RESOLUTION BCB NO. 144, OF SEPTEMBER 24, 2021

Consolidates and modifies the rules for loan operations through the Temporary Special Liquidity Line for the acquisition of Financial Promissory Notes with collateral in financial assets (LTEL-LFG).

The Collegiate Board of the Central Bank of Brazil, in a session held on September 23, 2021, based on art. 10, item V, of Law No. 4.595, of December 31, 1964, on art. 1-A of Law No. 11.882, of December 23, 2008, having in view the provisions of art. 66-B of Law No. 4.728, of July 14, 1965, art. 68, sole paragraph, of Law No. 9.069, of June 29, 1995, and arts. 26, § 1, and 28, § 2, of Complementary Law No. 101, of May 4, 2000,

RESOLVES:

CHAPTER I

ON THE OBJECT AND SCOPE OF APPLICATION

Art. 1. This Resolution consolidates and modifies the rules for loan operations, under specific conditions, through a Temporary Special Liquidity Line, by means of direct acquisition, in the primary market, of Financial Promissory Notes with collateral in financial assets (LTEL-LFG).

Art. 2. The loan operations referred to in this Resolution shall be carried out with multiple banks, commercial banks, investment banks, savings banks, and the National Bank for Economic and Social Development (BNDES), holders of Bank Reserve accounts that adhere to the contractual conditions and operational procedures established by the Central Bank of Brazil for the formalization of the issuance of the Financial Promissory Note and the mobilization of the collateral financial assets or securities.

Sole paragraph. The contracting of operations in the form of the caput is conditioned on the constitutive registration of the Financial Promissory Note in a central depository of financial assets authorized to operate by the Central Bank of Brazil, combined with the linking of collateral financial assets or securities pledged fiduciarily to the Central Bank of Brazil, in accordance with art. 66-B of Law No. 4.728, of July 14, 1965, at a time prior to the issuance of the Financial Promissory Note, for the purpose of calculating the financial limit of each operation.

Art. 3. The Financial Promissory Notes referred to in this Resolution may be issued, at the discretion of the Central Bank of Brazil, observing minimum and maximum maturity periods of 30 (thirty) and 359 (three hundred and fifty-nine) calendar days, respectively, and the other conditions established by the Autarchy.

Art. 4. The Financial Promissory Notes issued under the authority of this Resolution must provide for a single redemption payment, on the maturity date of the instrument, aggregating, to the principal value of the issuance, interest corresponding to the application, on the unit value of the instrument on the previous day, of the rate obtained by the composition of the Selic Rate, defined according to current regulation, calculated for each business day of the operation period, with an addition of 0.75% (seventy-five hundredths of a percent) valid on the date of issuance of the Financial Promissory Note.

Sole paragraph. On the balance of unsettled loan operations until maturity, daily financial charges for late payment apply, in addition to the financial charges established in the caput, starting from the maturity date, at 2.50% a.a. (two and fifty hundredths of a percent per year).

CHAPTER II

ON THE OPERATIONAL MODALITY

Art. 5. The LTEL-LFG is operationalized through loans against a collateral basket, constituted by means of the registration of a lien on financial assets or securities registered in a registrar entity or deposited in a central depository, as provided for in Law No. 12.810, of May 15, 2013.

§ 1. The collateral basket constituted in the form of the caput gives rise to the opening of a credit limit for the financial institution, which will govern the issuance of Financial Promissory Notes, instruments that embody the loan operations granted under the authority of the LTEL-LFG.

§ 2. All loan operations granted to a financial institution under the authority of the LTEL-LFG and embodied in Financial Promissory Notes are guaranteed by all the financial assets and securities comprising the collateral basket linked.

§ 3. The granting of loan operations is subject to the technical judgment of the discretion of the Central Bank of Brazil, manifested in the manner provided for in art. 17.

§ 4. Interfinancial transfers made with free resources within the National System of Cooperative Credit integrate the list of operations with the characteristic of granting credit referred to in art. 7, item III, and may, respecting the rules established in this Resolution, be part of the collateral basket constituted by cooperative banks in the form of the caput.

