Circular No. 3.954

The Board of Directors of the Central Bank of Brazil, in a session held on 10 July 2019, having regard to the provisions of art. 11, item VII, of Law No. 4.595, of 31 December 1964, of art. 10 of Law No. 10.214, of 27 March 2001, and of art. 26 of Law No. 12.810, of 15 May 2013,

R E S O L V E S :

Art. 1 The Regulation of the Special Settlement and Custody System (Selic), annexed to Circular No. 3.587, of 26 March 2012, shall come into force with the following amendments:

“Art. 6 In addition to the Central Bank of Brazil and the National Treasury, the following must be participants in Selic, if they carry out operations with securities and comply with the rules of this Regulation:

.........................................................................

• II - other financial institutions; and

...................................................................” (NR)

“Art. 8 ...............................................................

.........................................................................

• II - if not a settling participant, it may be carried out in the account of any settling participant in the STR, except as provided in arts. 9 and 66.” (NR)

“Art. 9 ...............................................................

.........................................................................

• III - forward purchases and sales, own or of clients, whose commands are transmitted in accordance with the provisions of item II of art. 51.

.........................................................................

§ 3 A non-settling credit cooperative may elect as default settling participant another credit cooperative that holds a Settlement Account and that has opted for the status of settling participant in Selic.” (NR)

“Art. 13 ..............................................................

§ 1 The opening and closing times of Selic are established by the Central Bank of Brazil and disclosed in a Demab normative act.

§ 2 When extraordinary facts so justify, the Central Bank of Brazil may, with effect for a given operating day, change the opening and closing times, communicating the change to the participants.

§ 3 In situations of serious technical unavailability, the closing time may be extended, exceptionally, beyond 11:59 p.m., in which case the date in force until then shall be maintained for the recording of operations, and not the calendar date.” (NR)

“Art. 16 ..............................................................

• I - SFN Network Manual;

• II - SFN Services Catalog; and

• III - SFN Security Manual.” (NR)

“Art. 18 ..............................................................

.........................................................................

§ 2 The access manager may be registered by an administrator or by another access manager and has its competence limited to access control functions.

...................................................................” (NR)

“Art. 20 ..............................................................

• I - normal custody: for recording operations, evidencing, by means of balance, the position of securities;

• II - special custody: managed by the system administrator or by a regulatory body, or by an intervening party;

• III - brokerage: for recording the intermediation of its holder in securities purchase and sale operations; and

• IV - issuance and cancellation of securities: managed by the system administrator.

§ 1 The normal custody account and the special custody account may be own or of third parties.

§ 2 The third-party custody accounts and brokerage accounts are exclusive to the institutions mentioned in item I of art. 6.” (NR)

“Art. 21 The third-party custody account must be individualized.

§ 1 The securities of participants may not be held in custody in a third-party custody account.

§ 2 In exceptional cases, at the discretion of the Selic administrator, the third-party custody account may be non-individualized.

§ 3 The bookkeeping of a non-individualized third-party custody account is done without indicating the names of the beneficiaries of the securities held in custody therein, with the analytical records, by beneficiary, being the responsibility of the account holder.

§ 4 The analytical records referred to in §3 must be promptly presented to the Selic administrator whenever it requests them.

§ 5 The accuracy and updating of third-party registration information are the responsibility of the participant holding the account.” (NR)

“Art. 22 For the opening of the principal own normal custody account, called the standard account, the participant must send, together with the list of persons authorized to represent it, Cadoc model 30001, one of the following correspondence models:

.........................................................................

§ 2 ...................................................................

.........................................................................

• V - at the discretion of the Selic administrator, when inactive, understood as an account without balance and without movement, for more than 30 (thirty) days.

...................................................................” (NR)

“Art. 24. ..............................................................

§ 1º The consultations and statements referred to in the caput cover all entries in the account, from the date of its opening in Selic, even if there has been a change of the participant holder, in the event of transfer of a client account, or change of the settlement agent.

