Normative Instruction BCB No. 446 — Amending the Text of Circular Letter No. 3,850 of December 19, 2017

INSTRUCTION OF THE CENTRAL BANK OF BRAZIL NO. 446, OF DECEMBER 22, 2023

Amends the text of Circular Letter No. 3,850, of December 19, 2017.

The Head of the Prudential and Exchange Regulation Department (Dereg), acting in substitution, using the powers conferred upon her by Article 23, item I, letter “a”, and Article 119, item I, of the Internal Regulations of the Central Bank of Brazil, annexed to Resolution BCB No. 340, of September 21, 2023, and considering Resolution No. 4,606, of October 19, 2017, Resolutions BCB Nos. 198 and 201, both of March 11, 2022, and Circular Letters Nos. 3,861, 3,862, and 3,863, of December 7, 2017,

D E C I D E S:

Art. 1º Circular Letter No. 3,850, of December 19, 2017, shall enter into force with the following amendments:

“Art. 1º ............................................................................................................

I - .....................................................................................................................

a) 6.1.1.00.00-4 - Social Capital, minus the balances of accounts 6.1.1.10.17-3 – Other Preferred Shares – Country, 6.1.1.10.27-6 – Other Preferred Shares – Foreign, and 6.1.1.20.00-8 – CAPITAL INCREASE;

b) 6.4.0.00.00-8 - NON-CONTROLLING INTEREST, minus the balances of accounts 6.4.1.10.80-2 - Controlled FIDC and 6.4.1.10.90-5 - Other Controlled Investment Funds;

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V - revenue accounts, which correspond to the sum of the values of accounts 7.1.0.00.00-8 OPERATING REVENUE; 7.3.0.00.00-6 NON-OPERATING REVENUE, 7.8.0.00.00-1 ALLOCATION OF INTERNAL RESULTS and 7.9.0.00.00-0 - RESULT CALCULATION;

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X - expense accounts, which correspond to the sum of the values of accounts 8.1.0.00.00-5 (-) OPERATING EXPENSES, 8.3.0.00.00-3 (-) NON-OPERATING EXPENSES, 8.8.0.00.00-8 (-) ALLOCATION OF INTERNAL RESULTS and 8.9.0.00.00-7 – (-) RESULT CALCULATION.

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Art. 2º This Normative Instruction enters into force on January 2, 2024.

Kathleen
Krause

EXPLANATORY NOTE

This Note justifies the issuance of a normative instruction by the Prudential and Exchange Regulation Department (Dereg), which amends Circular Letter No. 3,850, of December 19, 2017, due to the recent regulatory consolidation of the Accounting Standard for Institutions Regulated by the Central Bank of Brazil – Cosif.

1. The changes introduced into Cosif within the regulatory consolidation carried out through Normative Instructions BCB Nos. 268, 269, 270, 271, 273, and 275, all of April 1, 2022, and Normative Instruction BCB No. 315, of October 27, 2022, brought significant changes to the organization of the accounting rubrics of its various groups, revising the codes and nomenclatures of subgroups, subgroups breakdowns, titles and subtitles of accounting, as well as the functions and attributes of the titles and subtitles of accounting and the Estban code of the accounting titles.

2. Normative Instruction No. 388, of June 6, 2023, updated, among others, Circular Letter No. 3,850, of 2017, introducing the new nomenclatures of the accounting rubrics, and excluding accounts that were not maintained after the aforementioned consolidation. Subsequently, the need for specific adjustments in the aforementioned Circular Letter was identified with a view to better explicitate the normative content in force[1], as detailed in the following items:

• Inclusion of Cosif accounts 7.9.0.00.00-0 and 8.9.0.00-7, which constitute the list of revenue and expense accounts, respectively, and must be considered in the calculation of regulatory capital;
• Deduction of Cosif accounts 6.1.1.10.17-3 and 6.1.1.10.27-6, in that such a modality of preferred shares does not meet sufficient criteria for recognition in regulatory capital;
• Deduction of Cosif account 6.1.1.20.00-8, which should not compose regulatory capital, in that it contemplates capital increases while pending approval by the Central Bank of Brazil; and
• Deduction of Cosif accounts 6.4.1.10.80-2 and 6.4.1.10.90-5, in that a consolidated investment fund does not constitute a subsidiary of a prudential conglomerate and its equity does not meet sufficient criteria for recognition in regulatory capital.

3. It is worth noting that, as provided in items II and IV of Article 4 of Decree No. 10,411, of June 30, 2020, the obligation to conduct a regulatory impact analysis (AIR) does not apply to normative acts intended to regulate rights or obligations defined in a hierarchically superior norm that does not allow, technically or legally, different regulatory alternatives, as well as to normative acts that aim to update or revoke norms considered obsolete, without changes in merit. Thus, considering these provisions, the normative instruction presented herein is exempt from the preparation of an AIR.

4. In this context, based on the provisions of Article 23, item I, letter “a”, and Article 119, item I, of the Internal Regulations of the Central Bank of Brazil, annexed to Resolution BCB No. 340, of September 21, 2023, I issue the normative instruction in annex.

Kathleen
Krause
Head of the Prudential and Exchange Regulation Department

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[1]
Resolution CMN 4,955, of October 21, 2021, Resolution CMN 4,606, of October 19, 2017, and Resolutions BCB 198, 199, and 201, all of March 11, 2022.