Resolution CMN No. 3171 — Regulates Repo Operations Under Resolution 2,950 of 2002

RESOLUTION NO. 3171

Regulates the realization of repo operations governed by the Regulation annexed to Resolution 2,950 of 2002.

The CENTRAL BANK OF BRAZIL, in accordance with Article 9 of Law No. 4,595 of December 31, 1964, makes public that the NATIONAL MONETARY COUNCIL, in a session held on February 19, 2004, based on Article 4, items VI and VIII, of the aforementioned law and on Articles 9, 10, 14, and 29 of Law No. 4,728 of July 14, 1965,

RESOLVES:

Article 1. In the realization of repo operations governed by the Regulation annexed to Resolution No. 2,950 of April 17, 2002, and subsequent amendments, the free movement of any of the fixed-income securities subject to these operations is permitted, provided that they are registered and financially settled within the scope of the same clearing house or the same authorized settlement and compensation service provider acting as a contracting party for the purpose of settling the operations carried out through its intermediation.

Article 2. Consequently, Articles 1 and 2 of the Regulation annexed to Resolution No. 2,950 of 2002 are amended, which shall henceforth read as follows:

"Article 1. ......

§ 4. The repo operations governed by the caput, items II and IV, when carried out with clients who are not financial institutions nor other institutions authorized to operate by the Central Bank of Brazil and when registered and financially settled outside the scope of the same clearing house or the same authorized settlement and compensation service provider acting as a contracting party for the purpose of settling the operations carried out through its intermediation, may only have as their object securities of definitive ownership by the seller.

......" (NR)

"Article 2. ......

§ 1. The repo operations governed by Article 1, items II and IV, when carried out with clients who are not financial institutions nor other institutions authorized to operate by the Central Bank of Brazil and when registered and financially settled outside the scope of the same clearing house or the same authorized settlement and compensation service provider acting as a contracting party for the purpose of settling the operations carried out through its intermediation, as well as the forward purchase and sale commitments provided for in item VI of that article, may only have as their object securities issued by the National Treasury or the Central Bank of Brazil.

§ 2. The free movement of the securities subject to the repo operations governed by Article 1, items II and IV, is admitted, provided that this possibility is expressly agreed upon between the parties, in the case of operations:

I - having as their object securities issued by the National Treasury or the Central Bank of Brazil; or

II - registered and financially settled within the scope of the same clearing house or the same authorized settlement and compensation service provider acting as a contracting party for the purpose of settling the operations carried out through its intermediation, having as their object any of the securities referred to in the caput.

......" (NR)

Article 3. This resolution enters into force on the date of its publication.

Brasília, February 19, 2004.

Henrique de Campos Meirelles
President

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NOTE: Re-transmitted with amendments in Article 2.