CMN Resolution No. 4781 — Authorizes the Central Bank of Brazil to Grant a Rediscount Line to Direct Participants of the Instant Payment System (SPI)

The Central Bank of Brazil, in accordance with Article 9 of Law No. 4,595 of December 31, 1964, makes it public that the National Monetary Council, in a session held on February 20, 2020, based on Articles 3, item V, 4, item XVII, and 12 of the aforementioned Law, and on Article 28, § 2, of Complementary Law No. 101 of May 4, 2000,

R E S O L V E D:

Article 1. The Central Bank of Brazil is authorized to conduct repurchase agreements for federal public securities registered in the Special Settlement and Custody System (Selic) with financial institutions that are direct participants of the Instant Payment System (SPI) and holders of an Instant Payments Account (Conta PI), under the terms and conditions established in this Resolution.

§ 1. For the purposes of this Resolution, a repurchase agreement is understood as the purchase of a security by the Central Bank of Brazil with a commitment to resell, conjugated with the sale of the security by the financial institution with a commitment to repurchase.

§ 2. The operations referred to in the main text aim to provide liquidity outside regular operating hours in the Reserve Transfer System (STR) for the duration of transfers between clients within the SPI.

§ 3. The operations referred to in the main text are carried out, at the exclusive discretion of the Central Bank of Brazil, upon request by the interested financial institution.

Article 2. Federal public securities registered in Selic that are part of the financial institution's own custody position and are not subject to trading restrictions may be the subject of the repurchase agreements provided for in this Resolution.

§ 1. The Central Bank of Brazil will publish the federal public securities that will be accepted in the operations covered by this Resolution.

§ 2. Securities that have payment events (redemption, interest, or amortization) coinciding with the maturity of the operation will not be accepted.

Article 3. The following trading parameters shall be observed in the repurchase agreements covered by this Resolution:

I - Purchase price: the purchase price will be published daily by the Central Bank of Brazil;

II - Resale price: the resale price will correspond to the purchase price plus a value corresponding to the application, on the purchase price, of a percentage of the Selic Rate, defined according to current regulations, calculated for the day of the operation's contracting, fixed by the Central Bank of Brazil and valid on the date the operation is carried out;

III - Request: the registration of the operation request will be made through a specific command by the financial institution in Selic during regular operating hours of the STR and Selic or during an additional specific window to be defined by the Central Bank of Brazil;

IV - Contracting: the operation will be contracted with the release of financial resources directly into the PI Account held by the financial institution at the Central Bank of Brazil after the closure of regular operating hours of the STR, during the additional specific window to be defined by the Central Bank of Brazil, with the respective transfer of securities to the custody of the Central Bank of Brazil; and

V - Operation term: the repurchase operation must occur on the next business day following the contracting of the operation, during regular operating hours of the STR, through a specific command by the institution in Selic and financial movement directly into the PI Account held by the institution.

Article 4. The financial settlement and movement of custody accounts for the securities subject to the operations covered by this Resolution are subject to the rules and operational procedures provided for in the regulations of the respective settlement systems.

Article 5. The operation covered by Article 1, whose repurchase commitment is not settled by the financial institution within the timeframe and conditions established in item V of Article 3, will be considered defaulted.

§ 1. The securities subject to defaulted operations, as per this article, will be incorporated into the Central Bank of Brazil's own portfolio and sold at auction.

§ 2. Any negative result for the Central Bank of Brazil from the sale of these securities, determined at auction, must be reimbursed by the counterparty institution of the defaulted operation.

Article 6. The Central Bank of Brazil will issue norms and adopt the necessary measures to execute the provisions of this Resolution.

Article 7. This Resolution enters into force on March 2, 2020.

Roberto de Oliveira Campos Neto
President of the Central Bank of Brazil