§ 2º The Selic participant responsible for depositing the securities in a special custody account managed by the intervening party also has access to that account, for consultation and statement purposes.” (NR)

“Art. 24-A. The client with an individualized account has access to the statements of their account on the Banco Central do Brasil website on the internet or through the participant holder of their account.” (NR)

“Art. 25. ..............................................................

.........................................................................

• XVI - transfer of securities as a result of liens and encumbrances;

• XVII - splitting and reuniting of interest coupons;

• XVIII - payment of the monthly amount owed by the participant to Selic;

• XIX - transfer of securities as a result of inheritance, partition, legacy, donation or dissolution of marital society or stable union; and

• XX - transfer of securities as a result of direct placement, cancellation or early redemption by order of the issuer.

§ 1º Also subject to registration in Selic is the promise of purchase or sale of securities made by the participant to a promisee, whether a client or not.

§ 2º The Selic administrator reserves the right to carry out or enable transfers of securities related to operations not provided for in this article.

§ 3º The operation provided for in item XVI is governed by Chapter IX-A of this Regulation.” (NR)

“Art. 41. The transfer of securities provided for in items XII, XIII, XIV, XIX or XX of art. 25 is the sole responsibility of the participants who authorized the transmission of the respective commands, and they must keep documentation proving the admissibility of the operation.

...................................................................” (NR)

“Daily reconciliation

Art. 45-A. Selic performs daily reconciliation so that the total of deposited securities and the positions maintained in all custody accounts faithfully reflect the operations carried out in the system.” (NR)

“Art. 54. ..............................................................

.........................................................................

• II - with intermediation of third parties, which require two or three double commands;

• III - combined or associated, referred to in arts. 74 to 78, in which all commands of the operations to be settled by the offsetting results are required; and

• IV - transfer of securities as a result of lien and encumbrance registered in the form provided for in item I of art. 114-B, in which all commands of the operations corresponding to the transfer of the securities specified in the list of securities forming part of the electronic form referred to in arts. 114-C and 114-D are required.” (NR)

“Art. 57. ..............................................................

.........................................................................

• III - the commands of the operations not settled due to insufficient securities, observing the provisions of arts. 69 and 70.

.........................................................................

Sole paragraph. .......................................................

.........................................................................

• II - by the rightful party in the resale/repurchase resulting from a commitment provided for in art. 25, items IV, VI or VII;

• III - automatically by Selic, related to the operation arising from a trade closed in the complementary module Electronic Securities Trading, referred to in item IV of art. 51; and

• IV - by the rightful party in the operation provided for in item XVI of art. 25.” (NR)

“Art. 66. ..............................................................

Sole paragraph. The credit cooperative holding a Settlement Account may establish an operational limit for the financial settlement of operations of a credit cooperative that does not hold a Settlement Account.” (NR)

“Art. 69. ..............................................................

Sole paragraph. The provisions of the caput do not apply to the operations provided for in item XVI of article 25.” (NR)

“Art. 70. ..............................................................

.........................................................................

§ 1º The pending period provided for in item I of the caput is counted from the moment in which:

• I - all commands required by the operation have been accepted and, if applicable, by the other operations settled with it through offsetting results; or

• II - the commands are transmitted, through Selic, for the settlement of the forward operation.

§ 2º Operations in which one of the commands is transmitted through Demab, as a participant or as administrator of Selic, are not subject to cancellation after the expiration of the pending period provided for in item I of the caput, except in the case of combined or associated operations.” (NR)

“Art. 81. ..............................................................

.........................................................................

Sole paragraph. .......................................................

• I - in Ofpub: financial institutions; and

...................................................................” (NR)

“Art. 84. The chambers must be participants of Selic, and the operations in which they participate, directly or indirectly, to be registered and settled in Selic are governed by the provisions of this chapter and, insofar as they do not conflict with it, by the provisions of the other chapters of this Regulation.” (NR)

“Art. 90. The commands of the chamber's operations are transmitted by it through any of the Selic access networks, including the RSFN.

