Circular No. 3100 — Establishes the Reserve Transfer System - STR and Approves Its Regulations

CIRCULAR NO. 003100

Establishes the Reserve Transfer System - STR and approves its regulations.

The Collegiate Board of the Central Bank of Brazil, in a session held on March 27, 2002, based on the provisions of Article 9 of Resolution 2,882, of August 30, 2001,

DECIDED:

Art. 1. To establish in the Central Bank of Brazil the Reserve Transfer System - STR.

Sole Paragraph. The STR is a real-time gross settlement system for fund transfers between its participants.

Art. 2. The attached regulations, which govern the operation of the STR, are hereby approved.

Art. 3. The STR will begin operation on April 22, 2002.

Art. 4. The Department of Banking Operations and Payment Systems - Deban may alter the operating hours of the STR when special operating hours are established for the banking network, and is also authorized, along with the Department of Information Technology - Deinf, to issue norms and adopt measures necessary for the execution of the provisions of this circular.

Art. 5. This circular enters into force on the date of its publication.

Brasília, March 28, 2002

Luiz Fernando Figueiredo
Director

--------------------------------------------------------------------- Regulations attached to Circular 3,100, of March 28, 2002, which govern the operation of the Reserve Transfer System - STR.

CHAPTER I

SCOPE OF APPLICATION

Art. 1. The provisions of these regulations apply to participants of the Reserve Transfer System - STR.

CHAPTER II

DEFINITIONS

Art. 2. For the purposes of these regulations, the related expressions and terms are defined as follows:

I - settlement account: an account in which fund transfer orders issued by its holder, a STR participant, are settled;

II - Bank Reserves account: an account that records, per holder, the liquidity maintained at the Central Bank of Brazil, in national currency, by commercial banks, multiple banks, savings banks, and investment banks;

III - National Treasury Single Account: an account that records deposits maintained by the National Treasury at the Central Bank of Brazil;

IV - availability index: an index that expresses, in percentage terms, the degree of availability of the STR for participants, calculated as follows:

id = (hf / hp) x 100, where:

id = availability index;

hf = number of hours of effective operation of the STR, over the last twelve months, disregarding any extensions of normal operating hours;

hp = number of hours in which the system should have been open for use by participants, over the last twelve months, according to its normal operating hours;

V - credit order: a fund transfer order whose issuer is the participant holding the settlement account from which the funds for the transfer originate;

VI - fund transfer order: an order by means of which a transfer of funds is commanded between settlement accounts of participants;

VII - direct fund transfer order: a fund transfer order sent directly by the participant to the STR;

VIII - indirect fund transfer order: a fund transfer order sent to the STR, on behalf of the participant, through another system managed by the Central Bank of Brazil;

IX - issuing participant: the participant that issues the fund transfer order;

X - receiving participant: the participant to whose settlement account the fund transfer is commanded;

XI - National Financial System Network - RSFN: a data communication structure implemented through network technology, created with the purpose of supporting message traffic between financial institutions, clearinghouses, and compensation and settlement service providers, the National Treasury Secretariat - STN, and the Central Bank of Brazil, within the scope of the Brazilian Payment System;

XII - settlement optimization routine: a procedure for optimizing the settlement of fund transfer orders held in the waiting queue, which may involve, among other things, netting between them;

XIII - Circulating Medium System - CIR: a system managed and operated by the Central Bank of Brazil, which records and processes movements related to the circulating medium;

XIV - Special Settlement and Custody System - Selic: a system administered by the Central Bank of Brazil, intended for the custody of book-entry securities issued by the National Treasury and the Central Bank of Brazil, as well as for the registration and settlement of operations with said securities;

XV - fund transfer in favor of a client: a fund transfer in which the beneficiary of the transfer is a client of the receiving participant;

XVI - fund transfer in favor of the receiving participant: a fund transfer in which the beneficiary of the transfer is the receiving participant itself;

XVII - fund transfer in own name: a fund transfer made in the name of the issuing participant itself; and

XVIII - fund transfer on behalf of third parties: a fund transfer made in the name of a client of the issuing participant.

