Resolution CMN No. 3490 — Provides for the Determination of the Required Reference Equity (PRE)

Resolution No. 3,490, of August 29, 2007 1

RESOLUTION NO. 3,490

Provides for the determination of the Required Reference Equity (PRE).

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 August 29, 2007, considering the provisions of Article 4, items VIII and XI, of the aforementioned law, in Law No. 4,728, of July 14, 1965, in Article 20 of Law No. 4,864, of November 29, 1965, in Law No. 6,099, of September 12, 1974, with amendments introduced by Law No. 7,132, of October 26, 1983, and in Law No. 10,194, of February 14, 2001, with the amendment given by Law No. 11,110, of April 25, 2005, in Article 6 of Decree-Law No. 759, of August 12, 1969, and in Decree-Law No. 2,291, of November 21, 1986,

RESOLVES:

Article 1. Financial institutions and other institutions authorized to operate by the Central Bank of Brazil, with the exception of microentrepreneur credit societies and the institutions mentioned in Article 1 of Resolution No. 2,772, of August 30, 2000, must permanently maintain a value of Reference Equity (RE), calculated in accordance with Resolution No. 3,444, of February 28, 2007, compatible with the risks of their activities.

Article 2. The value of RE must be greater than the value of the Required Reference Equity (PRE), which must be calculated considering, at a minimum, the sum of the following components:

PRE = PEPR + PCAM + PJUR + PCOM + PACS + POPR, where:

PEPR = component related to exposures weighted by the risk factor attributed to them;

PCAM = component related to the risk of exposures in gold, in foreign currency, and in operations subject to exchange rate variation;

PJUR = component related to the risk of operations subject to interest rate variation and classified in the trading portfolio, in accordance with Resolution No. 3,464, of June 26, 2007, where n = number of different components related to the risk of operations subject to interest rate variation and classified in the trading portfolio;

PCOM = component related to the risk of operations subject to commodity price variation (commodities);

PACS = component related to the risk of operations subject to share price variation and classified in the trading portfolio, in accordance with Resolution No. 3,464, of 2007;

POPR = component related to operational risk.

§ 1. The calculation of PRE must include exposures of dependencies abroad.

Resolution No. 3,490, of August 29, 2007 2

§ 2. For institutions that are part of a financial conglomerate, in accordance with the Accounting Plan of Institutions of the National Financial System - Cosif, the value of PRE must be calculated on a consolidated basis.

§ 3. For institutions that are part of a financial conglomerate and of the economic-financial consolidation, the value of PRE must be calculated on a consolidated basis, both for the financial conglomerate and for the economic-financial consolidation.

§ 4. For single credit cooperatives that do not have any foreign exchange exposure and that present, at the close of two consecutive fiscal years, total assets equal to or less than R$5,000,000.00 (five million reais), the calculation of PRE in the following fiscal year is permitted based only on the components PEPR and POPR, with all other components considered null.

Article 3. The institutions mentioned in Article 1 must also maintain sufficient RE to cover the interest rate risk of operations not included in the trading portfolio, in accordance with Resolution No. 3,464, of 2007.

Sole Paragraph. The minimum criteria for measuring and evaluating this risk will be established by the Central Bank of Brazil.

Article 4. The processes and controls related to the calculation of PRE are the responsibility of the director responsible for risk management of the institution.

§ 1. The institutions mentioned in Article 1 must keep updated at the Central Bank of Brazil the indication of the director responsible for the institution's risk management.

§ 2. For the purposes of the responsibility referred to in the caput, it is admitted that the indicated director performs other functions in the institution, except those related to the administration of third-party funds and treasury operations.

Article 5. The Central Bank of Brazil may, at its discretion, determine to the institution:

I - reduction of the risk grade of exposures;

II - increase in the value of PRE.

Article 6. The Central Bank of Brazil will establish:

I - procedures and parameters for the calculation of the PRE components;

II - guidelines aimed at the evaluation and management of the risks of financial institutions and other institutions authorized by it to operate.

Article 7. Any citation to Required Equity (PLE), in normative instruments published by the Central Bank of Brazil, henceforth refers to the definition of PRE established in Article 2.

Article 8. Financial institutions and other institutions authorized to operate by the Central Bank of Brazil must disclose minimum information regarding the PRE components defined in Article 2.

Resolution No. 3,490, of August 29, 2007 3

Sole Paragraph. The Central Bank of Brazil will define the minimum information, the periodicity, and the disclosure instruments for the realization of the disclosure described in the caput.

Article 9. This resolution enters into force on the date of its publication, producing effects from July 1, 2008, when the following will be repealed:

I - item I of Article 1 of Resolution No. 2,283, of June 5, 1996, the Regulation attached to Resolution No. 2,099, of August 17, 1994, Article 3 of Resolution No. 2,686, of January 26, 2000, and Article 7 of Resolution No. 2,828, of March 30, 2001;

II - Resolutions Nos. 2,472, of February 26, 1998, 2,692, of February 24, 2000, and 2,891, of September 26, 2001.

Sole Paragraph. Citations and the legal basis of normative instruments, based on the now-repealed norms, henceforth refer to this resolution.

Brasília, August 29, 2007.

Alexandre Antonio Tombini
Acting President

This text does not replace that published in the DOU and in Sisbacen.