CHAPTER III

ON ADHERENCE

Art. 6. For adherence to the LTEL-LFG, financial institutions that meet the provisions of art. 2 must submit to the Department of Banking Operations and Payment Systems (Deban):

I - instrument of fiduciary assignment of rights over movable property for the purpose of loans with the Central Bank of Brazil, under the authority of the LTEL-LFG, according to the model published and made available on the Central Bank of Brazil website, signed by 2 (two) or more representatives with statutory powers for this purpose;

II - documentation issued by the Special Secretariat of the Federal Revenue of Brazil and the Attorney General's Office of the National Treasury certifying fiscal regularity with respect to Social Security, for the purpose of compliance with § 3 of art. 195 of the Federal Constitution, and with federal taxes, as provided for in art. 62 of Decree-Law No. 147, of February 3, 1967, and art. 1, § 1, of Decree-Law No. 1.715, of November 22, 1979;

III - documentation issued by the Federal Savings Bank certifying that there are no debts with the Time-Bound Guarantee Fund, for the purpose of compliance with art. 27 of Law No. 8.036, of May 11, 1990; and

IV - standard form containing identification of representatives of the institution who will make operational contacts.

§ 1. The instrument referred to in item I of the caput must be signed by means of a digital certificate issued by a certifying authority of the Brazilian Public Key Infrastructure (ICP-Brasil) and sent to Deban electronically.

§ 2. Movements of financial assets or securities for the purpose of constituting and deconstituting guarantees carried out within the central depository or registrar entity will constitute amendments to the instrument referred to in item I of the caput.

§ 3. Updates to the documents referred to in this article must be provided promptly, due to loss of validity, or at the request of the Central Bank of Brazil.

§ 4. Deban will inform the representatives of the institutions adhering to the LTEL-LFG of the encumbrance account owned by the Central Bank of Brazil, so that the constitution of guarantees can be carried out, in accordance with the operational procedures of the central depository or registrar entity.

§ 5. The financial institution adhering to the LTEL-LFG must carry out the necessary confirmations for the registration of the instrument referred to in item I of the caput, in an encumbrance account owned by the Central Bank of Brazil at the central depository or registrar entity.

§ 6. The financial institution adhering to the LTEL-LFG that presents registration in the Informative Register of Unpaid Credits of the Federal Public Sector (Cadin), as provided for in Law No. 10.522, of July 19, 2002, must provide for the regularization of its situation in order to contract operations within the scope of the LTEL-LFG.

§ 6. The Central Bank of Brazil will consult the situation of the financial institution adhering to the LTEL-LFG in the Informative Register of Unpaid Credits of the Federal Public Sector (Cadin), as provided for in Law No. 10.522, of July 19, 2002, without any eventual registration in this register, by itself, constituting a barrier to the contracting of operations within the scope of the LTEL-LFG. (Wording given by Resolution BCB No. 192, of 2/23/2022.)

§ 7. The adherences to the LTEL-LFG referred to in this article are conditioned on the establishment, by the Central Bank of Brazil, of new periods for the request, evaluation, and contracting of operations in accordance with art. 19.

§ 8. Adherences to the LTEL-LFG occurring during the validity period of Circular No. 3,996, of April 6, 2020, remain valid if practiced in consonance with the provisions of that normative act, and interested financial institutions wishing to request new operations must observe the provisions of art. 20.

CHAPTER IV

ON THE ELIGIBILITY CONDITIONS OF THE COLLATERAL FINANCIAL ASSETS

Art. 7. The following financial assets may be accepted as collateral for the Financial Promissory Note referred to in this Resolution, provided they are part of the issuing financial institution's assets and are registered in a financial asset registrar entity or deposited in central depositories of financial assets:

I - credit operations;

II - leasing operations;

III - other operations with the characteristic of granting credit.

Art. 8. The financial assets referred to in art. 7, to be accepted as collateral, must be classified in risk levels AA, A, and B, according to criteria established in current regulation, in the following proportion relative to the value of the Financial Promissory Note:

I - assets whose debtor has operations reported to the Credit Information System (SCR) by more than one financial institution, credits resulting from payroll-consignated loans in the public sector, or credits with real or surety guarantees at the discretion of the Central Bank of Brazil:

a) 120% (one hundred and twenty percent), for credits classified in the AA risk category;

b) 130% (one hundred and thirty percent), for credits classified in the A risk category;

c) 140% (one hundred and forty percent), for credits classified in the B risk category;

II - assets not included in item I of this article:

a) 150% (one hundred and fifty percent), for credits classified in the AA risk category;

b) 160% (one hundred and sixty percent), for credits classified in the A risk category; and

c) 170% (one hundred and seventy percent), for credits classified in the B risk category.