CHAPTER III

THE SYSTEM

Section I

Purpose

Art. 3. The purpose of the STR is to enable fund transfers between its participants.

Paragraph 1. The obligations, within the scope of the STR, related to the fund transfers referred to in the "caput" are settled in real time, operation by operation.

Paragraph 2. The fund transfers referred to in the "caput" are processed through entries in the accounts maintained by participants at the Central Bank of Brazil.

Paragraph 3. In the case of a participant holding a Bank Reserves account, the fund transfer order may be issued in own name or on behalf of third parties, in favor of the receiving participant or a client.

Section II

Management and Operation

Art. 4. The STR is managed and operated by the Central Bank of Brazil, through the Department of Banking Operations and Payment Systems - Deban.

Art. 5. The Central Bank of Brazil, in its capacity as manager and operator of the STR:

I - executes fund transfer orders and fund transfer cancellation orders as formulated by participants, provided that the requirements and procedures provided for in these regulations are observed;

II - observes the requirements, including security requirements, applicable to situations of receiving and issuing messages;

III - ensures the continuous operation of the STR, observing a minimum availability index of 99.8% (ninety-nine point eight percent);

IV - observes the legal provisions applicable to data confidentiality; and

V - provides participants with timely information regarding:

a) the operation of the system, with respect to changes in hours, the inclusion, suspension, and exclusion of participants, as well as the use of the prerogative provided for in paragraph 2 of Article 37; and

b) fund transfer orders involving the participant, except as provided in Article 45.

Section III

Structure and Technical Access

Art. 6. The structure of the STR constitutes Annex I.

Art. 7. The technical access of participants to the STR is made exclusively through the National Financial System Network - RSFN, except as provided in Article 44.

Section IV

Operating Days and Hours

Art. 8. The STR is available to participants, for the registration and settlement of fund transfer orders, on days considered business days for purposes of operations practiced in the financial market.

Art. 9. The operating hours of the STR for the registration of fund transfer orders are from 6:30 to 18:30 (Brasília time).

Paragraph 1. For fund transfer orders in favor of a client, the deadline for registration is 17:30.

Paragraph 2. Changes in the operating hours of the STR will be communicated to participants with a minimum advance notice of thirty calendar days, except for the situations provided for in paragraphs 3 and 4.

Paragraph 3. When extraordinary facts, in its exclusive judgment, justify it, the Central Bank of Brazil may, with effect for a specific session or for the sessions comprised in a determined period:

I - advance or postpone the opening; and

II - postpone the closing.

Paragraph 4. The Central Bank of Brazil may also alter the operating hours of the STR when special hours are established for the operation of the banking network.

Art. 10. The time observed by the equipment of the Central Bank of Brazil prevails over any other for all purposes.

Art. 11. For the request of the information referred to in paragraph 1 of Article 17, the STR is available to participants on all business days, from 4:00 to 24:00.

CHAPTER IV

PARTICIPANTS

Section I

Participation

Art. 12. The following participate in the STR:

I - mandatorily:
a) the Central Bank of Brazil;

b) institutions holding a Bank Reserves account; and

c) clearinghouses and compensation and settlement service providers holding a settlement account at the Central Bank of Brazil; and

II - optionally, the National Treasury Secretariat - STN.

Section II

Exclusion and Suspension of Participants

Art. 13. The closing of the account held by the participant at the Central Bank of Brazil, referred to in Chapter V, implies its immediate exclusion from the STR.

Art. 14. The Central Bank of Brazil, at its exclusive discretion, may suspend or exclude a participant that is:

I - putting the National Financial System - SFN or the STR at risk; or

II - operating in disagreement with the provisions of these regulations or other norms that regulate the operation of the SFN.

Art. 15. The STR will reject any and all fund transfer orders not yet settled involving the excluded or suspended participant.

