Normative Instruction BCB No. 521 — Amends Circular Letter No. 3,853 of December 19, 2017

BCB NORMATIVE INSTRUCTION NO. 521, OF SEPTEMBER 11, 2024

Amends Circular Letter No. 3,853, of December 19, 2017, which details the accounting line items to be used in the calculation of the risk-weighted asset portion in the simplified form regarding exposures to credit risk subject to the calculation of the minimum capital requirement through the simplified standardized approach (RWARCSimp).

The Head of the Department of Prudential and Exchange Regulation (Dereg), using the powers conferred upon him by Art. 23, item I, letter “a”; and Art. 119, item I, letter “a”, 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. 11, item IV and sole paragraph, of Resolution No. 4,606, of October 19, 2017, in Circular No. 3,862, of December 7, 2017, in Art. 6, item I, of Resolution BCB No. 198, of March 11, 2022, and in Art. 9, item IV, of Resolution BCB No. 201, of March 11, 2022,

R E S O L V E:

Art. 1º Circular Letter No. 3,853, of December 19, 2017, shall enter into force with the following wording.

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

..................................................................................................................................

III-A - investments in gold and exposures to assets represented by gold, which correspond to the values of account 1.9.8.90.20-1 - Gold;

..................................................................................................................................

XV - credit values contracted to be released, which correspond:

..................................................................................................................................

c) to zero, in the case of a Type 2 prudential conglomerate and a payment institution not part of a conglomerate; and

d) to the sum of the following accounts in other cases:

1. 3.0.9.80.00-4 - INSTALLMENTS OF FINANCING TO BE RELEASED; and

2.
3.0.9.86.00-8 - VALUES OF CONTRACTED CREDITS TO BE RELEASED;

..................................................................................................................................

XVII -
........................................................................................................................

..................................................................................................................................

c) 1.8.9.99.00-0 - (-) PROVISION FOR OTHER DOUBTFUL LOANS

..................................................................................................................................

XXIX - credit rights from acquired payment transactions with substantial transfer of risks and benefits, relating to accreditation or sub-accreditation services, registered in account 1.4.1.50.30-0 Values to be Received Acquired;

XXX - credit rights from acquired payment transactions without substantial transfer of risks and benefits, which correspond to the sum of the values of the accounts:

..................................................................................................................................

XXXI - values that issuers of post-paid payment instruments have to receive from final users regarding payment transactions, corresponding to the sum of the accounts:

..................................................................................................................................

Sole paragraph. .......................................................................................................

..................................................................................................................................

IV -
............................................................................................................................

..................................................................................................................................

b) 1.4.1.50.20-7 Values to be Received Ceded;

V -
..............................................................................................................................

..................................................................................................................................

f) 1.2.1.10.08-1 - National Treasury Notes - Linked to Pre-paid Account Balances;

g) 1.2.1.10.98-8 - Others - Linked to Pre-paid Account Balances; and

VI - for payment institutions not part of a conglomerate and for the Type 2 prudential conglomerate, in accordance with Resolution BCB No. 197, of March 11, 2022, the values to be received from the paying final user in which the institution acts as a post-paid card issuer, which correspond to the sum of the values of the accounts:

a) 1.8.8.79.10-6
Values to be Received Not Linked to Cessions, minus the values of account 1.8.9.96.10-6 (-) Provisions on Values to be Received Not Linked to Cessions; and

b) 1.8.8.79.20-9
Values to be Received Ceded, minus the values of account 1.8.9.96.20-9 (-) Provisions on Values to be Received Ceded;

VII - regarding linked active operations, the values of account 3.0.9.62.00-8 - Linked Active Operations; and

VIII - regarding assets deducted from Simplified Reference Equity (PRS5) or Reference Equity of Payment Institutions (PRIP), the sum, limited to zero, of the values of the accounts:

a) 2.5.2.00.00-5 - Goodwill in the Acquisition of Investment, minus the value of account 4.9.4.30.20-8 - Provisions of Goodwill of Investments with Basis in Expectation of Future Profitability;

b) 2.1.1.20.16-5

• Non-Financial Institutions - Goodwill Based on Expectation of Future Profitability;

c) 2.1.2.10.12-3

• Authorized to Operate by the Central Bank - Goodwill Based on Expectation of Future Profitability, minus the values of account 2.1.2.99.12-0 – (-) Authorized to Operate by the Central Bank - Goodwill Based on Expectation of Future Profitability;

