Circular No. 3.770

The Board of Directors of the Central Bank of Brazil, in an extraordinary session held on 29 October 2015, based on the provisions of arts. 9, 10, item IX, and 11, item VII, of Law No. 4.595, of 31 December 1964, and in arts. 3, § 2, and 15 of Resolution No. 4.193, of 1 March 2013,

R E S O L V E S :

Art. 1 The arts. 7, 8, 11, 22, 23, 31, 37 and 37-A of Circular No. 3.644, of 4 March 2013, shall now be in force with the following amendments:

“Art. 7 In operational leasing operations, the calculation of the RWA_CPAD portion must consider the exposure related to the underlying asset of the operation and the exposure related to the counterparty credit risk.

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§ 2 The value of the exposure related to the counterparty credit risk must correspond to the lease payments receivable that are already due.

§ 3 The value of the exposure related to the underlying asset must correspond to the book value of the leased asset, determined in accordance with the criteria established in Cosif.” (NR)

“Art. 8 In repurchase agreements and securities lending operations, the calculation of the RWA_CPAD portion must consider:

• I - the exposure related to the counterparty credit risk, in the case of the following operations:

  • a) purchase with resale commitment;

  • b) sale with repurchase commitment; and

  • c) lending of securities;

• II - the exposure related to the underlying asset, in the case of the following operations carried out with own underlying asset:

  • a) sale with repurchase commitment;

  • b) lending of securities.

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

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II - accounting value of the underlying asset of the operation, in the case of a sale with repurchase commitment and lending of securities.” (NR)

“Art. 11. .......................................................

• I - 20% (twenty percent), in operations linked to international trade in goods, in which the shipment of goods is associated with the payment guarantee of the operation;

• II - .............................................................

  • a) bid bonds and participation in auctions;

  • b) performance bonds, including perfect functioning clauses and compliance with service levels;

  • c) guarantee of supply of goods;

  • d) provision of guarantee for distribution of securities in the primary and secondary markets, through public offering, in accordance with the regulations in force; and

  • e) provision of surety or guarantee in judicial or administrative proceedings of a tax nature;

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

“Art. 22. A FPR of 35% (thirty-five percent) must be applied to exposures related to financing for the acquisition of residential property, new or used, whose contracted amount is up to 80% (eighty percent) of the appraisal value of the collateral on the date of credit granting, when the operation is secured by:

• I - fiduciary transfer of the financed property, if located in Brazil; and

• II - first-degree mortgage, if the property is located in the countries referred to in art. 19, item VII, provided that the average effective period for recovery of the collateral, in the country, is less than 24 (twenty-four) months.

§ 1 Exposures related to financing for the acquisition of residential property, new or used, that present the guarantees mentioned in the caput may receive the FPR of 35% (thirty-five percent), when the outstanding balance is up to 80% (eighty percent) of the appraisal value of the collateral on the date of credit granting and the current value of the collateral is not less than the appraisal value of the collateral on the date of granting.

§ 2 For the purpose of verifying the provisions of § 1, the following must be:

• I - a new appraisal of the property, observing the provisions of the legislation and regulations in force; or

• II - a consistent statistical methodology developed, subject to verification, documented and stable over time.

§ 3 The information necessary for verifying the effective periods for recovery of the collateral must be kept at the disposal of the Central Bank of Brazil.

§ 4 The use of the prerogative provided for in § 1 implies the maintenance of the FPR of 35% (thirty-five percent) while the respective exposure persists.” (NR)

“Art. 23. ....................................................... ..................................................................

• IX - loans secured by mortgage of residential property, new or used, whose contracted amount is up to 50% (fifty percent) of the appraisal value of the collateral, on the date of credit granting, when the collateral is located in the countries referred to in art. 19, item VII, observing the provisions of art. 22, item II and § 3.” (NR)

“Art. 31. For the purposes of applying the FPR to the exposure related to the counterparty credit risk arising from repurchase agreement and securities lending operations, the following must be considered as a credit risk mitigation instrument:

• I - the underlying asset traded in purchase with resale commitment operations or received on loan; and

• II - the financial resources received in sale with repurchase commitment operations or in the assignment on loan.” (NR)

“Art. 37. ....................................................... ..................................................................

§ 6 The provisions of § 5 do not apply to repurchase agreement and securities lending operations that meet the following requirements:

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• IV - .............................................................

  • e) the operation must follow market standards and the rules in force for repurchase agreements and lending of securities; and

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

“Art. 37-A. .....................................................

• I - repurchase agreements and lending of securities that meet the requirements set out in items II to IV of § 6 of art. 37; and

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

Art. 2 The Section III of Chapter III of Title II of Circular No. 3.644, of 2013, shall come into force with the following title: “On Leasing”.

Art. 3 The Section IV of Chapter III of Title II of Circular No. 3.644, of 2013, shall come into force with the following title: “On Repurchase Agreements and Lending of Securities”.

Art. 4 This Circular shall come into force on the date of its publication.

Art. 5 § 1 of art. 7 of Circular No. 3.644, of 4 March 2013, is hereby revoked.

Otávio Ribeiro Damaso Director of Regulation