...................................................................” (NR)

“CHAPTER IX–A

ON LIENS AND ENCUMBRANCES

Art. 114-A. Selic accepts the registration of liens and encumbrances on securities deposited therein.

§ 1º The registration of liens and encumbrances is governed by the provisions of this chapter and, insofar as they do not conflict with it, by the provisions of the other chapters of this Regulation.

§ 2º The parties involved in the registration of liens and encumbrances are the secured party and the grantor, who must hold an individualized normal custody account, whether their own or a third party's.

§ 3º In all acts necessary for the registration of liens and encumbrances, the secured party and the grantor are represented:

• I - by the participant itself, in the case provided for in item I of art. 49; or

• II - by its standard settlement agent, in the case provided for in item II of art. 49.

§ 4º The following are the sole responsibility of the secured party and the grantor:

• I - ensuring the legal feasibility of constituting the liens and encumbrances, as well as the legality of the corresponding instrument and its proper and timely registration, in the cases in which the law requires it;

• II - ensuring consistency between the instrument, where applicable, and the other information entered in the electronic form referred to in arts. 114–C and 114-D;

• III - observing the proper and timely authorization for the movement of securities, made by means of commands transmitted to Selic; and

• IV - being liable for damages arising from the rejection or absence of confirmation of the electronic form referred to in arts. 114-C and 114-D.

§ 5º It is not incumbent upon the administrator of Selic to verify the possible existence of another lien, another encumbrance or another restriction of rights of any nature over the securities subject to the registration of the lien or encumbrance, within or outside Selic, prior to the registration of the lien or encumbrance in Selic.

§ 6º Selic will keep the information provided by the secured party and the grantor during the procedures for the registration of liens and encumbrances, including in situations of rejection by either party or, furthermore, in those in which the registration request is not completed.

Art. 114-B. Liens and encumbrances may be created in the following forms:

• I - individualized, when they fall upon a specific security or a specific set of securities; or

• II - universal, when there is no prior specification of a security or a set of securities.

§ 1º In the cases provided for in items I and II of the caput, the securities subject to the registration of liens and encumbrances are held in a normal custody account registered specifically for that purpose, called a liens and encumbrances account.

§ 2º Each registration of liens and encumbrances is linked to a liens and encumbrances account.

Registration of liens and encumbrances

Art. 114-C. The process of registering liens and encumbrances in Selic comprises the following stages:

• I - one of the parties involved requests the registration by filling out an electronic form containing information on the liens and encumbrances and on the existence or not of authorization for the issuance of a certificate requested by a third party in the form of item II of art. 114-J, the list of securities with the specifications and quantities of the securities to be encumbered and, if applicable, the digitized instrument;

• II - the counterparty expresses its agreement with the completed electronic form;

• III - Selic automatically registers a liens and encumbrances account related to the request;

• IV - the parties authorize the transfer of the securities from the grantor's normal free-movement custody account to the liens and encumbrances account, by means of commands;

• V - upon each accepted double command, Selic segregates the securities from the grantor's normal free-movement custody account;

• VI - Selic verifies the correspondence between the content of the list of securities and the transmitted commands; and

• VII - Selic moves the segregated securities to the liens and encumbrances account, settles the transfer operations and effects the registration of liens and encumbrances, at which moment the constitution of the corresponding lien or encumbrance is perfected and the command given to the central depository is considered accepted, as provided for in art. 9º-A of the Regulation Annex to Circular No. 3.743, of 8 January 2015.

§ 1º The electronic form mentioned in items I and II of the caput contains the parameters to be observed by Selic, prevailing, in any case, over any divergences contained in the instrument.

§ 2º For the registration of universally created liens and encumbrances, the inclusion of the list of securities provided for in item I of the caput and the transfer of securities from the guarantor's normal free-movement custody account to the liens and encumbrances account are waived.

