Resolution CMN No. 28 - Credit, Financing and Investment Companies - Placement in the Market of Bills of Exchange for a Term Not Less Than 360 Days with Monetary Correction Clause - Revocation of Item XII of Resolution 21

RESOLUTION NO. 000028

THE CENTRAL BANK OF THE REPUBLIC OF BRAZIL, in accordance with the deliberation of the National Monetary Council, in a session held on 30.6.66, and considering the provisions of Art. 4, item VI, and Art. 9 of Law No. 4.595, and Art. 27 of Law No. 4.728, respectively dated 31.12.64 and 14.7.65,

RESOLVES:

I - Credit, financing, and mixed companies, with capital paid-in and free reserves equal to or greater than Cr$250,000,000 (two hundred and fifty million cruzeiros), may place in the market, from the date of this Resolution, bills of exchange accepted by them, for a term not less than 360 days, with a monetary correction clause.

II - The bills of exchange must be issued based on a credit opening contract, from which the following must appear:

a) a monetary correction clause, which, in addition to referencing Art. 27 of Law 4.728, must indicate a maximum limit for correction, as a percentage of the principal value of the bill; and

b) interest, payable at maturity.

III - The context of the bill of exchange, whose principal will include interest calculated up to the maturity date, must include the correction clause referred to in item "a" of the previous item.

IV - The acceptance must be guaranteed by a pledge of legitimate commercial effects in a value not less than the amount of the bill of exchange, plus the maximum percentage limit of the correction.

V - Item XII of Resolution No. 21, of March 15, 1966, is hereby revoked.

Rio de Janeiro-GB, June 30, 1966

CENTRAL BANK OF THE REPUBLIC OF BRAZIL

Dênio Nogueira
President