Art. 16. The decree of intervention or the regime of temporary special administration, referred to respectively in Law 6,024, of March 13, 1974, and Decree-Law 2,321, of February 25, 1987, does not prejudice the status of participant of the institution affected by the corresponding act.

Sole Paragraph. With respect to the participant affected by the decree of any of the special regimes referred to in the "caput":

I - fund transfer orders issued by it and not yet settled are rejected by the system; and

II - the issuance of new fund transfer orders observes the procedures provided for operation under the contingency regime, referred to in Article 44, until the intervener or the board of directors, as the case may be, requests the participation of the institution in normal condition from the Central Bank of Brazil.

Section III

Rights of the Participant

Art. 17. Subject to the procedures provided for in these regulations and the norms in force related to the RSFN, the rights of the participant are:

I - to issue and receive fund transfer orders; and

II - to receive timely information regarding:

a) the processing of fund transfer orders issued by it;

b) fund transfers made to it, observed the provisions of Article 45; and

c) the balance of its settlement account at the end of each session.

Paragraph 1. Upon payment of a specific fee in the form of Chapter VII and observed the specific messages provided for in the message catalog referred to in item II of Article 26, the participant may request, with respect to dates from April 22, 2002:

I - the balance of its settlement account in the settlement session in progress or at the end of a previous session;

II - the statement of its settlement account in a certain period; and

III - the list of fund transfer orders issued by it in a certain period with their corresponding situations.

Paragraph 2. At the discretion of the participant, the response of the STR to the requests referred to in items II and III of paragraph 1 is sent through electronic files or specific messages, provided for in the message catalog referred to in item II of Article 26.

Paragraph 3. When sent by message, the response is limited to a maximum of two hundred records per request.

Section IV

Duties of the Participant

Art. 18. The participant has the duty to:

I - observe the provisions of these regulations, especially those related to the issuance and receipt of fund transfer orders;

II - ensure the security and confidentiality of fund transfer orders issued and received by it and the proper operation of the STR;

III - inform the Central Bank of Brazil, immediately, of any irregularity observed by it in the operation of the STR;

IV - promote the return of funds in the situations indicated below:

a) improper remittance, considered to be a fund transfer order in which the beneficiary was improperly indicated; and

b) error that prevents it from identifying the beneficiary, in the case of a fund transfer order in favor of a client; and

V - pay timely the fees due by it in the form of Chapter VII.

Sole Paragraph. In the event of eventual damages caused to third parties by the delay in the return of funds, the financial adjustment must be made between the parties involved through remuneration negotiable within the limits current in the market.

Art. 19. In each daily session, the participant must also:

I - remain connected to the STR, in conditions to issue and receive messages, during the entire period of operation of the system, regardless of the occurrence of local holidays;

II - make efforts to anticipate the registration of its direct fund transfer orders, avoiding the concentration of these orders in the final period of the session; and

III - promote the adequate management of its settlement account, with the purpose of minimizing the average waiting time of direct and indirect fund transfer orders issued by it.

Art. 20. The participant is responsible for the accuracy of the data reported in the fund transfer orders issued by it.

Section V

Representation

Art. 21. Each participant must credential with Deban, in the form of its statutes:

I - for requests related to the contingency operation regime, referred to in Chapter VIII, at least two representatives; and

II - for communications with the Central Bank of Brazil related to any irregularity or operational emergency, at least one representative.

Sole Paragraph. For each representative, at least two telephone numbers for contacts must be provided, including outside the operating hours of the STR.

CHAPTER V

SETTLEMENT ACCOUNTS

Art. 22. The following are settlement accounts within the scope of the STR:

I - the National Treasury Single Account;

II - the Bank Reserves accounts; and

III - the accounts maintained at the Central Bank of Brazil by clearinghouses or by compensation and settlement service providers.

Sole Paragraph. The opening and closing of the accounts referred to in items II and III observe specific regulations.

CHAPTER VI

FUND TRANSFER ORDERS

Section I

Type and Value

Art. 23. The STR settles exclusively credit orders.

