INSTRUCTION NORMATIVE BCB No. 234, OF FEBRUARY 15, 2022

Discloses operational procedures to be observed in the Central Bank of Brazil's rediscounting within the scope of the Reserve Transfer System (STR) and within the scope of the Instant Payment System (SPI), as provided for in the Regulation attached to Resolution BCB No. 175, of December 15, 2021.

The Head of the Department of Banking Operations and Payment Systems (Deban) and the Head of the Open Market Operations Department (Demab), in exercise of the powers conferred upon them by Art. 23, item I, letter “a”; Art. 111, item V, letter “d”; Art. 112, item I, letter “c”; and Art. 114, item IV, of the Internal Regulations of the Central Bank of Brazil, attached to Ordinance No. 84.287, of February 27, 2015, and taking into account the provisions of the Regulation attached to Resolution BCB No. 175, of December 15, 2021,

RESOLVE:

CHAPTER I

SCOPE OF APPLICATION

Art. 1. This Instruction Normative defines operational procedures to be observed in the Central Bank of Brazil's rediscounting operations in the repurchase agreement modality, intraday, and one business day, with financial institutions holding Reserve Bank Accounts and Clearing Accounts, within the scope of the Reserve Transfer System (STR), and the rediscount line for financial institutions holding Instant Payment Accounts (Conta PI), within the scope of the Instant Payment System (SPI).

CHAPTER II

OPERATIONAL PROCEDURES

Section I

Rediscounting operations within the scope of the STR

Art. 2. The record pertinent to the request for granting rediscounting operations within the scope of the STR observes the regular operating hours of the STR for the settlement of fund transfer orders and the time schedules of the Brazilian Payment System (SPB).

Art. 3. The commitment assumed by the financial institution to repurchase the assets subject to the rediscounting operation must be settled by the end of the STR's operating hours on the operation's maturity date.

Art. 4. When extraordinary events, in its exclusive discretion, justify such action, the Central Bank of Brazil may, with effect for a specific day or period:

I - advance or postpone the hours for requesting rediscounting operations within the scope of the STR; and

II - postpone the repurchase hour, by financial institutions, of the assets subject to rediscounting operations within the scope of the STR.

Art. 5. The Central Bank of Brazil will daily publish, on its internet page, the list of federal public securities and their respective prices accepted in rediscounting operations within the scope of the STR.

Art. 6. Rediscounting within the scope of the STR will be available on days considered useful for operations practiced in the financial market, observing the provisions of Annexes I to III of this Instruction Normative.

Art. 7. It is admitted to honor the repurchase commitment in installments whenever the nature of the asset allows.

Art. 8. For all purposes, a one-business-day operation in which the resale occurs on the same date as the purchase is equated to the intraday operation.

Section II

Rediscounting operations within the scope of the SPI

Art. 9. The purchase price by the Central Bank of Brazil, referred to in Art. 10, item I, of the Regulation attached to Resolution BCB No. 175, of 2021, is the one published daily through the ASEL006 file on the Central Bank of Brazil's internet page.

Sole Paragraph. The federal public securities accepted in the aforementioned rediscounting operations are those contained in the ASEL006 file, referred to in the caput, except for securities that have redemption, interest, or amortization payments coincident with the operation's maturity.

Art. 10. The record of the operation request, referred to in Art. 14 of the Regulation attached to Resolution BCB No. 175, of 2021, is carried out through the SEL1009 message (IF requests liquidity in PI Account) of the SEL Service Group, of the SFN Service Catalog, sent by the financial institution to Selic.

Sole Paragraph. While the request record remains held at Selic, the financial institution may cancel it by sending the SEL1400 message (Participant requests Cancellation of operation record) of the SEL Service Group, of the SFN Service Catalog, to Selic, during the regular operating hours of the STR.

Art. 11. The repurchase operation by the financial institution, referred to in Art. 16 of the Regulation attached to Resolution BCB No. 175, of 2021, is requested through the sending of the SEL1016 message (IF requests payment of liquidity in PI Account) of the SEL Service Group, of the SFN Service Catalog, by the financial institution to Selic.