d) 2.1.2.10.22-6

• Other Participations - Goodwill Based on Expectation of Future Profitability,
  minus the values of account 2.1.2.99.22-3 – (-) Other Participations - Goodwill Based on Expectation of Future Profitability;

e) 2.5.1.00.00-2
Intangible Assets;

f) 1.9.8.70.40-3
Intangibles, minus the value of account 1.9.8.97.40-0 - (-) Intangibles, limited to zero; and

g) 1.9.8.80.40-0
Intangibles, minus the value of account 1.9.8.98.40-9 - (-) Intangibles, limited to zero;

h) 1.8.8.82.00-7

• Actuarial Assets Generated by Defined Benefit Pension Funds,
  minus the values of account 4.9.4.30.30-1 - Provisions of Actuarial Assets of Defined Benefit Pension Funds of Non-Unrestricted Access;

i) 2.1.1.20.15-8

• Non-Financial Institutions - Equity Method Value, minus
  the value of account 2.1.1.99.30-9 - Non-Financial Institutions;

j) 2.1.2.10.21-9

• Other Participations - Equity Method Value, minus the value
  of account 2.1.2.99.21-6 – (-) Other Participations - Equity Method Value;

k) 2.1.2.10.95-8

• Shares of Privatized Companies;

l) 1.3.1.30.20-4
Participation in Companies Controlled by a Central Credit Cooperative; and

m) 1.3.1.30.90-5
Other Participations;

n) 3.0.9.73.12-1

• Investments in Eligible Capital Instruments of the Investee for Principal Capital;

o) 3.0.9.73.13-8

• Investments in Eligible Capital Instruments of the Investee for Complementary Capital;

p) 3.0.9.73.14-5

• Investments in Eligible Capital Instruments of the Investee for Level II Capital;

q) 3.0.9.84.21-3

• Deferred Tax Assets of Temporary Difference - Passive Provisions;

r) to the result, limited to zero, of the sum of the accounts 3.0.9.84.29-9 Deferred Tax Assets of Temporary Difference - Passive Provisions - Others, 3.0.9.84.30-9 Deferred Tax Assets of Temporary Difference - Fair Value Adjustment, 3.0.9.84.40-2 Deferred Tax Assets of Temporary Difference – Others, minus:

1. the minimum
   between the value of account 1.8.8.25.30-1 Deferred Tax Assets - MP 992 and the sum of accounts 3.0.9.50.15-1 CGPE - Company with Gross Revenue up to R$100 Millions, 3.0.9.50.25-4 CGPE - Company with Gross Revenue between R$100 Million and R$300 Million and 3.0.9.50.35-7 CGPE - Eligible Programs, for the institution that did not adhere to the Credit Stimulation Program - PEC, instituted by Provisional Measure No. 1,057, of July 6, 2021; and

2. the minimum
   between the value of account 1.8.8.25.50-7 Deferred Tax Assets and the sum of the accounts 3.0.9.50.45-0 PEC - Operations Contracted up to May 25, 2022, 3.0.9.50.47-4 PEC - Operations Contracted from May 25, 2022 - Companies with Annual Gross Revenue up to R$4.8 Million, and 3.0.9.50.49-8 PEC - Operations Contracted from May 25, 2022 - Companies with Annual Gross Revenue Superior to R$4.8 Million for the institution that adhered to the PEC;

s) 3.0.9.84.60-8
Deferred Tax Assets of Accumulated Fiscal Loss - Income Tax;

t) 3.0.9.84.70-1
Deferred Tax Assets of Negative Base - CSLL;

u) 3.0.9.84.80-4
Deferred Tax Assets of CSLL Booked at 18% (MP No. 2,158/2001);

v) 3.0.9.84.90-7 Deferred Tax Assets of Accumulated Fiscal Loss - Others; and

w) 3.0.9.84.50-5
Deferred Tax Assets of Fiscal Loss - Supervening Depreciation.” (NR)

Art. 2º The following provisions of Circular Letter No. 3,853, of December 19, 2017, are revoked:

I - Art. 1, caput, item XV, letters “a” and “b”; and

II - Art. 1, caput, item XXIX, letter “c”.

Art. 3º This Normative Instruction enters into force on October 1, 2024.

