Resolution CMN No. 2327 — Prohibits State and Municipal-Controlled Financial Institutions from Acquiring New State and Municipal Bonds and Limits Private Institutions' Holdings

RESOLUTION NO. 002327

Dispenses with the acquisition of state and municipal bonds by financial institutions, other institutions authorized to operate by the Central Bank of Brazil, and mutual investment funds.

THE CENTRAL BANK OF BRAZIL, in accordance with Article 9 of Law No. 4,595 of December 31, 1964, makes public that the MONETARY COUNCIL NATIONAL, in a session held on October 30, 1996, based on Article 4, items VIII and XI, of the aforementioned Law, and on Law No. 4,728 of July 14, 1965,

RESOLVES:

Article 1. It is prohibited for financial institutions and other institutions authorized to operate by the Central Bank of Brazil controlled by the State, Municipality, or Federal District, from carrying out operations of definitive purchase and purchase with commitment to resell state and municipal bonds issued from the date of entry into force of this Resolution.

Article 2. The balances of investments in bonds referred to in the previous article maintained by private institutions authorized to operate by the Central Bank of Brazil, as well as by mutual investment funds, must observe the limit of 5% (five percent) of their respective net worth, adjusted in the manner prescribed by current regulations.

Article 3. The provisions of Articles 1 and 2 do not apply to state and municipal bonds eventually issued in substitution for those existing on the date of entry into force of this Resolution.

Article 4. The Central Bank of Brazil is authorized to issue norms and adopt measures deemed necessary for the execution of the provisions of this Resolution.

Article 5. This Resolution enters into force on the date of its publication.

Brasília, October 30, 1996

Gustavo Jorge Laboissière Loyola
President