Circular No. 4026 — Amends Circular No. 3,809 of August 25, 2016 Regarding Risk Mitigation Instruments for Credit Risk-Weighted Assets

The Collegiate Board of Directors of the Central Bank of Brazil, in a session held on June 10, 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,

RESOLVES:

Art. 1. Circular No. 3,809 of August 25, 2016, shall enter into force with the following alterations:

“Art. 27-A. A Probability of Default (PD) factor of 12% (twelve percent) must be applied to the exposure corresponding to a credit operation granted within the scope of the National Program to Support Micro and Small Enterprises (Pronampe), established by Law No. 13,999 of May 18, 2020.

Sole Paragraph. The PD factor referred to in the caput is restricted to credit operations that make up the portfolio of a financial institution composed exclusively of operations with guarantees granted by the Guarantee Fund for Operations (FGO) within the scope of Pronampe, when it is ensured that the FGO:

I – guarantees 85% (eighty-five percent) of the portfolio; and

II – assumes all initial losses of the portfolio as long as they do not exceed 85% (eighty-five percent) of the total value of the portfolio.” (New)

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

Otávio Ribeiro Damaso Director of Regulation