RICARDO
FRANCO MOURA

INFORMATION NOTE

Amends Circular Letter No. 3,853, of December 19, 2017, which details the accounting line items to be used in the calculation of the risk-weighted asset portion in the simplified form regarding exposures to credit risk subject to the calculation of the minimum capital requirement through the simplified standardized approach (RWARCSimp)

The amendment results from necessary improvements identified in Circular Letter No. 3,853, of December 19, 2017, which details the accounting line items to be used in the calculation of the risk-weighted asset portion in the simplified form regarding exposures to credit risk subject to the calculation of the minimum capital requirement through the simplified standardized approach (RWARCSimp). The main improvements correspond to adjustments resulting from the update of the Accounting Plan of the Institutions of the National Financial System (Cosif) and are related to (i) the gold asset, subject to the application of the risk weighting factor (RWF) of 0% (zero percent) as prescribed in Circular No. 3,862, of December 7, 2017; and (ii) provisions for other doubtful loans, accounts reducing the amounts of exposures related to credit operations, these latter subject to the application of the RWF of 75% (seventy-five percent).

2.                     In consonance with  
   

the principle of transparency and with the objective of clearing up any doubts regarding the application of simplified prudential regulation, it was also decided to add detailing for the accounting line items identifying assets that are not considered exposure, in addition to those currently already provided for, according to the determination in § 4 of Art. 3 of Circular No. 3,862, of 2017.

3.                     Specifically, such  
   

improvement details that the following accounting line items are not considered exposures: (i) linked active operations, according to item IV of § 4 of the aforementioned Circular; (ii) assets deducted in the calculation of PRS5 or PRIP, according to item I of § 4 of the aforementioned Circular; (iii) values to be received from paying final user in which the institution acts as a post-paid card issuer, both for payment institutions not part of a conglomerate, as well as for payment institutions that are part of a Type 2 conglomerate, according to item VIII of § 4 of the aforementioned Circular, values subject to the calculation of the RWASP portion, relative to the calculation of the capital required for the risks associated with payment services.

4.                     Another update  
   

results from the fact that Cosif records in the same clearing account both the credit values contracted to be released and the credit limits granted1. Thus, since payment institutions not part of a conglomerate, as well as Type 2 prudential conglomerates2, do not act in granting credit, due to legal and regulatory restriction and, by consequence, do not have installments to be released, and taking into account that the credit limits granted listed, notably those linked to post-paid payment instruments, are elements subject to calculation through the RWASP portion, adjustment is necessary to neutralize the values recorded in said clearing account for the institutions and conglomerates mentioned. This change aims to align accounting practices with the operational reality of these institutions, avoiding the improper inclusion of values that do not impact effective risk, as, in this case, they are not subject to conversion into credit by the institution itself. Finally, I recall that credit limits are not listed in the list of exposures of Circular No. 3,862, of 2017, which was conceived in light of the accounting structure.

5.                     Considering  
   

the provisions of item II of Art. 4 of Decree No. 10,411, of June 30, 2020, which allows for the waiver of carrying out a regulatory impact analysis (RIA) in the case of a normative act intended to regulate rights or obligations defined in a hierarchically superior norm that does not allow, technically or legally, different regulatory alternatives, I decide to waive the regulatory impact analysis provided for in Art. 5 of Law No. 13,874, of September 20, 2019.

6.                     Furthermore,  
   

I inform that the draft enters into force on the date of its publication. Such urgency is justified by the need for this Central Bank of Brazil (BCB) to monitor in a continuous and timely manner the capital allocation of these institutions. I also highlight that the measures do not represent a burden for the institutions, as it is the BCB itself that performs the calculation of the risk-weighted asset portions of all institutions of Segment 5 – S5, as defined in § 5 of Art. 2 of Resolution No. 4,553, of January 30, 2017, and in Resolution BCB No. 197, of March 11, 2022, and of Type 2 prudential conglomerates and payment institutions not part of a conglomerate, as defined in the aforementioned Resolution BCB.

7.                     In this  
   

context, based on the provisions of Art. 23, item I, letter “a”, of the Internal Regulations of this Central Bank, I resolve to issue the normative instructions in the form of the annexed drafts.

Ricardo Franco Moura
Head of the Department of Prudential and Exchange Regulation

1 Account 3.0.986.00-8, function to register the balance of values to be released from credit operations, except for financing carried out in the Housing Financial System, and lease contracts signed, as well as granted credit limits, unused, such as overdraft, post-paid payment account, revolving credit and similar.

2 Furthermore, the other institutions participating in a Type 2 conglomerate, namely Credit Rights Investment Funds (FIDC), are not authorized to act in granting credit or acquiring credit rights with future or contingent settlement and, by consequence, do not have values of contracted credits to be released.