Art. 12. The resale price and the financial values of the operations are calculated observing the methodology described in Annex IV of this Instruction Normative.

CHAPTER III

FINAL PROVISIONS

Art. 13. The following are revoked:

I - items I and II of item 2, item 10, and Annexes I, II, and III of Circular Letter No. 3.009, of April 19, 2002; and

II - Instruction Normative No. 23, of October 6, 2020.

Art. 14. This Instruction Normative enters into force on March 1, 2022.

Rogério Antônio Lucca
Head of the Department of Banking Operations and Payment Systems

André de Oliveira Amante
Head of the Open Market Operations Department

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ANNEX I

INTRADAY OPERATION

I - Main characteristics:

a) Operation authorized by the Central Bank of Brazil when requested by the financial institution observing regulatory requirements.

b) Rediscount Price PU[ida]: published by the Central Bank of Brazil, with 8 decimal places.

c) PU[volta]: equal to PU[ida].

II - Calculation criteria:

a) Financial Value[ida] = Quantity of securities (integer number) x PU[ida], with the result expressed with two decimal places, discarding from the third onwards.

b) Financial Value[volta] = Quantity of securities (integer number) x PU[volta], with the result expressed with two decimal places, discarding from the third onwards.

III - Example:

Operation carried out with 139,238 securities, with rediscount PU (PU[ida]) of 974.06997666

Financial Value[ida] = 139,238 x 974.06997666 = R$ 135,627,555.41

Financial Value[volta] = 139,238 x 974.06997666 = R$ 135,627,555.41

IV - Observation:

When the repurchase commitment is honored in installments, until the maturity date, the procedures described in Annex III apply.

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ANNEX II

ONE BUSINESS DAY OPERATION

I - Main characteristics:

a) Operation authorized by the Central Bank of Brazil when requested by the financial institution observing regulatory requirements.

b) Rediscount Price (PU[ida]): published by the Central Bank of Brazil, with 8 decimal places.

c) PU[volta]: calculated with 8 decimal places, mathematically rounded, for the business day following the operation.

II - Calculation criteria:

a) PU[volta] = PU[ida] x FatorCusto

Where:

• FatorCusto = FatorSelic x FatorAcréscimo, calculated with 8 decimal places, mathematically rounded;
• FatorSelic = (1+TaxaSelic/100)^(1/252), calculated with 8 decimal places, mathematically rounded;
• FatorAcréscimo = (1+TaxaAcréscimo/100)^(1/252), calculated with 8 decimal places, mathematically rounded;
• TaxaSelic: is the Selic Rate (% a.a.) ascertained for the day of the operation's contracting, published daily on the Central Bank of Brazil's internet page;
• TaxaAcréscimo: is the cost, in addition to the Selic Rate, relative to the 1-day business operation, expressed in annual terms, with two decimal places, and defined in the Regulation attached to Resolution BCB No. 175, of 2021.

b) Financial Value[ida] = Quantity of securities (integer number) x PU[ida], with the result expressed with two decimal places, discarding from the third onwards.

c) Financial Value[volta] = Quantity of securities (integer number) x PU[volta], with the result expressed with two decimal places, discarding from the third onwards.

III - Example:

1-day business operation carried out with 139,238 securities, with Rediscount Price (PU[ida]) of 974.06997666 on day D, for return on the next business day. The Selic Rate, ascertained by the Central Bank of Brazil for day D, was 18.31% a.a..

Financial Value[ida] = 139,238 x 974.06997666 = R$ 135,627,555.41

Calculation of Financial Value[volta]:

• FatorSelic = (1+18.31/100)^(1/252)=1.00066744

• FatorAcréscimo = (1+6.00/100)^(1/252)=1.00023125

• FatorCusto = FatorSelic x FatorAcréscimo=1.00066744 x 1.00023125=1.00089884

• PU[volta] = 974.06997666 x 1.00089884=974.94550972

• Financial Value[volta] = 139,238 x 974.94550972= R$ 135,749,462.88

IV - Observation:

When the repurchase commitment is honored in installments, until the maturity date, the procedures described in Annex III apply.

