazil, in view of the provisions of item II of Resolution No. 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, has 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; - 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 complying with the minimum limit referred to in item I of the preceding subitem, Central Bank Bills linked to resale commitments assumed in the form of the Regulation annexed to Resolution No. 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 No. 1.199, of 10.10.86, and observing the provisions of subitem "a" of this Circular, invest resources in securities issued, accepted or co-obligated 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, it being permitted that: a) any insufficiency verified in complying with the limit referred to in item I of subitem "a" of the previous item be eliminated by 15.10.87; b) the private securities forming part of the portfolios be held until their maturity date. 3. This Circular shall enter into force on the date of its publication, and Circular No. 1.217, of 13.08.87, is hereby revoked. Brasília-DF, 22 September 1987 Luiz Aranha Corrêa do Lago Wadico Waldir Bucchi Director Director Alkimar Ribeiro Moura Director