Circular No. 4024 — Amends Circular No. 3,644 of March 4, 2013 Regarding the Standardized Approach for Credit Risk Capital Requirements

The Collegiate Board of Directors of the Central Bank of Brazil, in a session held on June 3, 2020, based on the provisions of Articles 9, 10, item IX, and 11, item VII, of Law No. 4,595 of December 31, 1964, and Articles 3, paragraph 2, and 15 of Resolution No. 4,193 of March 1, 2013,

R E S O L V E:

Art. 1. Circular No. 3,644 of March 4, 2013, shall enter into force with the following alterations:

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

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X - operations with central governments of foreign jurisdictions and their respective central banks, as well as securities issued by them, whose external risk classification, granted by a credit rating agency registered or recognized in Brazil by the Securities and Exchange Commission (CVM), is equal to or higher than BBB- and lower than A- or equivalent classification;

XI - cash holdings in foreign currencies issued in the jurisdictions referred to in item X, as well as exposures to assets represented by said currencies; and

XII - credit operations to be amortized based on resources from the Energy Development Account (CDE), as provided in item XV of Article 13 of Law No. 10,438 of April 26, 2002, included by Provisional Measure No. 950 of April 8, 2020, provided that the following conditions are met cumulatively:

a) the credit operations must be in compliance with the provisions set forth in Decree No. 10,350 of May 18, 2020, and the regulation of the National Electric Energy Agency (ANEEL);

b) the credit rights owed by the CDE to the Conta-covid must be assigned fiduciarily or pledged in favor of the lending institution; and

c) the CDE quotas, specific for the amortization of the credit operations, must be increased to constitute a liquidity reserve equivalent to at least 10% (ten percent) of the sum of the principal, financial charges, and other administrative costs related to the operation.

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Art. 2. This Circular enters into force on the date of its publication.

Otávio Ribeiro Damaso Director of Regulation