§ 1. For the purpose of the provision of the caput, the value of the financial assets corresponds to the net book value of the provision, according to the criteria established in the Accounting Plan of the Institutions of the National Financial System (Cosif).

§ 2. The issuing institution of the Financial Promissory Note must update in the financial asset registrar entity or the central depository of financial assets the information that may imply a change in the classification of the collateral financial assets in the categories referred to in this article.

CHAPTER V

ON PRE-POSITIONING AND ADDITIONAL ASSEPTANCE CRITERIA FOR ASSETS

Art. 9. The financial institution must notify the Department of Financial System Monitoring (Desig) of the pre-positioning of collateral assets, which is done by means of the registration of a lien on financial assets registered in a registrar entity or deposited in a central depository.

Art. 10. The registration of a lien on financial assets for the purpose of granting loans under the authority of the LTEL-LFG must be reported by the central depository or registrar entity to Desig by the day following the date on which the lien was constituted.

Art. 11. The constitutive registration of the Financial Promissory Note, its central deposit, and the registration of liens on financial assets or securities in favor of the Central Bank of Brazil must be carried out within the scope of the same entity authorized by the Central Bank of Brazil to offer these services.

Sole paragraph. The provision of the caput does not apply to cases where the reconstruction of guarantees is carried out with federal public bonds, in the form of § 4 of art. 25.

Art. 12. The assets listed in art. 7 that possess one or more of the following characteristics will not be accepted as collateral for the LTEL-LFG:

I - operations that have the characteristic of revolving credit;

II - operations considered problematic assets in accordance with art. 24 of Resolution No. 4,557, of February 23, 2017;

III - recovered loss operations;

IV - renegotiated operations of the Special Program for Asset Sanitization (Pesa), in accordance with Resolution No. 2,471, of February 26, 1998;

V - operations renegotiated under the Program for Revitalization of Agricultural Production Cooperatives (Recoop);

VI - operations in judicial collection or whose issuer is in judicial reorganization;

VII - operations that do not have payments scheduled in the next 6 (six) months;

VIII - operations that have values to be released;

IX - operations assigned by the institution in negotiation with substantial retention of risk and benefits;

X - operations linked to interfinancial transfers from BNDES, the Special Industrial Financing Agency (Finame), constitutional funds, state or district funds, funds or special programs of the Federal Government, and operations linked to transfers of any kind from abroad and loans granted under the authority of resources controlled by rural credit;

XI - operations considered non-matured by force of normative act;

XII - operations with maturity date postponed by force of normative act;

XIII - operations with payment of operation deferred by an official body or program awaiting the release of resources;

XIV - operations linked under the terms of Resolution No. 2,921, of January 17, 2002;

XV - operations whose debtors do not have valid registration in the Individual Taxpayer Registry (CPF) or the National Registry of Legal Entities (CNPJ), as applicable;

XVI - operations that are registered as collateral for instruments in entities authorized to exercise the activities of central depository of financial assets;

XVII - foreign exchange contract advance operations; and

XVIII - all operations listed in art. 7, when there is a delay, by the financial institution, in sending the 3040 Document – Credit Risk Data – for more than 5 (five) business days, counted from the delivery deadline.

§ 1. All financial assets accepted as collateral must be classified in the risk levels corresponding to them according to Resolution No. 2,682, of December 21, 1999, for the purpose of classification under art. 8.

§ 2. All financial assets accepted as collateral must have been previously reported to the SCR.

§ 3. The Central Bank of Brazil may disqualify a specific operation based on other information available to the Autarchy, with prior communication to the financial institution.

§ 4. In addition to the financial assets provided for in the caput, operations in the form of foreign exchange contract advances, nor operations carried out with related parties, as provided for in art. 2 of Resolution No. 4,693, of October 29, 2018, will not be accepted, except, in this case, for the hypotheses provided for in art. 8 of that Resolution.