Art. 24. Fund transfer orders of any value may be processed in the STR.

Section II

Issuance

Art. 25. The fund transfer order must always be issued:

I - in national currency; and

II - for settlement on the same day.

Sole Paragraph. The fund transfer order is issued by the participant directly or through another system managed by the Central Bank of Brazil, except as provided in Article 46.

Art. 26. In the issuance of fund transfer orders, participants must always observe:

I - the procedures provided for in the Technical Manual of the National Financial System Network and the Message Security Manual of the Brazilian Payment System; and

II - the formats, standards, and specifications contained in the Message Catalog of the Brazilian Payment System.

Sole Paragraph. It is the full responsibility of the participant to ensure that only persons authorized by it have access to its equipment and systems issuing fund transfer orders, adopting, for this purpose, the necessary control and security procedures.

Art. 27. The receipt notice issued by the Central Bank of Brazil (message "Confirm on Arrival - COA") constitutes, for all purposes, the protocol of receipt of the fund transfer order issued directly by the participant.

Paragraph 1. The receipt notice referred to in the "caput" contains, in addition to the record of the hour of receipt of the fund transfer order, a specific identifier that confirms its origin.

Paragraph 2. The hour referred to in paragraph 1 is that of the Greenwich Meridian (Greenwich Meridian Time - GMT).

Art. 28. The receipt of the fund transfer order within the hours referred to in the "caput" and paragraph 1 of Article 9 ensures its processing by the STR, conditioning its effective attendance to the observation of the other regulatory provisions.

Section III

Level of Preference

Art. 29. The settlement of fund transfer orders held in the waiting queue in the form of Section V of this chapter observes the following decreasing levels of preference:

I - "A", applicable exclusively to:

a) those directed to a settlement account held by a clearinghouse or by a compensation and settlement service provider, in cases authorized by the Central Bank of Brazil; or

b) those related to cash withdrawals, originated by the Circulating Medium System - CIR;

II - "B", "C" or "D", established by the issuing participant, in each order, at its discretion.

Sole Paragraph. Level "D" is assigned to the order in which the indication of the level of preference does not appear.

Section IV

Settlement

Art. 30. The fund transfer order is submitted to settlement in the chronology of its receipt by the STR.

Sole Paragraph. At the opening of the STR, the following fund transfer orders are processed, preceding any other:

I - those sent through the Special Settlement and Custody System - Selic and related to the opening procedures of this system, in accordance with its respective regulations; and

II - those related to cash withdrawals.

Art. 31. The settlement of a fund transfer order is conditioned on the existence of sufficient balance of funds in the settlement account of the issuing participant, observed the provisions of Section V of this chapter.

Paragraph 1. The financial result compensated of each participant, originating from associated, conjugated, or group operations provided for in the regulations of the Central Bank Rediscount and Selic, is equated to a fund transfer order for settlement purposes.

Paragraph 2. The registration of the settlement of the indirect fund transfer orders, related to each operation that composes the associated, conjugated, or group operations referred to in paragraph 1, is carried out individually in the settlement accounts.

Art. 32. Once performed, the settlement of the fund transfer order is irrevocable and unconditional.

Sole Paragraph. The fund transfer order is considered settled at the moment when the balances of the settlement accounts involved are altered in the records of the Central Bank of Brazil.

Art. 33. The fund transfer order issued in compliance with the regulations and sent to the STR, directly or indirectly, is presumed to be legitimate and is subject to settlement in accordance with this regulation.

Section V

Of the Waiting Queue

Art. 34. The fund transfer order is forwarded to the waiting queue if, upon submission for settlement, any of the following circumstances occur:

I - insufficient funds in its settlement account; and

II - existence of another fund transfer order from the same participant in the waiting queue, with an equal or higher preference level.

Sole Paragraph. The provisions of this article do not apply to orders issued by a clearinghouse or by a clearing and settlement service provider, nor to indirect orders originating from Selic, which, in the situations covered by items I and II, are immediately rejected by the STR.