§ 3º In the case provided for in § 2º, the registration and the consequent creation of the lien or encumbrance shall be perfected upon the transfer of the securities from the guarantor's free-movement account to the corresponding liens and encumbrances account, in the form of art. 114-E, at which time the command given to the central depository shall be considered accepted, as provided for in art. 9º-A of the Regulation Annex to Circular No. 3.743, of 2015.

§ 4º The request for registration of liens and encumbrances shall be cancelled when rejected by any of the parties or not completed by the closing of Selic, resulting, if applicable, in:

• I - the automatic cancellation of pending commands;

• II - the release of the securities set aside in the guarantor's normal free-movement custody account; and

• III - the automatic exclusion from the liens and encumbrances account.

Amendment or rectification of the registration of liens and encumbrances

Art. 114-D. The process of amendment or rectification in the registration of liens and encumbrances comprises the following stages:

• I - one of the parties involved requests the amendment or rectification related to the registration of liens and encumbrances, by filling in, in the electronic form, the data to be amended or rectified and, if applicable, the list of securities to be transferred and/or the scanned instrument;

• II - the counterparty expresses its agreement with the electronic form;

• III - the parties authorize the transfer of securities between the guarantor's normal free-movement custody account and the liens and encumbrances account, by means of commands;

• IV - upon each accepted double command, Selic sets aside the securities from the transferring account of the operation;

• V - Selic verifies the correspondence between the content of the list of securities and the transmitted commands; and

• VI - Selic moves the securities set aside, settles the transfer operations and effects the registration of the amendment or rectification.

§ 1º The registration of amendment or rectification may be effected, and the provisions of items III to VI of the caput shall not apply, in the following cases:

• I - when it does not require movement of securities; and

• II - for universally created liens and encumbrances.

§ 2º The request for amendment or rectification of the registration of liens and encumbrances shall be cancelled when rejected by any of the parties or not completed by the closing of Selic, resulting, if applicable, in:

• I - the automatic cancellation of pending commands; and

• II - the release of the securities set aside in the guarantor's normal free-movement custody account.

Movement of securities in cases of universally created liens and encumbrances

Art. 114-E. In cases of universally created liens and encumbrances, the movement of securities between the liens and encumbrances account and the guarantor's free-movement account shall be authorized by the parties, by means of commands.

Execution

Art. 114-F. The execution of the securities held in the liens and encumbrances account is carried out by the secured party by means of transmitting a command directed to the liens and encumbrances account for the performance of a definitive purchase and sale operation of the executed securities.

§ 1º The following are the responsibility of the secured party:

• I - to comply with the legal provisions and procedures regarding the execution of the encumbered securities;

• II - to ensure that, in the event the obligation is secured by a pledge, the instrument creating the security provides for the possibility of sale of the asset or that such prerogative is contained in a power of attorney granted to the secured party by the guarantor, in accordance with art. 1.433, item IV, of the Civil Code;

• III - to transfer to the guarantor any excess financial amounts arising from the sale operations of the securities held in the liens and encumbrances account; and

• IV - to effect the extinction of the lien after carrying out all procedures related to the execution, in the form provided for in art. 114-G.

§ 2º In the case of item III of § 1º, the transfer of financial amounts shall be carried out outside Selic.

§ 3º It is the exclusive responsibility of the secured party and the guarantor to promote the transfer of the remaining securities held in the liens and encumbrances account to another account owned by them or by a third party.

§ 4º The execution of the securities does not depend on any command from the guarantor.

§ 5º It is not up to the Selic administrator to set the sale price of the executed securities.

Extinction of the registration of liens and encumbrances

Art. 114-G. The extinction of the registration of liens and encumbrances shall be carried out upon request by the secured party.

§ 1º In order for the extinction provided for in the caput to be requested, there may be no securities held in the liens and encumbrances account.