Art. 13. For the purpose of eligibility of the operation as collateral for the LTEL-LFG, the issuer or debtor of the financial assets referred to in art. 7 must have a default index (ID) in credit operations reported to the SCR of less than or equal to 0.05% (five hundredths of a percent), calculated according to the following formula:

$$ID = CB48 / (CA + CB48),$$

where:

CB48 = credits written off as loss up to 48 (forty-eight) months in the National Financial System (SFN); and

CA = active portfolio in the SFN.

Art. 14. In calculating the value of the eligible financial assets provided for in art. 7, only values to be received from 60 (sixty) days onward will be considered.

Sole paragraph. In the case of the same issuer or debtor, the sum of the financial assets is limited to up to 25% (twenty-five percent) of the total value of the portfolio of financial assets accepted as collateral, even if the total of the values offered for that issuer or debtor exceeds this percentage.

CHAPTER VI

ON FINANCIAL LIMITS

Art. 15. The Total Financial Limit for contracting operations under the authority of the LTEL-LFG will be calculated based on the collateral basket constituted by the financial institution, the criteria for accepting financial assets as collateral, and the rules for excess collateral provided for in art. 8.

Sole paragraph. The information for calculating the Total Financial Limit, referred to in the caput, available and processed in the Central Bank of Brazil systems until:

I - the first day of the period for requesting operations referred to in art. 18, § 2, for the purpose of informing the financial institution of the value of the Total Financial Limit; and

II - the last day of the period for requesting operations, referred to in art. 18, § 2, for the purpose of instructing the authorization procedure for the issuance of the Financial Promissory Note referred to in art. 18, item II of the caput.

Art. 16. The Available Financial Limit for new contracting of operations under the authority of the LTEL-LFG will be calculated for the purpose of subsequent issuance of the Financial Promissory Note and will have as reference the Total Financial Limit and the balance of outstanding operations of the financial institution within the scope of the LTEL-LFG.

CHAPTER VII

ON THE GRANTING

Art. 17. The granting of a loan is conditioned on specific authorization from the Collegiate Board of the Central Bank of Brazil for each operation, observing the following steps:

I - request for operation by the interested financial institution, which must be addressed to Deban and contain the amount of loan and the requested term;

II - authorization for the issuance of the Financial Promissory Note, on a specific date, based on the Available Financial Limit, on the parameters referred to in items I and II of the caput of art. 18;

III - issuance of the Financial Promissory Note, by means of its constitutive registration, by the financial institution in favor of the Central Bank of Brazil, in a central depository of financial assets, and linking of the collateral basket previously constituted in favor of the Central Bank of Brazil; and

IV - granting of the loan, with financial settlement within 2 (two) business days after the issuance of the Financial Promissory Note.

§ 1. The submission of the request referred to in item I of the caput is conditioned on the observance, by the financial institution, of the measures provided for in art. 6.

§ 2. In the request for operation, the financial institution may authorize the Central Bank of Brazil to adjust the amount of the requested loan to the Available Financial Limit if the requested amount exceeds that limit.

§ 3. The Central Bank of Brazil may, at its discretion, reduce the amount of the loan granted if the financial institution has an outstanding balance of operations contracted under other liquidity programs established by the Autarchy.

§ 4. The reduction of the loan amount referred to in § 3, if applied, will be proportional to the value of the outstanding balance of operations contracted by the financial institution under other liquidity programs established by the Autarchy.

§ 5. The financial settlement of the loan granting will occur by means of a message from the SLB Services Group, of the SFN Services Catalog, by crediting the corresponding value in the Bank Reserve account of the contracting financial institution.

Art. 18. The sum of the value of the Financial Promissory Notes issued by financial institutions belonging to the same prudential conglomerate, as provided for in Resolution No. 4,280, of October 31, 2013, or by multiple or commercial banks belonging to a cooperative credit system, at the time of issuance, relating to loan operations in progress, may not exceed:

I - in the case of financial institutions belonging to the same prudential conglomerate, 100% (one hundred percent) of the amount of the Reference Equity of the conglomerate, calculated in accordance with Resolution No. 4,192, of March 1, 2013;

II - in the case of multiple or commercial banks belonging to a cooperative system, 100% (one hundred percent) of the amount of the Adjusted Net Equity (PLA) calculated based on the Combined Balance Sheet of the Cooperative System, as provided for in Resolution No. 4,151, of October 30, 2012.

