NORMATIVE INSTRUCTION BCB NO. 163, OF OCTOBER 1, 2021

Publishes procedures to be observed for adherence, contracting, and payment of loan operations through the Temporary Special Liquidity Line for Acquisition of Financial Notes with Guarantee in Financial Assets or Securities (LTEL-LFG), as provided for in Resolution BCB No. 144, of September 24, 2021.

The Head of the Department of Banking Operations and Payment Systems (Deban), using the powers conferred upon him by item "a" of subsection I of Article 23 of the Internal Regulations of the Central Bank of Brazil, annexed to Ordinance No. 84.287, of February 27, 2015, and taking into account the provisions of Resolution BCB No. 144, of September 24, 2021,

RESOLVES:

CHAPTER I

GENERAL PROVISIONS

Art. 1. This Normative Instruction publishes procedures regarding the operationalization of the provisions of Resolution BCB No. 144, of September 24, 2021.

CHAPTER II

ADHERENCE

Art. 2. The procedures for new adherences to the LTEL-LFG referred to in Chapter III of Resolution BCB No. 144, of 2021, are unavailable and conditioned on the decision of the Central Bank of Brazil referred to in § 7º of Art. 6º of that BCB Resolution.

Art. 3. Financial institutions that adhered to the LTEL-LFG during the validity period of Circular 3,996, of April 6, 2020, in order to be eligible to request operations during the period referred to in § 2º of Art. 18 of Resolution BCB No. 144, must send the Addendum to the Fiduciary Assignment Instrument, whose model is available on the website of the Central Bank of Brazil, on the page titled "Temporary Special Liquidity Line for Acquisition of Financial Notes with Guarantee in Financial Assets or Securities (LTEL-LFG)".

§ 1º The sending of the Addendum to the Fiduciary Assignment Instrument, referred to in the caput, must be preceded by the following procedures:

I - fill in the sections for counterparty qualification, location and date, and qualification of the representatives of the financial institution signing the document;

II - convert the document to PDF/A format, according to guidelines available on the Central Bank of Brazil's internet site, on the Digital Protocol page;

III - obtain signatures from representatives, in the PAdES standard (PDF Advanced Electronic Signature), using either an ICP-Brasil digital certificate, according to guidelines available on the Central Bank of Brazil's internet site, on the Digital Protocol page, or signed on the Federal Government's Electronic Signature Portal, according to guidelines available on the Ministry of Economy's internet site, on the Digital Government page, in compliance with Art. 4º, subsection II, item c, of Decree No. 10.543, of November 13, 2020.

§ 2º The sending of the Fiduciary Assignment Instrument, cited in the caput, signed by two (2) or more representatives with statutory powers for this purpose, must be accompanied by a document indicating the provisions of the financial institution's articles of association that ensure that its signatories have full powers, without restrictions or limits regarding the values of the contracted operations, regarding their charges, and regarding the nature or values of the assets given as guarantee.

§ 3º In addition to sending the Addendum referred to in the caput, the financial institution must send the document referred to in subsection III and, if necessary, send updates to the documents referred to in subsections II and IV of Art. 6º of Resolution BCB No. 144, of 2021.

§ 4º The financial institution must pay attention to its non-registration in the Informative Register of Credits Not Settled with the Public Sector (Cadin), under penalty of impossibility of contracting operations within the scope of the LTEL-LFG, considering the provisions of § 6º of Art. 6º of Resolution BCB No. 144, of 2021.

§ 5º The financial institutions mentioned in the caput must observe all other requirements established in Arts. 2º and 3º.

Art. 4. After receiving the documentation provided for in Art. 3º, and verifying its conformity with current regulations, Deban will arrange for the signing of the Addendum on behalf of the Central Bank of Brazil and register it with the registering entity or central depository.

Sole Paragraph. The registration of the Addendum referred to in the caput will be carried out observing the rules established by the registering entity or central depository.

Art. 5. Financial institutions must comply with the provisions of Art. 3º, in the period from November 1 to November 19, 2021.

Art. 5. Financial institutions must comply with the provisions of Art. 3º, in the period from November 1 to November 24, 2021. (Amended by Normative Instruction BCB No. 186, of 11/23/2021.)

CHAPTER III

PRE-POSITIONING

Art. 6. Upon completion of the registration of the Addendum, as per Art. 4º, the financial institution will be eligible to register a lien on financial assets guaranteeing the Financial Notes, in favor of the Central Bank of Brazil.

§ 1º When transferring financial assets to the lien account of the Central Bank of Brazil, the financial institution must indicate that financial events will not be destined to the "Guaranteed" category.

§ 2º Upon registration of the lien, the financial institution must communicate the transfer of financial assets or securities to the Department of Monitoring of the Financial System (Desig), so that its Credit Financial Limit may be established.

§ 3º Deban, having information regarding the Credit Financial Limit referred to in § 2º, will communicate the value to the financial institution, via message from the Central Bank of Brazil's Electronic Mail System (BC Correio), as provided in subsection I of the sole paragraph of Art. 15 of Resolution BCB No. 144, of 2021.

