Qualified Foreign Central Counterparties In Brazil

Through Circular No. 3772, of December 1st, 2015, the Central Bank of Brazil (Banco Central do Brasil – Bacen), hereinafter simply referred to as Bacen Circular 3772/2015, regulated the process of recognition of a foreign central counterparty (contraparte central – CPC) as qualified by Bacen.

According to Bacen Circular 3772/2015, the expressions transcribed below are defined as follows:

• "foreign CPC" means any legal entity incorporated and domiciled abroad hired to assume the position of contracting party for the purpose of liquidation of obligations in relation to the original counterparties of a transaction;
• "competent authority" means any entity responsible for the regulation, authorization and supervision of the activities of the foreign CPC in its jurisdiction of origin; and