§ 1. The PLA is obtained by the algebraic sum of the following groups included in the Accounting Plan of the Institutions of the National Financial System (Cosif):

I - (+) 6.0.0.00.00-2 Net Equity;

II - (+) 7.0.0.00.00-9 Creditor Result Accounts;

III - (-) 8.0.0.00.00-6 Debtor Result Accounts.

§ 2. Operations requested from November 24, 2021, to December 1, 2021, will be evaluated for the purpose of granting authorization referred to in the caput of art. 17.

§ 3. Operations requested in accordance with § 2 must observe, in addition to the limits provided for in items I and II of the caput, the limit corresponding to 40% (forty percent) of the debtor balance of their previously contracted operations under Resolution No. 4,795, of April 2, 2020, and Circular No. 3,996, of April 6, 2020, in the accounting position as of December 31, 2020.

§ 4. For the purposes of this Resolution, the amounts of the Reference Equity of the conglomerate, calculated in accordance with Resolution No. 4,192, of 2013, and the PLA, calculated based on the Combined Balance Sheet of the Cooperative System referred to in Resolution No. 4,151, of 2012, will be those indicated in the last information available to the Central Bank of Brazil at the time of calculating the Total Financial Limit referred to in art. 15.

§ 5. The information available to the Central Bank of Brazil provided for in § 4 must, at most, relate to:

I - 2 (two) base dates prior to the month of requesting operations, in the case of the amount of the Reference Equity of the conglomerate, calculated in accordance with Resolution No. 4,192, of 2013; and

II - 2 (two) quarters prior to the month of requesting operations, in the case of the PLA, calculated based on the Combined Balance Sheet of the Cooperative System referred to in Resolution No. 4,151, of 2012.

§ 6. The absence of information made available to the Central Bank of Brazil within the temporal limits established in § 5 prevents the granting, to the requesting financial institution, of loan operations under the authority of the LTEL-LFG.

§ 7. Financial institutions adhering to the LTEL-LFG and belonging to the same prudential conglomerate or the same cooperative credit system must coordinate among themselves the requests for loan operations, so as not to exceed the limits provided for in this article.

§ 8. With the objective of ensuring compliance with the limits provided for in this article, the Central Bank of Brazil may promote a proportional reduction in the value of operations requested by financial institutions adhering to the LTEL-LFG and belonging to the same prudential conglomerate or the same cooperative credit system.

Art. 19. The Central Bank may establish, at its discretion, new periods for the request, evaluation, and contracting of operations under the authority of this Resolution.

Sole paragraph. By fixing, in the form of the caput, new periods for the request, evaluation, and contracting of operations, the Central Bank of Brazil may modify:

I - the percentage increase to the Selic rate referred to in Article 4; and

II - the contracting limits referred to in the main text and § 3 of Article 18.

Article 20. Institutions that have adhered to the LTEL-LFG under Resolution No. 4,795 of 2020 and Circular No. 3,996 of 2020, and that are interested in requesting the contracting of operations during the period referred to in § 2 of Article 18, must:

I - arrange for the signature and submission to the Central Bank of Brazil of an Addendum to the CREDIT LIMIT AGREEMENT GUARANTEED BY TRUSTEE CESSION OF RIGHTS OVER MOVABLE PROPERTY, FOR THE CONDUCT OF LOANS WITHIN THE TEMPORARY SPECIAL LIQUIDITY LINE DISCIPLINED BY RESOLUTION NO. 4,795 OF APRIL 2, 2020, AND CIRCULAR NO. 3,996 OF APRIL 6, 2020 (ACQUISITION OF FINANCIAL LETTER WITH GUARANTEE IN FINANCIAL ASSETS OR SECURITIES); and

II - submit to the Central Bank of Brazil the documentation referred to in items II, III, and IV of Article 6, updated and valid.

§ 1 The Addendum referred to in the main text must be signed using a digital certificate issued by a certifying authority of the Brazilian Public Key Infrastructure (ICP-Brasil).

§ 2 Two (2) representatives of the LTEL-LFG Participant are required to sign the Addendum referred to in the main text, with 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 collateral.

CHAPTER VIII
PROVISION OF INFORMATION FOR MONITORING BY THE CENTRAL BANK OF BRAZIL

Article 21. The financial institution must update the data reported to the central depository or the clearing entity, at least once per month, reporting the position of the last day of the month, by the 9th (ninth) business day of the following month.

