Instruction Normative BCB No. 425 — Amends Instruction Normative BCB No. 385 of May 30, 2023

Resolution No. 222

BCB INSTRUCTION NORMATIVE NO. 425, OF NOVEMBER 29, 2023

Amends
BCB Instruction Normative No. 385, of May 30, 2023.

The Head of the Department of Prudential and Exchange Regulation (Dereg), using the powers conferred upon him by Arts. 23, item I, letter “a”, and 119, item I, letter “d”, of the Internal Regulations of the Central Bank of Brazil, annexed to Resolution BCB No. 340, of September 21, 2023, and having in view the provisions of Art. 56, of Resolution No. 4,557, of February 23, 2017, in Art. 23, § 5º, of BCB Resolution No. 54, of December 16, 2020 and in Art. 63 of BCB Resolution No. 265, of November 25, 2022,

RESOLVES:

Art. 1º BCB Instruction Normative No.
385, of May 30, 2023, shall be amended as follows:

“Art.
1º-A The disclosure of the information required in the Pillar 3 Report in the form of open data, as provided for in § 3º of Art. 23 of BCB Resolution No. 54, of 2020, is suspended as of November 29, 2023.

Sole Paragraph. The disclosure in the form of open data will be resumed on a date to be informed after the establishment of specifications by the Central Bank of Brazil and must include the information regarding the period during which the disclosure remained suspended.

Art.
1º-B The Pillar 3 Report shall be amended by adding the following tables:

I

• Table CRE: IRB - Qualitative information on IRB approaches;

II

• Table CR6: IRB - Exposures to credit risk by portfolio and PD intervals;

III

• Table CR7: IRB - Effects of the use of credit derivatives as
  instruments to mitigate credit risk;

IV

• Table CR8: Information on variations in RWACIRB; and

V

• Table CR9: IRB - Comparison between estimated and observed losses (backtesting) of the PD parameter by category, subcategory and portfolio.

Art.
1º-C Table CR5 shall be amended in the table “Exposures and RWF applied to exposures not recognized on the balance sheet”. ” (NR)

Art. 2º This
Instruction Normative enters into force on the date of its publication.

RICARDO FRANCO MOURA

INFORMATION NOTE, OF
NOVEMBER 29, 2023

Regulation Matters – Amends BCB
Instruction Normative No. 385, of May 30, 2023.

BCB
Resolution No. 54, of December 16, 2020, establishes that the Pillar 3 Report must be disclosed on the IF’s website on the internet and, also, in open data format, in order to allow its use by any technological systems. It is the responsibility of the Central Bank of Brazil to provide the layout of the tables for disclosure on the website, as well as the catalog with the data parametrization for disclosure in open data. However, the update of the catalog, necessary for the disclosure in open data, in the form of the tables disclosed by BCB Instruction Normative No. 385, of May 30, 2023, is still not available and depends on the normalization of the workflow involving information technology.

2.                  Thus, as  
   

provided for in Art. 23, § 5ª of BCB Resolution No. 54, of 2020, it becomes necessary to temporarily suspend the obligation to disclose the information of the Pillar 3 Report in the open data format. Once the catalog is disclosed, the Central Bank of Brazil will communicate the resumption of the obligation of disclosure, respecting the necessary time for financial institutions to make the necessary adjustments to their systems.

3.              Additionally,  
   

with the publication of BCB Resolution No. 303, of March 16, 2023, which implements, as of July 1, 2023, the new procedures for the calculation of the portion of risk-weighted assets (RWA) regarding exposures to credit risk subject to the calculation of the capital requirement through internal systems for credit risk classification (IRB approaches) authorized by the Central Bank of Brazil (RWACIRB), it is necessary to update the credit risk tables to align with the new procedures.

4.                    An adjustment is also made  
   

to the table “Exposures and RWF applied to exposures not recognized on the balance sheet” of Table CR5. This table lists all Risk Weighting Factors (RWF) used in the calculation of the RWACPAD portion. However, the RWF of 80% applicable to specialized financing of non-financial legal entities was not included in the table, which is addressed here.

5.            Finally, I recall  
   

that, by virtue of Decree No. 10,411, of June 30, 2020, the issuance of normative acts by the bodies and entities of the direct federal public administration, autarchic and foundation must be preceded by a Regulatory Impact Analysis (RIA). However, as provided for in Art. 4, item VII, of the aforementioned Decree, the RIA may be waived in the event that the issuance of a normative act temporarily reduces obligations and requirements. This is the case with the update of the catalog necessary for the disclosure in open data. Moreover, in the case of the update of the credit risk tables, the RIA may also be waived, as provided for in Art. 4, item VI, of the aforementioned Decree, by being the issuance of a normative act resulting from a process of convergence to international standards.

RICARDO FRANCO MOURA
Head of the Department of Prudential and Exchange Regulation