CODIFIED CIRCULAR LETTER

NORMATIVE INSTRUCTION BCB NO. 118, OF JUNE 24, 2021

Consolidates the procedures for the daily submission of information regarding the total exposure in gold, in foreign currency, and in operations subject to exchange rate variation, and for the calculation of Risk-Weighted Assets (RWA) for market risk, used for the purposes of calculating the minimum requirements for Reference Equity (PR), Level I, Core Capital, and the Core Capital Add-on, as provided for in Resolution BCB No. 100, of June 2, 2021.

The Head of the Department of Monitoring of the Financial System (Desig), using the powers conferred upon him by Articles 23, item I, letter “a”, and 77, item IV, of the Internal Regulations of the Central Bank of Brazil, annexed to Ordinance No. 84.287, of February 27, 2015, and considering the provisions of CMN Resolutions Nos. 3.488, of August 29, 2007, 4.193, of March 1, 2013, 4.553, of January 30, 2017, and 4.557, of February 23, 2017, Circulars Nos. 3.641 and 3.646, both of March 4, 2013, and Resolution BCB No. 100, of June 2, 2021,

RESOLVES:

Art. 1º Financial institutions and other institutions authorized to operate by the Central Bank of Brazil classified in Segment 1 (S1), Segment 2 (S2), Segment 3 (S3), or Segment 4 (S4), in accordance with CMN Resolution No. 4.553, of January 30, 2017, must submit the information referred to in Resolution BCB No. 100, of June 2, 2021, through document 2011 - Daily Statement for Monitoring Capital Requirement Portions and Operational Limits (DDR), in accordance with the Annex to this Normative Instruction.

§ 1º The submission of the information referred to in the caput must be carried out daily, until the third business day following the base date.

§ 2º The information necessary for the preparation of the document indicated in the caput is available on the Central Bank of Brazil’s website at the electronic address https://www.bcb.gov.br/estabilidadefinanceira/leiautedocumentoscrd.

§ 3º The provisions of this Normative Instruction apply to all prudential conglomerates classified in S1, S2, S3, or S4, as established in Resolution No. 4.553, of January 30, 2017, and Resolution BCB No. 197, of March 11, 2022. (Added, effective July 1, 2023, by Normative Instruction BCB No. 395 of June 23, 2023.)

§ 4º The provisions of this Normative Instruction do not apply: (Added, effective July 1, 2023, by Normative Instruction BCB No. 395 of June 23, 2023.)

I - to payment institutions that do not belong to a prudential conglomerate; and (Added, effective July 1, 2023, by Normative Instruction BCB No. 395 of June 23, 2023.)

II - to institutions belonging to a Type 2 prudential conglomerate. (Added, effective July 1, 2023, by Normative Instruction BCB No. 395 of June 23, 2023.)

Art. 2º The information referred to in Art. 1º comprises:

I - the exposure in gold, in foreign currency, and in operations subject to exchange rate variation, as provided for in CMN Resolution No. 3.488, of August 29, 2007;

II - the RWAMINT portion of the RWA amount, as provided for in CMN Resolution No. 4.193, of March 1, 2013; and

III - the RWAMPAD portion of the RWA amount and its components, as provided for in CMN Resolution No. 4.193, of March 1, 2013.

§ 1º The information referred to in item II of the caput of this article must be submitted by financial institutions authorized to use internal models for market risk, in accordance with Circular No. 3.646, of March 4, 2013.

§ 2º The information referred to in items I and III of the caput of this article must be submitted by all financial institutions mentioned in Article 1º, including those authorized to use internal models for market risk, in accordance with Circular No. 3.646, of 2013.

Art. 3º As provided in Art. 2º of Resolution BCB No. 100, of 2021, the DDR must be submitted:

I - by the lead institution of each conglomerate, on a consolidated basis, for institutions belonging to the same conglomerate, in accordance with the consolidation adopted for the calculation of Reference Equity; and

I - by the lead institution of each prudential conglomerate, on a consolidated basis, regarding the information of the institutions belonging to the conglomerate, in accordance with the consolidation adopted for the calculation of Reference Equity; (Revised, effective July 1, 2023, by Normative Instruction BCB No. 395 of June 23, 2023.)

II - by financial institutions and other institutions authorized to operate by the Central Bank of Brazil, not belonging to conglomerates.

II - by financial institutions and other institutions authorized to operate by the Central Bank of Brazil, not belonging to a prudential conglomerate, and by cooperatives that are not part of organized systems of three or two levels; and (Revised, effective October 1, 2023, by Normative Instruction BCB No. 395 of June 23, 2023.)