§ 1 The update referred to in the main text must consider the occurrence of any change in the characteristics of the collateral that may imply a modification of classification or the value of the financial assets.

§ 2 Changes that may imply a modification of classification related to debtors whose operations represent more than 5% (five percent) of the financial assets securing the guarantees must be reported within 2 (two) business days, counted from the moment the change is identified.

Article 22. The central depository or the clearing entity must report to Desig by the 10th (tenth) business day of each month, according to procedures specified by the Central Bank of Brazil, the entirety of the set of financial assets comprising the collateral basket linked to the set of Financial Letters issued by each financial institution, under the LTEL-LFG, respecting the eligibility and sufficiency criteria defined in this Resolution.

§ 1 The information referred to in the main text must be updated as provided in Article 21.

§ 2 Whenever new collateral is constituted or the change referred to in § 2 of Article 21 occurs, the central depository or the clearing entity must provide the information referred to in the main text on the day following the occurrence.

Article 23. The governance structure and controls of the Financial Letter central depository aimed at ensuring the adherence of the collateral basket constituted in favor of the Central Bank of Brazil to the sufficiency requirements provided in this Resolution must include mechanisms aligned with the supervision process of the Autarchy, according to procedures specified by Desig.

CHAPTER IX
RELEASE, SUFFICIENCY, AND RESTORATION OF COLLATERAL

Article 24. The Central Bank of Brazil must arrange for the release of encumbrances constituted on the financial asset collateral, based on a request from the financial institution that linked them as collateral, whenever:

I - there is no creditor balance of Financial Letters linked to the corresponding financial assets; or

II - the release of the financial assets does not compromise the sufficiency conditions of collateral relative to the Financial Letters issued, as established in Article 25.

§ 1 The issuing institution may substitute the financial asset collateral with other eligible financial assets, provided that the substitution does not imply non-compliance with the sufficiency conditions of collateral linked to the Financial Letters issued, as provided in Article 25.

§ 2 The substitution referred to in § 1 depends on the formal approval of the Central Bank of Brazil.

Article 25. The issuer of the Financial Letter must maintain as collateral, in favor of the Central Bank of Brazil, financial assets that meet the defined criteria and in sufficient amounts to ensure that the total value of these financial assets, according to the criteria defined by the Autarchy and in agreement with what is regulated in this Resolution, is greater than the value of the Financial Letters issued.

§ 1 The total value of the financial asset collateral considered for the calculation of the sufficiency of collateral linked to the Financial Letters will be achieved by the sum of the value of each financial asset divided by the corresponding parameter defined in Article 8.

§ 2 The provisions of the main text, regarding the sufficiency of financial asset collateral relative to the value of the Financial Letters, must be observed throughout the entire term of the operations referred to in this Resolution.

§ 3 Whenever the total value of the financial assets given as collateral proves to be less than the updated value of the Financial Letters, the issuer must restore the collateral, by constituting additional collateral or substituting financial asset collateral.

§ 4 In cases where there is prior communication to Deban of the intention to use the prerogative, the Central Bank of Brazil will admit that the issuing institution of the Financial Letters uses federal public bonds to effect the restoration of the collateral.

Article 26. The request to deconstitute encumbrances on financial asset collateral must be submitted according to the procedures and form established by Desig.

§ 1 The release of the collateral is conditioned on maintaining the sufficiency of financial assets linked to the fulfillment of obligations contracted under the LTEL-LFG.

§ 2 The assessment referred to in § 1 regarding the sufficiency of the remaining collateral will be carried out based on the information in the SCR regarding the last base date made available to the SFN.

Article 27. The financial institution must maintain financial asset collateral in sufficient amounts to meet the requirement provided in Article 25 and avoid the need for frequent restoration of collateral.

Article 28. The financial institution that does not maintain financial asset collateral in sufficient amounts to meet the requirement provided in Article 25 must immediately report the occurrence to Desig and restore the collateral, as provided in said article, within 2 (two) business days counted from the date the insufficiency is verified.