Art. 35. Fund transfer orders maintained in the waiting queue are ordered, by the issuing participant, based on:

I - the preference level of each order; and

II - when they present the same preference level, in the chronology of their receipt by the STR.

Art. 36. The fund transfer order can only be settled after the settlement of the order preceding it in the waiting queue, except as provided in Art. 37.

Sole Paragraph. The STR processes the waiting queue of a given participant, for the purpose of settling the fund transfer orders maintained therein, when:

I - there is an entry of funds into its settlement account;

II - there is the cancellation of the fund transfer order positioned first; or

III - the liquidity optimization routine referred to in Art. 37 is activated.

Art. 37. Throughout a daily session and with a view to greater efficiency of the payment system, the Central Bank of Brazil may activate, if and when it deems necessary, a liquidity optimization routine, which may:

I - not observe the ordering criteria of the waiting queues;

II - involve the offsetting of obligations, without prejudice to the recording of the settlement of the orders, in the settlement accounts, being made one by one; and

III - have as its objective, among others, to settle the largest financial volume or the largest possible quantity of fund transfer orders maintained in the waiting queue.

Paragraph 1. The Central Bank of Brazil will initially adopt a liquidity optimization routine in the form set forth in item II, with strict observance of the ordering criteria in the waiting queues.

Paragraph 2. During the validity of the standard routine referred to in Paragraph 1, another optimization routine may be activated, at the exclusive discretion of the Central Bank of Brazil and with a view to ensuring greater fluidity to payments, which observes, isolated or jointly, items I, II, and III.

Paragraph 3. The Central Bank of Brazil will communicate, through Deban, with a minimum advance notice of thirty days, any change in the standard routine referred to in Paragraph 1.

Section VI

Of the Cancellation and Rejection of the Order Maintained in the Waiting Queue

Art. 38. The participant may request the cancellation of a fund transfer order of its issuance maintained in the waiting queue.

Paragraph 1. The request for cancellation of a fund transfer order is the sole responsibility of the participant.

Paragraph 2. In the case of an indirect fund transfer order, the cancellation request must be made through the same system in which the order to be cancelled was forwarded.

Paragraph 3. The provisions related to fund transfer orders apply, insofar as applicable, to the cancellation request.

Art. 39. In each daily session, the fund transfer orders maintained in the waiting queue are rejected by the STR:

I - at 5:35 p.m., in the case of fund transfer in favor of a client;

II - at the moment of the exclusion or suspension of the participant, or at the moment of the decree of intervention or special administration regime, respectively, according to Art. 15 and item I of the sole paragraph of Art. 16; and

III - at the closing of the system, in other cases.

CHAPTER VII

OF THE CHARGING OF FEES

Art. 40. The use of the STR subjects the participant to the payment of fees, defined in Annex II.

Paragraph 1. The fees are established by the Central Bank of Brazil with the view, exclusively, to reimbursing the expenses incurred by it in the management and operation of the STR.

Paragraph 2. Except as provided in item III of Paragraph 3 of this article, the fee value is uniform for all participants.

Paragraph 3. The Central Bank of Brazil may establish differentiated fees for the services provided within the scope of the STR, considering:

I - the time at which the fund transfer order is received;

II - the fact that the fund transfer order is or is not maintained in the waiting queue; and

III - the quantity and financial volume of the fund transfers carried out by the participant in a given period.

Paragraph 4. Changes in fees are communicated to participants with a minimum advance notice of thirty calendar days.

Art. 41. In each fund transfer order settled, the fee is charged to the issuing participant and to the receiving participant.

Art. 42. The operation in contingency regime subjects the issuing participant to the payment of an increased fee.

Art. 43. The amount due by the participant, related to the use of the STR in a given month, must be paid on the first business day of the following month.

Sole Paragraph. The collection of the amount due and the corresponding payment are made according to specific regulation.

CHAPTER VIII

OF FINAL PROVISIONS

Art. 44. The participant may operate in contingency regime in accordance with specific regulation established by the Central Bank of Brazil.

