Circular No. 3.557

CIRCULAR No. 003557 ------------------ Amends provisions relating to the Central Bank Rediscount present in the regulation annexed to Circular No. 3.105 of 5 April 2002. The Collegiate Board of the Central Bank of Brazil, in a session held on 1 September 2011, based on art. 10, items V and XII, and art. 12 of Law No. 4.595 of 31 December 1964, art. 28, § 2, of Complementary Law No. 101 of 4 May 2000, Law No. 10.214 of 27 March 2001, and Resolutions Nos. 2.949 of 4 April 2002 and 4.002 of 25 August 2011, RESOLVES: Art. 1 The regulation annexed to Circular No. 3.105 of 5 April 2002, with the amendments made by Circular No. 3.153 of 25 September 2002, shall take effect with the following amendments: "Art. 1 Access to the Central Bank Rediscount is granted to financial institutions holding a Bank Reserves account or a Settlement Account, except as provided in the sole paragraph of this article. Sole paragraph. The access of financial institutions holding a Settlement Account to the Central Bank Rediscount is restricted to transactions in the modality of purchase with resale commitment, intraday, of federal public securities registered in the Special Settlement and Custody System (Selic). Art. 2 Central Bank Rediscount transactions are granted, at the exclusive discretion of the Central Bank of Brazil, upon request of the interested financial institution, except for the automatic granting of a one-business-day transaction contracted by an institution holding a Bank Reserves account, as provided in art. 11-A of this regulation." (NR) "Art. 7 It is admissible, under the terms of the regulation of the Special Settlement and Custody System (Selic), to carry out transactions with the same federal public security, in the following association hypotheses: I - purchase transaction, by the Central Bank of Brazil, with intraday resale commitment, associated with: a) definitive purchase or with resale commitment; b) the release, by a clearinghouse or settlement and clearing service provider, of a security previously delivered as collateral by a financial institution, conditioned upon settlement, through the Reserve Transfer System (STR), of an indirect fund transfer order of equal value, issued by the same financial institution in favor of the clearinghouse or settlement and clearing service provider; or c) the multilateral creditor result in securities, arising from negotiations occurring in a clearinghouse or settlement and clearing service provider; II - payment of the transaction, to the Central Bank of Brazil, associated with: a) definitive sale or with repurchase commitment; b) the multilateral creditor financial result, arising from securities negotiations occurring in a clearinghouse or settlement and clearing service provider; III - Central Bank Rediscount transaction, except intraday, with the payment of a Central Bank Rediscount transaction of the same modality, of any term. Sole paragraph. The provisions of item III of this article do not apply to
transactions contracted by a financial institution holding a Settlement Account." (NR) "Art. 11 Intraday and one-business-day transactions are carried out through specific messages contained in the RSFN Message and File Catalog. Art. 11-A. The intraday purchase with resale commitment transaction contracted by a holder of a Bank Reserves account, not settled at the end of the operating hours of the Reserve Transfer System (STR), shall be automatically settled by the Central Bank of Brazil, on the same day, associated with the simultaneous granting of a new transaction of the same nature and with a term of one business day, observing the rules relating to the Bank Reserves account. Sole paragraph. The intraday purchase with resale commitment transaction, contracted by a financial institution holding a Settlement Account, not settled at the end of the operating hours of the STR, shall follow the procedures and rules described in art. 20-A." (NR) "Art. 16 The financial movement relating to Central Bank Rediscount transactions is carried out in the Bank Reserves account or in the Settlement Account maintained by the financial institution at the Central Bank of Brazil. Art. 17 The financial movement in the institution's account characterizes the definitive settlement of the obligations of purchase, sale, rediscount or payment of rediscount, provided for in this regulation." (NR) "Art. 20 ............................................. ........................................................ II - ................................................... Art. 20-A. The Central Bank Rediscount transaction, whose repurchase commitment is not settled by the institution until the end of the operating hours of the Reserve Transfer System (STR) on the maturity date of the commitment, shall be considered defaulted. § 1 The assets arising from defaulted transactions, under the terms of this regulation, shall be incorporated into the Central Bank of Brazil's own portfolio and sold at auction. § 2 Any negative result for the Central Bank of Brazil in the sale of these assets, determined at auction, shall be reimbursed by the counterparty institution of the defaulted transaction." (NR) Art. 2 This Circular enters into force on 5 September 2011. Brasília, 1 September 2011. Aldo Luiz Mendes Director of Monetary Policy