Circular No. 3.105

CIRCULAR No. 003105 ------------------ Establishes the Banco Central Rediscount, approves its regulation and consolidates its rules. The Collegiate Board of the Banco Central do Brasil, in an extraordinary session held on 4 April 2002, based on art. 10, items V and XII, of Law 4.595, of 31 December 1964, renumbered by virtue of arts. 19 and 20 of Law 7.730, of 31 January 1989, on art. 21 of Provisional Measure 2.160-25, of 23 August 2001, and on Resolution 2.949, of 4 April 2002, D E C I D E D: Art. 1º To establish, under the terms of Resolution 2.949, of 4 April 2002, the Banco Central Rediscount and to approve the attached regulation that governs it. Art. 2º The Department of Banking Operations and Payment System - Deban and the Open Market Operations Department - Demab are authorized to issue the rules and adopt the measures necessary for the execution of the provisions of this circular, including establishing times for the performance and payment of Banco Central Rediscount operations. Art. 3º This circular enters into force on 22 April 2002, when Circulars 2.965, of 8 February 2000, 2.979, of 26 April 2000, and 3.038, of 6 June 2001, are revoked. Brasília, 5 April 2002. Beny Parnes Director Regulation attached to Circular 3.105, of 5 April 2002, which provides for the Banco Central Rediscount. CHAPTER I ON ACCESS AND OPERATIONAL MODALITIES Art. 1º Access to the Banco Central Rediscount is restricted to financial institutions holding a Banking Reserves account. Art. 2º The operations of the Banco Central Rediscount are granted, at the exclusive discretion of the Banco Central do Brasil, upon request by the interested financial institution. Art. 3º The Banco Central Rediscount comprises the following modalities: I - purchase with resale commitment; and II - rediscount. Section I On Purpose and Terms Art. 4º The operations of the Banco Central Rediscount may be: I - intraday, intended to meet the liquidity needs of a financial institution throughout the day; II - one business day, intended to satisfy liquidity needs arising from very short-term mismatches in the cash flow of a financial institution; III - up to fifteen business days, and may be recontracted provided that the total term does not exceed forty-five business days, intended to satisfy liquidity needs caused by short-term mismatches in the cash flow of a financial institution and that do not characterize structural imbalance; and IV - up to ninety calendar days, and may be recontracted provided that the total term does not exceed one hundred and eighty calendar days, intended to enable the capital adjustment of a financial institution with structural imbalance. § 1º For the purposes of the provisions of this regulation, an intraday operation is understood as a purchase with resale commitment, in which the purchase and the corresponding resale occur on the same day. § 2º Operations in the rediscount modality referred to in item II of art. 3º are restricted to the terms defined in
items III and IV of this article. Section II On Purchase with Resale Commitment Art. 5º The following assets owned by a financial institution may be subject to the Banco Central Rediscount, in the purchase with resale commitment modality, provided that there are no restrictions on their negotiation: I - federal public securities registered in the Special Settlement and Custody System - Selic, which are part of the institution's own custody position; and II - other securities and marketable securities, credits and credit rights, preferably with real guarantee, and other assets. Sole paragraph. Intraday and one business day operations exclusively contemplate the federal public securities referred to in item I. Subsection I On Federal Public Securities Art. 6º The purchase with resale commitment operation of federal public securities registered in Selic observes the following conditions: I - purchase price: disclosed daily by the Banco Central do Brasil; and II - resale price: a) intraday operation: equal to the respective purchase price; and b) one business day or more operation: purchase price plus an amount corresponding to the application, on the purchase price and for the term of the operation, of the rate obtained by the composition of the Selic Rate, defined according to the regulations in force, calculated for each business day of the operation period, with a rate set by the Collegiate Board of the Banco Central do Brasil and valid on the date of the operation. Sole paragraph. The Banco Central do Brasil will disclose the federal public securities that will be accepted in the operations of the Banco Central Rediscount. Art. 7º The following operations may be associated within the scope of the Banco Central Rediscount, involving, in each of them, the same federal public security registered in Selic: I - Banco Central Rediscount operation, of intraday purchase with resale commitment, with: a) the purchase, definitive or with resale commitment, registered in Selic; or b) the release, by a clearinghouse or by a settlement and clearing service provider, of a security previously delivered as collateral by a financial institution, conditioned upon the 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 the settlement and clearing service provider; II - Banco Central Rediscount operation, for the terms provided in items II, III and IV of art. 4º, with the payment of a Banco Central Rediscount operation of the same modality, of any term; and III - payment of Banco Central Rediscount with the sale, definitive or with repurchase commitment, registered in Selic. Subsection II Of Other Assets Art. 8 In purchase transactions with a resale commitment of other securities and negotiable instruments, credits and credit rights, the following parameters shall be observed: I - purchase price: variable depending on the assets and