Art. 45. Within the scope of the STR, the fund transfer order is only informed to the receiving participant at the moment of its settlement.

Art. 46. The provisions of the sole paragraph of Art. 25 do not apply to contracts entered into by the Union prior to April 22, 2002, and that contain a clause authorizing the realization of a debit in the Bank Reserves account directly by the Central Bank of Brazil.

Art. 47. Other norms issued by the Central Bank of Brazil, related to the functioning of the STR, are part of this regulation for all purposes.

Annex I - Structure of the Reserve Transfer System - STR

---

Banco Central	___________
do Brasil	/ \
	/ intituições \
---------------	\ financeiras /
	Centro de		___________/
	Processamento		/ /
	Principal		/ /
			//////////\ / /
	STR		/ RSFN / /
	/\	---+--\ provedor de / /
					/telecomunicação 1 \ /
	/		\ /\ /
	contas		////////// \ /
	de		/ \ \
	liquidação		/ \ / \
---------------	/ \ / ___________
\	/ \ / / \
/\ /\ \	/ \ / / câmaras e \
		cabos		| / \ / / prestadores de\
		de fibra		/ \ / / serviços de \
		ótica		/\ \ \ compensação e de/
/ / /	\ / \ \ liquidação /
/	\ / \ \ /
---------------/	\ / \ ___________/
	Centro de		\ / \ /
	Processamento		\ / \ /
	Secundário		\ / /
			\ / /\ __________
	STR		/ / \ / \
	/\		/////////// / Secretaria \
					/ RSFN ---/ do Tesouro \
	/		\ provedor de / \ Nacional /
	contas	---+--/telecomunicação 2 \ \ /
	de		\ / __________/
	liquidação		//////////
---------------

---

Annex II - Fees of the Reserve Transfer System - STR

Fee values in reais
--------------------------------------------------------------------- Service Specification | Obs.| Time

	---------------------
	from 6:30	After 8h
	to 8h
--------------------------------------------------------------------- I - NORMAL OPERATION REGIME ---------------------------------------------------------------------

1. Settlement of fund transfer order |
   of funds |
   |--------------------------- . Issuing participant | | 0.31 |0.62
   |--------------------------- . Receiving participant | | 0.31 |0.62
   -----------------------------------------|---------------------------
2. Maintenance of fund transf. order | | |
   in waiting queue | 1 | 0.00 |0.00 -----------------------------------------|---------------------------
3. Rejection of fund transfer order | | |
   of funds | 1 | 0.31 |0.62 ---------------------------------------------------------------------
4. Cancellation of fund transfer order | | |
   of funds | 1 | 0.00 |0.00 -----------------------------------------|-----|---------------------
5. Information of account balance | | |
   of settlement | 1 | 0.62 |0.62 ---------------------------------------------------------------------
6. Provision of account statement of | | |
   settlement or list of postings, | 1 | 3.10/mes-|3.10/mes- through message | | sage |sage ---------------------------------------------------------------------
7. Provision of account statement of |1 and 2| 53.00/me-|53.00/me-
   settlement or list of postings, | | gabyte |megabyte through electronic file | | | --------------------------------------------------------------------- II - CONTINGENCY OPERATION REGIME ---------------------------------------------------------------------
8. Settlement of fund transfer order |
   of funds |
   --------------------------------------------------------------------- . Issuing participant | 3 | variable | variable |--------------------------- . Receiving participant | | 0.31 | 0.62 ---------------------------------------------------------------------

Observations:

1 - Fee charged exclusively to the issuing participant of the order/requester of the service.

2 - When the account statement is provided through an electronic file (item I.7 of the table), the minimum value of R$3.10 (three reais and ten cents) is charged.

3 - The issuing participant pays the minimum value of R$6,000.00 (six thousand reais) each time it requests operation in contingency regime. If the fund transfer orders that are to be settled while in contingency regime imply, by the application of normal fees, the calculation of a value higher than the established minimum, the higher value prevails.