BCB Resolution No. 129 — Voluntary Time Deposits by Financial Institutions at the Central Bank of Brazil for Monetary Policy Purposes

Demab/Gabin-2003/115

BCB RESOLUTION NO. 129, OF AUGUST 19, 2021

Provides for voluntary time deposits by financial institutions at the Central Bank of Brazil for monetary policy purposes.

The Collegiate Board of the Central Bank of Brazil, in a session held on August 19, 2021, based on Articles 1 and 3 of Law No. 14,185, of July 14, 2021,

RESOLVES:

Art. 1 The Central Bank of Brazil may accept, for monetary policy purposes, voluntary time deposits from financial institutions holding a Bank Reserves Account or a Settlement Account.

Sole Paragraph. The deposits shall be constituted and released through operations carried out within the Special Settlement and Custody System (Selic).

Art. 2 The voluntary deposits referred to in this Resolution shall be constituted for a fixed term up to a limit of 12 (twelve) months.

Sole Paragraph. The term referred to in the caput corresponds to the period between the settlement date of the deposit constitution, inclusive, and the release date, exclusive.

Art. 3 The Central Bank of Brazil may restrict the constitution of voluntary deposits to institutions accredited to operate as dealers with the Open Market Operations Department (Demab), in accordance with Circular No. 3,746, of January 27, 2015.

Art. 4 The remuneration rates for the voluntary deposits referred to in this Resolution shall be defined through a competitive auction or shall be previously established by the Central Bank of Brazil.

§ 1 In the event of deposit constitution through a competitive auction, the Central Bank of Brazil will use the following Selic electronic systems:

I - Public Offer (Ofpub), in the case of an auction directed to all financial institutions holding a Bank Reserves Account or a Settlement Account; or

II - Offer to Dealers (Ofdealers), in the case of an auction restricted to institutions accredited to operate as dealers with Demab.

§ 2 In the event of unforeseen circumstances that prevent the use of the electronic systems referred to in § 1, at the discretion of the Central Bank of Brazil, the collection of proposals via recorded telephone call or via electronic mail (e-mail), digitally signed by the proponent, through a digital certificate issued by a certification authority of the Brazilian Public Key Infrastructure (ICP-Brasil), may be used.

§ 3 In the event of deposit constitution with remuneration rates previously established by the Central Bank of Brazil, the commands for its constitution must be instructed by the depositing institution in a specific screen for this purpose in Selic.

Art. 5 Prior to contracting, Demab will publish the specific conditions for the constitution of voluntary deposits, including:

I - the term;

II - the method for defining the remuneration rate;

III - the type of eligible depositing institution;

IV - the financial volume offered, where applicable;

V - the Selic electronic system to be used, where applicable;

VI - the deadline date and time for submitting proposals, where applicable;

VII - the method of submitting proposals, where applicable;

VIII - the price criterion for settling accepted proposals, where applicable;

IX - the limit on the number of proposals per institution, where applicable; and

X - the date and time for the settlement of the deposit constitution.

Sole Paragraph. The specific conditions for the constitution of voluntary deposits will be published by Demab directly to dealer institutions or by public notice.

Art. 6 For the selection of winning proposals, among those received within the framework of deposit constitution through a competitive auction referred to in § 1 of Art. 4, the market functioning conditions will be considered, including the formation of the Selic rate.

Sole Paragraph. The Central Bank of Brazil may reject proposals made within the framework of deposit constitution through a competitive auction referred to in § 1 of Art. 4, in whole or in part.

Art. 7 In the event of non-performance of the deposit constitution through a competitive auction attributable to the depositing institution, the operation in Selic will be cancelled by the Central Bank of Brazil.

Sole Paragraph. In the event of operation cancellation, the depositing institution will pay the Central Bank of Brazil a compensatory value corresponding to the application, on the financial value of the operation, for a period of 1 (one) business day, of the Selic rate, defined according to current regulation, calculated for the date established for the settlement of said operation.

Art. 8 The early release of the voluntary deposits referred to in this Resolution depends on the express consent of the Central Bank of Brazil.

§ 1 The early release of voluntary deposits will only be admitted, at the discretion of the Central Bank of Brazil, if the depositing institution, through a reasoned manifestation, demonstrates the need to obtain the corresponding net resources at a time prior to that provided for the release of the deposit.

§ 2 In the case of § 1, the voluntary deposit will be remunerated according to one of the following alternatives, with the most favorable one to the Central Bank of Brazil prevailing:

I - at market price, considering the remaining term between the date of early release and the original release date, with the market interest rate, used to discount the projected cash flow, increased by 5% (five percent); or

II - at updated price, up to the date of early release, at a rate of 95% (ninety-five percent) of the rate contracted at the beginning of the operation.

§ 3 The Central Bank of Brazil will act as the calculation agent for the determination of the financial values referred to in § 2.

Art. 9 The deposits referred to in this Resolution will not be considered in the composition of any compulsory contribution or mandatory reserve requirement.

Art. 10 Demab is authorized to issue a notice detailing the conditions applicable to the deposits referred to in this Resolution, to act as the calculation agent cited in § 3 of Art. 8, and to adopt the necessary measures for the execution of the provisions of this normative instrument.

Art. 11 The submission to the Central Bank of Brazil of a proposal within the framework of deposit constitution through a competitive auction referred to in § 1 of Art. 4 implies the acceptance and agreement of the proponent with all provisions contained in this Resolution and its regulation, including the specific conditions referred to in Art. 5, and will be considered unconditional and irrevocable.

Art. 12 Any disputes arising from operations entered into based on this Resolution, arising between the Central Bank of Brazil and the depositing institutions, will be resolved by the Judicial Section of the Federal District, which will be defined as the forum of election.

Art. 13 The Regulation Annexed to BCB Resolution No. 55, of December 16, 2020, shall enter into force with the following alterations:

“Art. 2 Selic is an informatized system intended for:

I - the custody of book-entry titles issued by the National Treasury and the registration and settlement of operations with said titles; and

II - the registration and settlement of operations related to voluntary time deposits by financial institutions at the Central Bank of Brazil.

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

“Art. 29. ..........................................................................................................

.........................................................................................................................

XVIII - transfer of titles due to inheritance, marital property division, legacy, donation, or dissolution of conjugal society or stable union;

XIX - transfer of titles due to direct placement, cancellation, or early redemption by order of the issuer; and

XX - constitution and release of voluntary time deposit at the Central Bank of Brazil.

.........................................................................................................................

§ 3 Early release, total or partial, of the operation provided for in item XX is admitted, at the discretion of the Central Bank of Brazil.” (NR)

“Art. 52. ..........................................................................................................

I - in the system opening procedures, the commands for:

a) repurchase and resale of all titles under commitment that will be redeemed on the day; and

b) release of voluntary time deposit at the Central Bank of Brazil maturing on the day;

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

Art. 14 This Resolution enters into force on the date of its publication.

Bruno Serra Fernandes
Monetary Policy Director