established, according to the Banco Central do Brasil's own criteria, taking into account, among other factors, the present value, the market value, the credit risk, the maturity term, the liquidity and the price volatility of each asset, provided that the purchase price may not be higher than the updated nominal value of the asset subject to the transaction; and II - resale price: purchase price plus an amount corresponding to the application, on the purchase price and for the term of the transaction, of the rate obtained by the composition of the Selic Rate, defined in accordance with the regulations in force, determined for each business day of the transaction period, with a rate set by the Collegiate Board of the Banco Central do Brasil and valid on the date the transaction is carried out. Section III Of Rediscount Art. 9 Rediscount encompasses securities and negotiable instruments and discounted credit rights included in the assets of the interested financial institution, subject to the following conditions: I - rediscount rate: variable depending on the assets and established, according to the Banco Central do Brasil's own criteria, taking into account, among other factors, the present value, the market value, the credit risk, the maturity term, the liquidity and the price volatility of each asset; and II - sale price of the rediscounted assets: rediscount price plus an amount corresponding to the application, on the rediscount price and for the term of the transaction, of the rate obtained by the composition of the Selic Rate, defined in accordance with the regulations in force, determined for each business day of the transaction period, with a rate set by the Collegiate Board of the Banco Central do Brasil and valid on the date the transaction is carried out. CHAPTER II OF OPERATIONAL PROCEDURES Art. 10. In the rediscount transactions referred to in item II of art. 3, the Banco Central do Brasil shall pay to the rediscounting institution a "del credere" commission, negotiated between the parties, as remuneration for the administration of the rediscounted assets. Art. 11. Intraday and one-business-day transactions are carried out through specific messages contained in the Message Catalog of the Brazilian Payment System. Art. 12. Transactions of up to fifteen business days depend on prior consent from the Banco Central do Brasil and on the presentation, by the interested institution, of a detailed projection of its daily cash flow, demonstrating the expected funding needs for the transaction period. Art. 13. Transactions of up to ninety calendar days depend on approval by the Collegiate Board of the Banco Central do Brasil, and the financial institution must submit a substantiated request to the Department of Banking Operations and Payment System - Deban, accompanied, mandatorily, by: I - a statement of the cash needs projected for the transaction period; and II - a restructuring program aimed at its capitalization or the sale of its
controlling interest, signed by the controlling shareholder, to be implemented during the transaction period. Art. 14. The transactions provided for in items III and IV of art. 4 are conditioned upon the prior signing of a contract. Art. 15. The Banco Central do Brasil must be informed by the financial institution, by 4:00 p.m. of the same day, about any need to use a transaction provided for in items III and IV of art. 4. § 1 The communication is merely informative, not implying any commitment, either by the Banco Central do Brasil or by the financial institution, and shall be addressed to the Deban component where the financial institution is under jurisdiction. § 2 The Banco Central do Brasil, in addition to the legal and regulatory provisions, shall assess the operational feasibility of the request, taking into account the assets involved and the required formalities, which is why the requesting financial institution must anticipate, as much as possible, the contact and the submission of documents. CHAPTER III OF GENERAL PROVISIONS Art. 16. The financial movement related to the Banco Central's Rediscount transactions is carried out in the Banking Reserves account maintained by the financial institution at the Banco Central do Brasil. Art. 17. The financial movement in the Banking Reserves account characterizes the final settlement of the obligations of purchase, sale, rediscount or payment of rediscount, provided for in this regulation. Art. 18. In the Banco Central's Rediscount transactions, the transfer of the asset subject to the transaction and the completion of the corresponding financial movement are mutually conditioned. § 1 Whenever necessary to ensure compliance with the provisions of the caput, in addition to the contract provided for in art. 14, the transfer terms referred to in § 1 of art. 21 of Provisional Measure 2.160-25, of 23 August 2001, are used. § 2 The financial settlement and the movement in custody accounts of the assets subject to transactions in the purchase with resale commitment modality are subject to the rules and operational procedures provided for in the regulations of the respective settlement systems. Art. 19. The documentation required for the purpose of qualification for the modalities of Banco Central Rediscount, in accordance with the legislation and regulations in force, must be sent to the Deban component where the financial institution is under jurisdiction. Art. 20. The Banco Central's Rediscount transactions are always carried out: I - with a resale commitment by the Banco Central do Brasil, together with a repurchase commitment by the financial institution, for settlement under the regulatory terms, if it involves the modality provided for in item I of art. 3; and II - with a purchase commitment by the rediscounting institution, if it involves the modality provided for in item II of art. 3. Art. 21. For all purposes, other rules issued by the Central Bank of Brazil related to the Central Bank
Rediscount are part of this regulation. .o0o.