Circular No. 3896 — Establishes procedures for accounting registration and disclosure of information regarding assets in LIG portfolios and obligations by the issuer and fiduciary agent in cases of intervention, extrajudicial liquidation, bankruptcy, or insolvency

The Collegiate Board of the Central Bank of Brazil, in a session held on May 9, 2018, based on arts. 9 and 37 of Law No. 4.595, of December 31, 1964, and considering the provisions of Resolution No. 4.144, of September 27, 2012, and art. 80 of Resolution No. 4.598, of August 29, 2017,

RESOLVES:

Art. 1. LIG-issuing institutions subject to an intervention regime, extrajudicial liquidation, or bankruptcy, or in a state of insolvency recognized by the Central Bank of Brazil, must, on the date of the decree of the regime or the recognition of the state of insolvency, write off the assets comprising the asset portfolios subject to the fiduciary regime provided for in art. 69 of Law No. 13.097, of January 19, 2015, in counterpart to the liability related to LIG issuance obligations.

§ 1. The difference between the book value of the assets and the obligations written off according to the caput must be recorded in a specific accounting item, segregated from the other assets and liabilities of the institution:

I - in assets, if the value of the assets is greater than the value of the obligations; or

II - in liabilities, if the value of the assets is less than the value of the obligations.

§ 2. The value of the asset or liability referred to in § 1 must be reviewed monthly, based on the book value of the assets comprising the asset portfolios and the obligations from LIG issuances provided by the fiduciary agent administering the asset portfolio in the statement referred to in art. 2, recording any adjustments:

I - as an expense of the period, in the case of a reduction in assets or an increase in liabilities; or

II - as revenue, in the case of an increase in assets or a reduction in liabilities.

§ 3. In the accounting records provided for in this article, the institution must observe the general rules, procedures, and accounting criteria provided for in the Chart of Accounts of the Institutions of the National Financial System (Cosif) applicable to financial institutions and other institutions authorized to operate by the Central Bank of Brazil in extrajudicial liquidation regime.

Art. 2. From the decree of the intervention, extrajudicial liquidation, or bankruptcy regime, or the recognition of a state of insolvency by the Central Bank of Brazil, the fiduciary agent administering the asset portfolio referred to in the caput of art. 1 must prepare, monthly, a report called Asset Portfolio Report – Special Administration (DCA-AE), referred to in art. 65, item VII, of Resolution No. 4.598, of August 29, 2017, individualized by administered asset portfolio, containing:

I - the characteristics of the assets that make up the asset portfolio;

II - the commitments related to LIGs in circulation and other obligations related to the administration of the asset portfolio;

III - information on the LIG series in circulation issued by the institution;

IV - compliance with the requirements of the asset portfolio; and

V - the nominal and book values of the assets comprising the asset portfolios and the obligations from LIG issuances.

Sole Paragraph. The statement referred to in the caput must be:

I - disclosed by the fiduciary agent on its website by the 30th day of the month following the base date;

II - kept available to the Central Bank of Brazil for a minimum period of five years; and

III - forwarded by the fiduciary agent to the intervener, liquidator, or judicial administrator of the issuing institution by the 18th day of the month following the base date.

Art. 3. For the purpose of preparing the statement referred to in art. 2, the fiduciary agent administering the asset portfolio must measure:

I - the book value of the assets comprising the asset portfolios and the obligations from LIG issuances in accordance with the general rules, procedures, and accounting criteria provided for in Cosif applicable to financial institutions and other institutions authorized to operate by the Central Bank of Brazil in extrajudicial liquidation regime; and

II - the nominal value of the assets comprising the asset portfolios and the obligations from LIG issuances in accordance with the provisions of art. 34 of Resolution No. 4.598, of 2017.

Sole Paragraph. The fiduciary agent must maintain accounting controls that allow the individualization of the components of each asset portfolio and of the obligations from LIG issuances.

Art. 4. The Central Bank of Brazil will publish the operational procedures necessary to comply with the provisions of this Circular, including regarding the content and disclosure requirements of the DCA-AE.

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

Otávio Ribeiro Damaso
Regulation Director