CHAPTER IV

CONTRACTING AND PAYMENT OF OPERATIONS

Art. 7. The process of contracting operations under the LTEL-LFG begins with the formalization, by the financial institution, of the request referred to in subsection I of Art. 17 of Resolution BCB No. 144, of 2021.

§ 1º The request must be made via message from the Central Bank of Brazil's Electronic Mail System (BC Correio), addressed to the Banking Operations Division (Diban) of the Department of Banking Operations and Payment Systems (Deban), signed by two directors of the financial institution, and contain the desired term, in business days, and the value, in multiples of R$100,000.00 (one hundred thousand reais).

§ 2º In the request provided for in § 1º, the financial institution may authorize the Central Bank of Brazil to adjust the requested value to the Available Financial Limit, as permitted by § 2º of Art. 17 of Resolution BCB No. 144, of 2021.

§ 3º Only requests meeting the following conditions cumulatively will be admitted for deliberation regarding the specific authorization of the Board of Directors of the Central Bank of Brazil, provided for in the caput of Art. 17 of Resolution BCB No. 144, of 2021:

I - sent during the period from November 24 to December 1, 2021; and

II - requesting institutions meet the conditions established in Art. 3º of this regulation.

§ 4º The terms of the Financial Notes, determined by the Central Bank of Brazil based on the financial institution's request, shall not be less than 30 nor exceed 359 calendar days, counted from the issuance date, and maturities will occur only on business days.

§ 5º The issuance and maturity dates, quantities to be issued, and unit issuance prices of the Financial Notes will be informed by Deban to the financial institution, via message from the Central Bank of Brazil's Electronic Mail System (BC Correio), after the granting of the specific authorization of the Board of Directors of the Central Bank of Brazil, provided for in the caput of Art. 17 of Resolution BCB No. 144, of 2021.

§ 6º Guidelines regarding operational procedures for the issuance of the Financial Note are contained in Annex II of this regulation.

§ 7º The financial institution must inform Deban, as soon as it occurs, of the issuance of the Financial Notes.

Art. 8. The constitutive registration of the Financial Notes must be arranged by the financial institution, with the deposit in the Central Bank of Brazil's own account at the central depository being made by 1:00 PM on the date of issuance.

Art. 9. The loan contracting process, granted under the LTEL-LFG, will be concluded with its financial settlement, carried out only after confirmation of the deposit referred to in Art. 8.

Sole Paragraph: Financial settlement will occur via credit to the Banking Reserves account, operationalized via message "SLB0005 - SLB informs Credit Posting Effectuated", from the SLB Services Group of the SFN Service Catalog, with the indication in the message history that it concerns an operation of the Temporary Special Liquidity Line for Acquisition of Financial Notes with Guarantee in Financial Assets or Securities (LTEL-LFG).

Art. 10. Payment of an LTEL-LFG operation is due in a single installment, on the maturity date, and is effected through the redemption of the Financial Notes embodying the loan.

§ 1º The updated financial value of the Financial Notes to be redeemed is calculated according to the caput of Art. 4º of Resolution BCB No. 144, of 2021, observing the calculation methodology found in Annex I of this regulation.

§ 2º Financial settlement of the operation occurs via debit, in the financial institution's Banking Reserves account, of the value informed by the Central Bank of Brazil via message "SLB0001 - SLB informs Amount Due by Participant", from the SLB Services Group of the SFN Service Catalog.

§ 3º Failure to pay an LTEL-LFG operation, under the conditions provided for in this article, will result in the application of the provisions of the sole paragraph of Art. 4º of Resolution BCB No. 144, of 2021, without prejudice to the provisions of Chapter XI of said regulation.

Art. 11. Early payment of an LTEL-LFG operation occurs, upon request by the financial institution, through the redemption of the Financial Notes embodying the loan, before its maturity, and may be partial or integral.

§ 1º Early payment may occur in two ways:

I - facultatively, at the initiative of the financial institution;

II - obligatorily, by determination of the Central Bank of Brazil, due to non-compliance with the need for guarantee recomposition, as provided for in Art. 29 of Resolution BCB No. 144, of 2021.

§ 2º For early payment, the financial institution must send the request via message from the Central Bank of Brazil's Electronic Mail System (BC Correio), addressed to the Banking Operations Division (Diban) of the Department of Banking Operations and Payment Systems (Deban), informing the codes identifying the Financial Notes it intends to redeem and the respective quantities.

§ 3º The request provided for in § 2º must be made until 6:00 PM (18:00) on the business day prior to the intended date for financial settlement.

§ 4º Non-compliance with the provision of § 3º will result in the postponement of financial settlement to the second business day following the sending of the message.