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ANNEX III

PARTIAL PAYMENTS

I - Characteristics:

a) In all modalities of Central Bank of Brazil Rediscounting, installment settlement is admitted until the operation's maturity date. In the case of operations involving assets with Unit Price-PU, examples of which are intraday and one-business-day operations, the value of the last installment must be the necessary amount to settle the remaining value existing at the Central Bank of Brazil.

b) Given the characteristics of the formation of financial values for rediscounting, there may be a financial residue in the case of installment settlement, as the sum of the financial installments resulting from the PU x Quantity relations of each installment, due to rounding, may not correspond to the product PU x Total Quantity of the operation, and any residue must be adjusted when paying the last installment.

II - Example:

Intraday operation carried out with 139,238 securities, with rediscount PU equivalent to 974.06997666, paid in three installments: the first corresponding to 52,412 securities, the second corresponding to 46,414 securities, and the third corresponding to 40,412 securities, totaling the original 139,238 securities.

This operation generates the following financial flows:

Request for rediscount:

Financial Value[ida] = 139,238 x 974.06997666 = R$ 135,627,555.41

Payment of the first installment:

Financial Value installment1 = 52,412 x 974.06997666 = R$ 51,052,955.61

Payment of the second installment:

Financial Value installment2 = 46,414 x 974.06997666 = R$ 45,210,483.89

After the two installments, the financial institution still has a balance to pay of exactly R$ 39,364,115.91 (R$ 135,627,555.41 - R$ 51,052,955.61 - R$ 45,210,483.89). This value corresponds to the 40,412 securities (139,238 - 52,412 - 46,414) that still need to be repurchased. If the value of the third installment were simply calculated by the product of the remaining quantity of securities by the PU, a discrepancy of R$ 0.02 would be identified relative to the due value, due to the rounding performed when calculating the value of the first two installments:

Financial Value = Quantity of securities x PU

Financial Value = 40,412 x 974.06997666 = R$ 39,364,115.89

The difference of R$ 0.02 between the financial value corresponding to the balance of securities to be repurchased and the debtor balance of the financial volume generated by the original rediscount operation (R$ 39,364,115.91 - R$ 39,364,115.89) leads to the third installment being of value equal to R$ 39,364,115.91.

Thus, in rediscounting operations, where payment is made in more than one installment, the last installment, which fully settles the rediscount operation, must have as its financial value the remaining value existing at the Central Bank of Brazil.

In the example above, the last installment must bring the following parameters:

Quantity of securities = 40,412

PU = 974.06997666

Financial Value = 39,364,115.91 (and not 39,364,115.89)

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ANNEX IV

CALCULATION METHODOLOGY FOR REDISCOUNTING WITHIN THE SCOPE OF THE SPI

I - Financial value of the purchase by the Central Bank of Brazil

Vcompra = Quantity of purchase securities x PUcompra

Where:

• Vcompra corresponds to the financial value of the purchase by the Central Bank of Brazil expressed with two decimal places, discarding from the third onwards;
• Quantity of purchase securities corresponds to the quantity of securities (integer number) of the operation being contracted; and
• PUcompra corresponds to the unit purchase price of the security by the Central Bank of Brazil for the date of the operation's contracting, referred to in Art. 9 of this Instruction Normative, with 8 decimal places.

II – Resale Price

PUrevenda = PUCompra x ( 1 + (((1 + TaxaSelic)^(1/252) - 1) x percentual) )

Where:

• PUrevenda corresponds to the unit resale price by the Central Bank of Brazil referred to in Art. 10 of the Regulation attached to Resolution BCB No. 175, of 2021, with 8 decimal places mathematically rounded;
• PUcompra corresponds to the unit purchase price of the security by the Central Bank of Brazil for the date of the operation's contracting, referred to in Art. 9 of this Instruction Normative, with 8 decimal places;
• TaxaSelic corresponds to the Selic Rate (% a.a.) ascertained for the day of the operation's contracting, published daily on the Central Bank of Brazil's internet page; and
• percentual corresponds to the percentage of the Selic Rate, fixed in the Regulation attached to Resolution BCB No. 175, of 2021, valid on the date of the operation's contracting.