III - by cooperative banks, credit confederations, service confederations constituted by central credit cooperatives, or by central credit cooperatives, regarding the information of all cooperatives belonging to organized systems of three or two levels, on an individual basis. (Added, effective October 1, 2023, by Normative Instruction BCB No. 395 of June 23, 2023.)

§ 1º Payment institutions that are lead institutions of a Type 3 prudential conglomerate are included in item I. (Added, effective July 1, 2023, by Normative Instruction BCB No. 395 of June 23, 2023.)

§ 2º The information referred to in the caput must be submitted starting from the first base date on which the institution authorized to operate by the Central Bank of Brazil is effectively functioning. (Added, effective July 1, 2023, by Normative Instruction BCB No. 395 of June 23, 2023.)

Art. 4º The options regarding the prerogatives established in Arts. 1º, § 5º, item II, 3º, and 4º, of Circular No. 3.641, of March 4, 2013, used in the calculation of the portion of risk-weighted assets regarding exposures in gold, foreign currency, and assets subject to exchange rate variation (RWACAM), must be recorded in the DDR.

Art. 5º The institutions mentioned in Art. 3º that present all balances of the DDR accounts as zero may register this occurrence in the Document Submission Control System (CRD), available on the Central Bank of Brazil’s website at the electronic address https://www3.bcb.gov.br/crd, observing the provisions in the Manual for CRD usage, available at the electronic address https://www.bcb.gov.br/estabilidadefinanceira/controledocumentosif.

Sole Paragraph. The institutions mentioned in the caput that resume presenting balances in the DDR accounts must register this occurrence in the CRD.

Art. 6º The institutions mentioned in Art. 3º must indicate an employee qualified to respond to any questions regarding the information provided in accordance with this Normative Instruction.

Art. 7º The indications referred to in Art. 4º of Resolution BCB No. 100, of 2021, and in Art. 6º of this Normative Instruction must be registered and kept updated in the Information System on Entities of Interest to the Central Bank (Unicad), as provided for in Circular No. 3.165, of December 4, 2002.

Art. 8º The following are revoked:

I - Circular Letter No. 3.338, of September 3, 2008;

II - Circular Letter No. 3.573, of November 16, 2012;

III - Circular Letter No. 3.844, of November 10, 2017;

IV - Circular Letter No. 3.959, of July 15, 2019;

V - Circular Letter No. 3.989, of December 6, 2019;

VI - Circular Letter No. 4.018, of March 25, 2020;

VII - Circular Letter No. 4.059, of June 9, 2020;

VIII - Normative Instruction BCB No. 46, of November 18, 2020; and

IX - Normative Instruction BCB No. 79, of February 22, 2021.

Art. 9º This Normative Instruction enters into force on July 1, 2021.

Gilneu Francisco Astolfi Vivan

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Annex to Normative Instruction BCB No. 118, of June 24, 2021

Codification of the DDR and its other characteristics.

Document Code: 2011.

Document Name: Daily Statement for Monitoring Capital Requirement Portions and Operational Limits (DDR).

Submission Frequency: Daily.

Deadline for Submission: Third business day following the base date to which it refers.

Base Date: Daily.

Unit Responsible for Curation: Department of Monitoring of the Financial System (Desig).

Submission Method: Electronic means.

System for Submission: File Transfer System (STA), available on the Central Bank of Brazil’s website at the address https://sta.bcb.gov.br/sta/.

Submission Format: XML (eXtensible Markup Language).

Validation of Submission: Anticipated.

Submission Validation Schema: XSD (XML Schema Definition).

Additional Elements for Submission: layout, in XML format; models, in Excel format; XSD validation schemas; example files; validator program; and filling instructions, available on the Central Bank of Brazil’s website at the address https://www.bcb.gov.br/estabilidadefinanceira/leiautedocumentoscrd.

Director Responsible for Submission: Director responsible for the calculation of RWA, PR, and Core Capital amounts - CMN Resolution No. 4.193, of 2013.

Registration of Responsible Director: In the “Links – Inclusion – Responsible Director by Area of Activity” module of Unicad.

Registration of Employee Designated to Respond to Questions: In the “Links – Inclusion – Responsible for Sending Information” module of Unicad.

Electronic Address for Solving Doubts about Filling and Submitting the Document: ddr@bcb.gov.br.

Institutions Obligated to Submit the DDR: All financial institutions and other institutions authorized to operate by the Central Bank of Brazil classified in Segment 1 (S1), Segment 2 (S2), Segment 3 (S3), or Segment 4 (S4), in accordance with CMN Resolution No. 4.553, of January 30, 2017.