CHAPTER V

GUARANTEE RECOMPOSITION

Art. 12. To utilize the prerogative provided for in § 4º of Art. 25 of Resolution BCB No. 144, of 2021, the financial institution must carry out the following procedures:

I - timely inform, via message from the Central Bank of Brazil's Electronic Mail System (BC Correio), addressed to the Banking Operations Division (Diban) of the Department of Banking Operations and Payment Systems (Deban), of the intention to use Federal Public Bonds to effectuate the recomposition of guarantees for the Financial Notes issued;

II - carry out, according to Deban's guidance, the operational confirmation procedures necessary for the process of generating a universal lien account in favor of the Central Bank of Brazil, in the Special Settlement and Custody System (Selic), including regarding the linking of the fiduciary assignment instrument of rights over movable property for carrying out loans under the LTEL-LFG;

III - arrange, with the Special Settlement and Custody System (Selic), the constitution of the lien on the federal public bonds subject to guarantee recomposition, by transferring them to the universal lien account indicated by Deban during the execution of operational procedures.

§ 1º The operational procedures referred to in subsections I to III may be communicated by Deban to the financial institution via the e-mail addresses of the operational contacts referred to in Subsection IV, Art. 6º of Resolution BCB No. 144, of 2021.

§ 2º The financial value to be considered for purposes of guarantee recomposition, relative to federal public bonds encumbered in favor of the Central Bank of Brazil, will be based on the unit prices contained in the listing of Prices of Public Bonds for Rediscount, published on the Autarchy's internet site.

CHAPTER VI

DEFAULT

Art. 13. In the event of declaration of default by the Central Bank of Brazil, in the manner of Art. 31 of Resolution BCB No. 144, of 2021, Deban will notify the financial institution of the occurrence via message from the Central Bank of Brazil's Electronic Mail System (BC Correio).

CHAPTER VII

GENERAL PROVISIONS

Art. 14. In the event of the hypothesis provided for in Art. 19 of Resolution BCB No. 144, of 2021, specific guidelines regarding procedures related to guarantee evaluation, request, and contracting of LTEL-LFG operations will be published.

Art. 15. The following are revoked, effective upon the entry into force of this Normative Instruction:

I - Circular Letter No. 4,025, of April 13, 2020; and

II - Circular Letter No. 4,042, of April 30, 2020.

Art. 16. This Normative Instruction enters into force on November 1, 2021.

Rogério Antônio Lucca

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ANNEX I

Calculation Methodology for Daily Update of the Debtor Balance of the Loan Operation Contracted via LTEL-LFG:

SDt = SDt-1 * FatorEncargo

Where:

SDt: is the updated debtor balance on date t, with precision of 2 (two) decimal places, by truncation;

SD(t-1): is the debtor balance prior to the update of date t, with precision of 2 (two) decimal places, by truncation;

FatorEncargo = FatorSelic * 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, referred to in Circular No. 3,671, of October 18, 2013, on date t, expressed in annual terms, with two decimal places, and published by the Central Bank;

TaxaAcréscimo: is the percentage increase to the Selic Rate, provided for in the caput of Art. 4º of Resolution BCB No. 144, of 2021, expressed in annual terms, with two decimal places.

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ANNEX II

Information to be Provided in the Process of Issuing the Financial Note, at the Central Depository

I - Issuance Date, Maturity Date, Quantity, and Unit Issuance Value

Fields to be filled with information provided by Deban, according to § 5º of Art. 6º of this Normative Instruction.

II - Issuance Term

Filled with the number of calendar days between the maturity date and the issuance date, informed by Deban, according to § 5º of Art. 6º of this Normative Instruction.

Obs.: Must not be confused with the term presented by the financial institution in the operation request.

III - Financial Issuance Value

Filled with the result of multiplying the unit issuance value of the Financial Note by the authorized quantity (Unit issuance value x Quantity).

IV - Yield/Indexer/Floating Rate

Filled with the VCP Index.

Obs.: At maturity, Deban will inform the financial institution of the updated value for posting the redemption PU.

V - Payment Method

Filled to indicate payment of interest and principal, at maturity.

VI - Public Distribution

Filled with "no".

VII - Additional Description

Filled with the text: "This Financial Note has guarantee of financial instruments detailed in lien contract number [FILL IN]"

Obs.: Lien contract number informed by Deban, according to § 1º of Art. 3º of this Normative Instruction.

VIII - Deposit Operation

Use the option "Entry into custody without financial transaction".

IX - Beneficiary Account

Filled with the account number informed by Deban, according to § 1º of Art. 3º of this Normative Instruction.

X - U.P. (Unit Price)

Filled with the same value informed in the field "unit issuance value".

XI - Modality

Use the option "no modality".

XII - Payment Method

Use the option "1st) Payment of interest and principal, at maturity".

XIII - Index Description (VCP)

Fill with "Selic Rate + 0.75%", as provided for in the caput of Art. 4º of Resolution BCB No. 144, of 2021.

XIV - Type of Index Indicator (VCP)

Fill with "Selic LFG".

XV - Percentage

Fill with "100%".

XVI - Interest Rate/Spread

Do not fill.