Observation: The term "(1+TaxaSelic)^(1/252)" corresponds to the daily factor of the Selic Rate, rounded to eight decimal places, as published daily on the Central Bank of Brazil's internet page.

III – Financial value of the repurchase by the financial institution

Vrecompra = Quantity of repurchase securities x PUrevenda

Where:

• Vrecompra corresponds to the financial value of the repurchase by the financial institution expressed with two decimal places, discarding from the third onwards;
• Quantity of repurchase securities corresponds to the quantity of securities (integer number) that are being repurchased by the financial institution;
• PUrevenda corresponds to the unit resale price calculated in the manner of item II of this Annex.

Observation: Due to the characteristics of the formation of financial values of the operations, there may be a financial residue in the case of installment settlement, as the sum of the financial installments resulting from the PU x Quantity relations, due to truncation of values, may not correspond to the product PU x Total Quantity, and any residue must be adjusted when paying the last installment. Thus, when the repurchase commitment is honored in installments, the financial value of the repurchase of the last installment will be the financial balance of the operation before the payment of this last installment, which may not correspond to the product of the quantity of securities by the unit resale price.

IV – Financial balance of the operation

Saldo = Vcompra + Encargos – (Vrecompra1 + Vrecompra2 + Vrecompra3...)

Where:

• Saldo corresponds to the financial balance of the operation;
• Vcompra corresponds to the financial value of the purchase by the Central Bank of Brazil calculated in the manner of item I of this Annex;
• Encargos corresponds to ((Quantity of purchase securities x PUrevenda) - Vcompra); and
• (Vrecompra1 + Vrecompra2 + Vrecompra3...) corresponds to the sum of the financial values of the partial repurchases by the financial institution, calculated in the manner of item III of this Annex, effected for the operation.

Observation: The product Quantity of purchase securities x PUrevenda used in the calculation of charges is expressed with two decimal places, discarding from the third onwards.

V - Example:

Rediscount operation within the scope of the SPI contracted on day D with 150 securities at the unit purchase price (PUcompra) of 11,133.94172116. The Selic Rate, ascertained by the Central Bank of Brazil for day D, was 10.65% a.a., corresponding to a daily factor of 1.00040168. The percentage of the Selic Rate, fixed in the Regulation attached to Resolution BCB No. 175, of 2021, valid on day D is 90%.

On the operation's maturity date, the financial institution makes payment in three installments: the first corresponding to 60 securities, the second corresponding to 50 securities, and the third corresponding to 40 securities, totaling the original 150 securities.

Calculation of the financial value of the purchase (Vcompra):

Vcompra = 150 x 11,133.94172116 = R$ 1,670,091.25

Calculation of the financial value of the repurchase (Vrecompra) and of the charges:

PUrevenda = 11,133.94172116 x (1+(1.00040168-1)*(90/100))= 11,137.96677470

Vrecompra = 150 x 11,137.96677470 = R$ 1,670,695.01

Charges = 1,670,695.01 - 1,670,091.25 = R$ 603.76

Partial payments:

Vrecompra1 = 60 x 11,137.96677470 = R$ 668,278.00

Vrecompra2 = 50 x 11,137.96677470 = R$ 556,898.33

Vrecompra3 = Financial balance of the operation = 1,670,091.25 + 603.76 - 668,278.00 - 556,898.33 = R$ 445,518.68

Observation: The difference of R$ 0.01 between the financial value corresponding to the balance of securities to be repurchased (40 securities) and the debtor balance of the financial volume generated by the original rediscount operation leads to the third installment being of value equal to R$ 445,518.68 and not R$ 445,518.67 (40 x PUrevenda).

NOTE

It is understood that this Instruction Normative is not subject to the requirement of preparing a Regulatory Impact Analysis (AIR), as it aims to consolidate existing norms, without alteration of merit, in accordance with Art. 3, § 2, item VI, of Decree No. 10.411, of June 30, 2020.

Rogério Antônio Lucca
Head of the Department of Banking Operations and Payment Systems

André de Oliveira Amante
Head of the Open Market Operations Department