Sole paragraph. The restoration of the collateral must observe the following procedures:

I - when met through the constitution of new collateral at the central depository or the clearing entity, the financial institution must constitute encumbrances on the additional financial assets and notify Desig within the period established in the main text;

II - when met through the substitution of financial asset collateral, the linking of the new assets must be carried out within the period established in the main text, and the subsequent release of the substituted assets must be requested according to the procedure provided in Article 26; and

III - when met with the use of federal public bonds, as per § 4 of Article 25, operational guidance to be published by Deban through an Instruction Normative must be followed.

Article 29. The contracting financial institution must request the early redemption of the Financial Letter in an amount sufficient to comply with Article 25, by the business day following the end of the period provided in Article 28, if it does not restore the collateral.

CHAPTER X
PAYMENT

Article 30. The payment of the loan operations will occur through the redemption of the Financial Letter, which will occur on the maturity date of the Financial Letter or in advance, upon request by the financial institution.

§ 1 The Central Bank of Brazil will send a notice to the financial institution, on the maturity date of the Financial Letter, via a message from the SLB Services Group, of the SFN Services Catalog, containing the financial value to be settled.

§ 2 The early redemption of the Financial Letter must be requested from the Central Bank of Brazil at least 1 (one) business day in advance of the financial settlement date of the instrument.

CHAPTER XI
DEFAULT

Article 31. The debtor institution that fails to regularize payments or restore collateral may be declared in default by the Central Bank of Brazil, and in this condition, all maturities of Financial Letters issued by it under this Resolution will be accelerated to the date on which the default is declared by the Autarchy.

Article 32. The declaration of default will be made by decision of the Central Bank of Brazil and may, at its discretion, entail the execution, total or partial, and the alienation of the financial asset collateral.

§ 1 In the execution and alienation of financial asset collateral, which will be constituted through trustee cession of rights over movable property, as provided in Article 66-B of Law No. 4,728 of 1965, the result of any excess collateral will be returned to the contracting financial institution.

§ 2 The instruments that formalize the issuance of Financial Letters must contain a clause providing for the possibility of the Central Bank of Brazil, at its discretion, receiving the financial asset collateral in payment of the debt if their alienation does not materialize, without prejudice to the provisions of § 3.

§ 3 If, after the excision of collateral constituted on the financial asset collateral, the resulting proceeds are insufficient to settle the debt arising from the Financial Letters issued, plus collection, judicial, and extrajudicial expenses, the issuing financial institution and the providers of personal guarantee will remain obligated for the remaining debtor balance, with the provisions of Article 1-A of Law No. 11,882 of December 23, 2008, applied to them.

Article 33. On the default balance, including operations whose maturity was accelerated due to the declaration of default, default interest and late payment penalties will apply, from the date of the declaration of default, in accordance with Article 37 of Law No. 10,522 of 2002.

§ 1 The charges referred to in the sole paragraph of Article 4 cease to be demanded from the Default Participant from the date of the declaration of default.

§ 2 The debtor balance of each Financial Letter issuance operation on which the charges referred to in the main text will apply will be the closing balance on the date of the declaration of default of the Default Participant.

CHAPTER XII
GENERAL PROVISIONS

Article 34. The financial movement related to the operations referred to in this Resolution is carried out in the Bank Reserves account maintained by the financial institution at the Central Bank of Brazil.

Article 35. The offer of services for encumbrances and liens on financial assets aimed at constituting collateral under the LTEL-LFG is not conditioned on meeting the requirement provided in § 2 of Article 15-A of the Regulation Annexed to Circular No. 3,743 of January 8, 2015.

Article 36. Loans granted during the validity of Resolution No. 4,795 of 2020 and Circular No. 3,996 of 2020 remain governed by the provisions of those normative instruments.

Article 37. The following are revoked:

I - Circular No. 3,994 of March 24, 2020;

II - Circular No. 3,996 of 2020;

III - Circular No. 4,004 of April 16, 2020;

IV - Circular No. 4,007 of April 24, 2020;

V - Circular No. 4,011 of April 28, 2020;

VI - Circular No. 4,021 of May 26, 2020;

VII - BCB Instruction Normative No. 45 of November 16, 2020; and

VIII - BCB Instruction Normative No. 88 of March 19, 2021.

Article 37. This Resolution enters into force on November 1, 2021.

Bruno Serra Fernandes Paulo Sérgio Neves de Souza Director of Monetary Policy Director of Supervision