§ 2º The extinction of the registration of liens and encumbrances does not occur automatically due to the absence of securities in the liens and encumbrances account, being conditioned upon the request by the secured party provided for in the caput.

§ 3º The transfer of securities for the purpose of extinction of the registration of liens and encumbrances must observe the process described in art. 114-D and, for universally created liens and encumbrances, the provisions of art. 114-E.

Consultations and statements

Art. 114-H. The secured party and the guarantor may consult the information provided by both parties during the procedures for the registration of liens and encumbrances, including in situations of rejection or non-completion of the registration request, as well as consult information from the liens and encumbrances account and obtain the corresponding statements.

Sole paragraph. The guarantor does not have access to the identification of the counterparty of the definitive purchase and sale operation related to the execution.

Issuer events

Art. 114-I. The issuer events (interest, amortizations and redemption) related to the securities held in the liens and encumbrances account shall be credited to the account in the STR owned by the settling participant of the secured party.

Issuance of certificate

Art. 114-J. The certificate referring to the effective registration of liens and encumbrances is issued exclusively in electronic form:

• I - at any time, for the secured party and for the guarantor; or

• II - until its extinction, for a third party, provided that authorization for issuance of the certificate is granted, in the electronic form referred to in art. 114-C, item I of the caput.

§ 1 The certificate referred to in the caput indicates:

• I - for the secured party or for the guarantor, the information related to the registration of liens and encumbrances, observing the provisions of the sole paragraph of art. 114-H; and

• II - for a third party, the moment of the effective registration, the parties involved, the digitized instrument, if any, and the balance in securities of the liens and encumbrances account.

§ 2 In the case of registration of liens and encumbrances carried out universally, the certificate may be issued prior to the movement of securities to the liens and encumbrances account, in which case the inexistence of perfection of the constitution of the lien and encumbrance shall be highlighted.

Preexisting liens and encumbrances

Art. 114-K. In the case of liens and encumbrances constituted prior to the effectiveness of this Chapter, the use of the following accounts is the exclusive responsibility of the participants:

• I - normal custody fiduciary assignment;

• II - special custody managed by an intervening party in fiduciary assignment; and

• III - normal custody guarantee.

§ 1 For the accounts mentioned in items I to III of the caput, requests referring to the following are not accepted:

• I - registration of instrument;

• II - issuance of certificate; and

• III - consultation and statements made by the guarantor.

§ 2 The movement of securities:

• I - to the accounts mentioned in items I and II of the caput, is carried out by operations of transfer of securities related to the fiduciary assignment by means of:

  • a) transfer of securities from the normal custody account of free movement in which the securities of the guarantor are located to a normal custody account fiduciary assignment in the name of the secured party; or

  • b) intervention of a third party, in which case the securities are registered in a special custody account fiduciary assignment owned by the intervening party in the name of the secured party;

• II - to the account mentioned in item III of the caput, is carried out in accordance with the provisions of art. 42.

§ 3 Exclusively for the purpose of adaptation to the procedures provided for in this Chapter, the secured party may authorize the transfer of securities from the accounts mentioned in items I to III of the caput to a liens and encumbrances account, by means of commands, observing the procedures defined in arts. 114-C and 114-E.

§ 4 Upon the extinction of the liens and encumbrances referred to in the caput, the accounts mentioned in items I to III of the caput must be closed by their holder.” (NR)

Art. 2 The Open Market Operations Department (Demab) is authorized to adopt the measures deemed necessary for the execution of the provisions of this Circular.

Art. 3 The following provisions of the Regulation annexed to Circular No. 3.587, of 2012, are revoked:

• I - the sole paragraph of art. 13;

• II - items I and II of § 2 of art. 20;

• III - items I and II of the caput of art. 21;

• IV - the sole paragraph of art. 24;

• V - arts. 43 and 44; and

• VI - the sole paragraph of art. 70.

Art. 4 This Circular enters into force on 19 August 2019.

Bruno Serra Fernandes
Director of Monetary Policy