Resolution CMN No. 2844 — Establishes exposure limits per client

RESOLUTION NO. 2844

Establishes exposure limits per client.

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, in a session held on June 28, 2001, considering the provisions of Article 4, items VI, X, and XI, of the aforementioned law, Articles 10, 14, item II, and 29, item VII, of Law No. 4,728 of July 14, 1965, and Article 23 of Law No. 6,099 of September 12, 1974, with the amendments introduced by Law No. 7,132 of October 26, 1983,

RESOLVES:

Article 1. Fix at 25% (twenty-five percent) of Reference Equity (RE) the maximum exposure limit per client to be observed by multiple banks, commercial banks, investment banks, development banks, Caixa Econômica Federal, credit, financing, and investment companies, leasing companies, real estate credit companies, and mortgage companies in the contracting of credit and leasing operations and in the provision of guarantees, as well as regarding credits arising from operations with derivatives.

Paragraph 1. For the purposes of this Resolution, a client is considered to be any person, natural or legal, or group of persons acting individually or jointly, representing a common economic interest.

Paragraph 2. Regarding the public sector, the Union, the states, the Federal District, and the municipalities are considered clients, each together with their directly or indirectly affiliated entities (public companies, mixed-economy societies, their subsidiaries, and other affiliated companies; autarchies and foundations; other bodies or entities).

Paragraph 3. The operations of interbank transfers and the credits arising from the renegotiation of debts authorized by Laws No. 8,727 of November 5, 1993, and No. 9,496 of September 11, 1997, as well as any supplementary credit lines destined for the payment of renegotiated debts under the auspices of the aforementioned laws and Laws No. 7,614 of July 14, 1987, and No. 7,976 of December 27, 1989, are not included in the limit referred to in this article.

Paragraph 4. The limit referred to in this article does not apply to interbank deposits, which are subject to specific regulation.

Article 2. A maximum exposure limit of 25% (twenty-five percent) of RE is established for the institutions cited in Article 1, securities brokerage firms, currency brokerage firms, and securities distribution companies, in subscription operations for resale and guarantee of subscription of securities, as well as in investments in securities and financial instruments issued by the same entity, affiliated companies, and holding companies and their subsidiaries.

Paragraph 1. The limit referred to in this article does not apply to federal public securities, as well as to debentures issued by affiliated leasing companies.

Paragraph 2. Regarding the participation of financial institutions and other institutions authorized to operate by the Central Bank of Brazil in the process of primary placement of securities, compliance with this limit will only be required after the closing of the distribution period, with the elimination of any excess permitted as follows:

I - 50% (fifty percent), within a maximum period of thirty days counted from the date of closing of the said period;

II - 100% (one hundred percent), within a maximum period of sixty days counted from the date of closing of the said period.

Paragraph 3. The following are not subject to the limit referred to in this article:

I - securities and financial instruments subject to loan;

II - investments in investment fund quotas.

Article 3. In the event that the client and the entity issuing securities or financial instruments are the same person, the sum of the exposures referred to in Articles 1 and 2 may not exceed 25% (twenty-five percent) of the RE of the institutions related therein.

Article 4. A limit of 600% (six hundred percent) of RE is established for the sum of Concentrated Exposures to be observed by the institutions cited in Articles 1 and 2.

Paragraph 1. For the purposes of this article, Concentrated Exposure (CE) is considered to be the exposure per client, as defined in Article 1, or per entity issuing securities or financial instruments that represents 10% (ten percent) or more of RE.

Paragraph 2. In the event that the client and the entity issuing securities or financial instruments are the same person, the CE will be the sum of the exposures referred to in Articles 1 and 2.

Article 5. For the purpose of calculating the limits referred to in this Resolution, the amount of participations in the share capital of financial institutions and other institutions authorized to operate by the Central Bank of Brazil must be deducted from RE.

Article 6. Excesses verified in relation to the limits now fixed must be eliminated by December 31, 2001.

Sole Paragraph. It is prohibited for an institution in a non-compliant situation, while remaining in that condition, to contract operations that burden the excesses possibly verified on the date of entry into force of this Resolution.

Article 7. 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 8. This Resolution enters into force on the date of its publication.

Article 9. Resolution No. 2,474 of March 26, 1998, is hereby repealed.

Brasília, June 29, 2001

Arminio Fraga Neto
President

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